American Business Environment for Toshiba Inc.1
AMERICAN BUSINESS ENVIRONMENT FOR TOSHIBA INC.
[NAME]
MGT 302 - Principles of International Business
ASU
Summer 2019
PART A
American Business Environment for Toshiba Inc.2
Introduction
There is growing interest in studying multinational enterprises (MNEs) at the heart of
political economics studies, particularly in the United States. This essay situates the Toshiba
within its external institutional settings. MNEs are entangled in a web of relationships with a
variety of significant external players, including but not limited to governments. National and
regional disparities in the structure of these networks have significant consequences for
production and management arrangements inside the company, public policy decisions, and the
configuration of MNE government partnerships, to name a few examples (Van Zanten & Van
Tulder, 2018, p.209). Multinational enterprises (MNEs) are located at the intersection of
domestic structures in regional and national political economies as well as the
internationalization process within global political-economic systems when it comes to wealth
and power distribution. Therefore, a study priority for the 1990s should include a political
economy of international firms (MNEs) in global rivalry and cooperation structures with
institutional foundations, such as the World Trade Organization. This paper analyzes America's
business environment for Toshiba, its market entry modes and strategies and the alternative
actions it would take due to the nature of the business environment in the US. The paper has an
introduction with two parts, part B, which analyses the business environment, strategies, entry
modes, and alternative actions. It also provides a conclusion summarizing the paper.
This study's findings indicate that Toshiba corporation is a Japanese corporation with its
headquarters in Tokyo. The analyses of the business climate of America for Toshiba indicate the
link between government, politics, and institutions, as well as business, economics, and
distribution of goods and services. It also indicates that capitalism is the form of political
economics that exists in the U.SA. Profit is its motivator for progress. In late 2016, certain major
political developments began to have an impact on the semiconductor and electronics sectors,
particularly in terms of how services are conducted. Despite such changes, the underlying
principles that drove semiconductor cycles are still alive and well, with under- and over-supplies
causing explosive growth and spectacular crashes.
It also found that the tariffs implemented by Trump's administration lowered GDP by
approximately 0.23% ($58.02 billion). His administration had followed through on its threats to
impose new levies, GDP dropped about 0.24% ($59.40 billion), leading to 0.17% lower earnings
American Business Environment for Toshiba Inc.3
and 184,200 lower full-time comparable employment (Cooper, 2018, p.441). Such actions
greatly influenced the country's electronic industry, hurting profitability and other elements. It
follows that the Trump administration's tariffs had a bigger impact on the electronics industry. It
also indicates that agencies and institutions govern business in America. Importantly it states that
many countries emulate USA’s free-market economy because it has excellent corporate
operations elements which shape a complex a pattern of government rules. Cooper (2018, p.442)
states that it also found that a staggering 33% of Americans admit not recycling whatsoever.
The consumer culture of the USA is a low Context Culture. People who live in low
context cultures tend to communicate information and information clearly via words. Because
most information exists in explicit messages, relationships interfere with business, and exact
verbal agreements are crucial, it is an aspect of the American consumer culture that impacts trade
(Rokka, 2021, p.115). Regarding the challenges and strengths of Toshiba's activities in the
United States, it is influenced by federal and local government policies. Toshiba's activities in
the USA are also impacted by the government's transition and policy changes. It's typically a
firm that joins a market that determines its success. The paper found that Toshiba has formed
several strategic partnerships as part of its broader business strategy. It has been at on the lead in
technological advances and profited from early development in developing areas by cultivating
strong connections with key industry players. Nonetheless, a firm’s open market competitive
capacity is shown because some of its goods are in the five leading market shares. It has long
been regarded as a topnotch producer, but recently, it did not do as well in the marketing
department.
This paper also found that Toshiba's first general strategy focused on distinct,
independent operating entities to manufacture and sell its diverse product range. In the American
market, Toshiba offers several options and a diverse product portfolio. It has a competitive
pricing approach for her products since the electronic sector has many rivals. It also has a finest
pricing approach for its unique solutions and products in the infrastructure services and Energy
System as well as solution business divisions. Toshiba has been able to share resources and
knowledge thanks to smart collaborations. The strategic partnership has brought together the best
of both firms' strengths. It has also enabled the company to grow its market penetration,
manufacturing, and innovation in the United States.
