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Competitive Environment of the Motor Industry

Paper Type: Free Essay Subject: Marketing
Wordcount: 4126 words Published: 12th May 2017

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In today’s modern society, owning a car to transport is no longer a distant issue with consumers worldwide. therefore business has a lot invested in the manufacturing sector and business vehicles such as GM, Ford, Nissan, Toyota … the car companies launch will create a competitive environment is very strong in business car. And expanding business market to other countries in the trend of global integration is becoming a serious urgency to this enterprise. To participate in business abroad will not like the local business environment. Enterprises need to learn a lot about the conditions, standards and procedures of the different business environment affects how for production work and their business. of course if you want, they will be, they will have to adapt and to see changes to conform and survive in the environment they want to participate. Also businesses can take advantage of available resources such as cheap labor force, and natural resources abundant in the developing countries to produce their product and then sold in local and export exported to other countries.

Toyota is one such company that I also had a long interest in newspapers, articles on the website and on other media. In this article I will analyze and learn about the business environment impacts how for this business.

Toyota Motor Corporation (referred to as Toyota) is an automotive group transnational headquarters in Japan. Toyota was founded by Kiichiro Toyota on 28/08/1937 from a section separate from Toyota Industries. After a long development time, Toyota has now emerged to become the largest car manufacturing group in the world in terms of sales (Kendra Marr, Jan 22nd 2009).

According to the annual report fiscal year 2009 (from 01/04/2008 to 31/03/2009), Toyota provides jobs for 320,808 workers, with 529 subsidiaries, with total capital of the company up to 397.05 billion yen.

Major activities of the company is to design, assemble and sell cars, race cars, trucks,

transportation vehicles and related spare parts. Toyota is known for the famous brands such as the Prius (hybrid vehicles with clean fuel), Lexus and Scion (luxury), Tundra (truck) … Toyota owns a large amount of shares in the company Car Daihatsu and Hino, Fuji Heavy Industries, Isuzu Motors, Yamaha Motors, and Mitsubishi Aircraft Corporation. In addition to manufacturing automobiles, Toyota provides financial services (Toyota Financial Services), involved robots, biotechnology…

Toyota’s market share worldwide spread. Of these 26% in Japan, 29% in North

U.S., 14% in Europe … Toyota to build factories in all parts of the world, manufacturing or assembling vehicles in serving the needs of that market. These plants are present in APAN, Australia, India, Sri Lanka, Canada, Indonesia, Poland, South Africa, Turkey, Colombia, UK, USA, UAE, France, Brazil, Portugal, Argentina, Republic Czech Republic, Mexico, Malaysia, Thailand, Pakistan, Egypt, China, Vietnam, Venezuela, Philippines, and Russia.

Toyota was hit hard by the financial crisis of 2007-2010. With Toyota

2009 is the year’s first loss in the last 70 years. Toyota mired in debt and had to borrow 270 billion from the bank funded by the Japanese government. In 2010, Toyota’s image severely diminished when the company was forced to make the recovery of large vehicles across Europe and the U.S. due to errors in the accelerator and brake.


Major changes in the global business environment cause, has changed rapidly in the business environment for Toyota. The growth of global markets and expanding into resource-rich countries or emerging markets has led to a decline in the U.S. market. Due to environmental problems and threats of global warming, interest in a low carbon society has led to rising petrol prices and rapid growth in demand for fuel-efficient vehicles. Finally, rising raw material prices caused the increase of raw materials used in the automotive industry, especially steel. Moreover, the challenge is now recession has led Toyota to develop effective strategies to overcome financial losses. According to Business Week magazine in Toyota’s profit fell 10% last year in the United States because the economic downturn. For this recession, Toyota has launched two short-term strategies (for example, for production systems optimized to meet the demand in the U.S.) and long-term strategies (for example, to increase hybrid production). That is the strategic goal of the Toyota business in the state of the global economy today.

