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Penetrating The U.S. Market Essay

  • Submitted by: uflblbiz1001
  • on July 30, 2009
  • Category: Miscellaneous
  • Length: 601 words

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Below is an essay on "Penetrating The U.S. Market" from Anti Essays, your source for research papers, essays, and term paper examples.

Japan big three automakers, Honda, Toyota, and Nissan has successfully penetrated into the U.S. luxury car market which was exclusively dominated by American and German automobile companies. Their pricing strategies are critical points to enable them to open a new market. Meanwhile, their success of strategies may be as a result of utilizing the Chinese warrior, General Sun Tzu’s classical warfare theories.
First of all, first challenge was made by Honda after they found out an unusual demand of elasticity at the lower end of luxury price range in the mid 1980s. The demand was supposed to be elastic, but however, it turned out to be inelastic. This phenomenon revealed a penetration strategy can be applied as well as price competition. This factor coupled with the oil crisis in the 1970s which made American less popular due to heavy gas consumption put Japanese automakers to affect the U.S. luxury car market. Honda, in its new division called Acura, launched two luxury models with affordable price – Legend and Integra to meet targeted segment who are unable to afford but seeking to move up to bigger cars. In this phase, the Japanese used the Sun Tzu’s principle I-1 survey the situation, I-2 design the strategy, and I-3 plan the offense. Further, in order to accomplish its strategy, Acura kept increasing its number of dealerships to reach target sales, and in the meantime, give room for price negotiation to satisfy American customers. From abovementioned, Honda applied the principle-II-4, control the situation, and principle II-5, combat power through flexibility. Honda has a “first-mover” advantage so as to be in accordance with principle II-6, dominate the superiority.
Second, Toyota had expected to trade up some customers between middle ages with yearly household income of $100,000 by introducing two versions of Lexus- flagship LS 400 and sports sedan ES250. Owing to a lack of experience, the retail price that Toyota set was inconsistent with its image of...

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