International Business Analysis: Toyota Motors' Operations in India and Market Entry Strategies

The given data provides an overview of an international business analysis. It includes a table of contents, an introduction discussing the growth opportunities in Asian economies, a literature review on India's business environment, a company analysis focusing on Toyota Motors' operations in India, and an analysis and discussion section. The report emphasizes Toyota's joint venture entry mode, product offerings, market share, and cultural differences influencing its operations. The analysis highlights the challenges and advantages of joint ventures while noting Toyota's commitment to customer satisfaction.

Running head: INTERNATIONAL BUSINESS ANALYSIS
INTERNATIONAL BUSINESS ANALYSIS
Name of the Student
Name of the University
Author Note

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Table of Contents
1. Introduction................................................................................................................2
2. Literature review........................................................................................................2
3. Company analysis......................................................................................................5
4. Analysis and discussion.............................................................................................6
5. Conclusion and implication........................................................................................9
References....................................................................................................................10

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1. Introduction
As discussed by Chetty, Ojala and Leppäaho (2015), the developments and growth
that has been seen in the economies of Asia have attracted many different global
organizations from all over the world. The dynamic nature of the economy has been a major
reason behind the growth opportunities that are provided to global organizations by emerging
economies in Asia (Cuypers, Wilden & Tang, 2018). The organizations have been able to
improve the profitability levels and revenues in the industry with the support that is provided
by the dynamic economies and huge customer base as well. The multinational or global
organizations are also able to increase their presence in different parts of the world with the
help of effective support offered by dynamic external environment based conditions (De
Villa, Rajwani & Lawton, 2015).
The report will be based on the analysis of an organization that has entered an
emerging economy in Asia in order to improve the levels of revenues and to increase their
presence on the industry as well. The multinational organization that has been taken into
consideration for this analysis is Toyota Motors (Gabrielsson, Gabrielsson & Sinha, 2017).
The home country of Toyota Motors is Japan and the host country that will be analysed in
this case is India. The analysis will be mainly based on the ways by which Toyota Motors has
stared its operations in India and the revenues that have been earned by the organization as
well.
2. Literature review
As discussed by Hohenthal, Johanson and Johanson (2015), the business environment
that has been developed in India is based on the operations of different organizations after the
independence period. Four years after the independence of the country, India had been able to
develop effective levels of foreign reserves that were considered to be largest in the world.

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Around 4.6 % of the total GDP of the world had been generated by the successful operations
of different organizations in India. India was successful in developing a successful position in
global economy with the help of the dynamic business environment that had been developed
in the country (Hollender, Zapkau & Schwens, 2015).
According to Hollender, Zapkau and Schwens (2017), the competitive advantage over
the other countries had however not been effectively realised by India in the last few years.
India has proved to become the fastest growing economy in the world and has been highly
successful in the operations in attracting high levels of foreign investment from the
organizations that operate in the developed countries. The organizations that are a part of
developed countries have been able to increase their presence by lowering the costs based on
production. India has been able to provide major levels of opportunities based on growth to
the organizations in order to maintain the levels of their revenues and profitability (Holtgrave
& Onay, 2017).
Toyota Corporation had started its operations in India in the year 1999. The market
entry mode that had been implemented by Toyota in India is termed as Joint venture. The
organization had entered the country in the year 1999. The organization has recently
completed twenty years in the country with the support that has been provided by its partner
Kirloskar Motors. The company has also reached the market of 1million unit sales recently
with the help of proper sales of different types of products are services (Toyotabharat.com.,
2019). The different types of products that are offered by Toyota in India include, Innova
Crysta Fortuner, Camry Hybrid, Corolla Altis, Etios Liva, Land Cruiser. The organization has
been successful in catering to the needs of different segments of customers with the help of
diverse product line up. Toyota has been improving the standards based on the terms of
safety, quality, performance, comfort and the levels of fuel efficiency as well
(Toyotabharat.com., 2019).

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According to Karakaya and Stahl (2015), the market entry mode that had been
implemented by Toyota in order to enter India is joint venture. Joint venture can be defined
as the business arrangement that is based on agreement that is made between two or more
than two parties. The development of joint venture is not similar to a partnership agreement,
however, the operations of the organizations that are a part of the agreement. The process of
joint venture has many advantages and disadvantages that are offered to the consumers (Jalal,
2018).
Advantages of joint ventures –
The opportunities that are provided to the organizations which are a part of the
joint ventures are considered to be important for increasing the levels of
expertise and insights.
The levels of resources that have been gained by the organization are
considered to be an important factor that is able to affect the proper
development of joint ventures (Lai, Lin & Chen, 2017).
A joint venture can be a temporary agreement and the organizations can also
change the terms and conditions whenever it is required.
The parties or organizations that have developed the agreements are able to
share the costs and risks that are related to their operations in the business
environment (Laufs, Bembom & Schwens, 2016).
The levels of flexibility that exist in development of effective joint ventures
are high and the organizations are able to maintain the operations in a positive
manner.
The chances based on success of the organizations that are a part of joint
venture agreements are quite high in comparison to the other types of market
entry mode. This is mainly based on requirement of less investments in order

