Exploring Toyota's Business Environment in the UK: Recent History, Strategic Objectives, and Market Analysis

In this document we will discuss about Exploring Toyota's Business Environment in the UK and below are the summary points of this document:- Introduction to Toyota's business operations and its global market presence. Overview of Toyota's recent history, strategic objectives, and organizational structure. Discussion of Toyota's products and services and its relationships with the UK market and government.

Running head: BUSINESS ENVIRONMENT UK TOYOTA
BUSINESS ENVIRONMENT UK TOYOTA
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Table of Contents
Introduction:....................................................................................................................................2
Toyota recent history:......................................................................................................................2
Strategic objectives of Toyota:........................................................................................................2
Toyota structure:..............................................................................................................................3
Toyota’s products and services:.......................................................................................................4
The relationships of Toyota with UK:.............................................................................................4
United Kingdom PESTLE analysis:................................................................................................5
Political factors:...........................................................................................................................5
Economic factors:........................................................................................................................5
Social factors:..............................................................................................................................5
Technological factors:.................................................................................................................6
Legal factors:...............................................................................................................................6
Environmental factors:.................................................................................................................6
Economic situation affecting business environment of Toyota:......................................................7
Conclusion:......................................................................................................................................7
References:......................................................................................................................................9

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Introduction:
The aim of this report is to discuss the business operations of one of the largest car
manufacturing companies of the world namely Toyota Motor Company. Despite the fact that the
company has an Asian background, it has now captured the market of all the developed countries
as well as those nations having emerging markets. In each of the markets, Toyota Motor
Company has something different to offer or some different strategies. So that it can get the
competitive advantage in that particular market (Gov.uk 2019). This report will be discussing the
recent history of the company, its strategic objective and products and services. Toyota’s
relationship with the governments of the UK as well as its market is much older and strong.
However, despite all the aspects of the UK market is supportive of the growth of the company
but there are some economic issues especially after Brexit has affected the successful business of
this car manufacturing company. These factors will be analysed in this report in detail.
Toyota recent history:
Toyota Motor Company was established in the year 1937, Aichi, Japan. Initially it was a
division of Toyoda automatic loom works. This particular industry initially had a loom business
which was mainly a part of textile. Under the direction of Kiichiro Toyoda, this company got the
encouragement of making car parts from the government of Japan (Toyota-global.com 2019).
The war with China helped his company to grow sharply in the car manufacturing business
however, till 2012, Toyota was the largest car manufacturing company but now it is one of the
fourteen largest car manufacturing company in the world.
Strategic objectives of Toyota:
Toyota’s objective has three segments which include business, ethical and cultural as
well as environmental objectives (Toyota-global.com 2019).

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The business objectives states that-
 The company will maximise the wealth of the shareholders and return their invested
capital within time.
 Cost management
 Overcome competition
 High quality production
 Positive brand image in the local and international markets
 Proper utilisation of manpower.
The company’s ethical objectives include not to compromise ethics and true presentation
and offering, complying with law and attaining highest level of honesty and professionalism. The
company realises the need of the sustainable development hence takes care of the further needs
by arranging the waste management actions and protect the whistle blowers though arranging
meetings for the social, environment and cultural issues (Gao and Low 2015).
Toyota structure:
The business structure of Toyota is based on very business operation of the world. For
being world’s leading automobile manufacturer company has employees its organisational
structure for supporting the business goals as well as strategic directions (Toyota-global.com
2019). The structure followed by Toyota is connected with the traditional organisational
structures which are used in the Japanese businesses. This effectiveness of the company to
maintain a strong International presence shows the ability of using its organisational structure for
maximizing efficiency and strong global presence. Toyota’s organisational structure has three
main characteristics. The first is global hierarchy, second is project-based divisions and the third
is geographical divisions. In the first segment the company has announced decision making

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power bestowed on the regional heads as the business unit heads. Secondly the product is
divisions has four subdivisions depending upon different types of products produced by the
company. Finally, in the geographic divisions, there are eight segments into which the markets of
the world have been divided on the basis of market size and societal expectations (Toyota-
global.com 2019).
Toyota’s products and services:
As mentioned before, Toyota has been a looming company focussing on the textile
industry of Japan. However, in these five decades, the company has developed itself to products
like automobile such as engines, car air-conditioning compressors, vehicles and car electronics,
textile machinery and materials handling equipment. In addition to this the company also
provides financial services (Toyota-global.com 2019).
The relationships of Toyota with UK:
As the UK is an important country of the European Union, Toyota has a strong
establishment on this particular country. The market of the UK is also important as it has a
unique industrial base as well as strength to support a new company to grow. Starting from the
1989, when Toyota entered the market of the UK, it has made it clear that western culture will be
overwhelmed with the Japanese innovation and embrace this fully (Worthington and Britton
2015). However, with changing time and situation, this market has governed scope for different
competitors of Toyota which can hamper the growth of this particular company. However, as the
UK Government gets benefit from the Japanese Investments in the UK market, it gave more
advantage to Toyota to lower costs and enter more flexible markets in the neighbouring markets
in Europe (Gillespie and Hennessey, 2011). The relation of the UK government with Toyota has

