Analyzing Toshiba's Market Internationalization Strategies in India

This case study delves into Toshiba's market internationalization strategies in India, examining the company's entry mechanisms, expansion approaches, and overall success in the Indian market. The report highlights Toshiba's background, its various market entry strategies such as acquisitions, foreign direct investments, and mergers, and its significant achievements in India, including the establishment of manufacturing plants and contributions to the power sector. Furthermore, the case study provides a PESTEL analysis to understand the political, economic, social, technological, legal, and environmental factors influencing Toshiba's operations in India. The analysis underscores Toshiba's strategic efforts to navigate the complexities of the Indian market and establish a strong presence through diversified business lines and technological innovations.

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Table of Contents
Executive summary...................................................................................................................................3
Introduction...............................................................................................................................................4
Case study- Toshiba..................................................................................................................................5
Background..............................................................................................................................................5
Toshiba’s entry to India............................................................................................................................6
Acquisition...............................................................................................................................................6
Foreign direct investments......................................................................................................................7
Mergers...................................................................................................................................................8
Toshiba achievements in India.................................................................................................................9
Toshiba’s research and development strategies....................................................................................10
Toshiba’s PESTEL analysis....................................................................................................................11
Political factors......................................................................................................................................11
Economic factors...................................................................................................................................11
Social factors.........................................................................................................................................11
Technological factors.............................................................................................................................12
Legal factors..........................................................................................................................................12
Environmental factors...........................................................................................................................12
Conclusion................................................................................................................................................13
References................................................................................................................................................14

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Executive summary
Market internationalization is an approach that most organizations take strategically to
explore new markets in the foreign lands in order to expand their business production and to
overcome challenges of flooded local markets and to weather competition in the local market.
Such companies employ different strategies to access the new markets and to start operating in
the foreign land with room to further establish their business empires in such economies. This
report explores Toshiba’s entry mechanism in India and how the company has applied different
strategies in the new market to stay upbeat in its operation. This essay further explores the
successes of Toshiba and analyses of factors that may hinder or accelerate its operations in the
foreign market, India.

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Market Internationalization-Toshiba
Introduction
Seeking new markets by multinational companies is a strategy that many companies
employ in their quest to beat local market dormancy created by the flooded market with that
company's goods. Flooding of local market delimits the company from expansion hence no
capital growth something which is not sustainable in business. Lack of an exit channel for a
company's goods will lengthen the sales time and affect the production of subsequent the same
good which in turn would affect the company's financial predictions. Seeking new markets for an
industrial good is not a walk in the park since there are myriads of bottlenecks associated with
the move. These challenges often pose a significant threat to a company's growth strategies as so
far as expansion is concerned. So what then constitutes market globalization? According to
Hosmer (n.d), market globalization is a strategic approach that companies employ to sell and
promote their goods in new markets within and without their borders. Hosmer (n.d) further
asserts that market globalization ensures open and free trading without trading limits. Foreign
companies apply various strategies of entering new markets in order to expand their businesses
and overcome challenges of competition in the local market. Market entry strategy refers to the
approaches that these companies seeking to expand to foreign markets apply in achieving their
goals (Tanner, 2018).

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Case study- Toshiba
Background
Toshiba Corporation is one of Japanese oldest companies in their history which has
evolved over time spanning different technological inventions in a bid to make the world a better
place, not just for Japan but for the world at large. Minato (2018) identifies that Toshiba is one of
the largest companies in Japan whose central business line has been the production of electricity
and electric products which have impacted both the local and international markets worldwide in
one way or another. Toshiba's background dates back to the year 1873 when the then ministry of
engineering which was tasked to modernize Japan through inventions, authorized an inventor
Hisashige Tanaka to come up with a telegraph. According to Toshiba Corporation (2018),
Tanaka built an engineering factory in 1875 in Tokyo and named it Tanaka Seizo-sho, later
known as Tanaka Engineering Works. A series of inventions followed thereafter and spring of
inventors sprouted from the initial dream of developing a telegraphic equipment as was
commissioned by the ministry of engineering.
In 1939, Toshiba was incorporated but formerly known as Tokyo Shibaru Electronic
company after an amalgamation of Shibaru Engineering Works Limited and Tokyo Electronic
Company Limited. The name Toshiba was adopted in 1978 (Britannica.com, n.d). Toshiba
Incorporation's business line has seen tremendous boost and expansion over the years. The
business line in international markets consists of the famous world leading Toshiba notebook
computers, LCDs and semiconductors. Toshiba’s entry into Indian market dates back to fifty
years of service in this market. During an exclusive interview with Managing Director of
Toshiba Private Limited, India company, Okada (2018) asserts that Toshiba has been in

