Toyota's Modes of Entry Into the Us and China

TOYOTA’S MODES OF ENTRY INTO THE US AND CHINA

1.0 INTRODUCTION

Toyota is one of the well known global companies producing vehicles in six continents and serving them to 160 markets all around the world. Due to the huge variety of markets, it is obvious that Toyota has been exposed to apply a range of entry modes and strategies around the world. In that sense, it constitutes a consequential example to understand the essence of different entry modes into various countries.

The aim of this report is to carry out an in depth analysis into the Toyota Motor Company whose core business lies in the automotive industry. When carrying out the objective, first of all a detailed analysis of Toyota’s entry modes in China and in the US will be undertaken. The main reason on focusing on these two countries is that they offer two distinctive frameworks in terms of economic, legal, cultural and political structure.

Both US and China offer huge markets for multinationals, however the former constitutes an industrialized economy while the latter, a transitional economy. Such differences affected the way that Toyota formed its entry strategies in those countries. After analyzing each country with respect to Toyota’s entry strategies, a critical comparison will be followed. To finalize the argument a conclusion will be drawn evaluating how successful Toyota has been in entering the US and China.

2.0 TOYOTA’S ENTRY INTO US

2.1 Why multinationals enter the US?

In order to comprehend Toyota’s entrance in to US car market, first and foremost it is needed to look at why US is attractive to multinationals in a general sense. US offer “large and wealthy domestic markets, a dynamic and stable economy, a favorable political environment and openness” (Hill, 2007, p.241) for multinationals and these features reduce the risk and cost of the investments made and let companies to guarantee their estimated returns. The existence of well established financial institutions in US can...