2019 Volume 8 Issue 1 Pages 51-56
What should a multinational company do with its business when expanding to a new country’s market, thus remaining the success while it succeeded in other countries in the past? We study the antecedents and drivers of subcontractor localization in Vietnam motorcycle market of Honda which has an impressive success in Vietnam. This study demonstrates there are significant differences in the business environment between countries, hence a common success strategy for all foreign market expansions does not exist. Basically in any country, a strong level of localization will bring good results for the company. This localization depends on environmental conditions of each country in which the localization varies in terms of localization’s content and method. In Vietnam, the localization of component manufacturing companies according to the Japanese approach will lead to the success of Honda. Moreover, even after participating in a new market, the business environment constantly changes. The localization of business is an appropriate approach for multinational companies to face environmental changes and to maintain business success. This study emphasizes the theory of “market adaptation”. The findings of this study contribute to the development of International Business theory.