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operation in India for a long time figuring that he entered the Toshiba subsidiary in India way
back in 1983. Currently, the company employs a whopping more than ten thousand (10000)
employees in different role specialization.
Toshiba India deals in various products with a sleek design customized to fit the needs of
the marketplace. Since its inception in India, Toshiba has undertaken massive projects and
ensured deliverables were achieved at the specified project timelines. Take for instance in the
late eighties a time which was marred with political instability, intolerance, scarcity of
infrastructure and inadequacy in funding, Toshiba managed to oversee a thermal project (Anpara
B) to completion and delivered the required deliverables in time (Okada, 2018). To date, Anpara
B thermal plant is still operational even after being instituted in 1994.
Toshiba’s entry to India
Toshiba's influence in the Indian market is largely attributed to a number of foreign
market entry strategies applied by multinational companies of foreign origin. Toshiba among
other Japanese multinational companies is faced with the challenge of demographic and
economic hurdles which force such companies to seek market elsewhere to maintain their
marketing strategies, increase production, overcome ever-increasing competition and to ever
ensure growth. Toshiba has employed different market entry strategies into foreign markets, for
example, India (Tom O'Sullivan, Shimbun, and Kusaka, 2017).
Acquisition
Toshiba has had a number of acquisitions in the recent past in various parts of the world.
India’s prime market has made it easy for the entry of Toshiba. Toshiba has acquired many
companies in India providing different services and products and brands it under its name. most

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recently, Toshiba acquired the largest stake in an Indian water company UEM India. According
to Business Standard (2015), Toshiba has diversified its business entering different business lines
far from what it is known to do. In the acquisition of UEM, a water service company in India,
Toshiba has invested a further 54% from the initial 26% which it had, making it the biggest
owner of this company. Business Standard (2016) notes that UEM upon acquisition by Toshiba
has improved its operations by winning more tenders with companies associated with Toshiba.
Toshiba is also known to have acquired under percentile ownership of United
Technologies South Asia Pacific (PTE) for the provision of air conditioning services. The
acquisition will see Toshiba have a greater stake in the business by having a majority venture of
51%. Business Line (2018) notes that the new joint venture will see United Terminologies South
Asia Pacific renamed Toshiba Carrier Air Conditioning India.
Vijai Electricals also became a casualty of Toshiba's acquisition in an attempt to diversify
its portfolio. Pilla (2013) notes that Toshiba has acquired the transmission and distribution line of
business which is integrated into its own business line. Pilla (2013) further notes that Toshiba
positioned the new acquisition as their main core producer and distributor of electricity. Toshiba
acquired this company because of the concern the company had in entering the energy
transmission and distribution business. Vijai Electricals offered a better service using new
technologies in the transmission and distribution process which Toshiba though to take
advantage of (TelecomEngine, 2014).
Foreign direct investments
Toshiba is said to be keen on direct investment injecting its financial power in
multimillion-dollar projects in India. The Economic Times (2016) identifies that Toshiba is

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investing heavily in the Indian power system through its project dubbed Toshiba JSW Power
Systems Limited (TJPS). The project aims at the thermal power which is eco-friendly and
efficient using coal. This move by Toshiba has enabled the company to have varied avenues of
entry into foreign markets, for instance, India in this case.
Toshiba used different strategies to enter the Indian market. Direct exports of finished
product and services from Toshiba in Japan found their ways into the Indian market through
exportation in the bid to expand its market capture. Toshiba computer notebooks, LCD
televisions and semiconductors are some of the most exported finished products from Toshiba
Japan. India's vibrant economy set a base for increased demand for Toshiba products hence
opening up the trade avenues. The stringent measures that bar international trade between India
and Toshiba were loosened in order to enable Toshiba to operate efficiently through the
provision of services in the power industries, transmission and distribution of electricity in
exchange of free trade approach a move that saw Toshiba products flood the Indian market.
Mergers
Toshiba Corporation is also known to be in the forefront in merging with other local and
international organizations for diversification of its business line and expansion of the business, a
move which has seen the company take center stage in the diversified line of operations. In 2016,
Toshiba entered a merger with India's Maruti Suzuki motors manufacturers alongside Denso.
The move was in a bid for Toshiba to create a new line of products specifically the lithium-ion
battery which is said to have a major contribution to the powering of the electric train in India. In
this joint venture initiative, Toshiba receives the second highest stake of 40% after Suzuki's 50%
and Denso 10% (Thakkar, 2017).