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to develop the operations in a new country or market area (Li, Qian & Yao,
2015).
The organizations can build effective relationships with the companies which
are already operating in the host country.
The organizations can save money with the help of proper sharing of the
marketing and advertising based costs required for increasing awareness of the
products (Nordman & Tolstoy, 2016).
Disadvantages of joint venture –
The objectives based on development of joint ventures are not always
considered to be clear.
The levels of flexibility of organizational operations can reduce due to
agreements that are developed with other organizations (Powell, 2019).
The equal involvement of two organizations is not possible with the help of
joint ventures. This can cause issues in the operations of the two modern
organizations.
Imbalance levels between the organizations can cause major levels of issues
between the organizations that are operating in the country (Sartor &
Beamish, 2018).
The cultural differences that exist between two countries can be a major cause
based on lack of effective levels of revenues that can be earned by the two
organizations. The organizational environment can also be affected in a
negative manner due to policies that are a part of the joint venture agreements
(Schu & Morschett, 2017).

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Toyota Motors has also faced some major issues based on the ways by which the
organization has aimed at maintaining its position in the automobile industry. The company
had implemented this strategy in order to reduce the risks that could have been faced due to
its entry in the country (Sousa & Tan, 2015).
3. Company analysis
The operations of Toyota Motors in India had been influenced in a huge manner by
the cultural differences that exist between the two countries. Changes in the top management
of Toyota are also based on the needs and demands of the customers in automobile industry.
The Asia Pacific based operations of Toyota Motors were also entirely based on the role that
had been played by the top management of the organization (Stoian, Rialp & Dimitratos,
2017). Toyota Motor Corporations is highly committed to the development of a sustainable
future. The vision that has been developed by the organization in India with the help of
effective joint venture with Kirloskar Motors is also related to the commitment which is
followed in different parts of the world. The “Customer First Philosophy” has been
implemented by the organization in order to maintain its operations in the competitive
automobile industry (Surdu & Mellahi, 2016).
The company had provided major levels of importance to the ways by which demands
and needs of the Indian customers can be fulfilled with the help of products and services that
are offered to them. Toyota had also launched a program named “Toyota Connect India” in
the year 2017 in order to improve the relationships that have been developed with the
customers (Surdu et al., 2017). Toyota Motors offers different types of products that include,
Toyota Fortuner, Toyota Innova Crysta, Toyota Platinum Etios, Toyota Corolla Altis, Toyota
Camry 2019, Toyota Land Cruiser, Toyota Etios Liva, Toyota Prius, Toyota Etios Cross. The

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products have been able to cater to the needs of customers who belong to different levels and
groups (Tulung, 2017).
Toyota Motors has been able to gain more than 30% share in the Japanese automobile
market in comparison to its competitors in the industry including, Honda, Suzuki, Daihatsu
and Nissan. The company has gained a leadership position in the automobile industry of
Japan has maintained its position in the domestic automobile industry for many years (Xie &
Li, 2017). On the other hand, Toyota Motors has not been successful in gaining a huge share
in the Indian automobile industry (Toyotabharat.com., 2019). The share that has been gained
by Toyota Motors in the industry is around 5.27%, which is quite low in comparison to its
major competitor Suzuki that has been able to gain around 49.98% shares in the market. The
position of Toyota Motors in India is quite different in comparison to the position that had
been held by the company in its home country Japan (Surdu & Mellahi, 2016). The
organization has not been able to develop an effective position in the automobile industry of
India. The shares in the automobile industry of India are low in comparison to that of Japan
that is the home country of Toyota Motors.
4. Analysis and discussion
Toyota had entered the Indian automobile market in the year 1999 with help of a joint
venture with a local organization named Kirloskar Motors. The subsidiary of Toyota Motors
had been name as the Toyota Kirloskar Motor Pvt. Ltd. Kirloskar Motors has been provided
with the responsibility of manufacturing and the sales of the cars that are offered by Toyota in
the automobile industry. The joint venture had proved to be quite effective for the ways by
which Toyota Motors has developed its position in the automobile industry of India
(Nordman & Tolstoy, 2016).

