Toyota Automobile Corporation

1Kamoliddinov Farrukhbek

Table of Contents1.0 Introduction......................................22.0 Business Environment..............................32.1 Micro Environment.................................3Customers.....................................................3Competitors...................................................4Suppliers.....................................................4

2.2 Macro Environment.................................5Political Factor..............................................5Economical Factor.............................................5Social/Cultural Factor........................................6Technological Factor..........................................6Legal Factor..................................................7Ecological Factors............................................7

3.0 Strategy..........................................8Power of Buyer................................................8Power of Supplier.............................................8Struggle of Competitors.......................................9Threat Substitutes............................................9

3.1 External Opportunities...........................10Globalization Car Industry...................................10Profit from Partnership......................................10Outlook of Globalization (New Car Market)....................10

3.2 External Threats.................................11Strong competition...........................................11Appreciation Japanese Yen....................................11

4.0 Conclusion.......................................125.0 Reference........................................13


1.0 Introduction

In our time, Toyota Automobile Corporation is one of the biggest

car manufacturer companies around the world. It has installation

of factories and dealers in many countries. Despite the fact that

Toyota was established in 1933, but it became the largest

automobile company in 2008 for the first time. In addition, more

than six hundred branches of Toyota around the world implicated in

the production of vehicles and its parts. Toyota is popular due to

they are dependable and low-priced. Toyota can provide people with

car that is economy size, SUVs, trucks, minivans and buses. As a

form of assemble units transports of Toyota are distributed to

more than one hundred forty countries. Toyota has optimal

combination of goods, that it maintains which is lead to

concentrating on orientation, positioning and segmentation.

Because of this, net income and exporting of Toyota are rises. In

this assignment will be discussed influences environmental forces

to Toyota and there will be analyses some strategies which help

organizations to be responsible and survive in its conditional

permutations.


2.0 Business Environment

Business environment is a combination of several political,

economic, social and technological factors that influence to the

organization’s business processes in a negative and positive ways,

also these aspects are totally uncontrollable by business

organizations. Business environment separates into two parts.

These are external and internal environment, and it refers all aspect

of business enterprise, that have impacts on the controlling of

business.

2.1 Micro Environment


Elements that are have direct influence on performance and

strategies of company. It means that internal factors installed

into the business organization. Microenvironment also well known

under the name like operating environment of a company, and it

includes Suppliers, Customers, Shareholders, Competitors and Media.

As a analyses of Philip Kotler show, that microenvironment

concerns working conditions of an organization and it includes

factors in the vicinity of the environment, that affect the

business development in a company. Here are some components of

microenvironment:

Customers

Every business rotate around the customers. Client is who buys or

rents goods from the company. Customers directly related on

decision making of the organization, as they participate on

meetings the wants and needs of people. However, failure on this

meeting will lead big problems for the organization. That is why

researchers of Toyota Motors analyzed their customers’ wants, and

decided that people prefer cars that will waste less fuel. As a

result, Toyota make an agreement to produce first hybrid car or

green car, Prius, which is less damages to the environment.

Nevertheless, Toyota was sure that just because of fuel saving

people would buy Prius, and they tried create a key to convince

people to buy it. However, government ordered that give tax cut to

the owner green cars, after Toyota have asked government to do

this.


Competitors

Organizations have to change or add adjustments to their

realizations based on methods and strategies of its competitors.

Companies, to have a competitive advantage, have to understand and

critically analyze competitors’ plans of action. If we analyze

Toyota’s method in competition, we can see that it succeeded in

preservation its competitive edge. While, opponents like Citroen

have vehicles that also as efficient as Prius (Toyota). However,

Toyota is still leader in this component. They have reached this

reputation because of marketing strategy, they have grabbed

imaginations of people by being the first Hybrid Car and better

using advertisement. It means Toyota's key point of interest was

to be better ready to focus the needs and cravings of buyers

before they really express them. Toyota, maybe in view of its

initial disappointments in the US’s commercial center, led

exploration to perceive the administrative, natural and

authoritative business drivers that would be in the end decipher

into future obtaining variables for shoppers. This deftness gave

Toyota a rivalry edge in a business environment determined by

changes in business patterns and government obligations.

