Business Environment For Toyota Motor Corporation

Business Environment For Toyota travel CorporationBusiness environment is about exploring the nature of the chore in which it is world carried out. In this essay, analysis is being make for an automobile company cognize as Toyota Motor Corporation. Toyota Motor Corporation is commonly known as TOYOTA and is abbreviated as TMC. The company was founded by Kiichiro Toyoda in 1937 as a derivative from his fathers company Toyota industries to create automobiles. First passenger car was Toyota AA. Toyota Motor Corporation group companies are Toyota (including the Scion brand), Lexus, Daihatsu and Hino Motors, along with several non-automotive companies.Toyota Motor Corporation uses two tools for its business environment which is oath and grind away.Every business has an internal and an away environment. Before debating on external forces, internal forces/environment should be made clear. Internal environment is the one which is owned and controlled by the organisation itself.It comp rises ofResources Toyota has a wide-eyed variety of resources such as well qualified employees, root word.Knowledge and the actions of conclusion makers As they have well qualified employees, Toyotas decision makers are successful decision makers. immaterial Business environment is a set of political, economic, social and technological forces. These forces can have a negative as well as verifying impact on the operation of a business. External factors are of two types (i) External Micro factors, and (ii) External Macro factors.External micro factors comprises of suppliers, agents, transporters, distributors, wholesalers etc.External macro factors comprises of Political, Economic, Social and Technological factors.External micro factors or industry factors can be influenced by an organisation whereas External macro factors cannot be influenced by an organisation. Before beginning the marketing process, it is very important for an organisation to consider its external macro environ ment. External macro factors comprise of pesterer factors as discussed above.PEST factors are explained belowPolitical Political factor study political stability, legal obligations for contract, intellectual property protection, trade regulations and tariffs, pricing regulations, taxation, wage legislation, product labelling requirements, environmental regulations. In 2004, Toyota spent $2.4 million (approx.) on lobbying. In 2005, its lobbying investment increased to $3.4 million and in like manner for the first time TMC considered on creating a political committee. whiz strong factor behind Toyotas quest of greater political clout may be the possibility that the Big Three, staggered by slumping sales, will ask copulation for subsidies or a bailout, said Joan Claybrook, the president of the Public Citizen watchdog group in Washington.Economic These factors comprise of Government intervention in the free market, infrastructure quality, inflation rate, interest rate, economic growt h rate, availability of labour, wage rate of labour. Toyota got a tax incentive on producing clean go off and hybrid locomotive engine cars. Due to this tax rebate on Toyota, purchasing parity of consumers was increased for expensive hybrid engine and clean fuel cars.Social Social factors involve education, class structure, demographics, culture etc. Toyota has always remained one step ahead to its competitors. Toyota believes in sustainable development and they have proved it by producing clean fuel and hybrid engine cars. These cars ensure safety, better environment and affordability to their customers.Technological These factors depend on a countrys technological knowhow, recent technological advancements, rate of technological diffusion, investments made by the company etc. Toyota invests millions of dollars an hour to improve their technology for better driving experience as well as for the safety of passengers. Toyota also managed to handgrip some awards for their safety sy stems installed in the car, which is again possible due to advanced technology.Advantages of PEST analysisPEST analysis is an effective and efficient tool, which provides a mannikin to an organisation for effective decision make. By making effective use of PEST analysis, one can ensure affirmative orientation of the business organisation. PEST analysis also helps an organisation in avoiding decisions which should not be taken. PEST analysis helps in making lawful decisions for the companies which are willing to enter into a new market.Disadvantages of PEST analysisPEST analysis considers only the external business factors, but in reality all the factors should be considered in guild to make effective decisions for an organisation. Most of the data gathered through this analysis is based on assumptions, which sometimes may not prove to be red-fruited for an organisation. The rapid changes in the world economy can also make it difficult in analysing PEST factors for an organisatio n.The second tool used by TMC, the SWOT analysis is discussed belowSWOT analysis helps an organisation in achieving their goals in the environment in which they are operating. It comprises of environmental factors such as Strengths, weaknesses, opportunities and threats.An explanation of these factors in context to TMC is discussed belowStrengths Strength can be the expertise of an organisation. This attribute is internal to an organisation and can be controlled by it. Toyota made new investments in USA and China subsequently their profits were also increased. This increase in the profits was due to the effective market segmentation which Toyota made. Toyota uses marketing techniques to find the postulate of their target customers, the profits are also maximised by victimisation effective manufacturing techniques.Weaknesses Weaknesses of a company could be lack of effective marketing techniques, location of business, hapless reputation etc. In Toyotas case, the weakness is the ec onomic and political conditions of the countries in which it manufactures the largest number of cars. The demand for cars in USA and Japan is very fluctuating, this is the reason Toyota is making a shift toward emerging economies like China.Opportunities An organisation can have many opportunities such as mergers and acquisitions, availability of internet through which marketing becomes some(prenominal) easier, a new market segment, advance technology etc. Toyota has an opportunity of advanced technology, a new market segment and the availability of internet. By using advanced technology they produced hybrid cars, they got a new market segment in the name of Youth and they advertise their models on the internet.Threats Threats can be barbarian manufacturing defects which can hamper the reputation of a company, price wars with competitors, new innovative product with the rival etc. Toyota has a threat in terms of some(prenominal) manufacturing defects as well as price wars. In 200 5, Toyota had to recall a large number of vehicles due to faulty front wheel suspension system. And in USA, Toyota is facing tuff competition with General Motors.Advantages of SWOT analysisOne of the major advantages of SWOT analysis is that it provides a clear view of all the opportunities and issues being faced by an organisation. SWOT analysis also helps an organisation in saving time. SWOT analysis is very easy to perform any employee with basal understanding can perform it efficiently.Disadvantages of SWOT analysisSWOT analysis requires further thorough research in order to get a more comprehensive picture. For example, a business must consider the degrees of strengths, weaknesses, opportunities and threats. Sometimes, an organisation tends to miss the weaknesses after looking at the strengths. A thorough SWOT analysis should also see the opportunities available to a company in relation to strengths and weaknesses. SWOT analysis is an informal method which provides just an ov erview of the current market situation of a company.