i.

Executive Summary
This paper investigating areas of Toyota global network system, under what condition

creates strategic alliance. Also, explains the benefits for Toyota and other participant from Joint venture which leans on Toyota. According to main article, Toyota occupies central position in whole corporation network system, which base in the global market. So, in this paper shows how this system works, how goes exchange of knowledge inside Toyota company and business efficiency of Toyota's model. As author of article said Toyota build effective knowledge sharing network. the important is saving equilibrium between cultures, and protect competitiveness ability of alliance participant within network (pp.7). Participants of Toyota alliance are becoming similar which opens opportunity for easy work with each other. Also, there are areas which are available only in network system, as expensive high-tech technologies and scientific research (pp.9). Importantly, about Toyota background, advantages and disadvantages of strategic alliance for Toyota, the reasons inducing Toyota to enter strategic alliance (pp. 11-13). As well as the paper explains the reasons for companies to enter into an alliance with Toyota, which options Toyota can offer its partners and finally guidance to companies wishing to set up joint venture.

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Table of content.
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i. Executive summary ii. Table of content iii. List of charts, figure and table 1.0 Introduction 1.1 Literature review objectives 1.1.1 Benefits for Toyota from network system or strategic alliance. 1.1.2 Toyota's problems in establishing a global network in China. 1.1.3 Benefits for partners to be in strategic alliance with Toyota. 2.0 Summary of the literature 3.0 The backbone of the birth of strategic alliances 3.1 Prospects for the development of strategic alliances and joint ventures 3.1.1 The diversity of cooperation on an international business. 3.1.2 Impact on the development of the countries in the global economy from strategic alliances. 3.2 Toyota background. 3.2.1 Advantages and disadvantages for Toyota Corporation being in strategic alliance. 3.2.2 The reasons inducing Toyota to enter into the strategic alliance. 3.2.3 What Toyota may offer to its global partners? 3.2.4 Stages of globalization of Toyota. 3.2.5 Toyota's management system the best in world ± strategic alliances help to spread it. 4.0 Conclusion 5.0 Recommendation iv. Appendix v. Bibliography

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Figure 1 Evolution of knowledge sharing network Figure 2 A ³traffic island´ view in the Toyota network Table 1 Classification of successful Joint venture 3 . and figure.iii. table. List of charts.

importance of world network for Toyota corporation. Toyota can overcome import restrictions which were initiative of Congress of USA (Langfitt F. which became in 2000 Public Limited Company (Toyota in the UK). Afghanistan. technologies. The difference between types of alliances is dependent of goals and plans of the companies. It was successful alliance. P&G. That is why the multinational corporations is playing significant role in this research and as example will be Toyota corporation. Uganda. transparency. Sri Lanka. As we become develop society. sharing with management knowledge. our needs are fast growing.0 Introduction Today¶s world is the fast growing global organism. there are all participants interacting with each other. Kirgizstan. his style of business. efflorescence of nations. The interests are national stability. domestic calm. For example from alliance with GM. most African countries (Fortune 1000. business culture and etc. Exxon Mobile operates in the global scale and have turnover 10 times more than GDP in countries like Tajikistan. The world countries through their biggest companies participate in a great economical battle. Small company with a fifty employee from Taiwan or Hong-Kong has a big influence on multinational company. GM. 2009). In 1965 Toyota began to import cars in UK through small family company named Pride and Clark.1. We can see different type of Toyota alliances all over the world. Toyota. way of success business. 4 . 2010). For example companies such as Wal-Mart.

