Alternative Benchmarking Essay Example | Topics and Well Written Essays - 500 words

Alternative Benchmarking - Essay Example Lester Electronics had an exclusivity agreement to purchase its electronic supplies from Shangwa – Electronics which helped the firm obtain low-cost merchandise. This type of agreements is a common occurrence in the business world. Toyota Corporation is one of the largest car manufacturers which in 2007 sold over 8.5 million vehicles worldwide (Toyota, 2008). Toyota Corporation signed an exclusive contract in 2002 with BHP Billiton to supply the firm with its fleet of vehicles in its Australia operation to reduce overall transportation costs for this company (Bhpbilliton, 2005). Toyota is a firm constantly looking to negotiate deals and to get involve in project that will add value to the company. Two examples of negotiations between this firm and two other giants in the car manufacturing industry are the GM and Ford negotiations. In 2006 Toyota in order to top the efforts of its direct competitors, Nissan and Renault, the company seriously considered an alliance with General Motors (Isidore, 2006). The financial position of GM was the key variable that did not allow the deal to get done at the time. In early 2007 a partnership formation between Toyota and Ford was in the works to form a joint venture or partnership on powertrain technology (Krebs, 2007). The case study and the research into the automaker Toyota Corporation demonstrates the importance of the chosen capital structure of a company and the necessity to seek out alternatives to solve business issues to capitalize on business opportunities. A corporate business structure gives the management team and board of the directors of the firm the ability to make decision such as selling a portion of the business in the open market to finance projects that can generate income streams for a firm. Strategic alliances are great alternative for companies that do not involve an equity commitment which makes this strategic choice very popular in the international