Analysis Of 5 Asian Pacific Multinational Corporations And Their Strategies To Be Competitive In The Global Market
In today’s business world, there are a lot of multinational companies as well as local companies competing with each other to establish themselves. In order for the firms to be successful company’s the four factors which are the marketing strategy, their potential, corporate organization and well as government intervention to help them are important factors. Multinational companies are defined as companies that expand their market to the global market instead of being in their home country. In this report, the four factors of these multinational companies Secom, Mitsubishi Corporation, Toyota, Samsung Electronics and Huawei Technologies will be stated
Secom – Japan
SECOM is a security company that was found in 1962 in Japan. Today SECOM is a multinational company with offices in 19 countries such as Taiwan, Korea, China, etc. SECOM has a vision that is looking forward to the year 2030 and their vision is “By creating its ANSHIN platform, SECOM aims to provide enduring peace of mind to an ever-changing society. The “ANSHIN platform” means that SECOM would want to provide it consumers, individuals and partners with an excellent service. SECOM has adopted the strategy to build a better relationship with their customer and society. As seen in figure 1, SECOM are establishing their business to be better through the communication with consumers and as well as providing efficient service to it consumers.
SECOM has expanded into the international market either through acquisition or joint ventures. For example in Singapore, SECOM has a joint venture together with Singapore Civil Defence Force (SCDF) to monitor on the fire alarm security as well as leasing of safety deposit box.
The corporation has delegated each director to be in charge of each matter. For instance, the decision making factor for the company is taken by the board of directors at the top of the hierarchy. The director of president and representative is responsible for business plan being executed and as well as for the audit there are a team to handle them. The executive officer who are working in the office are working toward the mission of SECOM whereby to be more efficiency with consumer to establish a better relationship.
The core competency of SECOM has 6 divisions which are "Social Affairs Division", "Service Engineering Division", "Vision Intelligence Division", "Sensing Technology Division", "Communication Platform Division" and "Concept Modelling Division". The strength of SECOM is based on these divisions where experts work towards the creation of better securities and test are conducted on a consistent basis to ensure that only the best services are provided to consumer.
This is a competitive advantage for the company as they concentrate on developing their system based on research and development in a efficient way as the technology for security has to accommodate to the advanced technology. SECOM came up with a new launch known as “SECOM Drone’ which was providing surveillance security through the flying of drone. This launch will tighten the security as the drone is able to take pictures of intruder. The Japanese government had revised the “Civil aeronautics act” to allow this new invention to be used in Japan. Conditions for flying drone were revised to accommodate to the new launch for security purpose.
Mitsubishi Corporation- Japan
Mitsubishi Corporation (MC) was established in 1954 has business over most industries such as financing for the industrial, automation industry. MC is a multinational company with subsidiaries in an estimation of 90 countries located at Europe, North America, Asia etc.
The strategy that is being adopted by MC is the growth strategy. The company is trying to increase their profit earnings as well as a return on equity. In order to achieve this, the company is revising its management authorities to work towards the increase in the growth mainly concentrating on business- related sector such as financial industry. As for the offices located globally the mode of entry into the global market was through subsidiaries and joint venture. An example would be the recent joint venture with Surbana Jurong which will focus on the urban development in Asia.
The organizational structure of MC, each executive officer takes charge of each matter. Such as the board of directors, are part of the international advisory team while the president and chief executive officer are part of the auditing team. Furthermore as seen in figure 6, the Executive vice presidents concentrated on each multinational company this allow for the company to have specific attention to each region and allow them to achieve their strategy better. Mitsubishi Corporation headquarters believe that their success and core competency is based on these four factors which are ‘communication with their consumers’, ‘widespread of their sales through various medium’, ‘excellent service and support networks’, ‘Leading edge development’, ‘comprehensive product portfolio’ and ‘innovative approach to solutions’. The company believes that their strength lies on their communication and relationship strength among various countries that have help them establish them to a better position in today’s competitive world.
The Government of Japan are looking toward environmental friendly product. In 2016, MC, the automaker company had released in their press report the data of the fuel consumption. Assuming that the data were false, the transport minister went down to the Mitsubishi motor for an inspection to ensure that data are not falsified. Furthermore, the government also ensures that MC does not set up unrealistic targets that are difficult to achieve.
Toyota- Japan
Toyota Motor Corporations was found on 1937, it has been in the automobile industry for 75 years and its concentration is on the vehicle production and increase of the sales. The Toyota is a multinational company with factories in 51 countries such as Canada, China, India, etc. The strategy adopted by the Toyota Corporation is universal across all its production in different countries. Toyota uses a few strategies to ensure a growth. They use the cost leadership and differentiation strategy together to increase their sales. Cost leadership defined as being low cost of operation which helps to gain consumer’s attention and as well differentiation strategy which means Toyota try to come up with unique products that are not available in the market yet. Toyota penetrates into the market by researching and developing on their products that will increase demand for their sales and allow them to grow.