1 Literature review objective The objective of this topic is shows.influence of different nation culture. sharing the ideas and technologies. Their ability to get knowledge. Matching Symbolic Interaction with Relational Bonding: Lessons from the ³Toyota´ Network.1 Toyota benefits from network systems or strategic alliances. As Toyota reached highest position in global business doing only with their ambition to be firs and most success.1. the host countries company or government gives next: privilege on the new market.e. interact with various partners considering all over the world (Figure 1). 5. That is why important to share technologies. international alliances is playing significant role in developing product quality . capacity of workforce . For example. And all will go fast. only Interchange with technologies can ensure stable growth. like curiosity of last generation. 1. Source: Sharadindu & Sharma. embodiment of new ideas . interaction in knowledge direction. Toyota) Mature face. but the 30 years ago people did not think about that.e. It is influence of innovation capabilities of multinational corporations and alliances. modern world can possible to grow and develop only with global companies. When Toyota Company entering new market using strategic alliance. vol. that Toyota built the most successful network in the global arena. today we can¶t live without mobile phone. Ineffective Knowledge-Sharing Network Core firm (i. it is one of the most interesting multinational company. Initiation phase . For example no need to invent the wheel when it already have. The topic investigating directions are: the company's competitiveness depends on being inside the strategic alliance. 5 . capability of using of distribution network of partner-company. knowledge. no. Also.new functional products which is norm for today¶s humanity.total product quality. not hesitate on small tasks. Effective Knowledge-Sharing Network Figure 1 Evolution of knowledge sharing network. possibility to know needs of local customers through using knowledge and investigation results of partner-company. 1. 2009. Toyota) Small partner firms Core firm (i.1.

to improve quality.1. 6 . 1. For example.2 Toyota's problems in establishing a global network in China. China communist party not recommended freedom of thoughts for employees. even multinational companies. such as Chinese FAW entered into alliance with Toyota to get new technologies. obtain new technology.1. That is why Toyota trying to solve this problem through educational trip in Japan.1.3 Benefits for partners to be in strategic alliance with Toyota. Small and medium-sized companies can enter into strategic alliances to survive. independent partners in strategic alliances.

and all of them trying to achieve competitive advantage inside the network. Also. the most important .how business partners are interacting in network. But the main player which is playing significant role and all structure of network is lean on Toyota (Figure 2). 2009 7 . Figure 1.2. A ³traffic island´ view in the Toyota network Alliance partner has less strong { with hub partner  interested in the conglomeration of collaboration } bond Alliance partner µBridging role¶ Hub of sub network Hub Partner Forbearing restraining and entertaining forces from partners Having Cis organization structure Pioneering the flow of partner¶s traffic Alliance partner with strong tie Tran¶s organizational structure Traffic Island Overlapping structure of hub {strongly tied alliance partner} Guiding network Iso morphism Strong _ bond with cultural integration. no. vol. Matching Symbolic Interaction with Relational Bonding: Lessons from the ³Toyota´ Network.0 Summary of the literature. interacting with each other. also not damage competitiveness of partners in network. Their importance is saving equilibrium between cultures. Article shows the nature of network system in Toyota Company. To depict Toyota Company among the supply network he is using metaphor ³traffic Island´. 1. International Management Review. And the important thing for every participant of the network is to be as ³traffic Island´. It says that collective interests are fundamental base for ³Iron cage´ of the bureaucratic structure of the single organization. The network of partners is rich for differentiation and all of participants trying to get most important position in this texture. 5. Source: Sharadindu & Sharma.