American Business Environment for Toshiba Inc.4
Toshiba's strategic relationship allows it to enter new markets in the United States with
solutions that neither firm could have developed independently. It has benefited from strategic
alliances worldwide because it formed partnerships with reliable local partners to gain a
competitive edge in the American growing markets. Strategic relationships in the United States
have helped Toshiba and its partners expand their production and distribution capabilities and
grow swiftly to meet demands. Toshiba's strategic relationships failed because they raised its
liabilities. Both firms are responsible for the outcome of a strategic alliance or strategic equity
alliance. Because some of Toshiba's partners misrepresented what they brought to the table, its
strategic relationships resulted in financial losses. This paper suggested that exporting would be a
low-risk approach; it can benefit if it utilizes it.
Q2: Company Profile
Toshiba Corporation is among the world's largest multinational enterprises. Toshiba
Corporation is a Japanese corporation with its headquarters in Tokyo. It was formed after the
merger between After the merging between Shibaura Seisaku-sho and Tokyo Denki in 1938
(Hass, Burnaby & Nakashima, 2018, p.7). Shigenori Shiga is Toshiba's current chairman, while
Satoshi Tsunakawa is the company's current CEO. Toshiba has a worldwide presence, with
offices in Asia Pacific, Africa countries, North America, Parts of Europe and in the Middle East.
Toshiba is a company that sells both goods and services. Hass, Burnaby and Nakashima, (2018,
p.9) states that Electronics, Semiconductors, Domestic Appliances, Medical Equipment, Office
Equipment, and many more items are among the products available. Toshiba also provides
information technology and logistics (Hass, Burnaby & Nakashima, 2018, p.10). Toshiba may be
split into four segments: electronic devices, digital goods, household appliances, as well as social
infrastructure.
To trace the extent of Toshiba's influence globally, one could use a viewpoint of
international political economy where multinational corporations are considered as main actors
steering global governance and interdependence. As Nölke and May (2018) point out, firms like
Toshiba not only speed up the process of economic growth but also coordinate with governments
and agencies, and this involvement affects the worlds regulatory and policy environments. The
conglomerate’s spread-out activities in electronics, digital goods, and infrastructure have made it
a company that is deeply connected with global value chains. According to Nölke and May
American Business Environment for Toshiba Inc.5
(2018), the interdependence, in this case, provides the company with the potential of penetrating
new markets. However, at the same time, it exposes the company to the risk of trade and supply
chain disruptions as well as to geopolitical conflicts. Adding to this, Oatley (2019) maintains that
in a world of complex interdependence as we have nowadays, corporations like Toshiba are the
ones who reap the benefits but at the same time are the ones subject to the political and economic
systems that govern the areas where they do business. As a result, Toshiba's work is not limited
to inventing new technologies rather it is an example of a corporate world that is continuously
changing and is instrumental in reshaping the global economic order.
Aside from its economic function, Toshiba is an example that the big multinational
companies are increasingly more connected to the sustainable development sector and are also
social responsible. As Van Zanten and Van Tulder (2018) clarify, corporations are no longer just
required to produce financial profits but also to become in tune with the UN Sustainable
Development Goals delivering positive changes across the environment, responsible production,
and social equity. Toshiba has made a commitment to corporate social responsibility (CSR)
which mainly includes energy efficiency, medical technology, and sustainable infrastructure, and
thus the company is repositioning itself in line with the SDGs. Meanwhile, Rokka (2021)
observes that the consumer culture has a major influence on the firm's decision-making, because
customers now demand that global brands be ethical and environmentally conscious. Its green
technology and renewable energy program is a response to such shifts in culture. The company
not only benefits from the positive global reputation which results from such a strategy.
Lojacono, Misani, and Tallman (2017) contrasts that it also demonstrates how the company’s
approach is not only about the maximization of profits but rather about the fulfillment of societal
and environmental expectations in a highly competitive and dynamic market.
PART B
Q3. Analysis of the American business climate for Toshiba
Political Economy
There is a link between government, politics, institutions, and business, economics, and
distribution of goods and services. Capitalism in the form of political economics exists in the
U.SA. Oatley (2019, p.958) asserts that capitalism is all about profit, which is a motivator for
American Business Environment for Toshiba Inc.6
progress. Simply put, capitalism is based on the concept that private organizations and other
players are motivated only by organizational interests and control manufacture and distribution,
establish prices, and generate demand and supply. Late in 2016, certain major political
developments began to have an impact on the semiconductor and electronics sectors, particularly
regarding nations where government institutions play a critical regulatory role (Oatley (2019,
p.959). However, the underlying principles that drove semiconductor cycles are still alive and
well, with under and over-supplies causing explosive growth and spectacular crashes.
