Market Entry Mode and Staffing of Toyota - Coursework Example

Market Entry Mode and Staffing Market Entry Mode Efficient strategic management helps company battle successfully in foreign marketsand is an all-inclusive model for attaining a firm’s primary objective. Development of a strategy helps a company compete in multiple countries and needs to be updated constantly to be at par with the changing market trends in the different regions (Harrigan, 1986). In major companies like Toyota International Company, the formulation of the international market strategy is always handled by the top management. Before formulation of a market entry strategy, the management needs to answer a few questions such as; what products does the company want to sell to the foreign markets, where does the company want to sell its products, how and where will the company get the necessary resources for producing the products, how will the company compete with its competitors and what are the key success factors that the company need to consider (Harrigan, 1986). Developing an international strategy is more complicated as the company will deal with the different government systems, cultures and currencies (Harbison, 1998). In Toyota company the most effective and efficient market entry strategy is the strategic alliance. This refers to a strategy where a company comes into agreement with another company with the objective of creating new products for example the joint ventures, shared research and minority equity participation. Toyota will be able to benefit a lot from this strategy. Strategic alliance may still be used to connote the joint ventures (Harbison, 1998). In making a thorough evaluation of the various entry strategies, Toyota Company should consider a strategic alliance simply due to the consideration of the advantages that accrue when a company chooses to use this kind of strategy. Toyota Company, though it will face various changes in the demand for its products and economies, it will be able to respond to these changes by changing the processes of production (Harbison, 1998). Toyota will benefit by a great deal through employing the strategic alliance entry method since it is a new product that is brought into the market. Since Toyota Company does not understand the different markets in the different countries, it will have to come to an agreement with another company to form a strategic alliance through a joint venture. This will make the company learn a lot from the different countries and the different ideas can be used to improve on its productivity (Harrigan, 1986). Toyota will have to consider a company that deals with technological production that is nearly similar to them. This is so because the company will need to have been in the market for quite a while in that country and will have understood the market changes in the country. Though this will be costly for Toyota since it will have to put up more technological infrastructure to aid and improve in the production of the new product, it will bring more rewards. There are several benefits that Toyota will amass from this type of strategy. This venture will provide strengths to Toyota Company by creating a vertical connection to reduce reliance on interlopers. This will also improve on its access to other foreign technologies and gain economies of scale. Toyota Company will also benefit through diversification and integration (Wallace, 2004). This partnership will aid in attaining internal benefits such as risk sharing, access to other foreign resources, better production and information acquisition and will help reduce the employee turnover (Harrigan, 1986). This venture may involve uncertainties, and as we all know, no company is always willing to venture into such businesses ventures by risking their financial assets (Harrigan, 1986). Toyota Company will also benefit on its competitiveness. This will be achieved through wielding control over the ostensible market and blocking the competitor moves and schemes. Toyota company will also benefit strategically i.e. it will create and exploit the synergy advantage and gain other technological knowhow in technology transfer and will expand its production internationally (Harrigan, 1986). This joint venture will also aid Toyota Company overcome protectionism in the different countries and markets. This is because some of the markets tend to favor the domestic firms than other foreign companies (Wallace, 2004). Though most of the businesses that enter into strategic ventures have deficiency of resources, this is not the case for Toyota as the main aim of going into the partnership with a foreign company will be to understand the different markets. This will greatly cost Toyota as it has to set up technological infrastructure (Wallace, 2004). Toyota Company will have to look for a compatible company in the foreign country. There are various other factors that will need to be considered when coming up with the partnership agreement. Toyota Company will have to consider their major objective which is to bring its new product into the market. Toyota Company will also have to consider the other company’s willingness and motivation to entering into the alliance evaluate the importance of the company in the alliance (Geringer, 1988). Toyota company will also have to measure and weigh the extent to which it would go with the aid of the partnership and the extent it will move without the partnership. This evaluation will also consider the costs that are involved in the alliance (Geringer, 1988). Toyota Company will also have to consider the opportunities that it will forego in joining the company or the opportunities that the other company will forego by the commitments that will be made in the alliance. Lastly Toyota Company will also have to consider the benefits that each company will bring to the table. Toyota Company will need to evaluate this as it will invest a lot in the other company and will need to know the benefits to acquire from such a strategy to form a partnership with a foreign company (Geringer, 1988). In management of the overseas venture, Toyota Company will have to have supervisors and people who will control the inventory in that other country and other representatives who will be observing and monitoring