Modes of Entry into Japan
Determining the mode of entry is a long-term solution, which is not easy to change. So, the choice of the appropriate mode among the existing number of different alternatives should be approached with the utmost care and attention.
The easiest mode of entry into a foreign market is to export. Irregular export is a passive level of involvement, when the company exports its surplus and sells products to local wholesalers from time to time, representing foreign companies. Active export occurs in cases where the company sets the goal to expand its export operations in a particular market. In both cases, the company manufactures all its products in its country. Out of modes of entry export requires making minimal changes to the product portfolio of the company, its structure, capital expenditures and program activity (Friesner, 2014).
Another common area of access to foreign markets is combining efforts with country- business partner in order to create production and marketing capacity, for example, to organize a joint venture. Thus, a foreign investor can buy a share in a local company. Also, a local firm can buy a share in an existing local company of the foreign companies. There is an alternative for both parties, which can work together to create a completely new venture.
In a case of Japan, the country is very progressive in the car manufacturing, and export of cars to Japan cannot be considered as the prior mode of entry. The joint venture is quite risky, because partners may differ in the views on investment, marketing and other business principles. However, despite this fact the car company is recommended to organize joint venture in the Japanese car market. For example, in 2012 Toyota Motor Corporation (TMC) decided to establish winning strategic long-term collaboration with BMW Group. They have agreed on the direction of the joint improvement of a fuel cell system, design and mechanisms for a sports automobile and mutual R&D of lightweight know-how (Tutor, 2013).
Cross-Cultural Factors relevant to Japanese Car Industry
At first it should be noted that a characteristic feature of the Japanese economy is the practice of clustering. It means the establishment of inter-enterprise sustainable long-term relationships, on which the whole system of business relations in the country is based. Such associations of banks, large industrial companies with medium and small firms-suppliers are called Keiretsu. This is a very effective form of business integration. The core of uniting the companies within the keiretsu is industrial relations, focused on the needs of the parent company (Kwintessential). Toyota Group is a group of companies that use Toyota brand. In contrast to most of the Japanese keiretsu, the leading company in the group is not a bank, but the Toyota Motor Corporation. This is one of the most striking examples of tight organization of vertical type, based on a high degree of dependence of subcontracting companies from the parent company.
One of the principles of Japanese management is total quality control (TQC), using which, you first have focused on the management of the quality assurance process. Subsequently, it was developed into a system covering all aspects of management (Kawar, 2012). The task of senior management is to analyze the current state of the market and to set priorities for policy to improve the quality, cost and delivery. Employees must understand the thinking and activities of Toyota, and then engage in a process of continuous improvement and management of the company.
Japan is characterized by a mixture of bureaucratic and democratic systems, and the special value belongs to the cooperation and equality. Due to the fact that “flexible collectivism” and “mutually conditioned individualism” coexist in Japanese culture, it managed to succeed in the organization of mass society and extremely maintain a high level of internal cultural stability. At the same time as the Japanese culture is based on a combination of derivatives, rather than pure types of individualism and collectivism, its internal resistance is not effective enough to withstand the pressure from the outside.
References
Friesner, T. (2014). Modes of Entry into International Markets (Place). Retrieved 8 May, 2014 from http://www.marketingteacher.com/modes-of-entry-into-international-markets-place/
Kawar, T. I. (2012). Cross-cultural Differences in Management, International Journal of Business and Social Science, 3(6), p. 105-111.
Kwintessential (n.d.). Doing Business in Japan. Retrieved from http://www.kwintessential.co.uk/etiquette/doing-business-japan.html
