TOYOTA TERM PAPER | Course Paper

A TERM PAPER ON

TOYOTA

Course Name: Management of Organization & Systems

Course No: MGT 701

Submitted To:

Professor Dr. Md. Faridul Islam

BRAC Business School

BRAC University

Submitted By:

 Subrata Roy (ID:18374017)

 Ekramul Hoq (ID: 18174019)

 MD Shaukat Hossain (ID:18374006)

 Sadia Jahan (ID:18174019)

 Mohammad Shamim (ID:17274026)

EXECUTIVE SUMMARY

Toyota Motor Corporation (further Toyota) is the world’s leading automaker

(often tied with Volkswagen for 1st-2nd place) based in Toyota City, Japan.

In 2012, the company was the first automotive company to produce over 10

million vehicles in a single year.

The company operates 4 different brands: Daihatsu, Hino, Lexus and Toyota.

Toyota’s brand is the world’s 7th most valuable brand in the world and the

most valuable automotive brand, worth US$50.291 billion. The main

Toyota’s markets are Japan, United States and China, where the company sells

over 50% of its vehicles. The company produces the best-selling hybrid

vehicle Prius.

INTRODUCTION

The aim of this paper is to discuss the environmental analysis of Toyota. In

today’s business scenario most of the companies are astonished by the amount

and type of changes taking place in their external environment. Companies of

any type of industries are facing the uncertainties of the external environment.

So in this paper we will discuss the external environment of Toyota and how

external environment affects the functioning of the company and how the

company responds to these uncertainties.

Toyota Motor Corporation competes in the automotive industry. The past five

years were tumultuous for automobile manufacturers. Skyrocketing fuel

prices and growing environmental concerns have shifted consumers’

preferences away from fuel-guzzling pickup trucks to smaller, more fuel-

efficient cars. Some automakers embraced the change by expanding their

small-car portfolios and diversifying into the production of hybrid electric

motor vehicles. Other automakers were more reluctant to shift their focus

from big to small cars, expecting the price of fuel to contract eventually,

bringing consumers back to the big-car fold. When fuel prices did fall during

the second half of 2008, it was due to the US financial crisis ripping through

the global economy. This had a domino effect throughout the developed and

emerging worlds, with many Western nations following the United States into

recession. Industry revenue fell about 15.4% in 2009. 2 Pent-up demands will

aid industry revenue growth, estimated at 2.1% in 2013, thus bringing overall

revenue to an estimated $2.3 trillion. 3 Overall, the large declines followed by

recovery are expected to lend the industry average growth of 2.2% per year

during the five years to 2013. Throughout the past five years, growth in the

BRIC countries supported production. Rising income in these countries led to

an increase in the demand for motor vehicles. Also, Western automakers

moved production facilities to BRIC (Brazil, Russia, India and China)

countries to tap into these markets and benefit from low-cost production. Over

the next five years, the emerging economies will continue their growth, and

demand for motor vehicles in the Western world will recover. Industry

revenue is forecast to grow an annualized 2.5% to total an estimated $2.6

trillion over the five years to 2018.

The current stage of Toyota is that of a leading motor company which offers

a wide range of products from mini vehicles to trucks. The company has

dealerships and manufacturing plants all over the world. The fact that Toyota

puts the customer first provided the company the possibility of growth and

also the possibility of increasing the market share. Their vision is about a

sustainable future with new petrol and diesel engines.

The challenge that represents the global warming and urban pollution made

Toyota try to develop new and innovative environmental technologies and

vehicles. Due to this, Toyota is well known for being the first motor company

that produced a hybrid car. Another innovation of Toyota was the Toyota D-

CAT (Diesel-Clean Advanced Technology) concept. This last innovation was

created in order to reduce the diesel emissions. Toyota is a company that is

environmentally-driven and it sustains the “zero-emissions” concept.

ORGANIZATION ENVIRONMENT

Every organizations affect by its outside world force as well as inside forces.

Both forces have huge impact to an organization to take proper planning,

proper use of resources and going to ultimate goal. There are two main parts

of environmental factors. These are:

1. INTERNAL ENVIRONMENT

2. EXTERNAL ENVIRONMENT

1. INTERNAL ENVIRONMENT:

The internal environment is the environment that has a direct impact on the

business. Here there are some internal factors which are generally controllable

because the company has control over these factors. It can alter or modify

such factors as its personnel, physical facilities, and organization and

functional means, like marketing, to suit the environment.

A) Value system: The value system of the founders and those at the helm of

affairs has important bearing on the choice of business, the mission and the

objectives of the organization, business policies and practices.

B) Mission, vision and objectives: Vision means the ability to think about

the future with imagination and wisdom. Vision is an important factor in

achieving the objectives of the organization. The mission is the medium

through which the objectives are achieved.

C) Management structure and nature: The structure of the organization also

influences the business decisions. The organizational structure like the

composition of board of directors, influences the decisions of business as

they are internal factors. The structure and style of the organization may

delay a decision making or some other helps in making quick decisions.

2. EXTERNAL ENVIRONMENT:

It refers to the environment that has an indirect influence on the business. The

factors are uncontrollable by the business. There are two types of external

environment:

1. Task/Micro Environment

2. General/Macro Environment.

1. Task/Micro Environment: Task Environment of an organization is the

environment which directly affects the organization from attaining business

goals. In brief, Task Environment is the set of conditions originating from

suppliers, distributors, customers, stock markets and competitors which

directly affects the organization from achieving its goals.

2. General/Macro Environment: The factors and conditions (such as

economic, legal, political, and social circumstances) that generally affect

everyone in an industry or market in more or less similar manner. It consists

of five dimensions: Economic, Technological, Sociocultural, Political–

Legal and International.

OBJECTIVE OF THIS PAPER

 TO DISCUSS POLITICAL-LEGAL FORCES OF TOYOTA

 TO STUDY THE SWOT ANALYSIS OF TOYOTA

 TO STUDY THE COMPETITIVE ANALYSIS OF TOYOTA

 TOYOTA & BANGLADESH

POLITICAL-LEGAL FORCES OF TOYOTA

The worldwide automotive industry is subject to various laws and governmental

regulations such as –

 Government

 Trading policies,

 Funding grant and Initiatives,

 International pressure group,

 vehicle safety

 Wars and conflicts,

 Government