Both of them are protecting from competing networks and help to overcome inter-approach conflicts.supplier association. where says that in China's communist system freedom of thought is not recommended. he noticed that increasing of share possible by ³culture integration´. They believe that Toyota philosophy of work helps to improve workforce and the quality. article shows on success of companies. absence of inter-cultural education and integration. because they are strong in innovation potentials. Alliance. Oracle. Both of them are important for survive and growth degree of interactions. it marks that each partner from itself adds and creates the value for total dynamic of network. It refers different research. They are not separate part of network. That is why Toyota companies every month send employees in Japan. Also. As example author shows Toyota network system. and ParkeDavis. because of absent properly attention on innovation potentials and not enough improve capability of integration. Correct mechanism of communication provides agreement. they are one big organism which is functional area achieve successful scenario for the whole network system. That is. divided with in "iron cages". He describes the value of Toyota interacting knowledge experience and benefits of integration. Eli Lilly & Co. alliance capabilities and benefits. and their principles puts as analogy of partners in alliance. The Toyota solves 3 fundamental dilemmas in their interaction with network. They are capable systematically to create profitable alliances. The main idea is that all participants of alliance become similar and work with them is easily. which in substance consist of trans-organization and single-organization capabilities. The investigation shows Cis capabilities. 8 . It shows that Toyota has 4 level of interchange knowledge. They are . complementarily of different-orientated participants of alliance. All of them are free for both bend the intercultural solid bars and to learning with using capabilities of dynamic network. companies inside the alliance have to complete each other.Also. So. in other word tautomeristic relation. As examples. That is why the most of them is not successful and very risky. such as Hewlett-Packard. And here author shows for compare ³sigma bonds´ and ³pi bonds´ as in Figure 1. consulting teams. is important to develop connection routines and common language for describing different technical issue. thereby raise their stability. The benefits from them are straightforward contact and interaction. He marked two type of company: capable for integration and with innovative capacity. learning teams and employee transfers. as a tool for achieve competitive capability can generate fast. establishes norms of collaboration and learning.

Access to markets and capital resources are often exchanged for the technology and production skills. That is why Toyota network is further to accumulate knowledge much faster than any other. They are accompanied by various agreements that regulate and determine all terms of cooperation (Griffin & Pustay. the European Union even forced the firms in different countries to cooperate as a condition for receiving subsidies. knowledge. As the costly process of globalization companies have the opportunity combine into strategic alliance to share costs. motivate each participant of network to interchange knowledge and receipt effectiveness with finding and achieving various type of important knowledge. risks. experience. In other cases two or more companies are working together on new product development or improvement of new technology often under the financial patronage of the government or government agencies. They are give advantage to join the fast growing markets and share profits. products and processes does not exclude competition in all areas (most of them) are not covered by agreements. for research and development costs skyrocketing. Thomas-SGS.0 The backbone of the birth of strategic alliances The bases of organizational structure in the recent years become the interrelation of large companies. and it known as strategic alliances. and the program on microelectronics JESSI (Geneva & Eindhoven. several companies unite and create a new company. This was the case with Philips.such as prevent from free riders. Siemens. as example the alliance in joint venture or just a union in the development of new technologies. In this case. an opportunity to enter new markets and competitive advantages. markets. Such alliances are very different from the traditional oligopolistic cartels and other agreements as they relate to specific terms. 3. One of the common options strategic alliances is the creation of joint ventures.1 Prospects for the development of strategic alliances and joint ventures. 2000). In Europe. For example. if companies want to 9 . 3. and access to privileged information increasingly difficult in an industry where innovation is the main competitive weapon. All of them he uses with analogy of ³traffic Island´ as figure 1. They are especially important in high-tech industries. There are also various types of alliances. International strategic alliances is like ³relatively strong connection between firms with using abilities for achieve own individual goals´. 2010). It also has advantages and disadvantages.

in the form of shares or cash in form of investment. A. Alliances and partnership between companies can take many forms and variations ranging from simple supply chains and distribution deals to large consortium agreements. Statoil and the BG together in a joint consortium to develop oil field Kashagan in Kazakhstan. ST Liquid Crystal Display Corp. it is usually long-term alliances (Ricky & Michael. As we can see in table. For example in 1997 Shell. Thus the prospect of future strategic alliances is enormous (Table 1) (Russell P & Clara D.diversify their risks in other countries. and the company each time gain experience and learn from mistakes. capabilities and market requirements. and 8 of them collapsed. Joint Venture between Toyota and Sony in 1997. BP. As we can see the group of powerful world companies collaborate to achieve benefits (Chazan. H. But despite all the difficulties and benefits of strategic alliances. Mobil.. 2007).K. As example. This can create a joint venture.1. 4 from 12 Joint Ventures in auto industry is successful. 2008). For example DaimlerChrysler joint venture did not meet their expectations and in 2007 sold the Chrysler Company (Raihan. most of them are not successful. ENI. 10 . Nevertheless. It all depends on the intentions. most economists and analysts agree that the modern world is progressing. Table 1 Classification of successful Joint venture Industry Auto Pharmaceuticals Banking Computer Business services Total 34 24 58 Failure 8 2 14 10 6 Success 4 8 14 6 6 16 Total 12 10 Source: International Business & Economics Research Journal ± April 2008 3. & Kimberly. In recent years.J. perhaps they jointly developing a strategy or marketing. As well as strategic alliances may be in the form of granting licenses for the use of technology or know-how. wide dissemination have investments in capital. 2010). 2008). Total. but some are agree just for development of certain technologies or products.1 The diversity of cooperation on an international business.

