Environmental Evaluation of Toyota

Toyota - Environmental Analysis

1. Toyota - A Brief Introduction

Toyota is one of the world's most popular car manufacturers, being known for its unique quality products. Launched in Japan, it is now known worldwide, having 52 processing companies in 27 countries and regions excluding Japan and 170 countries as marketplaces because of its vehicles (Toyota 2010).

2. Nature of the Business

2. 1. Historical Overview

Toyota started as a part of the Toyoda Auto Loom Works in 1933 and was under the way of the founder's kid, Kiichiro Toyoda. Nowadays, Toyota is most beneficial known for its cars, although the business was mainly specializing in processing looms. The Toyoda Auto Loom Works still exists and their products can be found worldwide. Toyota Electric motor Co. was separated from the Toyoda Automatic Loom Works in 1937 and it became an independent company. The name Toyota was chosen to show a separation from the home life to the task life of the founders. Being on the edge of personal bankruptcy in 1949 had not been an impediment for Toyota. Even if Toyota has struggled, it managed to revive through the Korean Conflict when 5000 automobiles were purchased by the united states army. Toyota began to grow in 1960 through research and development and it were able to establish a worldwide existence.

2. 2. Current Stage

Toyota's success originates from its planning and execution systems. Their management system helps to keep Toyota competitive year after year. Toyota is a quality leader for more than 2 decades, as well as Honda. Toyota slipped when rivals matched its quality or even surpassed it. In the positioning of a head predicated on quality, Toyota faced some issues that made it slip. These issues are: the actual fact that the company was sure about the success it includes being a quality innovator made the business stop from the continuous improvement of quality process and the fact that they thought that it will take long enough for other companies to complement their quality benchmarks.

Although it appears that the business has fixed their quality issues, the criteria of choosing an automobile depends on styling, ride, handling and cabin design rather than quality. It really is well known that Toyota's value proposition was based on quality and trustworthiness. The challenge that Toyota encounters is that it has already set specifications for quality and dependability and forced competitors to get up, however now it has to set new requirements in other areas such as development, design and customer engagement in order to remain a market innovator.

In order to gratify customer's requirements and to be a market leader, Toyota has established several goals, such as: improve quality, improve efficiency, lessen cost and increase productivity. The company thinks that satisfied and quality-driven staff can provide quality products and that is why Toyota focuses on the human resources department in order to provide efficiency and quality.

The current stage of Toyota is that of a respected motor company which offers a wide range of products from little vehicles to trucks. The business has dealerships and creation plants all around the globe. The fact that Toyota puts the customer first provided the company the likelihood of growth as well as the possibility of increasing the market share. Their vision is approximately a ecological future with new petrol and diesel motors.

The task that signifies the global warming and metropolitan pollution made Toyota make an effort to develop new and innovative environmental technology and vehicles. Due to this, Toyota established fact for being the first motor unit company that produced a hybrid car. Another technology of Toyota was the Toyota D-CAT (Diesel-Clean Advanced Technology) idea. This last invention was created as a way to reduce the diesel emissions. Toyota is a company that is environmentally-driven and it sustains the "zero-emissions" concept.

The "Customer First" principle is utilized by Toyota. Their main concern is to achieve maximum client satisfaction, through providing trust and devotion. In their judgment only satisfied customers are likely to be faithful. Customer experience is taken into account atlanta divorce attorneys step of the buying process, from the look and development to sales and after-sale. Toyota would like to be sure that customers are positive of the experience with them. Its reputation for quality, toughness and trustworthiness is a way of increasing brand consciousness and satisfy prospects.

2. 3. Company - AN INTERIOR View

As a worldwide company, the organisational composition of the company is hierarchical. As stated above, Toyota depends on its employees to be able to have success. According to Toyota (2010), the business encourages diversity, possessing a business partnership - Toyota Business Partnering Group, with different members to the job: DARK-COLORED Collaborative, Variety in Motion, GALA (Lgbt (Bisexual, Transgender & Friends) Alliance), Toyota Religious Fellowship, Toyota Asian American Contemporary society in Alliance (TAASiA) and so forth. Also, technology is another important for the company, as the business depends on its new technology and originality.