In the U.S, the real estate tycoon Donald Trump became President after making a series
of bold comments about bringing back jobs into the country. He also vowed to prevent American
firms from building factories abroad and "repatriating" earnings to the country through tax and
tariff reforms (Khemani, 2017, p.4). Although the specifics of such legislative and political
reforms are unclear, there is little question that they have influenced the nations' economies and
businesses. Khemani (2017, p.7) states that this is set against the backdrop of China's
questionable situation, which includes a commanding centralized government and a still-
evolving corporate model. The automotive, manufacturing, and electronic goods industries are
expected to be the most affected in electronics, with semiconductors needing to react in their
manner.
The tariffs implemented by Trump's administration had an immense impact on the
country's economy. It lowered GDP by approximately 0.23 % ($58.02 billion) (Nölke & May,
2018, p.115). The Tax Foundation model states that salaries went down by 0.15 %, resulting in
179,800 full-time employment equivalents (Nölke & May, 2018, p.156). If the President
Trump’s administration had followed through on its threats to impose new levies, GDP would
have dropped about 0.24 % ($59.40 billion), leading to 0.17 % lower earnings and 184,200 lower
full-time comparable employment (Nölke & May, 2018, p.119). Such actions would have greatly
influenced the country's electronic industry, hurting profitability and other elements. Even if a
few firms have a distinct edge over the others, allowing them to charge an astronomically high
price for products or services, the impact would have been immense. Even the wealthy
companies, however, keep a close watch on prices while maintaining excellent quality. On the
other hand, most technological businesses are concerned that a competitor with a lower-cost
solution would steal their clients, making the decisions critical to business operations (Nölke &
American Business Environment for Toshiba Inc.7
May, 2018, p.121). It follows that the Trump administration's tariffs had a bigger impact on the
electronics industry.
Agencies and institutions govern business in America. Other countries look to America's
free-market economy as an example. According to Goldthau and Keating (2018, p.64),
America’s economic performance seems to support the notion that the its economy works better
when its government lets firms and individuals flourish (or fail) according to their values in free,
competitive markets. It confirms the fact that a complicated web of government rules shapes
many elements of corporate operations. Goldthau and Keating (2018, p.65) annually, the
government presents numerous novel guidelines, often specifying what companies are permitted
and forbidden to do in minute detail.
Despite the difficulties workers experienced in their new positions as wage workers, the
development of industry in the U.S. provides people with unprecedented access to services and
consumption of commodities. Goldthau and Keating (2018, p.64) state that big business growth
has transformed America into a society of time-saving and leisure goods, where individuals
could hope to encounter everything, they desired in stores or through mail order. According to
Cumings and Deyo (2018, p.44), various polls indicate that only 25% of people in the USA are
used to recycling electronic devices, making it the biggest marketplace for customers to purchase
and sell previously used electronic gadgets. Cumings and Deyo (2018, p.44) add that a
staggering 33% of Americans admit not recycling whatsoever.
The culture of the USA is a low context culture. People who live in low context cultures
tend to communicate information and information clearly via words. Askegaard and Östberg
(2019, p.66) say because Americans are task-oriented, communication is primarily used to
communicate information, facts, and views. Because most information exists in explicit
messages, relationships interfere with business, and exact verbal agreements are crucial
(Askegaard & Östberg, 2019, p.66). It is an aspect of the American consumer culture that
impacts trade. Also, Askegaard and Östberg (2019, p.66) add that contracts are binding and
separate from personal connections in the US. There is a monochorionic attitude to time where
time is viewed as a commodity and timetables are strictly adhered to.
One of the characteristics that have always shaped the American business atmosphere is
innovation. It has been one of the sources of both demand and supply for multinationals with
American Business Environment for Toshiba Inc.8
Toshiba being one of such companies. The U.S. government and organizations have, in fact,
through such measures as R&D tax credits, intellectual property proprieties and public-private
partnership, created a favorable environment for technology to flourish. Bloom, Van Reenen and
Williams (2019, p.165) claim that government policy is very critical in innovation as the targeted
initiatives can largely raise the productivity and competitiveness of firms. Moreover, He et al.
(2019, p.412) refer to the part of data analytics and customer knowledge," as a key to innovation,
particularly in the case of Toshiba's electronics and IT divisions." At the same time, Hass,
Burnaby and Nakashima (2018, p.8) note that the history of governance challenges at Toshiba
has been a major cause of the necessity of combining innovation with good management and
administration so as to have a successful run in a market such as the US. It is a difficult task for
Toshiba, to be in such a market where they would be competing against American companies
who are never satisfied with their past achievements and are always trying to surpass themselves
by coming up with new technology. The company has to strike a balance between consolidating
its global business objectives and adapting itself to the America-led innovation ecosystem to be
able to successfully overcome this challenge.