Mendelow I will use the matrix to analyze the role of environmental factors affecting the operations of Toyota:

Figure 1:

Through consideration Mendelow matrix we can see the role of the factors that affect decisions relating to Toyota’s strategy as follows:

With business partners, suppliers and local communities Toyota put them in the table have less impact to Toyota because most of these children contributed only a small part and depends on decisions cuaToyota and Toyota can replace these elements with new elements even more valuable and more relevant. These factors are not vital element of the business. Factors competitors and shareholders are located in the “Keep inform” the Toyota because of all the activities of Toyota and its competitors are analyzed when any new product or any act of they are reviewed information that is harmful or beneficial, must be treated thoroughly used for business purposes, especially when competitors launch new products to market. The elements of the customer and the government (including provisions for legal, tax, ..) of the host country where Toyota Toyota market participants are placed in the “Keep satified.” Consumers are objects that Toyota wants them subject towards consumption and their assessment is objective and is crucial to the existence or destruction of the Toyota. Toyota’s products when launched without the support and acceptance from customers will be very difficult for Toyota business in the local market and can even lead to bankruptcy of enterprises. along with policies and regulations of the host country is also an important factor determining when the policy issued by them without appropriate support for business activities, the business can not business profits in the market of that country. And finally the factors that play an important role for Toyota as owners, managers, employees, and banks. Owners have the important decision to make leadership and development company in the right direction and purpose. Bank could help Toyota Toyota help on the financing to complete the project and product development objectives and expand into new markets. and finally the officers and employees of the company they are the factors that make our products and contribute to the value of the product, they will promote and increase the value of brand products as well as Toyota.

Toyota is still considered the pinnacle of creativity, production quality and the power industry in Japan – especially after the company passed General Motors (USA) became the largest carmaker in the world. But now they are facing catastrophic – why?

Most problems related to Toyota’s business environment is currently facing are:

The recovery (recall), nearly 8.5 million cars Toyota worldwide due to technical deficiencies endanger the safety for the users has caused a serious crisis.

From November 2009 Toyota begins withdrawal of 3.8 million cars to repair parts of the accelerator, to overcome unwanted vehicle acceleration. 1-2010 to May, Toyota recall to 2.3 million vehicles on the same reason, and stop production at five factories in the U.S.. 9-2 days, Toyota recalls 440,000 additional hybrid vehicles (both cars have gasoline-electric), including the popular Prius model, to fix a problem in parts wins. According to Reuters news agency on 23-2, Toyota is also considering withdrawal Corolla – selling car after the Camry Monday – due to problems in parts of the wheel.


The competitor with the Toyota U.S. crisis is also opportunity for Toyota to launch promotional campaigns “Giving up the car to Toyota to buy their vehicles.”

Before Hyundai, two U.S. carmakers General Motors (GM) and Ford are also adopted measures similar to entice customers. GM and Ford pledged to donate $ 1,000 for consumers to switch to Toyota’s second car company. Toyota customers that GM could get a loan to buy the car for 5 years without paying any interest…


Also Toyota is also facing problems due to the state of the environment and the earth’s warming, gas prices, increased demand truongve vehicle fuel consumption. and finally the rise of raw material will cause an increase in the price of the product in the future.

Toyota’s goal is to continue to maintain its position as the world’s No. 1 in sales and continue to upgrade and further improvements in product quality and will regain its image.

2010 saw the vehicles fuel combination of Toyota Prius sales break record for a single model in Japan. Prius sales increased program support by the Japanese Government, for consumers to buy environmentally friendly vehicles.

Toyota predicted that car sales reached 8.61 million vehicles in the global market in 2011 this

However, according to analysts, the crisis worse recalls that Toyota faced in the past year, which is accompanied by a wave of claim and the record fines, there will be chasing this car in the process to regain the confidence of customers.

“Hold No. 1 in sales is not that important to us. Our goal is to become number one for the customer, in terms of service and satisfaction levels of customers, “spokesman Paul Nolasco said Toyota AFP


Toyota also aims to regain most of the stocks have recovered after losing more than 8 million vehicles worldwide. (Jeff Green, Mar 11, 2010)


Toyota is the world’s largest car company that is the word identified by the AFP news agency report released on leads 24 / 1 of Toyota said sales of the Toyota group increased by 8% in 2010, reaching 8.418 million units. Meanwhile, any U.S. rivals General Motors (GM) sold 8.39 million vehicles.

Particularly in Japan, Toyota’s group sales – including both car Daihatsu Motor and Hino Motors – down 10% in the past year. However, the group’s sales in foreign markets increased 7%. Toyota sold 7.528 million vehicles last year, up 8% from a year earlier.


According to data provided from the output Goodcarbadcar.net in 2010 new car sales at Toyota’s U.S. market have fallen behind both GM and Ford Motor to GM: more than 2.2 million vehicles, Ford Motor: more than 1.9 million vehicles, and Toyota: more than 1.76 million units, and the rest belong to other companies such as Hyundai, Kia, …about 900,000 units. (Good car guy, Jan 5, 2011)

Figure 2:


Through the above analysis and data can be found despite declining sales in the U.S. and Japan, but Toyota’s sales are still increasing in other markets, especially emerging markets like China Asian Nations.