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Toshiba’s exploration of merging businesses also extended to its own private subsidiary
Toshiba India Private Limited where it merged various outlets for electronics such as LCD
televisions and PC distribution to operate under one subsidiary. This move according to Business
Line (2011) was a strategic move to unify the business subsidiaries in order to take advantage of
their digitized platform. This move was also a means of localizing production of electronics and
to bridge the importation gap and subsequently cut any links of importing televisions and PCs to
Indian market but rather to manufacture and target the manufacturing to the consumers’ taste and
preferences. The merging approach implemented on various Toshiba importing outlets in India
also targeted development of new business lines under one roof and to improve the experience of
clients while interacting with Toshiba products. The move saw Toshiba come up with an idea to
improve the 3D experience for the good of the consumers of such products who feel restricted by
the 3D glasses.
Toshiba achievements in India
Toshiba has had tremendous achievement in its entry into the Indian market. Okada
(2018) notes that Toshiba's early entry into the Indian market as foreign direct investors in which
the company built Anpara B thermal plant the period between the late 80s and early 90s. This
technology was built in designs that have seen the project span over long periods of time in
operation without fail. The Anpara B thermal plant is still operational and has not failed a single
day. This is an achievement for the multinational company in India.
Toshiba was awarded by MIPI in 2017 Corporate awards. According to Toshiba.com
(2017), the auspicious MIPI awards recognized the achievements and contribution of Toshiba
company and its subsidiaries. Toshiba became the first Japanese company to ever win the award

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to its sleek design of hardware and software for mobile interfaces. This award also came in
handy with Toshiba’s good record on quality leadership.
According to Inayama (2018), Toshiba’s Chennai plant became the first foreign
Toshiba’s power manufacturing plant outside Japan to ever been commissioned. The Toshiba
owned plant based in India forms the first of its kind and the only plant outside Japan. This is a
world breaking record plant which hosts the world largest turbine balancing tunnel featured by
22 meters in length and 10.6 meters in diameter. This is a great achievement for the Toshiba
company operating in India. Inayama (2018) also notes that Toshiba has delivered in various
instances in its power subsidiary, 1000 MW of steam power in the Anpara B thermal plant
among other notable achievements in the power sector.
Toshiba’s research and development strategies
Toshiba's central focus is to design products which are consumer oriented. To achieve
this, therefore, Toshiba applies a four-step strategy in its research and development strategy; the
social infrastructure, energy, electronic devices, and digital solutions. In social infrastructure,
Toshiba considers the supply of reliable, yet efficient technologies and service provision to its
consumers in all social categories such as transportation, building and construction industries in a
bid to promote safety and security to all.
Toshiba gears towards the provision of efficient energy conventionally and ensures
stability in the supply of this energy without fail. Also in line with the World Health
Organization's requirement on the reduction of carbon emission, Toshiba focuses on producing
low carbon emitting energy which is safe both for the users and the environment at large.
Toshiba's electronic devices come in user-friendly designs focusing on meeting the consumer

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demand without strain. Toshiba is concerned about the use of new cutting-edge technologies in
their bid make life easy through their technical inventions. The world is going digital; Toshiba is
not left out in their digital solutions to real problems that face the consumers. The company seeks
to solve life issues using digital solutions in line with the growing techno-how (Toshiba, 2018).
Toshiba’s PESTEL analysis
Political factors
Toshiba is a company that is not directly affected by the political activities in its field of
operation due to the nature of the business, however, political upheavals and aftermath such as
instability caused by a political process can affect in one way or another the business of the
company. Political instability realized in India in the early 90s affected Toshiba's operations
greatly during the Anpara B power plant project (Haseeb, 2017).
Economic factors
A developing economy such as that of India which realizes a 7% annual growth rate
poses an outward growth opportunity for Toshiba as new markets are formed hence the need to
capture these markets by the provision of products which fit the consumers. Increase in per
capita income is good for an economic growth hence the population will have the purchasing
power, vice versa is true and not good for business.
Social factors
This constitutes the culture, beliefs, and norms of a particular society where Toshiba may
seek to operate. In India, for example, Toshiba is tasked to design policies and act in accordance

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to the culture requirements of the market it serves. As a Japanese company, whilst operating in a
foreign land, Toshiba has to adjust its policies to suit the local market and act as per those
policies.
Technological factors
Continuous competition and market development have pushed multinational companies
like Toshiba to quickly adapt to new technological ways of doing business. Toshiba edges
competition due to innovativeness which puts cutting-edge technology at their disposal.
Legal factors
Legal factors such as copyrights and pirate related issues stand out in whenever big
multinational companies with great competition in the market are mentioned. Toshiba has to
whether such by ensuring that it stays upbeat in realizing tactics which are not good for business
such as theft of copyright and other malpractices which might be involved.
Environmental factors
Environment forms the basic component for every systems' operation. Consumers are
skeptical about their favorite brands being able to satisfy the environmental friendliness. The
brands from Toshiba should, therefore, gear towards socially promoting environmental
preservation and conservation in every means for example production of clean power free of
carbon emissions.