The American corporate world has another distinctive feature which is the USA stance on
global climate governance and environmental policy, a factor which is significantly influencing
foreign companies. Cooper (2018, p.442) alludes that changes in U.S. climate policy especially
those revolving around the Paris Agreement would inject a lot of insecurity into the energy
planning and sustainability initiatives of the firms. Consequently, for Toshiba, changes in the
policy would affect the company not only in terms of production costs but also by corporate
strategy since their product portfolio covers electronics, home appliances, and energy
infrastructure. Goldthau and Keating (2018, p.64) point out that the regulation of energy in the
U.S. is a; scenario where the clash of the two forces, i.e. free-market competition and vigorous
state-level environmental policies; is often what characterizes the outcome. Cheng (2019, p.162)
further adds that in such a setting, corporates have to engage in ethical behavior and show
environmental responsibility as the trend indicates that investors and consumers are becoming
more supportive of the concept of sustainability. The problem Toshiba is faced with is that it
needs to incorporate the operations with the stricter state-level environmental standards and at
the same time make use of the renewable energy resources and clean technologies. In this way,
American Business Environment for Toshiba Inc.9
U.S. policy plays the role not only of a limitation on but also a source of empowerment for
Toshiba’s long-term R&D and sustainability strategy.
The American corporate environment is largely influenced by the issues of corporate
governance, transparency, and institutional oversight that are of great concern to foreign
multinationals. Cheng (2019, p. 161) emphasizes that the earnings overstatement scandal at
Toshiba in the past is a lesson of the risk that comes with poor governance in international
markets. Hass, Burnaby and Nakashima (2018, p. 6) similarly claim that the failure in financial
reporting and ethical standards can destroy the trust that is at the core of the relationship between
the parties in heavily regulated environments such as the U.S. Jacob, Svystunova and Rao-
Nicholson (2021, p. 74) argue that multinational enterprises should put in place institutional
strategies after market entry that will be in line with the expectations of the host country, thus,
transparency and compliance being vital in maintaining a market presence. Bloom, Van Reenen
and Williams (2019, p. 172) also illustrate that the establishment of solid governance
mechanisms usually leads to flourishing of creativity and productivity as it provides investors
with the needed trust. For Toshiba, the road to success in the U.S. market is through confirmation
that innovation is complemented by conformity to rigorous auditing standards, ethical practices,
and stakeholder engagement, which is proactive in nature. This equilibrium not only lessens the
risk of the company’s reputation but also makes it stand out as an entity that is both credible and
responsible in one of the most challenging business environments in the world.
The potential and problems that the country's business climate presents for Toshiba's
Operations
Federal and local government policies influence Toshiba's activities in the United States.
Bloom, Van Reenen and Williams (2019, p.164) assert that local governments significantly
impact policy development and execution since most rules and practices are administered by
local governments. Also, law enforcement agencies often report to local governments in their
respective states on different laws (Bloom, Van Reenen & Williams, 2019, p.164). Because the
government follows all of the laws and regulations set out by the World Trade Organization, the
federal government's regulations and deregulations impact its commercial operations (Bloom,
Van Reenen and Williams, 2019, p.166). Both the formulation of policies and their execution is
consistent.
American Business Environment for Toshiba Inc.10
Toshiba's activities in the USA are also impacted by the government's transition and
policy changes. Cumings and Deyo (2018, p.45) say in the United States, policymaking is
consistent from one administration to the next. Second, administrations of all political stripes
adhere to past governments' accords (Cumings. and Deyo, 2018, p.45). For example, the Trump
administration's trade policies are likely to have an impact on the company's business throughout
President Biden's tenure.
Conditions to join the market, regulations to operate inside the market, and procedures to
settle disputes with other stakeholders are frequently governed by legal considerations. Cumings
and Deyo (2018, p.45) state that Toshiba may face various problems if the judicial system is
weak, ranging from customer petitions to government shakedowns.