annual 2009 sales was around $220. in 2007 they opened fist factory in Russia. It was a kind of ³technological alliance´. namely the exchange of new developments. was signed multi-year agreement with General Motors: in conjunction with the American giant Toyota acquired a controlling stake in the largest British manufacturer of sports cars . 2009). building cars in 27 countries and sales in over 170 countries all aver he world with a 15 % of global market share (Appendix 1). It is one of the world best successful businesses. which gives capabilities to growth and develop. UK. In February 1983. In 2005 they opened Join venture in new factory with Peugeot Citroën PSA in Czech Republic (Ichijo & Radler. with excitement waiting for new functions of goods. such as USA.This opened the opportunity for produce new generation of LCD displays (Koshi I.808 (Toyota Company Profile. Toyota is continuously in contact with foreign enterprises. Toyota¶s Global Production Training Centre every year provides company with high qualified professionals (Toyota Globalization Strategy). 2006).28 billion. quantity and implement new technologies. phone Apple or Nokia. All these factors are beneficial primarily for companies inside the alliance. But the Toyota corporation not only interesting in car industry. As we can understand more participants can do more.2 Toyota background. Nowadays Toyota Motor Corporation is one of the top international companies. Australia. building. it is also operation in textile. telecommunication and boat-building industry. engineering and building cars in the countries where they selling it. Total number of employees with affiliated companies is 320. 3. "Alliances are where the real growth is strategic alliances providing a synergy for partners in which two and two make at least five in revenues preferably more" ± said Drucker (Samsunlu & Akdemir). Also. the development of professional expertise. 3. increasing markets. All of this pushing companies to enter into strategic alliance.the 11 . The significant role is playing that Toyota designing.1.2 Impact on the development of the companies in the global strategic alliances. because together they can achieve high quality.). The buyer is looking forward to the new version cars Toyota or Mercedes. Globalization through strategic alliances is the way for development.

In 1988 he opened an assembly plant with a capacity of 50 thousand cars per year in Canada.2. conflicts between members of alliance and pricy trials. 2007). to go into the new market and effectiveness of using resources. If formed a joint venture have a risk of disagreement and management conflicts (Rivers A. it can give more advantage to growth in company specific resources.if alliance is not able to analyse condition for successful international alliance they can lose control. Also it can be as protection of local market from outside intervention and international competitors. as well as thousands of medium and small automotive companies. And also to gain access to specific markets. methods. and other protectionist legislation like GM and Toyota .1 Advantages and disadvantages for Toyota Corporation being in strategic alliance. Toyota a strong player in the automotive market of the world. Toyota does not limit the scope of their interests by automotive industry by investing in the development of other branches of engineering (Toyota Company profile. The importance of strategic alliances is consisting in avoid some barriers licensing requirements. 2009)..13 parent companies. finance. and that is why entering into an alliance with companies of secondary importance there are risks of using any trade secrets. Also they can use know-haw technologies out of the alliance without any compensation according to own interests. experience and knowledge (interchange of new technology) to attainment common interests. An important place in this system occupies formally independent Hino and Daihatsu.company Lotus. According to this especially for Toyota strategic alliances can be extremely beneficial (Rivers A. Advantages is for each of partner low degree of financial spending and risk (key is joint investments). Disadvantages of strategic alliances are . In addition. By avoiding direct conflict. ability to pooling of resources (some countries do not have important resources for production). producing 200 thousand cars per year. a superior competitor in all respects.to avoid venture import quotas. Toyota has its own factory in Kentucky. Japanese experts were conducting a thorough investigation of the causes of high competitiveness of German car and set themselves the task of creating a car. technical capabilities and managerial competence. Today the group of Toyota . such as to increase market share. 12 . 3. So.. 2006). to diverse of product line. they follow a flexible and prudent policy to ensure the introduction of his car on the world market (Ichijo & Radler. 2007). like Chrysler and Benz gain access to Europe and strategic alliances with Western Europe companies.

