International business
Table of content
1a Brief introduction of Toyota (2)
1b Toyota’s business in terms of products and markets (2)
2.0 The reasons why Toyota internationalizes its business (2)
3.0 International product lifecycle to explain the internationalization process of Toyota (3)
4.0 Key environmental factors faced by Toyota (4)
4a Environmental factors faced by Toyota in Singapore (4)
4b Foreign currency risk faced by Toyota (5)
5.0 Social-culture factors (5)
5a Hall’s high and low context culture (5)
5b Context culture of Singapore (6)
6.0 Market entry strategy (6)
6a Five market entry strategy (6)
Exporting (6)
Franchising (6)
Licensing (7)
Management contract (7)
Joint ventures (7)
6b The market entry strategy used by Toyota in Singapore (8)
广汽三菱奕歌7.0 International staffing strategy of Toyota (8)
8.0 Standardized and customized international marketing (8)
8a The differences between standardized and customized international marketing (8)
8b Reasons why Toyota uses customized strategy in Singapore (9)
9.0 Conclusion (10)
Reference (11)
1.0 Introduction
1a Brief introduction of Toyota
Toyota was created in 1933 and now has developed as i one of the top ten auto companies in the world (Muffatto, 1998). In its development process, Toyota has achieved huge success. On May 8, 2013, the company issued its financial result, which shows that its net revenues was 216 billion U.S. dollars (ref: www.statista/statistics/262752/total-net-revenues-of-toyota/). Until 2014, its net revenues was increased to 249 billion U.S. dollars (ref: Toyota 2014 annual report).
1b Toyota’s business in terms of products and markets
Toyota produces and supplies high quality auto and other relevant products to target customers under five brands, which respectively are Toyota brand, Hino, Lexus, Ranz, and Scion. Currently, the company has produced some excellent automotive products, such as CROWN, REIZ, PRIUS, COROLLA, COROLLA, VIOS and LAND CRUISER and so on. to achieve further success, Toyota continues to expand its business into different countries and regions excluding Japan. In its international expansion process, the size of the company has been expanded. Until now, the company has 52 manufacturing companies in 170 states. To some extent, its success benefits from its effective international expansion strategy.
2.0 The reasons why Toyota internationalizes its business
There are some reasons why Toyota internationalizes its business. The first reason is to seek for more market opportunities and achieve further development and success. To some extent, international markets provides more opportunities for enterprises to sell their products and services (Robles, 1994). For example, to obtain more market opportunities, Toyota is expanding its business into developing countries such China and India etc. The international expansion can help Toyota to achieve a growth potentiality.
The second reason is to maintain higher competitive advantages. As more and more automotive enterprises enter automotive industry, the competition in automotive industry is
becoming more and more intense (Zapata & Nieuwenhuis, 2010). Under this condition, Toyota has to expand its business into different international markets in order to obtain and maintain its competitive advantages in the competitive industry.
汽车入门The third reason is to occupy more market shares in different international markets. The international expansion of enterprises enables the enterprises to successfully sell its products in different markets, win more loyal customers and then occupy more market shares (Hohenthal et al, 2003). Thus, Toyota internationalizes its business with the purpose of occupying more market shares in different international markets.
3.0 International product lifecycle to explain the internationalization process of Toyota The theory of international product lifecycle was proposed by R. G. Vemon in 1968. The theory of international product lifecycle suggest internationalization process should well consider production lifecycle (Hashimoto, 2003). According to the theory of international product lifecycle is divided into four stages, which respectively are introduction, growth, maturity as well as decline (figure 1). In the stag
e of introduction, products are innovative and unique because there are not same products provided by other firms. Under this condition, firms will own monopolistic advantage in a certain market. At the stage of growth, products are often sold in domestic market and sometimes are exported into other international markets. For example, Toyota not only sells its products in domestic market, but also expose its products into America and the euro area. When the products come to the stage of maturity, industrial competition in domestic market will be more and more intense as more and more enterprises provide same products in the domestic market (Qin and Nembhard, 2012). Under this condition, enterprises have to develop foreign markets and continue to conduct international expansion in order to occupy more market share and maintain competitive advantage in a very competitive industry. For example, Toyota exposes its products into Singapore in order to occupy more market share in Singapore e market. Since the competition in the automotive industry is becoming more and more intense, thus, Toyota has to internationalize its business in order to occupy more market shares in different international markets and obtain higher competitive advantages in the competitive industry.
Figure 1: Stages of product life cycle
倒车入位4.0 Key environmental factors faced by Toyota
4a Environmental factors faced by Toyota in Singapore
Currently, the company has operated its business in the Singapore market. When operating its business in Singapore, there are some environmental factors that creates good development opport
unity for the company. Political environment is first reason. Over the past decade, the political environment in Singapore is relatively stable (Sim et al, 2003). In this case, Toyota can obtain a good development environment for its business development in Singapore. Besides that, to attract foreign investments, Singapore also has implemented a series of preferential policies for foreign companies (Anwar, 2008). Under this condition, the company can obtain a good development due to good political environment in Singapore. In addition, economic environment in Singapore also creates good condition for the development of Toyota. In recent years, Singapore’s economy has been rapidly development and people’s living standards and income level have been significantly improved. Currently, more and more Singaporeans can afford cars and have strong desire for buying cars. Undoubtedly, good economic environment in Singapore also provides a good opportunity for Toyota to sell its automotive products.
4b Foreign currency risk faced by Toyota
When enterprises operates its business in Singapore, the enterprise have to conduct the translation of funds (Lee & Jang, 2010). However, it should be noticed that the translation of funds will be different at different time due to the fluctuation of exchange rates (Millman, 1990). As a result, enterprise involved in international trade often will face some uncertainties and risks. Currently, Toyot
路肩是什么a operates its business in Singapore. Under this condition, Toyota often will face translation and transaction risks in Singapore when the company translates its funds. To some extent, the foreign currency risk often will lead a certain international enterprise to experience a huge loss. For this, Toyota should conduct effective management of the foreign currency risk in Singapore. To effective manage foreign currency risk in a Singapore, it is strongly recommended that Toyota must keep an eye on the fluctuation of exchange rates in Singapore. Only then can Toyota effectively prevent huge financial loss caused by the foreign currency risk.
5.0 Social-culture factors
5a Hall’s high and lo w context culture
Culture also is an important environmental factors that will impact on internationalization process of an enterprises. According to Muzychenko (2008), cultural differences have major impacts on business operation. Thus, Toyota should well understand cultural differences in its international expansion. According to Hall (1966), national cultures can be divided into high-context and low-context. According to Hall’s high/low context, people in high-context culture often will prefer to communicate or be communicated with a euphemistic way, while people in low-context culture prefer
艾瑞泽3to communicate straightforward and heavily depend on words and message itself (Hall, 1966). For this, Toyota should communicate relevant messages with customers in different cultural contexts. For example, since Singapore is a country with high-context, thus, Toyota should communicate messages with a euphemistic way. By doing so, the company can effectively communicate some messages with an efficient and effective way.
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