Denso
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DENSO
1. How has DENSOs relationship with Toyota affected its international strategy? DENSO was/is part of Toyotas keiretsu. Toyota has a vertically integrated supply chain, which DENSO is part of. Toyota accounts for over half of DENSOs business. When Toyota expanded internationally, DENSO had to follow to supply Toyotas overseas plants. So Toyota initially set DENSOs international strategy However, DENSO started supplying other automakers with parts. Economies of scale are equally important for parts suppliers and assemblers. Toyota has also benefited from Densos scale economy, which translates into lower costs, yet
better quality products. The contradiction is that Denso has attained market power and pricing autonomy by becoming an oligopoly, which has freed it from Toyotas grasp somewhat. It attains this bargaining power through customer diversification, with Toyotas consent. But, Toyota paved the way for DENSO by being the first in many new markets, such as North America, and by supplying needed capital to DENSO.
2. What types of quality programs has DENSO adopted, and how do you think they will affect DENSOs future as a global supplier? It has adopted TQM, and is striving for zero defects to satisfy Toyota. DENSO also has ISO 9001 and QS9000 certification so it can supply parts to auto makers in Europe and North America. I think by adapting to various quality programs, besides just TQM for Toyota, has enabled DENSO to become a supplier for many other auto companies. Being able to meet many automakers quality standards can only help DENSO grow its foreign sales and make it less dependent on Toyota.