In this case. 3. "5 Whys". entered into alliances with companies.2. But since Japan is a small island nation with limited resources and capacity. the result price for the stocks increased (Chang & Lai. the company is trying to provide a quality product to consumers and peculiar take a place in a particular economy. But in order to achieve the success of this magnitude the company progressed in half a century-scale of integrations with resource providers. for a competitive advantage in the mini-car segment in the European market in 2005. and even governments to gain access to the markets of different countries (Toyota Globalization Strategy. 2010). Toyota has been profitable cooperation because she had no experience in creating mini-car. as well as consumers. So. Such as for example "Just-in-Time". cooperation or joint ventures need first pay attention to the origins of the company. 2008). The Toyota Company is the driving force of country. investment companies). It is beneficial for local representatives of the automobile industry. For example. as well as it was necessary to gain a foothold in this segment of the market in Europe (Ichijo & Radler. In India. 2006). the reasons why Toyota enters into strategic alliance are dependence 13 . and this was to provide a tripartite partnership. Toyota together with the House of Habib (locating in Bombay) opened Indus Motor Company (House of Habib). Toyota opened a joint venture with Kirloskar Group and forms a Toyota Kirloskar Motor Private Limited. and the national pride of Japan. Toyota entered into an alliance with Peugeot and Citroen Groups as a result of the company was able to grow in the high-tech production system. country as a great economic organism must engage in economic alliances and unions. Single Minute Exchange of Dies (SMED). In recent decades. Mitsubishi provided with new technologies and Lockheed expand sales in Japan.As example of great benefit of strategic alliance rot both of participant we can look at alliance Lockheed Martin Corporation and Japan's Mitsubishi Electric Corporation. economic organizations (banks. the principles and methods of doing business and the Concept of the Toyota became the core for Japanese companies. Toyota is auto industry leader in Japan and among the top three auto-building companies in the world. government. In such unions. Low cost supplier. In 1990 in Pakistan. If we talk about the benefits that Toyota gets from the alliance. Jidoka.2 The reasons inducing Toyota to enter into the strategic alliance. An operator of these alliances is big companies and corporations of the country.

" It is due to the design. 2008). 3. that is to create the machine in the country or region where they will be sold. ie. production and sale of cars on the ground in each of the potential part of the world.2. HR management. expanding the network. the prospect of entering new markets and knowledge based (Raihan & Kimberly. joint ventures.quality management. Toyota demonstrates his skills in all aspects of activities ."global localization. this company set up joint factories and enterprises worldwide. But most of all the success achieved "Global vision 2005". and the stock price. In another case the company entered into an alliance with Toyota promotes its own credibility in the world. For example. According to this have been developed 4 main components: Recycling Based 14 . The program is called . alliances.4 Stages of globalization Toyota. Since the program was aimed primarily at work abroad. Also as example the export of technology cycle Plan-Do-Check-Act is a valuable experience for world manufacturers. Thus the company in 1995 takes a program to increase sales on a global scale. c) Global vision 2010 (2002 ± 2010) ± 3 main areas: R&D. In April 2002. globalization and vision of prospects for long term.on resources. This may affect both the quality of cars.3 What Toyota may offer to its global partners? The company as a business partner exports its style of doing business. 3. acquisition of components. advertising. The main task to achieve the goal aimed at cooperation with foreign auto manufacturers. developing new product lines and replacement of engines on the Lexus more powerful models. marketing. 3 programs of globalization: a) New Global business plan (1955-1996) b) Global vision 2005 (1996 ±2005) ± the main purpose of the localization of production. The new vision in the strategy "Innovation into the Future".2. the company announced a new corporate strategy aimed at achieving market share worldwide in the 15% by 2010. of an alliance with Toyota helped GM company to gain the knowledge and experience of management and governance for American companies (Langfitt F. management. 2010). The success of Toyota globalization begun from the adopt strategy which were adopted by the first program of globalization.