the market to detect any changes. This will only be successful by employing competent personnel in the different countries. Toyota Company will also need to come up a technological team that is very conversant with the new item that has been brought into the market to aid in the personal selling and exhibitions. This could be necessary as the new product would need demonstrations and illustrations. Toyota Company will also need to train other personnel in the other country on the new products and the required marketing strategy if need be (Wallace, 2004). In the beginning, Toyota will have to employ direct exporting to capitalize on the economies of scale. This is because the first consignment will be small in quantity as large quantities of exports may prompt protectionism. This direct exporting will also help Toyota acquire responses from the foreign target market and gain control over the market. After some time Toyota will need to export its products to the other foreign venture through the freight forwarders. This is because the company will receive different orders from the other partner venture in the foreign country (Wallace, 2004). The management will vary in regard to the ownership of the venture. Since Toyota will have contributed the most resources into the business, it will make more strategic and operational decisions of the partnership (Wallace, 2004). These forwarders always contact a carrier to assist in the movement of the goods between the different countries. These freight forwarders will offer Toyota, the exporting company, the clearance of the various documents that will are needed in the freight such as the bill of lading and the export declaration. This will have saved Toyota Company the long bureaucratic procedures involved in the processing of export and import grants though it is done in a paperless environment in this modernized and globalised world. Staffing In distribution of its products, Toyota will have to come up with a good and effective distribution mix that will enable it get to the whole market available in the foreign country. This distribution decisions in the company are very vital and the company should consider the one that will be cost effective and the one that will give high yields (Dent, 2011). Toyota Company will need to evaluate the locals, expatriates and Third country nationals to determine the most effective distribution channel. The third country national may tend to be costly as there will be shipment costs that will be involved in the process of bringing them to the other foreign country. In order to penetrate the foreign market properly, Toyota Company will need to get distributors who are well conversant with the foreign environment in terms of the market structure and the consumer’s or the customer’s purchasing behaviors (Dent, 2011). The major aim of distribution is to reach a bigger market and this can only be attained if the company chooses to embrace an approach that will involve personnel who are well aware of the market. Distribution and sales of the products can only be a success if the company can get people who can be relied on by the nationals in the foreign country (Dent, 2011).The nationals will need to purchase products they are very sure of and using the locals in that area will increase on the trust and the reliance of the products by the other people in that country. Toyota Company will have to employ a distribution scheme that will make use of the locals in that given country. This is because the locals are very familiar with the national language or any other language used in that foreign country and this will boost the demonstration and the illustration to the people as they will explain in a simple language that can be understood by the other locals (Dent, 2011). Toyota Company may also need to employ the use of the expatriates. These expatriates who are the people, who belong to a different origin apart from the one of that country or society, can be used to improve on the product distribution. These people live in that country temporarily or permanently. There are various factors to consider before using the expatriates like how long they have stayed in that country and how much they have known about the people in that country. The expatriates may be used in determining the target market as they have familiarized themselves with the foreign environment. A permanent expatriate may be used in that case (Dent, 2011). The nationals in that country may find it hard to believe the temporary expatriates as they are not familiar with them. Trust in this case will mater since the distributor personnel represent the company in that given market. The same case applies to the third country nationals. The people in that country may find it hard to trust them and the third party nationals may fail to understand the market of that given country and its trends. Toyota Company should ensure that there are different roles for the different distribution agents. These agents should have different roles and functions. Since product distribution is a part of marketing, these agents should aid in the personal selling apart from distributing to the different markets. Therefore there should be different teams that should have the different roles such as the personal selling and distribution to the various retailers (Dent, 2011). Toyota Company, together with the other partner company should also segment the market geographically to be able to reach the different markets and there should be different product distribution groups that should be assigned the different regions and areas in the country. This will ensure that the different regions are covered and boost customer relations and services within the whole region (Dent, 2011). References Geringer, J.M. 1988. Joint Venture Partner Selection, Quorum Books Harbison, J.R., and P. Pekar, Jr.1998. A Practical Guide to Alliances: Leapfrogging the Learning Curve. Booz-Allen and Hamilton, Inc. Wallace, R. L. 2004. Strategic Partnerships: An Entrepreneurs Guide to Joint Ventures and Alliances. Dearborn Trade Publishers Dent Julian, 2011. Distribution Channels: Understanding and Managing Channels to market. Kogan Page Publishers Harrigan R. Kathryn, 1986. Managing for Joint Venture Success. Lexington Books. Read More