Suppliers

Business organizations to supply apparatuses of the firm or raw

materials need suppliers. The chosen dealers should be reliable,

and company should have multiple choice, not one or two. Toyota

allocates much attention to their suppliers, and they separated


into two functional levels by Toyota. The combination of all first

level dealers work in PDT (product development team). The Second

tier of providers work with individual parts. There is high level

of partnership and exchanging information between participants of

first level. It means first tier dealers were essentially co-

operative. It noticeably decrease spending time in improvement of

producing. As Toyota believes that because of suppliers, there

will be development in technology stages. Because technology will

help compensate time through sending personnel to dealers.

2.2 Macro Environment

The organizational environment includes factors that influence its

technique. Macro environment is one of the sections of external

environment that can influence to the economy growth when

organization does not have any options with regarding tax policy

of company in many republics. The information about what have

affected the manufacturing in the past years, as well as what is

going to influence in the future clearly showed in the analysis of

the macro environment. Macro environment factors separated into

several stages such as Political, Economical, Social,

Technological, Environmental and Legal. These categories well

known as PESTLE or PEST. Only in 2000, Toyota recognized changes


in the macro environment of the company. As the business and

global carmaker company, its processes of manufacturing were

changing, Toyota accomplished that alteration has to act in

conditions of the changes, where organization can take full

advantage of profit from producing Toyota Prius, first hybrid car.

Here some PESTLE analysis for Toyota Automobile Company:

Political Factor

The Political environment has greatly influence to the development

of new good and decision of marketing. Its affect a business

depends strongly on the steadiness of democratic or monarchy,

economic policies of the government and others. In addition, it

includes legal responsibilities for contract, protection of

intellectual possessions, regulations of costs. Toyota paid

approximately $2.4 million on lobbying venture. However, a year

later, this amount increased to $3.4 million and in that year

Toyota decided that create political committee into the

organization.

Economical Factor

Economical factors play very important role in the government

verdict, and provide for organizations opportunities and threats,

and these are influenced by government policy and political

aspect. It means that economy is also major factors in almost all

countries. Because of benefits and fuel savings, consumers started


choose hybrid cars, which means “Paid Back”. Furthermore,

government made insurance cost and taxation for using road much

lower for green cars than conventional vehicles. As some facts

show that, the price of fuel will be higher than now, it means

users can save their money, by using Toyota Prius. Recent

statistics show that rising fuel cost leads to negative effects on

individuals’ GPD (gross domestic products). Because of reduction

in the excise fee by fifty percent, the cost of Toyota Prius will

be lower, than before in market place. With rational cost, in that

way individuals are acceptable to buy hybrid car. Consequently,

abbreviation in the fee tendency will be on behalf of Toyota go

into green car production.

Social/Cultural Factor

Recent time social factors become serious issue because of

changings in climate. That is why, Toyota should produce vehicles

that will not damage or bring contamination to the environment. To

overcome the problem with fossil fuel which is non-renewable

energy, Toyota need to manufacture vehicle that will not depend

only on gas or oil. After inventing hybrid car, Toyota got a great

amount of offers from countries, which are not industrialized

fossil. Because they do not need to depend on fossil fuel

producers. However, by reason of high technology conventional cars

more inexpensive than hybrid cars. This indicates that new

technologies modernized approximately in early of the 21st century.

Nevertheless, business predictors analyzed that after the


technology of hybrid cars will become more accustomed, the cost of

green cars should decline. (Pearce and Robinson 2005)

Technological Factor

It is major factor for competitive edge and one of the important

element for globalization. It involves whether the company can

produce high quality good at a moderate cost and whether

organization manufacture groundbreaking products. For example, the

idea of using battery powered car means that the IT used by PHEV

(Plug-In Hybrid Electronic Vehicles). Despite the fact, people

say that hybrid car do not have a power as conventional cars,

Toyota’s hybrid car can reach speed of 62 miles per hour. Toyota

produce Prius with 1.8 liter engine displacement which capable of

generating high capacity and torque. Furthermore, carmakers

installed Cool-EGR into the engine, which has opportunities

recalculate temperature of exhaust and system recirculation. In

addition, to help Prius warm up faster, it reuse heat, which is

very useful I winter, cold season.

