Exporting and importing promotes the development and growth of national economies. The business also indicates that nations are maintaining good relationships and is proof of interdependence where nations get a chance of obtaining products that they do not produce locally. Since not all countries have the required skills and resources to create certain goods and services, imports and exports are necessary although some states may impose barriers to imports which is a function of international trade with the aim of promoting and protecting local industries. The producing nation adds to their gross national product through exports. While importing helps a state to reduce the costs of production, exporting increases the sales potential and increase profits to the exporting country. Shipping is not only crucial to the producing nation but also very helpful to the consumer who could not get the product locally. However, globalization has made it increasingly efficient for organizations to venture into startups in foreign countries thereby reducing the logistical complications associated with importation and exportation.
The focus of this assignment is an expansion of Japan-based Toyota Company to Jamaica and how to make this business a success. Japan is a recognized nation globally for producing and exporting quality vehicles, and this has given her an advantage over other car manufacturing countries. Expanding its business to Jamaica will increase its sales potential and profits altogether, and this requires the maintenance of good relations between the two nations. This research will concentrate on identifying expansion opportunities of Toyota brand in Jamaica, strategies of dealing with international competitors, analyzing and assessing business environment, summarizing a business proposal and an analysis of the prospects of the business.
Identification of Opportunities
Jamaica poses a market gap for motors that Toyota should strive to fill. The first approach to entry to the new market would be to carry extensive internal analysis and external market research to determine the prevailing market conditions to come up with policies, strategies, and models that would satisfy the target market. Through this, Toyota will consider the availability of the factors of production required in making of the requested cars. Factors of production will include labor, land, capital, and know-how which will facilitate the making of the vehicles. Considerations will entail how effective these factors will support the manufacture and sale of Toyota motors in Jamaica. A majority of the cars used in Jamaica are imported, and Toyota Company can establish the possibility of starting a manufacturing firm in the country. Through market research, it would be possible to identify whether the company can meet the demands of the Jamaican population. Toyota Company has a wealth of experiences in international trade having been involved with operations on a global scale.
The company has to establish the supporting industries and infrastructure in the automotive sector in Jamaica that they can collaborate with before deciding the brand to introduce in the new market. They include industries which produce various parts of a vehicle like the engines, body, and wheels since they make an essential part of making the car. Shipment services are part of the support industry through which unavailable parts will be exported from Japan to Jamaica. The conditions for shipments and the requirements should be on focus to help Toyota prepare to import anything when required to satisfy the customers in Jamaica. The costs of materials from the support industry should be affordable and efficient to use.
The new foreign firms should follow the requirements needed by the Jamaican government to start the business. The provisions would include proper licensing, taxation and compliance with the set rules of the nation. The firms should follow the guidelines for their formation, running and the conditions that can lead to dissolution and termination. A firm considering to start in a foreign country should weigh options between competing locally or venturing in another country. If the local competition is so stiff, a firm can opt to open a branch in another state and compete with the companies in that nation.
International Competition
Toyota should identify competitors like Nissan or Mitsubishi to be able to come up with strategies that would guarantee a competitive advantage. The pricing of the competitors should be analyzed to help Toyota know how to set its prices that would be within the range of the competitors. Knowing the strength of the rivals will help in understanding what Toyota should maximize on and make the competitors’ weaknesses as its main strengths. The company should know the expectations of her customers and achieve to meet them in the most required form. Customers expect nothing but the best, and therefore, every company will strive to impress the buyers, and this will leave the buyer with a pool of quality products to choose. The requirements of a customer form the bases on which a firm should focus on while producing a certain product. Meeting the customers’ expectations will be an indicator of customer loyalty (Panwar, Kumar " Ray 2016).