For trouble-free operation of the system "just in time" 100% of products without marriage should be delivered the next production sites. 3. it can be achieved in solving the three sub-sub-tasks: 1) The operational management of the volume and range of production. Thus. As we can see all 3 programs focusing on foreign market expansion. They are using it as the basis for making managerial decisions d efinitively thinking. the development of creative thinking and the introduction of constructive ideas. Managing Toyota begins with the company philosophy. which means a change in the number of workers depending on fluctuations in demand. that is why it is necessary for Toyota enter into alliance or build partnership network. increase the value of the organization through staff development and the recognition that a permanent solution of the problems the base of organizational learning. While cost reduction is the most important task for the Toyota. 2004). quality control is so important that it must coexist with a system of "just in time" through the "kanban". The main achievement of the company is a world recognition system Just-in-Time. Age of Information Technology. and Diverse Society (Toyota's Globalization Strategies. problemsolving process. Development of Motorization on a Global Sale. It aims to reduce production costs by eliminating the production of unwanted items.2. which should be carried out. which helps the system to adapt to daily and monthly changes in the number and range of demand.Society. as soon as the system uses the human resources towards the main goal.5 Toyota's management system the best in the world ± strategic alliances help to spread it. The other two principles are the flexibility of the workforce. The basic principle is: the production of the necessary parts at the right time and in the right quantity. Using the suggesti ons of employees significant savings. Automatic quality control means you can install on the line of 15 . and this flow must be continuous. 3) Activation of workers. 2) Quality Assurance. that allows to organize the supply of each subsequent operation with first class components from subcontractors. The foundations of this philosophy are using it in such as "learn manufacturing" and Just-in-Time production.

All of these methods and using it in the first application of Toyota are the most successful in the world. 16 . That same grounds principle management decisions is long-term perspective. even at the expense of short-term financial gain (Morgan & Liker. The word "autonomization" (dzidoka) should be understood as an autonomous organization and control of infringement processing.such devices. which could prevent the emergence of a mass or equipment failure. 2006). To adopt of this experience GM and other automakers enters into the alliance with Toyota.

they think that competitors can learn the secrets of production and gain an advantage." 17 .. supply chain management. cross-company cooperation in the company of Toyota recognized the best in the world. In this study we investigated the influence Toyota to international business. The quality systems. All competitors are focused on one goal. Rigsbee says. Many companies make a big mistake. they are afraid to enter into alliances. 2007). types of joint ventures.. And many companies are taking these techniques to their own weapons. the advantages and achievement. creating a variety of forms. and by the afternoon we might be working together on something" (Melanie H. 2007). As well as the reasons for Toyota and its partners to join the alliance. pointed to her ability to build alliances and networks. The motto of Toyota is "Innovation in the future" and to "work with passion and commitment to create a prosperous society. Ed Rigsbee (Melanie H. during its existence through cooperation and collaboration in the international market. But it's impossible to be good at everything. But better to see the benefits of alternative and 'keep your friends close but enemies closer¶.Conclusion "We're finding that we have to be better at more things than we used to have to be. personnel management." said corporate consultant of PartnerShift and Developing Strategic Alliantses Mr. so better to join forces for the common good. Toyota is one of the most successful global auto manufacturers. production. In spite of the fact that opportunities of Home country is limited has a leader position in the world. so the key is to look for partners with core competencies that fill in your gaps. somebody might be my competitor in the morning. "Nowadays.

