I have attended UC Berkeley for three years now, but the halls of the Haas Business School were still foreign to me. However, that would not longer be the case as they were also the residence of Economics Professor Steven Wood, or at least during the day.
Steven Wood has been the chief economist at multiple firms, was the managing director at Bank of America Securities, and a corporate economist for Toyota Motor Sales. Now, he has been a professor at Berkeley for almost 20 years and is currently lecturing for Macroeconomic Analysis and Macroeconomics in the Global Economy.
I had never met Professor Wood previously, but he graciously offered me the opportunity to interview him on his knowledge of Japanese company expansions. He explained to me the many obstacles that foreign companies, specifically Toyota Motors from Japan, faced when entering the US market place and what made them so successful.
After mapping my way through the winding halls of the unknown top floors of the Haas Business School, his popularity was immediately apparent. While I had prepared to be early for our appointment, apparently so had many other students who awaited a chance to talk to him.
After a 30 minute delay, I finally had an opportunity to meet him in person. I noticed as soon as I walked in that I had caught him in the middle of his lunch, but as he care-freely grabbed a handful of his trail mix, I quickly felt more comfortable than I had anticipated.
He mentioned that working at Japanese Based Company, Toyota Motors, was not something he had particularly set as a career goal, but it more so just fell into place for him. However, when I asked him if he noticed any differences working at a Japanese based company as opposed to a US company he confidently replied with a simple, “definitely.”
“There was no doubt in my mind that Toyota was a Japanese company, run by the Japanese,” he then added.
When I asked him to explain, he said, “Japanese companies, even if located in the United States, still have a Japanese market structure. There may be senior American managers, but they always have a Japanese counter part.“
“A Japanese counterpart?” I asked.
“The Americans generally have a more formal title, but the Japanese have the power.”
Toyota is clearly one of the more famous Japanese companies to be successful in America – is there anything that particularly stands out about the strategies that Toyota implemented to enter the US market?
According to Professor Wood – not really. “Japanese car makers had the right product at the right time to make a big successful push into the US market,” said Wood. “They made a very good product, and they sold it at a very reasonable price.”
There were apparently many external factors that came into play as well. Wood claimed that the oil crisis of 1973 also contributed to the rapid growth of Toyota Motors in the US. “Gasoline prices quintupled and people wanted to buy well made small fuel efficient cars.”
When it really comes down to it, I started to notice from my interview with Wood that there were many factors at play to be successful in the US marketplace. A lot of it strategy, but a lot of it luck as well.
He admitted that he found the advertising strategies put in place by Toyota during his time there actually proved very cost ineffective. “They were pretty bad about their marketing,” he said openly.
It seemed that although Toyota was a rapidly growing company in US, it maintained much of its traditional Japanese structure. It may be adjusting its goods slightly and catering its marketing strategies toward the US consumers, but as far as the way they run the company, it keeps Japanese hierarchies intact. Their technical process and forms of communicating remain true to Japanese culture and habits.
As I was getting ready to wrap up the interview (in respect for the many students still waiting to talk to him), I decided to ask another question, just out of curiosity. “What advice would you have for companies that are trying to enter the US Market Place?” He simply smiled and replied with “This is an easy market place to enter. But you need to come with a good product – well built and fairly priced.”