Toyota: Impact of cultural, political and economic factors on globalization

This article discusses the impact of cultural, political and economic factors on globalization, specifically focusing on Toyota's global expansion and its market entrance in the US and UK. It explores the political instability, cultural changes, and economic environment that affect Toyota's business.

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TOPIC: INTERNATIONAL MARKETING
DATE: 9-2-2019

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Toyota: Impact of cultural, political and economic factors on globalization
Since rapid development in the automobile industry has expanded its wings in the global market,
there are several factors that impact due to globalization. Toyota is one of the multinational
enterprises that was established in 1937. Toyota holds a market share of 10% with oversea
manufacturing and domestic marketing. Toyota has sold 8 million in more than 160 countries
every year. The key success element of Toyota is a commitment towards engineering, designing
and unique models for several target market. Due to the elements of success, the organization has
felt the need to work towards globalization while it impacts in a positive and negative context in
the new market. There are several factors that affect the company while focusing on
globalization (Frederic, Agnes & John 2011). The global expansion of Toyota in the US has a
reason to overtake GM General Motors. On expanding the Toyota market in the US, there was an
impact on cultural, political and economic factors.
Political factors
The auto industry has to undergo several rules and policies once it decided to enter in a different
market. Toyota manufactures its automobiles in Japan due to pricing and low strategy. While
there are several other factors that affect the business and considers the supply process in a rapid
manner (Grzeskowiak, Blut & Kenning 2007). Political instability majorly affected Toyota in the
US market due to the supply process and distribution channels. There are several factors such as
increasing taxes, regulations for the automobile sector, etc. US has openly accepted the
distribution channel that has helped Toyota to bring its market in the US. There can be
ownership risk, operating risk and transfer risk that can be identified as severe factors that affect
the new market entrance. Toyota had a medium political risk while entering in the UK market.
Cultural factors
There is a significant influence that involves the marketing strategy of Toyota in the US market.
Toyota has focused its brand with quality assurance and brand commitment strategies. To create
a strong connection in the market, Toyota has focused on brand and its recognition while
advertising and attracting the audience. There are cultural changes that can certainly affect the
business (Teignmouth 2010). Toyota has gained its importance in the UK market as the audience
were ready to accept the new product in the automobile market. Cultural factors at times

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unfavorable as it includes the attitude of people that can be negative or positive, work and
lifestyle, caste and religion, etc.
Economic factors
The economic environment includes employment rate, interest rates, inflation, per capita income,
etc. Entering the US market, Toyota did not face a severe situation as it has an unorthodox
manufacturing system. Due to the low production cost, Toyota has developed its market with
new technologies and have built the market in the US. The economic factors had a positive
impact while entering in the market. The major factors that reflect the market include industrial
structure and income distribution of the country (Winch 2014).

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References
Frederic P M, Agnes F V & John M, 2011, Pest Analysis, VDM Publishing.
Grzeskowiak, S, Blut, M & Kenning, P, 2007, Market Orientation in Vertical Business
Networks, Journal of Marketing Channels, vol. 14, pp. 31-50.
https://doi.org/10.1300/J049v14n03_03
Winch, G. (2014) Strategic Business and Network Positioning for Internationalisation. Service
Industries Journal, vol. 34, pp. 715-728. https://doi.org/10.1080/02642069.2014.886196
Teignmouth S, T, (2010). The Pest, BiblioBazaar, USA