Business Environment For Toyota Motor Corporation Marketing Essay

Business environment is about researching the nature of the concern in which it is being carried out. In this essay, analysis is being made for an car company known as Toyota Motor Corporation. Toyota Motor Corporation is normally known as TOYOTA and is abbreviated as TMC. The company was founded by Kiichiro Toyoda in 1937 as a derived function from his male parent ‘s company Toyota industries to make cars. First rider auto was Toyota AA. Toyota Motor Corporation group companies are Toyota ( including the Scion trade name ) , Lexus, Daihatsu and Hino Motors, along with several “ non-automotive ” companies.

Toyota Motor Corporation uses two tools for its concern environment which is PEST and SWOT.

Every concern has an internal and an external 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 administration itself.

It comprises of:

Resources: Toyota has a broad assortment of resources such as good qualified employees, substructure.

Knowledge and the actions of determination shapers: As they have good qualified employees, Toyota ‘s determination shapers are successful determination shapers.

External Business environment is a set of political, economic, societal and technological forces. These forces can hold a negative every bit good as positive impact on the operation of a concern. External factors are of two types ( I ) External Micro factors, and ( two ) External Macro factors.

External micro factors comprises of providers, agents, transporters, distributers, jobbers etc.

External macro factors comprises of Political, Economic, Social and Technological factors.

External micro factors or industry factors can be influenced by an administration whereas ; External macro factors can non be influenced by an administration. Before get downing the selling procedure, it is really of import for an administration to see its external macro environment. External macro factors comprise of PEST factors as discussed above.

Plague factors are explained below:

Political: Political factor affect political stableness, legal duties for contract, rational belongings protection, trade ordinances and duties, pricing ordinances, revenue enhancement, pay statute law, merchandise labelling demands, environmental ordinances. In 2004, Toyota spent $ 2.4 million ( approx. ) on lobbying. In 2005, its lobbying investing increased to $ 3.4 million and besides for the first clip TMC considered on making a political commission.

One strong factor behind Toyota ‘s quest of greater political clout may be the possibility that the Big Three, staggered by slouching gross revenues, will inquire Congress for subsidies or a bailout, said Joan Claybrook, the president of the Public Citizen watchdog group in Washington.



Economic: These factors comprise of Government intercession in the free market, substructure quality, rising prices rate, involvement rate, economic growing rate, handiness of labor, pay rate of labor. Toyota got a revenue enhancement inducement on bring forthing clean fuel and intercrossed engine autos. Due to this revenue enhancement discount on Toyota, buying para of consumers was increased for expensive intercrossed engine and clean fuel autos.

Social: Social factors involve instruction, category construction, demographics, civilization etc. Toyota has ever remained one measure in front to its rivals. Toyota believes in sustainable development and they have proved it by bring forthing clean fuel and intercrossed engine autos. These autos guarantee safety, better environment and affordability to their clients.

Technological: These factors depend on a state ‘s technological knowhow, recent technological promotions, rate of technological diffusion, investings made by the company etc. Toyota invests 1000000s of dollars an hr to better their engineering for better driving experience every bit good as for the safety of riders. Toyota besides managed to bag some awards for their safety systems installed in the auto, which is once more possible due to advanced engineering.

Advantages of PEST analysis:

Plague analysis is an effectual and efficient tool, which provides a model to an administration for effectual determination devising. By doing effectual usage of PEST analysis, one can guarantee affirmatory orientation of the concern administration. PEST analysis besides helps an administration in avoiding determinations which should non be taken. PEST analysis helps in doing lawful determinations for the companies which are willing to come in into a new market.

Disadvantages of PEST analysis:

PEST analysis considers merely the external concern factors, but in world all the factors should be considered in order to do effectual determinations for an administration. Most of the information gathered through this analysis is based on premises, which sometimes may non turn out to be fruitful for an administration. The rapid alterations in the universe economic system can besides do it hard in analyzing PEST factors for an administration.

The 2nd tool used by TMC, the SWOT analysis is discussed below:

SWOT analysis helps an administration in accomplishing their ends in the environment in which they are runing. It comprises of environmental factors such as Strengths, weaknesses, chances and menaces.

An account of these factors in context to TMC is discussed below:

Strengths: Strength can be the expertness of an administration. This property is internal to an administration and can be controlled by it. Toyota made new investings in USA and China ; later their net incomes were besides increased. This addition in the net incomes was



due to the effectual market cleavage which Toyota made. Toyota uses marketing techniques to happen the demands of their mark clients, the net incomes are besides maximised by utilizing effectual fabrication techniques.

Failings: Failings of a company could be lack of effectual selling techniques, location of concern, hapless repute etc. In Toyota ‘s instance, the failing is the economic and political conditions of the states in which it manufactures the largest figure of autos. The demand for autos in USA and Japan is really fluctuating, this is the ground Toyota is doing a displacement toward emerging economic systems like China.

Opportunities: An administration can hold many chances such as ; amalgamations and acquisitions, handiness of cyberspace through which selling becomes much easier, a new market section, progress engineering etc. Toyota has an chance of advanced engineering, a new market section and the handiness of cyberspace. By utilizing advanced engineering they produced intercrossed autos, they got a new market section in the name of Youth and they advertise their theoretical accounts on the cyberspace.

Menaces: Menaces can be minor fabrication defects which can halter the repute of a company, monetary value wars with rivals, new advanced merchandise with the rival etc. Toyota has a menace in footings of both fabricating defects every bit good as monetary value wars. In 2005, Toyota had to remember a big figure of vehicles due to faulty front wheel suspension system. And in USA, Toyota is confronting tuff competition with General Motors.

Advantages of SWOT analysis:

One of the major advantages of SWOT analysis is that it provides a clear position of all the chances and issues being faced by an administration. SWOT analysis besides helps an administration in salvaging clip. SWOT analysis is really easy to execute ; any employee with basic apprehension can execute it expeditiously.

Disadvantages of SWOT analysis:

SWOT analysis requires farther thorough research in order to acquire a more comprehensive image. For illustration, a concern must see the grades of strengths, failings, chances and menaces. Sometimes, an administration tends to lose the failings after looking at the strengths. A thorough SWOT analysis should besides see the chances available to a company in relation to strengths and failings. SWOT analysis is an informal method which provides merely an overview of the current market state of affairs of a company.



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