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The organization has been able to increase the levels of presence in an emerging
economy like India. The journey of Toyota had started in the industry with the launch of
Toyota Qualis in the year 1999. The launch of many other car models of Toyota over the
years of its operations has been able to provide major growth based opportunities to the
organization. The joint venture had played a major role in the ways by which Toyota was
able to understand the culture and values of people in India (Lai, Lin & Chen, 2017). The
organization has offered convenience and safety to the customers with the help of the app that
has been launched in order to communicate and develop an effective relationship. The
cultural differences that exist between the countries have been able to affect the ways by
which Toyota has been able to offer the products to customers (Hollender, Zapkau &
Schwens, 2015).
The cultural differences that exist between the two countries can be analysed in a
detailed manner with the help of Hofstede’s cultural differences.
Power distance – The power distance based score that has been gained by India is 77
that is able to depict that the top-down or hierarchical structure is followed in the
organizations of the country. The score based on power distance that has been gained by
Japan is 54 that is able to depict the low presence of hierarchies within the organizations
(Karakaya & Stahl, 2015).
Individualism – The individualism based score of India is 48 which is considered to
be an indicator of both the collectivist and individualist traits of people who are a part of the
society. Japan has gained a score of the 46 in the third dimension and has been able to depict
a collectivist society (Hofstede-insights.com. 2019).
Masculinity – The masculinity score that has been gained by India is 56 which is able
to depict the high levels of masculinity traits of the society. The score of Japan in this

9INTERNATIONAL BUSINESS ANALYSIS
dimension is 95 and is considered to be a highly masculine society (Hofstede-insights.com.
2019).
Uncertainty avoidance – The levels of uncertainty avoidance that exist in India are
low as the score in this dimension is 40. The uncertainty avoidance score of Japan is 92 as the
country always aims to reduce the levels of uncertainty that exist in the environment
(Karakaya & Stahl, 2015).
Long term orientation – The score based on long term orientation of India is 51 and
the people in this country prefer to develop long term based plans that are a part of their lives.
The long term orientation score of Japan is 88 and the country is considered to be the highest
level of uncertainty avoidance based society (Hofstede-insights.com. 2019).
Indulgence – The score that has been received by India in the sixth dimension is 26
and this is able to depict the culture based on restraint. The indulgence based score of Japan
on the other hand is 42 which is considered to be quite low in case of levels of restraints that
exist (Lai, Lin & Chen, 2017).
The cultural differences that exist between the two countries has a major impact on
the ways by which operations of Toyota Motors can be developed. The joint venture that has
been developed between the two countries has a major impact on the understanding that is
provided to the organization based on cultural factors in the country. The understanding
based on Indian culture is considered to be highly important for the development of products
and services that are able to fulfil the needs and demands of the consumers (Stoian, Rialp &
Dimitratos, 2017). The entry mode has been able to provide major opportunities to the
organization based on the ways by which the operations can be developed in the industry.
The automobile industry is highly competitive in nature and this is considered to be a major
factor that is related to the proper development of the operations of Toyota Motors. Kirloskar

10INTERNATIONAL BUSINESS ANALYSIS
Motors has been able to provide major levels of information based on the ways by which
Toyota can develop the products with respect to the demands and needs of the consumers
(Gabrielsson, Gabrielsson & Sinha, 2017).
Toyota had faced major levels of issues based on the levels of unintended acceleration
that had occurred in the cars. The sudden unintended acceleration or SUA mainly occurs
when the cars of the organization start accelerating from the stationary position without the
attention of the drivers. This had been able to cause a major issue in the reputation that had
been gained Toyota with the help of its operations (Stoian, Rialp & Dimitratos, 2017). The
lack of effective reputation had been able to reduce the revenues that have been gained by the
organization in the highly competitive automobile industry of India.
The partner of the organization had however not been able to provide any support to
the organization in order to maintain its operations. The joint venture of Toyota Motors with
Kirloskar Motors had been able to provide major levels of opportunities to the organization
based on the ways by which the production facilities can be developed (Gabrielsson,
Gabrielsson & Sinha, 2017). The major disadvantage of the joint venture was based on the
ways by which cultural differences can exist within the organization and its operations. The
entry mode that had been used by Toyota in the industry is considered to be quite effective
for the operations of the organization. However, some major issues had also been faced by
the organization in order to maintain the levels of revenues and profitability that had been
gained in the industry (Schu & Morschett, 2017).
5. Conclusion and implication
The report can be concluded by stating that Toyota Motors had been able to develop a
position in the automobile industry of India with the help of effective market entry mode that
had been implemented. The joint venture with the local organization had been able to provide

11INTERNATIONAL BUSINESS ANALYSIS
major growth opportunities to the organization in order to increase its presence in the
industry. The shares that have been developed by Toyota Motors in the industry are not
considered to be quite high in comparison to the position that it holds in the domestic market.
On the other hand, some major issues have also been faced by the organization with respect
to the joint venture that had been formed. The requirement of capital based on development
of operations of Toyota had been quite low and had been able to provide major opportunities
to the organization in order to continue the operations that have been developed in India. The
theories based on Hofstede’s analysis has been able to provide major insights based on the
cultural differences that exist between the two countries. The cultural differences have been
able to play a major role in the ways by which the employees are able to provide the best
levels of services. The joint venture with Kirloskar Motors had been able to play a major role
in the understanding that has been provided to Toyota Motors based on cultural differences.

12INTERNATIONAL BUSINESS ANALYSIS
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