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provided stable and secured markets so that the company can become more competitive and
increase its sale each and every year.
United Kingdom PESTLE analysis:
Political factors:
UK is more or less fair country and the people have large influence on the inner workings
of the government. The government is proactive and stable. Despite of having an institutional
monarchy, it is split into national and international administration. However, despite having
well-guarded by the people, there are some instance of hidden corruption present in the political
system.
Economic factors:
The country has a strong economic position in the European union countries. It has a
diverse economy, high GDP and free market (Ons.gov.uk 2019). The population of the United
Kingdom is large which makes the small market to be profitable. The country has a diversified
economy which has both the private as well as private sectors (Gillespie and Hennessey, 2011).
Increasing foreign direct investment in this market has made this attractive for any type of
business to enter. However, the economic recession of 2008 and 2009 has affected the economy
of the UK intensely which has slowed down the recovery process even. As the country as a
welfare government, much among is spent on the public services and aid purpose.
Social factors:
The living standard of people in the UK is high with all round circumstances. UK has a
high population growth. In mid-2017, the population of the UK was an estimated 66 million
which creates an attractive market for the international business organisations. The country has

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created a cosmopolitan environment with culture diversity (Ons.gov.uk 2019). This has created
skilled yet cheap labour for the employment purposes. In addition to this, the customers in this
country knows to value the higher quality rather than cost effective products. Therefore, the
international brands which focus on the high quality of products rather than the price of the
products get opportunity to flourish within limited period. However, there are some incidents of
social unrest regarding the ethic groups residing here and ever-increasing education cost that ay
affect the availability of cheap labour.
Technological factors:
The technological factors involve quality innovation capabilities. The Government of the
UK invests a large amount of aid in the growth of Information Technology and expertise in
Science. It as effective laws so that the companies can secure their intellectual property. There
are plenty of opportunities and internal competition in the information technology segment
which stimulates growth. However, the technological development is much lower than that of the
USA. Therefore, this market is not getting proper opportunity to present itself to the international
market.
Legal factors:
The legal system of the UK is watch organised and supportive of investment. The
government has introduced new policies and security measures for the growth of business in this
market (Ons.gov.uk 2019). However, the issues of Brexit can affect the smooth running of
business which relates to the confusion of remaining in the European Union. In case the UK
leaves the EU without any deal, then the business can suffer more than expected.

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Environmental factors:
UK Government is much concerned with the environmental degradation issues.
Therefore, it is supported only those companies which focused on the sustainable growth
agreements. The waste management and initiatives to reduce pollution along with the properties
of environmental resources are supported in this market. In addition to this, the consumers in this
particular market are highly educated and much aware of the environment issues. Therefore.
They only support those brands which as fulfilled the reasonability’s regarding environmental
issues through CSR policies.
Economic situation affecting business environment of Toyota:
The economic factors as mentioned above has an important role to paly for the fulfilment
of the business. In the case of UK, the confusion over the Brexit issues had affective UK
economy in ab adverse way. According to the news published in The Guardian this political
issue had slowed down the car sales and factory output stalled amid the highest uncertainty due
to Brexit (Partington 2019). The chief economist of PwC had stated that the economy of this
country would remain in doldrums until this issue of Brexit is resolved (Partington 2019).
These external factors of economy that was connected to the politics of the country and
international relations have the potential to manipulate the business of an international company.
Despite the fact that Toyota has a strong place in this UK market but the political confusion had
slowed down the sales growth. As the growth of GDP at this period of Brexit was marked by the
international business to be one of the most dissatisfactory periods where the foreign direct
investment to the economy was completely stopped. In these doldrums, the consumers showed
no interest for purchasing cars and most importantly, the trade deficit in the goods and services
of the UK had the gap widened by 3.1 billion Euro between the total value of exports and

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imports (Gao and Low 2015). Due to this no deal Brexit situation, the car manufacturing
company like Toyota had suffered a lot.
Conclusion:
Therefore, it can be concluded that the company has a strong and dependable business
growth in any part of the world. Despite of operating in the market of Japan and other developed
and developing markets of the world, the company has not compromised the high quality of its
products for cheaper price. By following all the legislation as well as polities whether social or
environmental, the company has made an effective brand image in the In the UK market. The
situation of the company is stable and growing but it needs to take care of the external factors of
the markets especially the economy which can affect the business in any time both positively as
well as negatively.

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References:
Gao, S. and Low, S.P., 2015. Toyota way style human resource management in large Chinese
construction firms: A qualitative study. International Journal of Construction
Management, 15(1), pp.17-32.
Gillespie, K. and Hennessey, H. 2011. Global marketing. Mason, OH: Cengage South Western.
Gov.uk 2019. Countries in the EU and EEA. [online] GOV.UK. Available at:
https://www.gov.uk/eu-eea [Accessed 11 Mar. 2019].
Kato, I. and Smalley, A., 2012. Toyota Kaizen methods: Six steps to improvement. Productivity
Press.
Ons.gov.uk 2019. Overview of the UK population - Office for National Statistics. [online]
Ons.gov.uk. Available at:
https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/
populationestimates/articles/overviewoftheukpopulation/november2018 [Accessed 11 Mar.
2019].
Partington, R. 2019. UK economy slows as car sales slide. [online] the Guardian. Available at:
https://www.theguardian.com/business/2018/dec/10/uk-economy-slows-cars-sales-
manufacturing-brexit [Accessed 11 Mar. 2019].
Toyota-global.com 2019. Toyota Global Site | Sustainability Issues. [online] Toyota Motor
Corporation Global Website. Available at: https://www.toyota-global.com/sustainability/csr/csr/
[Accessed 9 Mar. 2019].
Worthington, I. and Britton, C. 2015. The Business Environment (7th Ed). Harlow: Pearson
Education.