Legal Factor

Factors as current legislation in the local market, the domestic

market, future legislations, regulatory authority employment laws

and processes are deliberated by legal framework. Toyota is

exposed by several legal systems, such as laws about intellectual


property, taxation, consumer protection and competition law. Plug-

In hybrid Electronic Vehicles (PHEV) has special technologies for

legal and policies, which will decline radiation of usual air

pollutants in comparison with other vehicles. In contrast with

conventional cars PHEV decrease fuel expenditure, also it can be

seen in comparison with CNG and new generation of net gas engine.

As researches, show that during the useful life of PHEV, it can

save around six thousand liter of fuel compared with usual cars.

In addition, PHEV cars’ cost, service and fuel pricing in some

cases less than regular cars. However, all these settlements are

strongly dependent on costs of fuel, discounts and taxes. (Terry

Halbert, 2008)

Ecological Factors

Environmental aspect of PESTEL analysis include into consideration

environmental regulations, consumer significances. Nevertheless,

the gases such as carbon dioxide and monoxide, and other types of

oxides which our cars produce, harmful and damage our ozone layer,

it will cause climate changes. As well as it will lead problems to

human bodies, like problems with lungs and hearts. One of the

major reasons for Toyota move into green (Hybrid) cars production

is preoccupation about ecological influences of Prius will lead

us. As we know, Toyota Prius wastes less amount of gas and oil

because of its hybrid car. That is why Prius leads to people do

not be dependent on non-renewable energy, and it adduces less

pollution, less any types of gas emission. In addition, new models


of Prius provided with new technologies, which will secure ecology

by PHEV. As we know, PHEV technologies can cause decreasing

warming globally and any kind of smog; pollution will be reduced

by this.

The above analysis show that external environment aspect has great

influence HRP (human resource policy) of the organization,

particularly in the case of Toyota


3.0 Strategy

By the analysis of Kevan Scholes and Gerry Johnson, they say that

strategy sets goal and direction of a company for a long period.

Because of crisis around the world, Toyota confronting with new

chances and difficulties. As Porter’s five forces indicated that

competition between existing contenders, potential entrants,

authorities of suppliers and demanders are forcing them worry. To

understand the power of present competitive situation, company

need analysis of Porter’s five forces. The five forces of Porter

contains market position of buyers, market power of suppliers,

influences of potential entrants, threat of replacement and

competition between opponents.

Power of Buyer

The market force of purchaser is portrayed as the business sector

of yields. The dealing force of purchasers capacity of the clients

apply weight on organizations by requesting lessen cost and

expanding the item quality. Organization must perceive demands by

consumer, what they want and what they need. Company should

analyze fluctuation in customer tendency. When the large amount of

people focused in buying or using company’s goods and facilities,

buyers will reach higher market power. In car industry, the

purchasers have the best power. Because, they can the low

exchanging expenses connected with selecting from contending


brands. On the off chance that purchasers get to be disappointed

with some automaker, they can search for choices particularly

remote autos.

Power of Supplier

The market strength of supplier is depicted as the business of

inputs. Supplier is given the raw materials and apparatus to

organization than the organization can do its business operations.

The organization will regularly faces to high enforcement on edges

from supplier, when the market power of suppliers will be higher.

For instance, if Toyota Corporation have one dealer to provide

resources, in that case provider expands own cost. As a result,

Toyota will have to increase the price for SUVs, tracks and any

kind of vehicles. The organization will be expanding reliance

revenues cooperating with numerous suppliers, to decrease market

power of suppliers.

Struggle of Competitors

The competition among contender is depicted the force of

aggressive contention. The competition among contender means have

the significant qualifier of the manufactural competitiveness. The

comparative trend among contender is most evident of any industry.

The opponent typically will offer the same item or administrations

as your organization. Fights for competitive edge incorporate

value wars, new item presentation or promoting battles. Contention

among contender can decrease the gainfulness of organization,

however, these perhaps great things of publics. The contention


among contender exist when the business development. To diminish

the comparative tendency among contender, Toyota Automobile

Corporation stay away from value rivalry with different automakers

and concentrate on distinctive fragments. Toyota organization

reacted with contender; it additionally can decrease the

competition among opponents. Moreover, it can be cause to build

mutually beneficial cooperation.

