Suzuki in America
Overview For nearly three decades Suzuki had been known in the automobile market as the maker of cheaper, more compact cars. For several reasons, in 2012, they decided to pull out of the U.S. market and focus on other regions where they had a firm market share. The decision was due in part to the sluggish economy and exchange rate between a strong Yen and USD, which led to drastically slumping sales and debt of well over $300,000,000 to only two-thirds of that amount in assets (Tabuchi, 2012). With a market share a mere .2% and final year sales of just over 21,000 cars, Suzuki was left with a decision, which was hardly a decision at all, to either stay in the market with an attempt to turn things around or to abandon the …show more content…
The factors that led up to the decision, as well as future ramifications, were at hand so a myriad of people were involved. Below are the different positions or groups that most likely had a part in the analysis and final decision.
Chief Executive Officer This is a no brainer, but the CEO of American Suzuki, a wholly owned subsidiary of Suzuki, was obviously involved in the final decision, most likely putting the final stamp on it. As the leader of the organization as a whole, with the top department heads reporting directly to them, the CEO would have received input from all sides of the argument and made the decision based on all factors.
Operations – Manufacturing With the cost of manufacturing a huge cog in the decision making process, the manufacturing team is an integral piece of the puzzle. One of the issues plaguing Suzuki towards the end, and an issue that played a large role in their struggles, was the cost of manufacturing. In particular it was the delivered cost to the United States. Suzuki was manufacturing their tiny cars in Japan, and then shipping them halfway across the world to the U.S. which adds a large freight cost into the mix, both over the water and inland. Also, from a logistical perspective, a supply chain set up in this manner causes an additional delay to market of a month or more. This addition of time span from build to lot not only creates a more delivered cost due to …show more content…
The head of the finance team, most likely the CFO directly, will be every bit as, if not more heavily, involved in the decision making process as the CEO of the company. In business essentially every decision is a financial one. In a game where profits and top lines are the score, finance is the head coach of the team. In Suzuki’s case, the finance team would have a finger in everything. From current profit and loss statements, to projected earnings and losses, as well as the issuance and maintenance of common stock, the finance team will have weighed in and had more influence on the decision as any one other individual or department.
Internal and External Factors The environment surrounding the decision by Suzuki was, of course, shaped by both internal and external factors. These factors as a whole were largely responsible for the ultimate decision to pull from the U.S. market. We focus on several factors below which led to the demise of
Overview For nearly three decades Suzuki had been known in the automobile market as the maker of cheaper, more compact cars. For several reasons, in 2012, they decided to pull out of the U.S. market and focus on other regions where they had a firm market share. The decision was due in part to the sluggish economy and exchange rate between a strong Yen and USD, which led to drastically slumping sales and debt of well over $300,000,000 to only two-thirds of that amount in assets (Tabuchi, 2012). With a market share a mere .2% and final year sales of just over 21,000 cars, Suzuki was left with a decision, which was hardly a decision at all, to either stay in the market with an attempt to turn things around or to abandon the …show more content…
The factors that led up to the decision, as well as future ramifications, were at hand so a myriad of people were involved. Below are the different positions or groups that most likely had a part in the analysis and final decision.
Chief Executive Officer This is a no brainer, but the CEO of American Suzuki, a wholly owned subsidiary of Suzuki, was obviously involved in the final decision, most likely putting the final stamp on it. As the leader of the organization as a whole, with the top department heads reporting directly to them, the CEO would have received input from all sides of the argument and made the decision based on all factors.
Operations – Manufacturing With the cost of manufacturing a huge cog in the decision making process, the manufacturing team is an integral piece of the puzzle. One of the issues plaguing Suzuki towards the end, and an issue that played a large role in their struggles, was the cost of manufacturing. In particular it was the delivered cost to the United States. Suzuki was manufacturing their tiny cars in Japan, and then shipping them halfway across the world to the U.S. which adds a large freight cost into the mix, both over the water and inland. Also, from a logistical perspective, a supply chain set up in this manner causes an additional delay to market of a month or more. This addition of time span from build to lot not only creates a more delivered cost due to …show more content…
The head of the finance team, most likely the CFO directly, will be every bit as, if not more heavily, involved in the decision making process as the CEO of the company. In business essentially every decision is a financial one. In a game where profits and top lines are the score, finance is the head coach of the team. In Suzuki’s case, the finance team would have a finger in everything. From current profit and loss statements, to projected earnings and losses, as well as the issuance and maintenance of common stock, the finance team will have weighed in and had more influence on the decision as any one other individual or department.
Internal and External Factors The environment surrounding the decision by Suzuki was, of course, shaped by both internal and external factors. These factors as a whole were largely responsible for the ultimate decision to pull from the U.S. market. We focus on several factors below which led to the demise of