Foreign direct invest is a fundamental element for all business as they try to have a competitive advantage over competitors in the market. The aim of all corporations is to attract more customers to purchase their goods and service as these will increase their profit margin hence ensure continuity of business operations. It is hard for any business to eliminate competition and therefore strategic plans have to be put in place to give the business advantage over the competitors in the environment. Technology has led to changes in ways of doing business which must be adopted by all corporations to have advantages over their competitors. Therefore, it has been easy for firms to move to other nations to look for markets or other factors of productions. Corporations have employed blue ocean strategy to search for areas with no competitions. These areas are ‘blue oceans, ' and they guarantee a high market for the firms' goods and services (Kim, & Mauborgne, 2014). Competition contributes to the failure of some businesses and where their no rivalry the corporation is assured of business success as all factors are favorable for business growth. Factors that are leading to foreign direct investment by firms are the availability of cheap labor, availability of a market for the goods and services, low taxation rates, cheap transport and communication services, availability of cheap raw materials, etc. All this are favorable factors which lead to business success. In this paper am going to look at competitiveness and structure of the leading global companies. What the examples are using is the Toyota company in Japan and the Ford Company in America.
Toyota company in Japan has gained a competitive advantage in the market over its competitors. The firm uses Just-In-Time inventory management strategy. This approach ensures low inventory levels by the company. When a customer places an order, it's when the company requests the list from different suppliers. The method eliminates storage costs of inventory and enables the firm to be able to change with ease the production pattern. The strategy ensures the cars prices are low as the production costs are low unlike those of competitors. Additionally, the firm has hardworking employees who produce results within the required time by the customers. These makes customers have trust in the company as it reliable (Monden, 2011).
Ford is a company that manufactures vehicles and has the headquarters in Dearborn, Michigan, US. The company has several factors that make it competitive in the market. It uses the total quality approach to production by focusing on long-term effects by continuously improving the products offered to the customers. The company has very qualified engineers who can make a high quality vehicle to the market. The operations of the firm are all over the world hence it attracts large markets. The brand name of the company is well known hence attract more markets for its vehicles. Production for the company is on a large scale hence this reduces the costs which in turn reduces expenses of the vehicles manufactured (Ford, 1926, pp.821-823).
However, comparing the two automakers, the Toyota company in Japan uses a strategy which is cost efficient than the Ford company in the US. Theses make the Toyota company make high-quality vehicles at a lower price than the Ford corporation. Customers always look for products that satisfy their needs and at an affordable price. These imply that the Toyota company have a competitive advantage over the Ford company making it have a significant market share. It, therefore, eliminates competition by use of the pricing strategy of its vehicles.