(2) in CJV benefit. 3) Allow more foreign management control. CJV easier to terminate or modify than EJV. If there is any dispute about expenses. but there are two difference: (1) unlike EJV. The CJV requires foreign investors to achieve enough level of controlling. but also a lot of disadvantages. In CJV foreign companies can own or ³lend´ assets and licenses which are forbidden for foreign companies by PRC law. as example in China. Also applicable negotiated levels of management and financial control. because it is not depend of equity stakes. The government legislation requires only Joint venture.0 Recommendation. The China government preventing CJV from local partner noncompliance. When entering China market company can choose between equity joint ventures (EJVs) or cooperative (or contractual) joint ventures (CJVs). not only advantages. if Chinese partner in CJV not agree with expensive expatriates. CJV does not need to be a separate legal person under PRC law (may benefit from lower costs. Mostly they are same. Because. 18 .5. According to Paul H. Chinese partners are supporting by government. but in EJV they are divided in proportion to the equity shares invested by the participants. Most companies are equity joint ventures. as intervention of foreign business. Folta (The China Business Review) there are several advantages for CJV exactly in China: 1) Allow access to restricted sectors. foreign partner can pay themselves. 2) Alleviate capital contribution difficulties. Nevertheless. This in EJV not allowed. 6) Resolve expense controversies. Despite the attractiveness of China for investment. country is not comfortable for doing business. risks and control divides according to requirements of contract. In CJV possible to repay for leased equipment before revenue profit sharing. For example. Recommendations for companies are wishing to enter into a strategic alliance or joint venture in foreign market. because the partners make arrangement according to contract from the beginning. 4) 5) Reduce risk. limited liability on parties to the joint venture).

the opportunity to diversify their activities. niche in the market (The Agency for Enterprise Development. the selected partner-companies have to share the views on the objectives of their joint activities. The steps to organizing joint venture. Even unless the tax advantages in CJV and EJV is same.7) Offer tax advantages. which are deciding to enter into China market. Business co-operation should be part of business strategy. CJV have extra tax benefits. To create the joint venture is necessary. but other Joint ventures is 50:50. both parties benefits from cooperation. Practically. This may be the following: the final product. complementing the business of another party. larger shares of the property owner have in its hands the control over all activities of the joint venture. Business co-operation leads to the creation of joint venture or alliances in cases where: (1) One of the parties have products or technology. a new market. Typically. marketing. they must clearly define what business opportunities they are seeking. 1995). The enterprise must have the necessary resources: financial. while the other has products and technologies (The Agency for Enterprise Development. managerial. the joint venture is created when developed a unique product or process with clear advantages in certain markets. These seven advantages for CJV comparing with EJV are more adaptable for foreign investors. The distribution of property depends on the partners and negotiated in the agreement. finding partners for joint venture. production. The main stages in the process of creating a joint venture: assessment of the enterprise in order to determine its readiness for the establishment of joint ventures. such license agreement. as well as on the business development of each party. the company must determine what it can give potential partner. Most importantly. 19 . the beginning and negotiations. whiter than the modern product or technology. 1995). Lacking the advantage is very difficult to gain the trust and provide the funding. (2) Both parties are working in one industry and pooling of resources and joint work is mutually beneficial. As Toyota in China owned 70% of JV for producing engine. Ownership of a joint venture may be distributed equally 50:50 or someone from the partner can own a large part of it. In any case. If a company wants to create a joint venture. (3) one of the parties have access to a vast market.

com.toyota-europe.iv. 20 . Appendix 1) Toyota ± across the world                        Austria Belgium Bosnia Herzegovina Bulgaria Canary Islands Croatia Cyprus Czech Republic Denmark Eire Estonia Finland France Germany Gibraltar Great Britain Greece Sweden Switzerland Turkey Ukraine Toyota Japan Toyota US                       Hungary Iceland Israel Italy Kazakhstan Latvia Lithuania Luxembourg Macedonia Malta Moldova Monaco Netherlands Norway Poland Portugal Romania Russia Serbia and Montenegro Slovakia Slovenia Spain Source: Toyota worldwide. www.

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