One of the greatest possibilities offered by the U.S. business climate for Toshiba is the
country’s vibrant innovation ecosystem, which is supported by institutions at the federal and
state levels. Taylor (2016, p.88) states that the United States is still the first in the world in
science and technology due to its strong investment in research, high-quality universities, and the
collaboration between the government and private firms. Therefore, Toshiba can take advantage
of opportunities to work with American companies, to acquire the latest technological
developments in the surrounding environment, and also to update its own R&D. On the other
hand, Benito, Petersen and Welch (2015, p.236) point out that foreign corporations should be
cautious enough to adjust their modes of operations to local institutional contexts as hard global
strategies may not always work in the U.S. In this case, for Toshiba, it is about being able to use
the U.S. technological resources to the best advantage while at the same time adjusting its
operations in line with the rules and culture. There is a big potential, but the challenge is to keep
on investing and having the right strategies that will help one to be flexible enough to succeed in
America’s highly competitive and innovation-driven market.
On the other hand, Toshiba is facing the issue of resilience and risk management in the
business environment of the U.S. According to Sheffi (2015, p.72), the best global companies
survive the toughest situations by building a strong resilience model to unexpected shocks such
as policy change, supply chain disruption, or financial crisis. In response to the extreme volatility
of the regulatory environment and the unstable trade policies in the U.S., Toshiba has to manage
the uncertainty by thorough contingency planning. Jerzemowska and Koyama (2018, p.37) point
American Business Environment for Toshiba Inc.11
out that the governance mistakes and financial trouble in the past of Toshiba are the reasons why
the company needs the most efficient risk management and transparent corporate governance. In
a similar tone, Mehta and Bhavani (2017, p.694) reveal that the accounting scandal at Toshiba in
the past disclosed weaknesses that could lead to stakeholder trust falling if not resolved properly
in foreign markets such as the U.S. Therefore, despite the fact that the American market provides
opportunities, it still asks for the company to build up its resilience, governance and compliance
so as to be able to manage the risks efficiently.
The other significant area of potential and difficulty is the concern over sustainability
expectations in the U.S. market. Bjørn et al. (2017, p.109) state that the performance of
multinational corporations as reported in their corporate responsibility reporting becomes the
main criteria, with a special focus on environmental sustainability, that is in line with a view of
Earth as a closed system. For Toshiba, this is a chance to go further with its clean technologies,
especially in energy-saving appliances and renewable energy solutions. Elbatran et al. (2015,
p.43) convey that the sources of clean energy such as micro-hydropower installations are a
perfect example of how the technical progress may address the sustainability and business
objectives at the same time. On the other hand, Toshiba will be required to change its
manufacturing processes and reporting to meet more rigorous consumer and regulatory demands
if it is to comply with American sustainability standards Jerzemowska and Koyama (2018, p.42)
indicate that not doing so might deepen governance frailties and worsen Toshiba’s image in the
most controlled markets such as the U.S. Hence, sustainability is not only a strategic source of
Toshiba’s potential for increasing its turnover but also a challenge that must be handled with tact
for the company to be able to keep its place on the market.
Q4: The Entry mode in the host country's market
Strategic alliances and partnering
It's typically how a company join a market that determines whether or not it will be
successful there. Lojacono, Misani and Tallman (2017, p.436) state that different techniques all
have advantages and disadvantages, and selecting which to use requires market knowledge and
financial rationale. Toshiba has formed many strategic partnerships as part of its broader
business strategy. IBM, Intel, Motorola, Texas Instruments, General Electric, National
Semiconductor, MIPS, RCA, the International Fuel Cells, MIPS Computer, the Time Warner,
American Business Environment for Toshiba Inc.12
Philips and Siemens are among the company's commercial partners (Lojacono, Misani &
Tallman, 2017, p.437). Toshiba is at the leads in technological advances and profited from early
development especially in the developing areas by cultivating strong connections with key
industry players. As a result, Toshiba is up against a lot of competition. Nonetheless, the firm's
capacity to contest in the markets is revealed through the fact that some of her goods are among
the leading five regarding the market share.
Toshiba is a first-class producer, though its performance were dismal in its marketing
department. Lojacono, Misani and Tallman (2017, p.436) say, as a result, the business signed a
lasting sponsorship contract with San Diego's La Costa Women's Professional Event, regarded as
Toshiba Tennis Classic, which brought it on TV with high-profile advertisements.
