Danny Cabrera

Case study

Toyota at Apaseo el Grande, Guanajuato.

On January 2015 Toyota decided to establish a new manufacturing facility at Apaseo el
Grande, Guanajuato with the intention to consolidate some other operations around the world
in one single mega-site mainly focused on producing 2 car models, the Corolla sedan and Tacoma
pick-up. In order to make this project a reality in record time, Toyota made agreements with the
Mexican federal government to expedite all the legal processes needed for a quick start up.
Toyota committed to invest in the construction of a world-class site hiring more than 10,000
employees under a ramp up strategy (2017 – 2020).
The full project represents better employment ratio, economic development, life quality
improvement and millions on taxes. The federal government committed to build the required
infrastructure needed to “host” such a big project like this one. Water wells, new electricity
supply points, high ways, bridges, security investment, natural gas piping, communications, etc.
The government even planned the construction of a small city around the area called “Ciudad
Toyota” (please watch the video in you tube for reference).
Even when the federal government promised to set up all the needed infrastructure, the
high-tension electricity sub-station got delayed. In order to avoid an impact in the construction
timings, Toyota decided to build its own sub-station, investing several million dollars in the
project. Since Toyota paid for the project, the federal government granted them a concession
to manage the distribution to other manufacturing facilities around the area (smaller
companies).
COTY Inc, is a global beauty company with presence in the area (2 kms away from
Toyota). You, as the Engineering manager of COTY, are highly interested on using the spare
capacity in Toyota sub-station. Engaging with Toyota in a negotiation process for high tension
electricity is a challenge. They are the big player in the area and you have almost zero leverage
with them.

1.- What do you know about the Japanese culture?

2.- What will be a winner approaching strategy?
3.- Is there any rule that you already know about negotiation processes with Japanese people?
if not… please think about the DO(s) and DON´T(s) and list 2 of each?
4.- How flexible the rules are? People could behave different outside their home countries.
Think about it.
5.- Is there any protocol that you may follow to approach the negotiation process?
6.- What strategy would you take to open the conversation?
7.- Which place would you select to engage?
Please analyze the case in teams of 5, answer the questions above, prepare a presentation and
be ready for discussion during class.

Danny