¶ … external environment facing TOYOTA, the global car manufacturer. This paper discusses impacts of the company's internal organizational strategy (structures and management). The work is divided into two tasks. Task 1: Critically evaluates key factors (e.g. environmental, global, competition, technology) impact TOYOTA performance. Task 2: Provides strategic recommendations for senior managers of the TOYOTA.
Examine the external environment of TOYOTA and how this impacts on the internal organizational strategy (structures and management). Critically evaluate the key factors (e.g. environmental, global, competition, technology) that impact on TOYOTA performance. Findings are drawn from use of analysis tools (e.g. PESTLE, Porter's five forces, SWOT).
Strategic Analysis
We begin our analysis of Toyota by looking at the company through three analytical prisms: Porter's Five Forces Analysis, SWOT Analysis, and PESTLE. It is necessary to define what these analytical prisms are, initially, i.e., define terms, before beginning the analysis in earnest.
Porter 5 Forces Analysis
Porter's Five Forces is an analytical framework for analysis and business strategy development formed by Michael E. Porter of Harvard Business School back in 1979. This model draws upon Industrial Organization (IO) economics to derive "five forces" that determine the competitive intensity and, thus, the attractiveness of a potential market. In this context, attractiveness refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition," where available profits for all firms are driven down to zero.
Note that three of Porter's five forces refer to competition from external sources. The others are internal threats, and Dr. Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. What follows is the five factor framework:
Source: Michael Porter/Harvard University
SWOT Analysis
SWOT analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats facing a business. A SWOT analysis involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique was created Albert Humphrey, who chaired a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 firms.
PESTLE Analysis
PEST analysis is a tool, and the acronym stands for "Political, Economic, Social, and Technological analysis." This describes the framework of macro-environmental factors used in the visualization of the environment element of strategic management. Some scholars added Legal and rearranged the mnemonic to SLEPT. Other scholars added Environmental factors expanded it to PESTEL or PESTLE. The model has recently been further extended to STEEPLE and STEEPLED, adding Ethics and demographic factors. This tool is used as part of an external analysis when conducting a strategic analysis or doing market research, and provides an executive an overview of the many macro-environmental factors that the company has to take into consideration when planning. PESTLE is quite a helpful strategic tool for understanding market growth or decline, business position, and potential options. The growing importance of environmental or ecological factors in recent years have given rise to "green business" and encouraged widespread use of an updated version of the PEST framework.
TOYOTA BACKGROUND
Toyota Motor Corporation (,LSE: TYT, NYSE: TM), commonly known as Toyota, is a multinational automaker headquartered in Toyota, Aichi, Japan. Toyota Motor Corporation employed 71,116 people worldwide, total Toyota 320,808, as of 2009. The company is the world's largest car maker by production and sales. See, Toyota Motor Corporation Global Web site, http://www.toyota-global.com/
Toyota Motor Corporation is headquartered in Toyota City, Aichi and in Tokyo. Founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company, Toyota Industries, the founder's vision was to create a global car maker. The company's first product was the Type A engine; and its first passenger car, the Toyota AA. The company's brands include Toyota, Scion, Lexus, Daihatsu and Hino Motors. Ibid.
Toyota also provides financial services through its Toyota Financial Services division and also builds robots. Supra.
Toyota ranked eighth on Forbes 2000 list of the world's leading companies for the year 2005. The company was number one in global automobile sales for the first quarter of 2008. Supra.
TOYOTA'S ANNOUNCED STRATEGY
Toyota Motor Corp.'s "global master plan" calls for grabbing 15% of the world car market in the company's quest to permanently unseat rival General Motors in the coming years
The automaker is focusing its future on growing demand...
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