To manufacture and sell its diverse product range, Toshiba's first general strategy focused
on distinct, independent operating entities. Toshiba America is a conglomerate with numerous
operational firms spread across the United States. According to Jacob, Svystunova and Rao‐
Nicholson (2021, p.55), TAIS, established in California, manufactures printed circuit boards as
well as notebook and laptop computers. Toshiba America Medical Equipment, Inc. (TAMS)
manufactures MRI systems in San Francisco as well as its San Diego Medical Magnets Systems
in California (Jacob, Svystunova & Rao‐Nicholson, 2021, p.55). Toshiba America Electronic
Components, Inc. (TAEC) produces semiconductors in its Sunnyvale, California,
Microelectronics Center; Toshiba Display Devices Inc., a TAEC subsidiary, makes different
sizes of colour television tubes in Horseheads, New York. Its color TV sets and chassis are made
in Lebanon, Tennessee and Juarez, Mexico, respectively (Jacob, Svystunova & Rao‐Nicholson,
2021, p.55). In Manassas, Virginia, a partnership between IBM/Dominion Semiconductor L.L.C
and Toshiba is producing advanced semiconductor memory chips.
Toshiba's dependence on the strategic alliances is an example of the wider trend among
the Japanese multinational enterprises (MNEs) that are looking way to reduce the risk and speed
up the international growth. Glowik (2016, p.214) states that the Asian high-tech firms are likely
to select the partnership-based collaborative strategies while going abroad as the partnerships
take them through the resource constraints and cultural barriers. For Toshiba, as well, the joining
of forces with top U.S. firms like IBM, Intel, and Motorola not only opened the doors to cutting-
edge technologies but also made easy the knowledge sharing and customer acceptance. Hamel
American Business Environment for Toshiba Inc.13
and Prahalad (2017, p.289) further say that internal company resources cannot be the only base
on which a global strategy is made; it is rather utilizing the cross-border cooperation that allows
one to take advantage of the complementary strengths. In the case of alliances, for Toshiba, they
were both the instrument for lowering the risk and the stage for innovation, which gave the
company the competitive advantage in the highly volatile industries such as semiconductors and
consumer electronics.
Toshiba's going global outside of Japan is reflecting the same kinds of patterns that
researchers have found in their comparisons of Japanese and East Asian high-tech
companies. Hees (2018, p.143) points out that Japanese MNEs generally choose joint ventures
and partnerships to wholly owned subsidiaries due to their conservative way of handling
uncertainty in foreign markets. Moreover, Bassino, Dovis and van Der Eng (2017, p.118) argue
that Japanese companies set expatriates in a foreign partnership as a means of maintaining
control and at the same time, establishing trust with the local stakeholders. This strategy is very
much in line with Toshiba's arrival in the U.S. . through co-operations such as the
IBM/Dominion Semiconductor program in Virginia, the company has been able to mix its
technological skills with the localized production. Such entry modes not only lowered the
exposure to policy risks but also allowed Toshiba to be still responsive to the host-country
institutional and cultural environments.
Toshiba's approach is consistent with the internationalization models which are based on
the idea of gradual learning and commitment by increments. Huong (2016, p.47) utilizes the
Uppsala Model to demonstrate the firms' gradual increase of resource commitments in foreign
markets as they acquire knowledge and consequently reduce uncertainty. On the U.S. market,
Toshiba made its first steps through partnerships and licensing agreements before the creation of
more expansive and independently functioning subsidiaries, such as TAIS and TAEC. Magnier-
Watanabe and Lemaire (2018, p.437) point out that the strategies for inbound and outbound
investments are usually influenced by the degree of regulatory openness and the receptiveness of
the host-country which, in the case of the U.S., went in favor of Toshiba's mixed strategy of
collaboration and internalization. Over time, Toshiba increased its U.S. presence by becoming
deeply involved in various industries, from semiconductors to medical equipment, showing an
interplay of a cautious approach to the market and a commitment to it in the long run. The
American Business Environment for Toshiba Inc.14
gradualist, partnership-driven approach allowed Toshiba to not only spread out the risks but also
to establish a strong and sustainable presence in the U.S. market.
Market Entry strategy
Toshiba Price/Pricing Strategy
In the American market, Toshiba offers several options and a diverse product portfolio.
Toshiba has a competitive pricing approach for its products since the electronic sector has a large
number of rivals. He et al. (2018, p.12) says because purchasers (consumers) have more
negotiating power and may quickly switch brands, this price approach is used. Toshiba has
always focused on offering the highest quality goods to its consumers, despite all rivals' prices
being almost identical. He et al. (2018, p.12) adds that Toshiba also charges a premium for new
and innovative items not available from competitors, such as laptops and memory storage
devices. The firm also has a flexible price strategy and occasionally offers discounts on its items,
mostly offered through e-commerce sites (He et al., 2018, p.13). The corporation has a premium
pricing approach for its unique products and solutions in the infrastructure services and Energy
system as well as solution business divisions. It refers to the price approach for the marketing
mix.
