Arguably, Toyota Company is the top automotive industry in the world. The Toyota motor corporation was built-in in the year 1937.It has many strengths both external and internal that have made it be the leader in the automotive industry. Toyota Corporation has three important brands; these include Lexus, Toyota and scion. Having many brands has made the company prosper worldwide. It lets the company reach different sectors in the world in a good choice of vehicles to ever rising customers demand (Arkadi 3). Additionally, Toyota has been the leading in total quality management. Toyota external environment refers to key forces outside the corporation with greater possibility to influence significantly their services and products.
The external environment affects the demand and supply of Toyota Motor Corporation. The general external environment that affect manufacturing of Toyota cars, include government regulation, fuel shortage, war, terrorism, political instability and labor strikes. Additionally there are more specific external factors, these are persistent increase of raw materials cost and high competition. The industry too utilizes the opportunities that arise globally. There is a tremendous increase in the demand of fuel efficient cars (Mary 198).
Toyota and Lexus have the reputation for manufacturing vehicles that are environmentally friendly. Toyota brand has Prius, while Lexus has a RX400h hybrid. Both brands are basically based upon advanced technology developed by the industry (David, Kim, & Mackenzie 92). Currently, the world is experiencing rocketing prices of oil; this problem has led to an increase in the demand of hybrid vehicles. In addition, Toyota has sold its technology to other manufactures of motor, for example ford has bought Toyota technology for the new brand explorer SUV hybrid. This factor strengthens the interest of Toyota Company into investing in the manufacturing of hybrid brands (Arkadi 4).
As a matter of fact Toyota targets the ever growing population of the urban youth. The industry has launched a new Aygo, these aims at the streetwise market of the youth and attempts to capture the DJ culture and the nature of modernization in enormous competitive markets. The vehicle is a convertible and very unique in the market. Its models extend at the rear.
Debatably, product recalls is always a big problem to many vehicles manufactures. In the year 2005 Toyota Company had to recall some pick-up trucks and sports vehicles due to faulty suspension systems. Despite the recalls, Toyota Company did not give clear detail on its actual cost. The majority faulty Toyota vehicles were sold in Japan, US, Australia and Europe.
Just like any other car manufacturer, Toyota Corporation faces stiff competition from the rivals in the car manufacturing industry. Competition is expected to increase in a daily basis, especially from new manufacture ring plants in the market. In most cases the new entrants come from South Korea, China and Eastern Europe. The competition furthers the concentration in light of the continuing consolidation and globalization in the global automotive industry. Factors affecting the degree of competition is pricing, product quality, innovations, reliability, fuel economy, financing terms and customer services (David, Kim, & Mackenzie 93).
Raw materials are very important factors to be put into consideration, especially in growth and development of every in industry. Toyota Company faces the external forces in the persistent changes in the price of raw materials. The raw materials include fuel, steel and rubber. The further increase in the prices of oil, it will indirectly cause an increase in price the auto parts. This implies that the manufactures will increase the total procurement cost of the car.
Politically, Toyota motors are affected through government laws and regulation. The industry has been influenced by these laws and regulations since 1960s.The pressure to the government to implement rules come from consumers and environmental specialists. The consumers go for safer automobiles, therefore the industry if forced to manufacturer cars under the control of law and consumer preference. The political climate in the Toyota markets affects the importation and exportation of the Toyota vehicles (Mary 198).
Despite the speed that is linked to Toyota vehicles, it has suffered major setbacks especially in US. The accelerating power of Toyota vehicles have been linked to more than 15 deaths to certain acceleration. Hence the government of America has discouraged the importation of most accelerating Toyota brands.
The inventions and innovations in all sectors of the economy have converted the world into a global village. As a matter of fact businesses too have become a global affair. Internet and other means of communication have provided a good advertisement ground for Toyota. Study on the demand of Toyota vehicles increased due to the Internet accessibility. For example 60% of the people who buy Toyota brands, referred to the Internet before purchasing. Hence the entire Toyota products have ventured beyond the national boundaries. For example Toyota Corporation manufactures cars in India and USA and sells them in the whole world. It is through innovation that hybrid vehicles and the prius models were developed (Arkadi 3).
Terrorism and war disrupts the normal functioning of the Toyota Corporation. It affects the organization adversely It completely induces fear and demoralize the employees in the corporation. Investors and shareholders are sendoff by threats especially in USA. It destroys the infrastructure and killing the innocent and potential customers of Toyota.
The external environment analysis of the Toyota Company identifies problems and issues that are based on operations, structure and international management conflict. Toyota being one of the most recognized automotive makers globally, they should realistically analyze the external environmental issues so as to remain on top.
Works cited
David, L.Kim, S. & Mackenzie, F.Contemporary Marketing. New York: Pearson.2009.
Arkadi, B.Report on the Toyota Company.Norderstedt:Auflage.2010.
Mary, C.Strategic Management in Action.California: Prentice Hall.2002.