Situation in world oil prices are rising, customers tend to use the car

consumer oriented products that save fuel or use clean energy sources.

Toyota is pursuing projects built natural gas vehicles and hydrogen by applying the

and technical achievements of the modern world and the results of R & D. While customers

looking for alternative sources of oil, this is a lucrative project for the company.

Currently, in many countries where the demand for large vehicles but the supply is still limited

processing. Toyota may expand the market to these countries. Additional vehicles to meet manufacturing requirements of geographical conditions, expand the target audience is young modern opportunities

Toyota to raise its market share.


As discussed above, there are many other vehicle manufacturers around the world have joined

market. This is a big challenge for Toyota while moderately improving the quality and price

product to compete with the existing car, just have to find ways to compete with

potential competitors. Besides, changing the exchange rate between the dollar and yen also lead to beneficial

The company’s profit decline, raw material cost increases, making it difficult for the production.

After the prolonged economic crisis, the governments are expected to proclaim

tight spending policy, leading to sales and sales of vehicle manufacturers will decrease. Government

Countries are also encouraged people instead of using these products may cause environmental pollution as cars, motorcycles, you should use public transport to move like a train, bus, high speed train.

In addition, changing demographics, such as families now prefer to use the

large models, the change in the use of family car as the car uses less than in making

children to school, the home delivery services, also reduces the demand for cars fell


Analysis of environmental factors I would use PEST model includes the elements of the macro environment have little impact to the operation of businesses and Toyota is no exception. The influence of these factors within Japan and internationally will also be addressed in turn.


Political environment – the Japanese law has most affected the operations of Japanese companies including Toyota. Recently, the Japanese political situation is very volatile. Only within 3 years from 2007 to 2009, Japanese politics has seen three times the resignation of President Shinzo Abe, Yasuo Fukuda and Taro Aso before the incumbent Prime Minister Yukio Hatoyama took office. The key positions in the cabinet as well as such but rather

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change. Toyota is a company which has been great support from the Japanese government to fluctuations in the blizzard of Japan will make this relationship been shaken. One problem is equally important that the Japanese government’s policy. Trade policy of Japan is mainly export-oriented. Japan implemented the tariff policy to limit and reduce protection of domestic purchasing power of Japan, to reduce imports and increase exports. To promote export of their goods, Japan has adopted incentives and incentives for exports such as tax exemptions for companies that import and export; through the Development Bank of Japan Copyright and import-export bank, low interest financing, incentives for exporters. Specifically, the government has established institutions to support exports in the field of exploration and search for external markets. In addition, Japanese government also set up banks to support export credits for projects that have export turnover of which is as big as cars. Japan has a policy of quality control of exports is not very strict in order to reach the inferior-quality goods outside the market to keep credibility. The main work closely examine the quality of Japan’s exports has made the importer of Japanese goods trust and contributing to the increase in exports of this country. Policy priorities such exports, Toyota received preferential treatment from the Japanese government. Such a broad review of the political environment – in water law, Toyota has been more favorable.

Since Toyota is a multinational company so of course influenced by the environment

treatment of foreign markets as well as international political environment. China is a

in the largest market for Toyota. In particular, China is a market for big cars

But the world’s tax policies to limit Chinese imports of automobiles, this

Toyota makes the experience difficult to export cars to China units,

instead to develop the type of company in China.


In 2007-2009, the Japanese economy as well as the world economy into recession.

Japan is recovering gradually after the crisis, but negative growth rate and unemployment rate

the industry is still highly problematic.

Unemployment rates lead to higher consumer prices fell 1.7% in 2009 compared with 2008. Only the main consumers, decreased by 9 months, leading to deflation and cause damage to

economic growth by low corporate profits, consumers are also more economical and therefore

will reduce the need … tough economy will reduce demand for Toyota products.

Faced with economic recession, the short-term policy of the Japanese government is trying

to maintain a weak yen (USD / JPY, EUR / JPY is always trying to stay high)

to facilitate exports. With such rate policy and with the stimulus of

Japanese government, Toyota also received certain assistance.

But considering the long term, Japan has a more or less developed countries will suffer

trend effects of economic restructuring from industry to services. This trend will

difficult for a company in the manufacturing industry such as the priority for Toyota

This industry is gradually declining.