Toshiba uses a price management policy, which is mainly carried out in the U.S. and is
inseparable from its efforts to maintain a good brand via the marketing mix. Chowdhury (2017,
p.6) points out that companies like Toshiba have to combine competitive pricing with quality
assurance which results in consumer trust and loyalty. As a result of making their products be
considered reliable and lasting, Toshiba is creating a value that is beyond the mere cost, hence,
using the pricing policy of both competitive and premium by virtue of the product category. For
instance, Toshiba laptops and storage devices have prices that pull in the students and the
professionals who are looking for the most use of their money, but its advanced infrastructure
and energy solutions are high-priced. Prasetyo and Purwantini (2017, p.14) said that product
quality and brand image were the major deciding factors for consumers purchasing Toshiba
laptops. This shows that price is one of the elements that goes side by side with brand image.
Nevertheless, Toshiba needs to be on the lookout because consumers have little switching costs
in the electronics industry. Due to this fact, Toshiba is obliged to let affordability be balanced
with differentiation and use promotions and discounts in a way that give them the opportunity to
American Business Environment for Toshiba Inc.15
hold on to the market share without compromising their premium image. In this sense,
Toshiba’ s tactic is a good example of pricing which can be at the same time a tool for
competition and a brand-strengthening mechanism in the saturated and ever-changing American
electronics market.
One more attribute that has been fundamental in the decision-making process within
Toshiba with regards to how to set the prices is the historical challenges of the company with
financial reporting and accounting, which have ultimately impacted consumer and investor
perceptions of value. Caplan, Dutta and Marcinko (2019, p.44) explain the rise-case of Toshiba
in which the former giant had to face an accounting scandal, and as a result, having transparent
business practices became the most important element in the recovery of market trust. In this
situation, the pricing issue is identified not only with the competitiveness of the company but
also with the delivery of a message about the honesty and the permanence of existence of a
company. Gujarathi and Dugar (2020, p.30) describe the use of methods such as channel-stuffing
in the personal computer division of Toshiba by which the company concealed its earnings, thus
they raised the question of whether the sales were driven by the real demand or by the
accounting maneuvers. The issue is that almost every event that is happening these days is
underlining the importance of combining with pricing strategies real value creation, instead of
merely inflating of the revenues. Moreover, product innovation not only significantly affects
brand image and consumer behavior but also is a great influencer in the case of Toshiba
televisions in Jakarta, as the authors of the paper Octavia, Witono and Kurniawan (2021, p.17)
confirm, and these are lessons that are also valid in the U.S. market. So, it can be said that the
pricing used by Toshiba should be the one that is closest to the concept of justice and truth,
which is the one that comes with trust and at the same time allows a company to be competitive
in a fast-moving technology sector.
Moreover, the consumer-centric and the institutional or government buyer orientation are
the two main facets which greatly influence the pricing of Toshiba. In his article, Kavén (2019,
p.58) clarifies that business-to-government (B2G) exchanges demand a separate methodology.
The prices in such contracts mostly concentrate on a long-term value, the reliability of the
service, and compliance rather than being immediately competitive. The company, through its
energy and infrastructure solutions, which are mostly aimed at public organizations, mirrors this
American Business Environment for Toshiba Inc.16
by utilizing pricing models that are of premium nature and that take into account the total cost of
ownership and the need for personalized services. However, Toshiba also has to take care of the
divisions that cater directly to consumers such as the laptop and the electronic appliances
business where the price is the main concern and the competition is more intense. Prasetyo and
Purwantini (2017, p.16) demonstrate that price is still a major factor that influences consumer
choice among students whereas Octavia et al. (2021, p.13) point to the significance of innovation
in allowing consumer electronics to set higher prices. It is a challenging task for Toshiba to
coordinate these two aspects, that is, the need for cheap products for the mass market and the
charging of premium prices for institutional contracts. The Japanese company is compelled to
change its tactics so as to be able to operate successfully in different markets and under different
conditions. Gujarathi and Dugar (2020, p.30) says by utilizing the flexibility and segment-
specific pricing strategy, Toshiba is able to make sure that it can compete on both government
and consumer markets and thus maximize its profit and keep its varied operations in the US
market alive.
Examination of the advantages and disadvantages of Toshiba's decisions
Collaborations are vital component of every business's strategy, small or big. Though,
while countless alliances begin with supercilious ambitions and goals, all are not strategic
(Cheng, 2019, p.163). Toshiba has been able to share resources and knowledge thanks to smart
collaborations. Cheng (2019, P.163) says a strategic partnership should bring together the best of
both firms' strengths, which might be a better grasp of the goods, sales or marketing expertise, or
just additional hands-on to speed up time to market.
