International Business

Topics: Automobile, Automobile industry in China, Japan Pages: 10 (2653 words) Published: March 15, 2013
The Market entry strategy of Toyota in Chinese urban market

Executive Summary

To make products enter into the the target market smoothly, suitable entrance mode should be choosen. Products of Toyota has enter into Chinese market for many years, for example, Camry, Lexus and Prius. It can be perceived as holding the advantage in Chinese market.

At the same time, the Chinese automobile market keeps growing in recent years and the urban market has huge potential. The political and legal environment, economic environment, social environment, technological environment provide favorable conditions for the development of auto market. The natural environment makes low-emission cars become the future development trend.

To launch its low-emission cars in urban market of China successfully, Toyota could take the low price strategy. Advertising, promotion and public relation activities can be adopted by the organization. Besides, the entry modes like joint ventures and merger and acquisition are appropriate for this market. To maintain the operational benefits of Toyota, lean production mode is still applicable in its target.

Table of content
Executive Summary2
Table of content3
1.0 Introduction4
2.0 Competition position of Toyota4
3.0 Market intelligence of the Chinese automobile market5
4.0 Business environment analysis of the Chinese auto market6 4.1 Political and legal environment6
4.2 Economic environment7
4.3 Social environment8
4.4 Technological environment8
4.5 Natural environment9
5.0 Market entry strategy of Toyota9
5.1 Positioning9
5.2 Price10
5.3 Promotion10
5.4 Human resource11
5.5 Strategic objectives11
5.6 Entry mode12
5.7 Operation12
6.0 Conclusion13

1.0 Introduction
In order to enter the target market smoothly, it is important for an enterprise to choose suitable market entry strategies. Toyota has entered many countries successfully across the world, such as America. To gain sustainable growth, it needs to enter into new market segments. This report chooses Chinese urban areas as the target market of Toyota. It firstly introduces the market intelligence of the Chinese market. The following part is business environment analysis. Then it gives a proposal for the market entry strategy, including market positioning, price and promotion etc. Entrance mode, operation and human resource policies are also explained. The last part is conclusion.

2.0 Competition position of Toyota
Competitive position refers to the position of an enterprise in the target market and it is an important basis for strategic planning. Toyota has entered Chinese market for many years and its market share grows continually. Its products like Camry, Lexus and Prius are already popular in Chinese market (Buckley & Horn, 2009). In recent years, Toyota has become the top automobile enterprise. The following table is its sales in Chinese market. In 2011, its market share in the global automotive market is 10% while that in China is only 4.3%. Toyota has an ascendant position in China. Table 1: Sales of Toyota in Chinese market

| |2007 |2008 |2009 |2010 |2011 | |sales (ten thousand)|49.9 |58.6 |70.9 |84.6 |89.5 |

(Data source: Toyota, 2011)

3.0 Market intelligence of the Chinese automobile market
Along with its economic growth, the Chinese automobile market develops rapidly in recent years. Since China joined the World Trade Organization (WTO) in 2001, Chinese automobile market capacity has expanded a lot (, 2012). In 2009, China overtook Japan and America and became the largest car market in the world. In the next few years, Chinese auto sales kept growing. The...
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