Product differentiation will place Toyota Company ahead of her competitors by adding desirable features to the Toyota cars, better designs, and unique colors. The company should also produce automobiles that are unique from her competitors in quality, functional characteristics, promotional methods and availability in reaching customers to their locations. The aim of differentiation is the improvement in the performance of a product by reducing the directness of competition. According to Belleflamme and Peitz (2012), well-strategized product differentiation will move your product from the competition based on pricing to competition based on non-price factors. Toyota company should consider stepping out in marketing to reach her customers better than before. It will involve moving to the digital era of communicating to the customers as a new strategy rather than a mere channel of marketing. Prioritizing and brainstorming the best content ideas to customers ensures that the right information reaches the customer and subsequently yield more results.
A successful marketing strategy will require total engagement with the customer that will make a firm appear unique from its competitors. Creating blogs where a firm should be interacting with the customers online will leave a company with alternative ways like e-mailing the customers and efficiently getting feedback (McClellan " Parker 2012). Upgrading the image of the new firm in the foreign land helps it to compete effectively in the industry since a good name goes a long way and customers are interested in a firm that has already proved the capability of producing what they need. Portraying a good image comes along with relating well with the government, responding to customer needs, healthy competition with the rivals, taking care of the environment, complying with the guidelines of corporate social responsibilities and production of quality product. Toyota should strive to pursue a good image that will put her ahead of her competitors in Jamaica and be a reliable supplier of Toyota brands.
Assessment of Business Environment
The Toyota firm must assess the environment within which many factors affect the running of any business and caution must be taken to ensure the survival of the company. Economic considerations of Jamaica that affect all firms include unemployment, inflation, interest rates, tax rates and when the taxes, inflation, and interest rates are low, the environment is safer for a new business hence Toyota should consider starting up during such a season and come up with strategies of coping with conditions that are beyond the control of the firm. Geographic factors that will affect the business includes transport costs, weather changes which impacts on labor force through diseases and Toyota should set enough money to cater for these expenses.
Analyzing the socio-cultural factors helps in identifying the cultural set up in Jamaica regarding what the people believe and uphold. A firm can conduct a business which is in line with the cultural norms of a country, and in this case, Toyota should analyze the social set up in Jamaica and understand their practices and their lifestyles before manufacturing the Toyota. The aesthetics, values, and attitudes of the Jamaicans will determine the models, and the form in which they buy from the company and therefore, a proper examination of the societal needs is crucial to every business.
The government sets regulations that control any business and the Toyota firm ought to comply with the rules. Legal-political factors give guidelines in which firms are licensed, the process of taxation, the maintenance of health and safety measures and the relationships between the management and the employees. Toyota must adhere to the Jamaican rules and ensure that all the legal aspects are met effectively to ensure survival and avoid collisions with the government. The new firm must meet all the necessary documentation that will facilitate smooth operations and acceptance by the Jamaican government. Singh and Gupta (2018) stipulated that the business environment is uncertain since it is challenging to predict its forces with accuracy and firms should know how to deal with the uncertainties. The business environment is dynamic as changes are taking place every day and since these changes are fast and active, only companies that will recognize and adjust to these changes will survive.
Business Proposal Summary
The business proposal is a Japanese Toyota company starting a business in Jamaica producing Toyota cars models. The best form of market entry for Toyota Company would be starting up a new venture in Japan by acquiring the necessary licenses, certification, and authorization by the Jamaican government. The new firm must comply to avoid business dissolution. Toyota will negotiate the tariffs for starting a business imposed by the Jamaican government to make them affordable to the new company. The product is the Toyota vehicles produced with caution and of high quality that should attract many customers and make Toyota the sole seller of cars in Jamaica. The vehicles should have available spare parts and expertise to handle any mechanical issue in case of a breakdown. All the system should function well and warranty guaranteed and discount offered to entice more purchases.
The possible target market is the whole of Jamaica starting from the government, companies and personal buyers. Different designs will be directed to varying buyers since a school, and a company may not buy the same model. Toyota will aim at penetrating the Jamaican market and flood the cars so that the rivals may find an already saturated market and opt to venture somewhere else and hence giving Toyota an advantage of acquiring the largest market share in the motor vehicle industry. These advantages will, however, extend to other countries globally, and Toyota will be the outstanding producer and seller of cars although this will require smart and well-formulated and achievable strategies.