Threat Substitutes

The danger of substitutes is portrayed as an industry's benefit

relies on upon the relative cost to execution of the diverse sort

goods and facilities to which client can turn to purchase other

item that practically has the same capacities. If item interests

are influenced through exchanging expenses, there will appear

danger of substitutes. It shows that the expenses of changing to

substitutes. In the car business, the risk of substitute's item is

exceptionally big being that, in car industry has numerous

carmaker companies. Therefore, to keep away from substitute item

supplant the Toyota Motors autos and SUVs, Toyota Automobile

organization has cut out its private particular remarkable item.

For instance, Toyota Motors cut out fuel option vehicles like

energy component electric and mixture vehicles. Item separation

can decrease the danger of substitute. That is why each one

organization likewise endeavors to cut out one of exclusive goods.

Patents, which are created by potential entrants, will be

purchased by some organizations, and it will cause to maintain a

strategic distance from the substitute entrance markets.


3.1 External Opportunities

Globalization Car Industry

The global car manufacturing were extremely prejudiced impact by the

monetary crisis. Causes for that was reduction in profit, which

analyzed in 2008-2009. On the other hand, eventual recovered all,

which was examined in 2012. As indicated by MarketLine, the

worldwide car producing Manufacturing improved through eight point

nine percent in 2012 to reach assessment more than one billion

dollars. The recovery of global car manufacturing consequently make

Toyota opportunity to increase amount of customers and build profit.

Advantages of Partnership

Because of corporation with BMW, Toyota gained huge amount of

profit. In 2012, both companies made agreement for long time about

collaboration on technological areas. As a section of contract, the

two organizations will accomplice for the combine resources to

develop an energy component framework; additionally there will be

development of components of sports car and in architectural areas.

Finally, one of the most important aspect is the combined firms will


lead extremely partnership and consumption of extra money and

activation of the action edge.

Outlook of Globalization (New Car Market)

The innovative car bargaining around the world has collision

temperate improvement between 2008 and 2012 years. Nevertheless,

figures recommend it will accelerate twice-stronger character

improvement around the 2012 and 2016 years. Consequently, the strong

imagination for the global new car market joined with the innovative

product reports of firm, which provides improvement opportunity for

the company

3.2 External Danger (Threat)

Strong competition

Global automobile market have large comparative tendency. Toyota

encounters solid rivalry trough automakers in global several

business. The resistance between several car manufacturers is

prone to strengthen in view continuation with becoming globally

and union in the global automobile manufacturing. The elements of

influence of opposition includes goods which have guarantee, and


time management to advancement and development, evaluating,

reliability, wellbeing, mileage, client services and financial

condition. Expansion in comparative tendency may offer a bit lower

automobile contracts and substantial share, reduction in costs

which leaded by this, in this manner impact the monetary situation

and consequences of actions into the firm.

Appreciation Local Currency

Fluctuation in worldwide currency rates exchanging, especially

American dollar and euro dedicated by Toyota. Toyota may be

effected by fortification local currency to the American dollars,

and to the foreign currencies. Additionally, it will lead negative

effects. In some cases, it influences to the assessment of the

firm.


4.0 Conclusion

In conclusion, it can be clearly understood that firs of all I

wrote brief information about Toyota. Then I analyzed impacts of

micro environmental and macro environmental factors, and did

PESTEL analysis for Toyota Corporation by giving examples.

Furthermore, examine business strategies of Toyota to set a long-

term goal. Finally, I did research about external opportunities

and threats, which are help Toyota to become more popular among

public.


5.0 Reference

Anna Francsovics, 2011. Macro and Micro Economic Factors. 1sted. Poland: Faculty of Business Obuda University.

Johnson, C, 2012. Energy Efficiency and Renewable Energy. 1sted. U.S.A: Johnson, C.

Oxford University, Retrieved from PESTEL analysis of themacroenvironment, 2007. Gillespie: Foundations of Economics -Additional chapter on Business Strategy. 1st ed. England:OxfordUniversity Press.

Retrieved from Toyota Moving Forward. 2012. Toyota Company.[ONLINE] Available at: http://www.toyota.com. [Accessed 08December 14].

Retrieved from hybridcars. 2010. Hybrid Sales Slide, WhileClean Diesel Continues Growth. [ONLINE] Available at:http://www.hybridcars.com. [Accessed 08 December 14].


Thembani Nkomo, Nkomo, 2011. Analysis of Toyota MotorCorporation. 1st ed. Japan: Toyota Corporation.

Toyota Automobile Corporation

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