2. 4. Future Performance

As the company depends on producing green autos, their future products (such as Fuel Cell-Hybrid Vehicle and FT-EV Concept Vehicle) are also regarded as eco-friendly and also have low usage (Toyota 2010). Based on the same source, by the year 2015, Toyota could have launched all plug-in hybrids, hydrogen gas cell hybrids, electric vehicles and natural gas hybrids.

3. Strategic Models of Environmental Analysis

3. 1. PESTEL Analysis

Being one of the most used frameworks for environmental examination of companies, PESTEL provides an in-depth view of the most crucial factors, which can affect Toyota both externally and internally, from the exterior to the within of the business.

Political: The resource chain is highly important for Toyota, because it has plants all over the world, manufacturing and delivering globally. When having this rates strategy (for example, Toyota companies the majority of the autos in Japan due to low costs included), there are politics factors which must be studied into account. Politics instabilities may affect the supply process, especially the syndication. Also, political decisions such as increasing taxes, inflation, regulations influence the company and its own chain of syndication worldwide.

Economic: Corresponding to Hirotaka et. al (2008), Toyota has an 'unorthodox' manufacturing system. Namely, low cost creation in Japanese vegetation enables the company to develop and increase new technology quickly.

However, despite of the reduced costs of developing, by being a worldwide brand, there are a few disadvantages that influence the business. Aspects like forex, interest deficits, exchange rates fluctuations, can have a substantial impact over the business and its earnings. For example, nowadays, when the monetary recession has damaged all marketplaces, global companies have endured the most because of the exchange losses and the depreciation of currencies.

Socio-cultural: This factor has a significant influence over the business and its marketing strategy. Specifically, all Toyota's marketing campaigns give attention to the brand's determination to quality and it uses gentle selling to be able to create a strong connection between your brand and the audience seeing the adverts (such as My Toyota - Youtube 2010).

Also, to be in fads and encourage car purchase, Toyota targets environmentally trendy cars, such as the electric ones (for example, Toyota Prius). Also, they target various market segments and make an effort to be regarded as a cosmopolitan brand, which can satisfy anyone's needs.

According to Mintel Group (2010), in your choice making techniques, consumers now examine several aspects, such as gas usage, carbon emissions and noise pollution. In order to fulfil these wishes, Toyota targets innovation and trading markets its vehicles as eco-friendly, with low usage and less carbon emissions than regular vehicles. Also, in order to create a competitive advantage and a unique selling point, the company now offers a five season warranty for customers that choose to acquire a Toyota (Toyota 2010).

Technological: Research and investment on innovation - as seen on the website (Toyota 2010), they rely on the ground breaking aspect and utilize it for marketing purposes as well. Also, matching to Jim Lentz, chief executive and chief operating officer of Toyota Engine Sales, U. S. A. , the business's main headquarter is in Japan because it gives its research workers the opportunity to review all technologies (Taylor 2010).

Environmental: Regarding to Toyota (2010), the company can be an environmental head and produces ground breaking products, with low energy intake, which fulfil the current environmental trends. A good example of something launched by the company that fulfils this manner is the hybrid car Toyota Prius. The company also evolves other products corresponding to this tendency, such as Camry Hybrid and Highlander Hybrid (Toyota 2010).

Also, to be able showing its customers that the brand uses this concept to be eco-friendly, the company posts regular environmental reviews on the website and environment reviews (Toyota 2010). Also, Toyota's advertising campaign concentrates significantly on the environmental aspect, exhibiting that the business is making major work not to pollute the environment.

