BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

3 Abenomics Meets a Troubled WorldThe“Abenomics”economic policy promoted by theadministration of Prime Minister Abe in 2012 was atemporary fix. It helped Japan’s economy recover andinstigate a steep rise in stock prices, but it also revealedthe limits of monetary easing and aggressive fiscalstimuli. The recent rising opposition to globalizationand emergence of isolationist economic policies focusedon domestic priorities are symbolized by the U.K.’sintention to withdraw from the European Union and theadvent of the Trump presidency in the U.S. Amid anincreasing degree of chaos, the world economy demandsnew problem-solving efforts.Section2TheEnvironmentSurroundingGeneralTradingCompanies1 The Role of Specialization in GeneralTrading CompaniesIn tandem with the long stagnation of the Japaneseeconomy in the 1990s, former communist countriestransitioned to market economies, the economies ofdeveloping countries grew in Asia in particular, andemerging countries rose in influence. The responseof general trading companies was to enhance threecompetencies: (1) globalization of overseas businessanchored by project investment, (2) ongoing investmentin resources and energy, and (3) investment in domesticretail sectors. These functions became more advancedin the 2000s, when there was a stronger demand to shiftto general business operations and business investmentthat combined market development capabilities,business development and management capabilities,risk management capabilities, data functions, andorganizational functions.2 Pursuing Value Chain StrategiesRather than focusing only on dividend income and saleprofits, starting in 2000, the general trading companiesbecame keenly aware of the need for facilitatingcollaboration especially with its group companiesto maximize value. The general trading companiessought a so-called value chain strategy or supply chainmanagement to create a revenue model at every stage,from upstream to downstream in each area in which eachof its clients operated. This included areas as diverseas natural resources, energy, automobiles, chemicals,information and communications, foodstuffs, andlifestyle services. To be more specific, this was a way formultiple companies and divisions to work together in allprocesses, from securing raw materials and procuringmaterials to sales, to streamline the flow up to the pointa product is received. By sharing information about anorder and the level of demand, minimizing inventory instock, shortening delivery time, and providing a timelyproduct supply the general trading companies in year of2000 after, maximized their value for customers.Value chain overviewHistory119