Considering the environment outside the country, notably the U.S. – Toyota’s largest market, economy

But recession has badly affected the automotive business, including

Toyota. America must confront the problem low growth, high unemployment, inflation problems.

The economic crisis makes America – one time was “addicted consumers” – become limited consumer spending. This certainly makes the maintenance of vehicle sales, build more factories in the United States of Toyota becomes difficult.

In summary, the impact of the recent financial crisis, the economic environment impacts

Toyota in the direction of more negative than positive.


These factors impact on all aspects of Toyota production operations, and management of


Japanese society itself that they lack many of the conditions but need to assert themselves,

should tend introduction and improvement of what we introduced in order to become Japanese

Copyright. Japanese society to honor the labor sacrificing themselves for business and for society. Japanese people appreciate the labor of all, sticking with entrepreneurs than with their families, put all his career for the success of the organization. As a business in Japan, Toyota also inherit and promote the qualities of the Japanese. Toyota set up a new phase must also learn manufacturing products based on American cars but not entirely reproduced the features, product quality is always improving. Toyota also took great leadership as key departments: Toyota President Kiichiro Toyoda had voluntarily resigned in 1950 to assuage foreign workers before unemployment increased after World War II period. With the influence personality, national culture so sure Toyota will contribute to revive the Japanese economy during the economic crisis – finance.

Japan itself is also the largest market for Toyota, so these two characteristics

views on social and cultural impact to our product characteristics. Japan is a

Developed countries have per capita incomes in the highest group in the world today. Living

in an environment with high living standards, consumers in Japan to set specific standards

accurately differentiate the quality, durability, reliability and usability of the product. For Japanese consumers, price is a signal of quality. Besides a salary, most workers are rewarded twice a year. Bonus each time by about 1 to 3 months salary. For employees, the cost of normal daily activities are also paid from a salary bonus for savings or to purchase expensive as buying a car. Structural expenditure, travel expenses for food only behind, spending more for travel of Japanese households tend to increase in recent years. This is a favorable influence and direction on natural products for Toyota quality, style and fashion without too affordable.

Similarly, the structural elements of the population, income, education level, in other countries …

that Toyota considered the market also affects the characteristics of Toyota products in the market that school. With a multinational company with market-wide, you need to have multiple products range of price, style …


Toyota also benefited from the policy research – technological development of Japan.

Currently Japan is the country with investments in research in the world’s largest GDP.

Further research collaboration between modern technology and government enterprises are

support. Thus, environmental science research – domestic technology facilitates

beneficial to business in the field of high technology content in general and Toyota in particular.

Join the automobile industry – a sector that technological factors have a role, Toyota is also subject to

the impact of technological improvements regularly, this is not required for Toyota

continually study and apply modern technology in the production and manufacture products. Public Modern technology allows more energy use reduction, weight, size of vehicle

increasingly reduced, the higher the level of safety. Especially recently, hybrid technology has emerged as an advanced

new set of saving energy, limiting pollution emissions. Computer constantly updated, constantly renewing of science – technology requires Toyota to research and apply new technologies to continually cut costs, reduce costs, increase product quality, creating products effective both economically and environmentally.

Toyota has always aimed to meet the needs of each country and region. Accordingly,

basic product campaigns from 2000 to today’s Toyota is to provide all types of vehicles for all

countries, all regions. As of 2009 Toyota has formed a global network

with 11 research and development centers and 75 manufacturing centers in Japan and abroad; network net sales has been in over 170 countries and regions. However, the market conditions

harsh automotive field today, the expansion in this manner becomes more difficult

while Toyota is to perform its role as an automobile manufacturer to contribute to

a rich social, economic growth and environmental future of the earth. So in

Toyota to time to determine where it wants to compete and the region should take steps


Currently, Toyota has developed its own strategy for each major market segment

world, with developing countries (especially Chinese) competition in pricing strategies,

domestic market focus on product quality, the North American market development towards self-sufficiency, the European market advantages of using clean fuel vehicles.

With production mode during the formation of long-term operation, Toyota owners

an intrinsic value of sustainability. Company culture is also an important factor in creating

value of the company. However, in recent years the rapid growth of the company,

expanding at a rate that is too large companies facing the problem of quality.

Now, after a spate of recalls, Toyota has changed its medium-term strategy from

dominant market focus to improve product quality. Advanced high confidence

product quality, restore the honor of the brand will be the most important tasks of the Toyota

in 2011. If done well this task, Toyota has the opportunity to further develop and gain

giant leap from the leading advantage.


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