The pricing will be set according to either the cost of production, the level of competition, the demand, the quality perception of the Toyota brand, product differentiation, and brand image, the objective of the firm and Jamaican government factors. The prices should not be too high where the customers cannot afford, neither should it be too low to create doubt in quality or lead to the closure of the rival businesses. Good pricing will ensure the manufacturer gets profits, and all the related costs are paid and as well as satisfying the customer (Belapure 2014).
The distribution channels for the Toyota cars will be based on cost and efficiency. The methods will depend on whether the vehicles are distributed in retail or wholesale and the form in which the customers have requested. Online distribution will be an efficient way since the customers will place their orders after reading the features and pricing online and the order will reach the producer in a matter of few minutes, and this will enable the producer to transact the business timely. The international promotional strategies will aim at informing, persuading and influencing the customers’ decisions and will help the Toyota company to convey the right information to the customers, differentiate its products and increase sales. The Toyota business will invest so much in advertising, offering customers with a preview of the products, e-mailing the potential customers, holding events and offering offers like free spare wheels and these will attract many customers to place their orders.
The Future
The right people must be employed to ensure sustainability of the business through effective production with zero defects, operational efficiencies of all systems must be in place and prospecting the right clients will help in avoid spending on reaching unwilling and incapable consumers. The new firm should be very keen while making decisions on which strategies to use and initiating great leadership that will see the job is done correctly (Couto, Plansky " Calgar 2017).
The company should also produce new products that will go in line with the cars including the seats covers, car carpets, installing the music system in the vehicles and also making graffiti if required. These accompanying products will complete the extension services of the product, and the customer will prefer getting them from the Toyota firm that sold them the vehicle instead of looking for the services somewhere else. Back-up plans will ensure that the operations do not stop when a particular system fails. There should be a standby supporting infrastructure which can easily be useful in case there are failures in the installed system. When the car business fails, there must be an option of starting another company which will be profitable and long-lasting.
The possible problems that may occur in this new business involve high capital, getting expert labor, strict government regulations, high taxes, restrictions from the Jamaican government of sales quotas and the possible damages while distributing the products. The firm should borrow capital from financial institutions with lenient terms, get professionals who will deliver 100% quality to avoid wasting materials, adhere to government rules and regulations to ensure continuity and negotiate with the hosting country for better terms.
Conclusion
The above research is well formulated and can be used by a firm in Japan to start a Toyota branch in Jamaica. The business will begin by identifying the possible opportunity that is the gap in Jamaica for quality vehicles. Dealing with both the domestic and international rivals will help the firm to know the strategies used by the competitors and maximize on them to lead in the industry. Assessing the business environment is essential in expecting any changes and formulating ways of dealing with the uncertainties. Placing the product in the market will require appropriate decisions on pricing, promotional methods, distribution channels and identifying the target market. The survival of the business is crucial, and therefore, a company should come up with ways of ensuring that the business is sustained by ensuring effectiveness and efficiency from the labor used, machinery and government compliance. It will be possible to conduct new business in a foreign nation if a firm follows the above procedure and always have an open mind of bringing in more productive ideas.
References
Belapure, M, Ashutosh. (2014). Export and Import Management. Horizon Books (A Division of Ignited Minds Edutech P Ltd)
Belleflamme, P., " Peitz, M. (2012). Industrial organization: Markets and strategies. Cambridge: Cambridge University Press
Couto, V., Plansky, J., " Caglar, D. (2017). Fit for Growth: A Guide to Strategic Cost Cutting, Restructuring, and Renewal
McClellan, G. S., " Parker, J. (2012). Stepping Up to Stepping Out: Helping Students Prepare for Life After College: New Directions for Student Services, Number 138. New York, NY: John Wiley " Sons
Panwar, U. S., Kumar, R., " Ray, N. (2016). Handbook of research on promotional strategies and consumer influence in the service sector
Singh, k. J., " Gupta, Sanjay. (2018). Business Studies Latest Version: With-Disciplinary Based Questions. SBPD Publications
