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Case III: LATE MOVER ADVANTAGE?

Questions

1. Why has the ‘late corner’s strategy’ of Toyota failed in China, though it succeeded in India?

2. Why has Toyota failed to capture the Chinese market? Why is it trailing behind its rivals?

1.ans – Toyota failed to get a strong hold in the Chinese market due to poor understanding of the market. The reasons being mainly due to high pricing of the vehicle with which it entered the market in China as Toyota followed the price skimming strategy while entering China. The existing car companies like Volkswagen, Honda, and Hyundai had priced their vehicles keeping in mind the price sensitive customers in China. Toyota entered into a joint venture with First Auto Works Group In Japanies market sold only single brand of cars while on the other hand the Chinese markets sold multiple brand of other car companies also. Besides, China is a large, diverse country. A standardized ad campaign will not do.

The late mover also proved to be a failure for Toyota as the markets were filled with competitors. The existing car companies had a sound knowledge of the market and lived up to the expectation of the Chinese customers.

While entering China Toyota assumed the markets to be similar to the Japanese markets, But Chinese market, in reality, resembled the American market in terms of the sales representatives sold cars on commission bases but in Japan the sales reps would get salary for the job done.

To conclude the in Indian markets the late mover proved to be an advantage to Toyota as the multi- utility segment had no existing players, as TATA sumo was a mini-truck converted into a rugged all-purpose van. Toyota had an upper hand in this multi- utility segment as it provided a new Avatar for the Indian customers and was priced appropriately and offered quality then the competitors.

2ans.
No proper understanding of the market. – the Chinese markets functioned in a different way as compared to Japaniese,...
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