Toyota’s corporate organization is based on the various operation in various countries. To sustain the growth, Toyota has change the organizational structure in 2017. The board of directors are in charge for decision making and management overviewing matters and the operational officers will concentrate on the operational level. To facilitate a more efficient decision making process for Toyota the board of director members were reduced to nine from eleven. Furthermore, to increase the innovation of the products, Toyota has established an in-house company called “GAZOO” this consist of team that will concentrate on developing vehicles based on the latest technology. Lastly, it has also revised the roles of the head office and region-based units to have an efficient product planning and production planning.
The Toyota production system which is the lean production is a core capability of the Toyota which cannot be implemented by other automotive companies. The lean production is defined as the company eliminating waste and reducing cost of products. Toyota has been an example to many companies for their lean production. Another capability would be the capital capabilities. Toyota has been in the top for automation industry making the most amount of profit compared to other automation company. Thus Toyota would have more capital to invest in their research and development to innovate a better technology driven product for the consumers.
The government has intervene to help the Toyota Company by spending $20 billion yen to bring down the value of yen. This decision was taken by the Japan government to help the currency exchange rate to drop so that the value for the Japanese product would be less expensive. Thus, in this case, Toyota’s car prices would be less expensive and since Japan depends on exporting companies for revenue as well thus by doing this it will not affect their exporting revenues and does not decrease the market share value of Toyota.
Samsung Electronics - Korea
Samsung electronics is a company that has its base in Seoul, Korea. The multinational company has entered into the global market through subsidiaries and it has many businesses across the world such as at Africa, Asia, Europe. Samsung has adopted a sustainability approach to increase their growth. Samsung states “As a global corporate citizen, we fulfil our social responsibility, deliver innovative products and services, and create economic, social, and environmental values”. Based on the statement above, Samsung is trying to establish itself by being socially responsible and delivering unique products and services and gaining trust from it consumers. Samsung’s corporate structure is an ownership structure which means that the company decision making and shares are majority held by the internally. Samsung is a family run business also known as ‘Chaebol’. Most of the decision making will be done by the people in the top of the hierarchy. Samsung believe that their ownership structure has help them remain competitive in the business and has help them sustain financial crisis.
The core competency of Samsung is it concentrates on continuous improvement on its products internationally and it spends a huge sum of capital in research and development. Samsung also do research on how to create new marketing strategy and designs of product to increase their reputation among consumers. As mentioned that Samsung spends a large capital on research and development, in 2017, Samsung spend US$ 15. 53 billion on research and development and managed to gain a net profit of US439. 01 billion. Using this competency, Samsung has made it way up from a no name brand to a well-recognised brand.
The South Korea’s government is encouraging all firms based at Korea to relook into their corporation management and ownership structure. The government wants the companies in Korea to be a holding company so to increase the transparency. The new policy proposed that the companies need to be a holding company with at least 30% equity to be a listed subsidiary as reviewed by the Fair Trade Commission.
Huawei Technologies - China
Huawei Technologies is based in China. It is a multination corporation that is a provider of information and communication technology infrastructure. Their business concentrates on the telecommunication network, smart devices, IT and cloud services. Huawei has entered in 170 global markets such as in Ireland, Singapore, London, etc. Huawei technology strategy is to concentrate fully on research and development. Solely concentrating on research and development rather than getting into a joint venture and learning from other companies, Huawei were able to engage with their consumers through research and development and were able to understand the consumer’s need and preference for the digital technology. Huawei is also concentrating on it research and innovations to be the first company to come up with the 5G network.
Huawei’s corporate organization is a very small organization consisting of more than 20 staff representing on value chain, research and development, Human resource, etc. The committee at the higher level of hierarchy concentrates on the decision making and working towards the goal of Huawei’s mission together as a team. The organisation is trying to increase its committee member so that they will be able to meet their goals in the business. Huawei’s core capability is their attitude. Huawei has an attitude of “Customer first”. Corporations which usually cared only about their company’s well-being however, Huawei’s concern was of their consumers. For instance, in the rural areas of China, there were rat infestations which cause the cable wires to be damage by the rats. Huawei conducted research regarding this problem and innovated their products with “Chew proof wires” which will reduce the problem of damage wires in the household. This is the strength of Huawei to establish themselves in the local and global market as their priority is set towards the buyer of their product which gains them consumer’s value.
Huawei has been said to have benefitted from the anti-trust law and foreign investment from the China government. The anti-trust law is to protect the china companies from the foreign markets and abuse of the local market. Huawei being a local company would benefit from this anti- trust law which is meant to protect China companies. However, Huawei has denied receiving any form of help from the China government and states that the business is operated based on only their decisions and are increasing the transparency.
To sum up the reports of all the five companies chosen above, Multinational companies each have their own marketing strategies to be competitive in the global market. Thus if the company is able to establish themselves to be successful in the international market, it is based on their marketing techniques, research and development and the staff committee working towards the goal for each individual company.
