Four external factors that impact Toyota and its business are technology, customer needs, laws and regulation and economy. Development of a technology increases the level of competition in the market. Toyota aims to satisfy customer needs with their products and changing customer needs leaves the company with a big challenge to overcome.
Laws of the automobile industry are expected to be followed by companies such as Toyota and any mistake can lead to fines. Finally, changes in the economy can reduce the demand in the automobile industry.
Small companies do not participate in global business, because they do not have the financial resources to compete with local customers and laws. With continuous growth in globalization, it is possible that small business will start getting involved in global trade.
Identify the Problem
In 2010, TPS (Toyota Production System) became a source of serous criticism for the company. Toyota has to recall more than 8 million cars for adjusting accelerator plates and replacing floor mats. This mistake led to the company being targeted by media outlets with negative coverage. It is clear that Toyota lost their way as they failed to apply their TPS principles to their production process. The priority for Toyota is to ensure that they return back to their old ways and manage production in the lean six sigma production process (Van Ede N.pag).
Clarify Priorities
The priority for Toyota was to ensure their production process does not repeat similar mistakes as it could hit the company hard in financial terms and reputation. The lean production process of Toyota has already been highly successful for the company and they need to refocus on the same. Toyota already has improved the lean system through their TPS and principles applied are an improvement on the previous lean production method of Ford.
TPS has helped Toyota to overcome the conventional problems such as scarcity of raw material and deliver more variants in a shorter space of time. For Toyota, the priority remains ensuring that their company maintains their reputation as a leader in car manufacturing and refocusing of TPS is the best solution (Van Ede N.pag).
Problem Statement
The problem at Toyota is major as 8 million recalls increases the work burden on their dealerships and engineers. Also, the problem needs to be fixed to ensure Toyota can focus on selling new cars, rather than fixing old mistakes (Evans & MacKenzie N.pag).
Problem and its Impact
The problem came into picture in late 2009 and early 2010 and continued till the NHTSA investigations in 2013. The revenue of Toyota Motors took a hit during the recall crisis and impact on their reputation was also visible (Evans & MacKenzie N.pag).
Works Cited
Evans., S. & MacKenzie., A. The Toyota Recall Crisis. Motortrend. Motortrend.com. 27 January 2010. Web. 17 February 2016.
Van Ede., J. Toyota returns to its roots: listen, stop, think, improve. Business Improvement. business-improvement.eu. April-July 2010. Web. 18 February 2016.
