Question

Takmobile is a Japanese manufacturer of cellphones. Established in the 1970s, the company closely follows traditional Japanese business culture with seniority-based promotions and lifetime employment. The company also uses teams of engineers and designers who work together on new product development. The company has identified Vietnam as a potential market to manufacture and sell mobile phones in the country. The company is yet to decide on the appropriate entry mode to enter the Vietnamese market. Their decision will be influenced by a number of factors:
· Maintaining control over the subsidiary to ensure the same high quality of production in Vietnam as they currently have in Japan.
· Not having existing networks in, or knowledge about the local business culture and regulations in Vietnam, which is necessary to operate in the country.
· Concerns about intellectual property theft in Vietnam.
Based on this information, you are required to answer the following questions:
1. What do you believe is the organizational culture of Takmobile? Explain your answer (250 words)
2. Which is the most appropriate entry mode that Takmobile should use when entering Vietnam? Explain and justify your choice of this entry mode ( 250 words)

Answer 1

1. The culture in Japan is different from other countries because the employees take a job after leaving school and continue to work until retirement. And it can be seen that about 80% of companies are observing lifetime employment as compared to other countries. It not prescribed by law but it’s just like custom which is strongly tied to promotions and raises. Salaries for young employees are relatively low as compared to the old employees but when the employee reaches his mid-thirties then rise is been provided. And another culture they have is the Seniority wage system in which salaries and positions rise with the length of the service provided by the employee to the company. Companies promote simultaneously 15 years after the employee enters the company. The basic idea behind that is people who worked for the same amount of time should be provided with the same contribution to the company. These cultures make Japanese culture different from other countries. Takmobile uses the same culture because it is the home country of the company if it has to grow in the country it has to follow the same standards as per the industry. But the company can mold these cultures according to the area it is serving because if it is going to serve in the other market or county it has to adopt the culture used there to attract employees towards the company.

2. The best entry mode to enter the Vietnam for the Takmobile is through the Joint venture because the Takmobile is totally aware of the culture that is followed in the Japan and is not aware of the culture that is being followed in Vietnam. If Takmobile is going to implement the same culture then it might affect the values and cultures of the people it is going to hire. To know about the cultures of Vietnam we believe that the Joint venture is the perfect way to enter the market.

The major reasons why it should go for the joint venture are:

· Takmobile doesn’t have any networks in Vietnam.

· Vietnam is the potential market and the Takmobile don’t want to lose that market just because of the different culture so it should go for the Joint venture to gain knowledge of the culture of Vietnam.

· To make sure that they are maintaining control over the quality produced in the Vietnam is same as in Japan it is necessary to have the area knowledge of the company.

· To know the business laws and the rules and regulations required it is possible that the Takmobile should go for the Joint venture.

· One major benefit to the Takmobile for the joint venture is that the company will have the ability to grant investors unprecedented access to the market. so with this, the investors will gain access to many conditional sectors, which impose ownership restrictions.

So in short the Joint venture is the best mode of entry for entering the market of Vietnam.