It has also enabled the company to grow its market penetration, manufacturing, and
innovation in the United States. Cheng (2019, p.163) adds that Toshiba's strategic relationship
allows it to enter new markets in the United States with solutions that neither firm could have
developed on its own. Toshiba benefited from strategic alliances as it went worldwide because it
formed partnerships with reliable local partners to gain a competitive edge in the American
growing markets (Cheng, 2019, p.164). Strategic relationships in the United States have helped
Toshiba and its partners expand their production and distribution capabilities and grow swiftly to
meet demand. Cheng (2019, p.163) says with innovative solutions which are a full package for
its clients; it has been able to outperform the competition thanks to its partners. These
American Business Environment for Toshiba Inc.17
collaborations have become innovative and revolutionary, dramatically altering the commercial
environment.
Strategic alliances have drawbacks
Toshiba's strategic relationships failed because they raised its liabilities. Both firms are
responsible for the outcome of a strategic alliance or strategic equity alliance. Cheng (2019,
p.166) says both partners are in danger of losing their reputation if anything happens to halt
production or produce annoyed consumers. For example, in the case of Panasonic and Tesla, a
mutually beneficial partnership deteriorated when batteries were not made and transported
promptly, creating delays in Tesla car manufacturing and delivery. Cheng (2019, p.166) says that
because some of Toshiba's partners misrepresented what they brought to the table, its strategic
relationships resulted in financial losses. They didn't completely commit to the cooperation or
failed to pool their resources properly. As a result, financial losses occurred, leading to the
fabrication of financial accounts, resulting in a major controversy
A different course of action for Toshiba
International marketing is generally approached with caution by businesses. He et al.
(2019, p.57) asserts that they have an obligation to evaluate the market possibilities as well as
their core competencies to determine which technique is the best fit. Organizations frequently
start with a lower-risk strategy and then progress toward other methods to increase investment,
risks, and potentiality after proving its first success.
Exporting
Exporting is taking items made in one nation and selling in another. Many reasons make
firms believe that exporting is a low-risk approach. To begin with, He et al. (2019, p.57) asserts
that local businesses in a domestic market may uncover new growth opportunities abroad.
Second, some companies think that exporting existing products are less risky and much more
lucrative than those starting from scratch. (He et al., 2019, p.57). Third, firms with periodic
domestic demand may strive to market their goods globally in order to counteract the effects of
periodic demand upon their revenue sources.
Licensing/Franchising
American Business Environment for Toshiba Inc.18
A licensing arrangement permits a firm (the licensee) to sell products to an overseas
company in return for the licensee's production method, brand name, patents, and sales skills.
Cheng (2019, p.162) says the licensee obtains a competitive advantage, while the licensor
benefits from low-cost entrance into new markets. This is often the only method a firm can sell
globally because to a lack of funds, import restrictions, or governmental bans. (Cheng, 2019,
p.164). There are certain dangers associated with this approach. It's usually the least profitable
way to join a foreign market, requiring long-term investment.
PART C: Conclusion
In the United States, there is rising interest in studying multinational businesses (MNEs)
at the core of political economics research. Foreign-owned multinational enterprises (MNEs) are
situated in the nexus of domestic structures in regional and national political economies and
internationalization within global political-economic systems. According to many academics and
business analysts in modern society, the study of the politics of transnational corporations
engaged in global competition and cooperation structures with institutional underpinnings such
as the World Trade Organization is a top priority. According to the findings of this7 research,
tariffs enacted by Trump's government reduced GDP by about 0.23% ($58.02 billion) over a
year. Since his administration followed through on its promises to impose additional levies, the
economy shrank by 0.24% ($59.40 billion). Such measures significantly impacted the country's
electronic sector, causing it to suffer in terms of profitability and other aspects. Internationally,
the free market economy of the United States serves as a model for other nations because it
provides outstanding components of company operations that are not constrained by a complex
web of government regulations. As a result of strategic cooperation, Toshiba has shared
resources and experience with other companies. Toshiba's strategic partnership with IBM
enables the company to expand into new areas in the United States. It has also allowed the firm
to expand its market penetration, production capabilities, and innovation capabilities. According
to the report, exporting would be a low-risk strategy that the company might gain from
implementing it.
American Business Environment for Toshiba Inc.19
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