Write 2 pages thesis on the topic toyota to move from torrance to texas; automaker plans to create new american headquarters with jobs shifting to dallas area.

Write 2 pages thesis on the topic toyota to move from torrance to texas; automaker plans to create new american headquarters with jobs shifting to dallas area. Insert Los Angels was used by the company as a transshipment point and not a manufacturing point due to its proximity to the port. This is because the Toyota Company imported cars by sea. There is also the easy access to Tokyo by the company. By this, the Toyota Company was able to maximize profits by minimizing its cost of transporting cars far from the port. The company’s profit is equal to total revenue less cost of inputs and the transportation costs. The costs that vary across space are procurement costs and the costs of distributing the output. Thus, the Toyota Company had to choose a location that would minimize its total transport cost (Hirsch and Undercoffer, 1).

However, the company now does not import its vehicles and 75 percent to its branded cars sold in the United Sates are manufactured there. Most of them are manufactured in Toyota plants in Texas, Kentucky and Mississippi. There is a reason that could have led the Toyota Company not to use Los Angeles as a manufacturing point. These are: the distance from the market. and the distance from the inputs. Locating a manufacturing firm near its market helps in lowering the transportation cost of the output. With such companies, the monetary weight of output is more than the weight of the input thus the firm locates manufacturing points near its market (Hirsch and Undercoffer, 1).

As is suggested by the observer, the move that shows that Toyota is trying to avoid high taxes in California is true. This is evident from the article. It is stated that, Perry visited California so as to recruit companies. He contends that 50 California companies have planned to grow and move to Texas as it offers a business climate that is better than California. The author of the article also states that, “Toyota could also save money in an environment of lower business taxes, real estate prices and the cost of living” (Hirsch and Undercoffer, 2).

With the communication technology today, the Toyota Company should not feel compelled to relocate its headquarters closer to its manufacturing facilities. This is because technology enables companies to operate even when there is distance between its headquarters and the manufacturing point. The managers of the Toyota Company are able to run it even from another location. There are also other factors that may hinder Toyota Company from relocating its headquarters such as the cost of moving, the quality of life in the new location, the cost of living and the cost of operation in the new area (Busch, 1).

However, the location of a company’s headquarters form part of its identity and position for its investors and clients. It is also a fundamental part of its market position and how the company is identified by customers and its products. Ironically, Toyota’s historic market positioning that is linked to location may be a driver for its relocation. The Toyota Company may be required to relocate its headquarters in the manufacturing point in response to the transforming future opportunities. As a part of a fresh identity and position, Toyota Company may need to severe links with its old location (Busch, 1).

Work Cited

Busch, Peter. Organizations. 2008. Print.

Hirsch, Jerry and Undercoffer, David. “Toyota to move from Torrance to Texas: Automaker plans to create new American headquarters with jobs shifting to Dallas area.” Los Angeles Times, (2014): 1-2. Print.