Legal: Headquartered in Japan but expanded worldwide, Toyota needs to consider regulations for every country. The company and its success can be influenced by legal aspects, such as federal taxes, vehicle protection and emission levels laws. Also, other rules such as occupation policies or health and safety are very important. To be able to generate a positive image, the legal factors must be directly analysed. By not achieving this, the business risks to create a negative image among the customers, fact which will probably decrease its sales.

3. 2. Porter's Diamond Model

Developed by Teacher Michael Porter at Harvard business school in 1990, the precious stone model focuses on the position of any nation in an internationally competition. It allows managers to disclose factors that may be strategically employed as advantages to support globalisation. There are four main components creating the Diamond model:

Factor endowment: Effective production is improved by factors establishing the efficiency and request of production. You will find basic factors such as land labour, environment location and demographics; however, Porter insists that these are just supportive to more complex factor endowments like skilled labour, communication infrastructure and research and development.

Demand conditions: This firmly relates to home demand, it targets the nature of that demand, how much sales a country makes, how often do the sales vary, how often do tendencies change how often will customer choices change. Supply and development in the country are also catalyst to demand conditions.

Firm strategy, structure and rivalry: Porter shows that strategy, framework and rivalry styles impact on how organizations perform internationally for example a country which encourages home rivalry is more like to remain competitive effectively against other countries.

Related/support establishments: This model suggests that the ease of access to recycleables influences what sort of country competes internationally. Porter shows that united related market sectors benefit a region globally. Including the more holiday seasons sold, a lot more tourists are for sale to entertainment. Therefore if air services, Resorts and Casinos business show information and work together their potential to compete keenly against other countries may very well be greater than those countries that operate differently.

As a well-known country for its scientific development, Japan is consistently growing and innovating. Experts are a substantial type to quality products and services and although this highly benefits their manufacturing industries, Japan appears to be lacking skilled personnel. It may well not directly have an effect on the manufacturing companies, but if helping and related business are influenced by this it could cause a domino result. As an extremely interested country in research and development, whose success increases because of continuous innovations and ideas, Japan has initiated several global brands, such as Toyota, Honda, Sony, Canon, Nintendo, Panasonic and Nissan.

3. 3. SWOT Analysis

As a global company, Toyota advantages of a vast market, existing clientele and numerous resources. Therefore, it is a strong brand, with infinite opportunities. However, there are factors which might affect Toyota adversely; therefore, a SWOT Examination must be conducted, to be able to identify and analyse possible Advantages, Weaknesses, Opportunities and Dangers.

Strengths: Existing key player in the motor vehicle market; therefore, Toyota is regarded as a reliable and reliable brand. This also eases launches of new products, as the introduction stage can be easily included in the brand's acceptance. Another strength is the fact car parts can be easily found and they are affordable. Being a strong company economically, Toyota are able great training opportunities and skilled employees. Also, this financial balance enables the company to do research on development and keep maintaining its role of key player on the market.

Weaknesses: Despite the fact that these are new and unique, electric automobiles do not offer very practical uses apart from the consumption, getting the regular need of recharging. Also, being a big company means several degrees of communication within the organisation and it might not always be reliable. Also, it is problematic for the company to release new plants and create higher degrees of innovation, as the expenses of building, research and production are high.

Opportunities: Being a global brand, Toyota can explore the reduced processing costs and develop its market without opening new vegetation. Another opportunity is distributed by the fact that this can encourage sales through discounts for big purchases; improve its rate payment purchase, offer free services with the purchase of a car (free servicing, upgrade, warrantee). Also, as the markets and consumers' anticipations are continuously changing, the business can explore new styles and launch new products. Also, as the eco-friendliness is very popular and the business has already created a name because of this, Toyota can explore this probable through its unique and impressive products.

