Pre-clusterization in Emerging Markets: The Toyota Group's Entry Process in China

Drawing on network analysis and informing the internationalization process of Japanese firms, this study introduces an ad hoc entry strategy, termed ‘pre-clusterization’. Unlike conventional keiretsu firms, competitive suppliers in a well-integrated network can enter a new market and begin clustering in a location that the core firm targets before the full entry of the core firm. The process of pre-clusterization is illustrated using a case study of the Toyota Group in China. A number of testable propositions are presented. Findings reveal the importance of strategic collective actions when coping with intensive competition and uncertainty in emerging market contexts.