Threats: Competitors represent a significant threat, as hostile strategies can make companies such as Honda to gain market talk about. Also, as mentioned above, needs and desires of consumers are consistently changing and the company may not always act regarding to these needs. Also, by offering free services, the company risks to lose earnings; reconditioning of cars must also be looked at, as it implies costs from the company. Furthermore, the existing financial climate continues to be unstable which is risky for the business to look at new strategies. The monetary recession also influences currencies, inflation, fees, and it must be considered.

3. 4. Strategic Options - Porter's Generic Strategy

According to Michael Porter, the effectiveness of an organisation comes on their major and extra determinant. The primary determinant associated with an organisation is represented by profitability, as the extra determinant is the position within the industry (commonly known as Porter's Common Strategy

In order for an organisation such as Toyota to acquire durability within the industry and create a competitive benefit, Porter shows that the cost benefits, differentiation, concentrate and hybrid need to be considered.

Cost advantages strategy is referred to as the knowledge of an organisation of its position within the industry and which attempts to create itself apart by being the less or most expensive product or service provided. The use of cost advantage is performed through Toyota differentiating with luxury and class by using low priced procedures in the car creation industry. However, Toyota designs car for different sections; thus appealing to all market section (Macmillan and Tampoe 2000).

In addition, Toyota can form your competition in the automobile manufacturing industry by applying Porter's recommendation on bargaining vitality of buyer with the relations of cost benefits, as the company's main goal is to build affordable vehicles with quality, style and providing safeguard. Hooley et al. (2008) argue that consumers can have an enormous impact within the automobile making industry, with major competition that provides similar product compared to that of Toyota. Therefore, in forcing pressure that make a difference the amount of competition within the industry as there are alternate source of car manufacturers for consumers to get from. It really is for this reason that Toyota has to maintain their standard of creation to avoid the loss of current and potential consumers. This approach can enhance the brand image of the company, whilst increasing their sales.

Porter's argument on differentiation strategy points out how a company such as Toyota can place itself in addition to the recovery of their rivals, through their product and service where they offer. Toyota will need a solid creative office that is attentive to changes in the world. First of all, this department would have to consider the economical, technological and financial changes in order to stay faithful with their customers. In the technical aspect Toyota must include features that can persuade customers to purchase their car, by processing autos that has superior features in comparison to their rivals and it could be based on the design, performance and quality of the vehicles.

Secondly, Toyota needs to give a superior after sales service and successful distribution programs as the perception of customer can determine the turnover of the company. Thus, having knowledge on the economical conditions of different countries in which they are located in would be an edge for the business. Toyota's marketing office must be sure that the company's brand name is distinguished through their advertising, design and technology (Macmillan and Tampoe 2000).

Focus strategy is the combination of both cost focus and differentiation focus strategies. However, emphasis strategy only aim for specific consumer in the market instead of the whole market. This will allow a business such as Toyota to focus on a particular market segment, such as manufacturing cars to suit people in the city. This marketplace wish to have powerful cars which are also reliable and would take them to their vacation spot. While customers who looks for for adventures would like powerful car, that may survive in several conditions plus some customer would just like a car that is comfortable Macmillan and Tampoe (2000). Toyota can perform this by carefully choosing and handling their suppliers to enable them in adapting a low fat development and low service costs from quality product.

Toyota concentrates their procedure on hybrid strategy. This plan is an optimum balance between price and value. As Toyota might want to concentrate on price, appealing to customer who are price mindful or give attention to providing quality car that is luxurious appealing to customers who want the best. Hybrid strategy allows Toyota to use both cost and differentiation. It is therefore a blend of both differentiation, price and cost control as it is well suited for the position where they are at in the automobile creation industry. Therefore, Toyota runs with this plan which is low priced production on autos which can be differentiated based on their quality and consistency (Macmillan and Tampoe 2000).

4. Conclusion

In final result, Toyota is an excellent leader in the automobile industry and is a global company. It has a great possibility to grow but and yes it faces some threats though it has a reputation for quality, strength and stability, and that is why the company needs to adopt new strategic options in order to keep its position as a market leader.

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