Analyzing Toyota: Business Principles, Trade, and Operations Plan

This report provides a comprehensive analysis of Toyota's business principles, covering various aspects such as organizational structure, legal frameworks, external environmental factors, international trade influences, and operational planning. It identifies Toyota as a public company and discusses the advantages and disadvantages of this structure, comparing it with private companies and partnerships. The PESTLE and SWOT analyses are used to evaluate the external and internal factors affecting Toyota, highlighting opportunities and threats. Furthermore, the report examines the drivers of international trade and their impact on Toyota, along with operational activities and plans designed to achieve corporate objectives. The analysis emphasizes the importance of technological and environmental factors in shaping Toyota's strategies and operations. Desklib offers this report as a valuable resource for students studying business development, providing insights into the practical application of business principles within a multinational corporation like Toyota.

Business Principle

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
QUESTION 1..................................................................................................................................3
a. Identify the type of organization of chosen company and explain its advantages and
disadvantages on its performance................................................................................................3
b. Identify two different types of organisations and compare and contrast their purposes to
your chosen organisation.............................................................................................................4
c. Identify two contrasting legal structures of businesses. Outline two advantages and
disadvantages for each of the identified legal structures.............................................................4
QUESTION 2..................................................................................................................................5
a. External environment analysis of company.............................................................................5
b. Implications of analysis to company’s operational planning..................................................7
c. Identify and explain two factors impacting on your chosen organisation’s industry..............7
QUESTION 3..................................................................................................................................8
a. Discuss two main drivers of international trade......................................................................8
b. Explain with specific examples how your chosen organisation has been impacted either
positively or negatively by international trade............................................................................8
c. Assess the impact of globalisation on your chosen organisation’s industry............................8
QUESTION 4..................................................................................................................................9
a. Two operational activities undertaken by company................................................................9
b. Based on the two operational activities identified, provide a brief operational plan with an
explanation of how they are used to achieve its corporate objectives.........................................9
c. Explain three key considerations required for managing and leading effective operational
plans within organisations and discuss two techniques used for evaluating the outcomes of
operational plans........................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Every organization is established with their own purpose and they are required to work in
the dynamic external environment which brings several challenges and opportunities to it. The
companies do not have any control on the factors which are brought from external environment
so it becomes difficult for it to respond to such challenges (Kennedy and et. al., 2017). The
organization chosen in this report is Toyota, a Japanese multinational company which deals in
automobile sector and is headquartered in Aichi, japan. It has its expanded business in UK as
well. This report will deal with different types of organizations, legal structures and its pros and
cons. Then it will cover analysis of external environment of company and implication of analysis
to operational planning. Lastly, it will cover drivers of international trade, how it affects
company and operational activities which can help in developing operational plan.
MAIN BODY
QUESTION 1
a. Identify the type of organization of chosen company and explain its advantages and
disadvantages on its performance.
There are mainly two types of organizations, one is public and other is private companies.
Toyota is a large multinational organization which is a public company.
It has several advantages of performing in such type of organization which includes the
following-
 It can raise the capital by the public issue of the shares when the company is listed in the
recognized exchange. As Toyota is the public company it has ability to raise the funds
from public by selling shares to public and any person can invest their amount. It can
raise more capital than private companies.
 The public companies are able to raise finances so they have more opportunity to pursue
new projects, market or product. Toyota drives innovation with the support of finances
which enhances its performance in competitive world (Augenstein and Fleig, 2018).
Disadvantages:
 There are many regulatory requirements which helps in protecting the shareholders. For
example, it has to obtain trading certificate from Companies House, and requires
minimum two directors. Toyota is also required to make compliance with legal

regulations so that it do not have any hardship. It wastes its time and efforts which affect
its performance.
 The public companies have high level of transparency as its financial accounts are
required to be disclosed in public.
b. Identify two different types of organisations and compare and contrast their purposes to your
chosen organisation.
The private company has the sole purpose of generating profits while the public company
is aimed to generate profit as well as do welfare of the society. As Toyota is a public company, it
is aimed to maximise the profits but keep in mind the society and its welfare so that there is no
hardship faced by it.
c. Identify two contrasting legal structures of businesses. Outline two advantages and
disadvantages for each of the identified legal structures.
There are various kinds of legal structure which are prevailing in UK which includes sole
proprietorship, partnership, private limited company, public limited company, etc. Two types of
legal structure include partnership and public company. The former involves two or more
persons who mutually decides to undertake the ownership and working of firm and share
responsibilities, profit, loss and other aspects of business while the latter involves the minimum
of three members who initiates the business by raising funds from public in lieu of ownership.
Legal structure Advantages Disadvantages
Partnership  There is contribution
of capital from all
partners which helps in
reducing stress of
raising funds.
 It takes less formality
to register the
partnership firm
(Stoyanova and
Angelova, 2018).
 There is sharing of the
profit and loss and
decision making
powers.
 There is no
independent working
rather partners have to
consult others partners
before making any
decision.
Public company  It raises the finance  There is less

from the public so that
it can grab more
opportunities
overcome challenges.
 There is more
interference of the
government which
gives it support to
work in competitive
environment.
confidentiality as
compared to
partnership firm in this
as it requires public
disclosure of the
documents of the
public company.
 Toyota is public
company which
involves complex
process to establish the
company and
registration at
Companies House
which takes more time,
effort and money.
QUESTION 2
a. External environment analysis of company.
The PESTLE analysis is a framework which is used to analyse the external environmental
factors which are not in control of the firm. In context to Toyota, it is discussed below-
 Political: The stability of political environment in various market works as opportunity
for Toyota in order to grow with minimum political tension. There is also improved
market penetration for Toyota due to free trade agreement among japan and other states.
 Economic: The rapid growth in the developing nation possesses opportunity for Toyota
as there are more labour, capital and manpower in order to raise the revenue. Moreover,
less inflation is UK possesses opportunity for Toyota to enhance sales due to high
spending habit of people.

 Social: Due to more widening gap in wealth of people which works as threat to company
as it mainly corresponds to decreased middle class as they are main source of revenue for
Toyota. So this is the biggest concern for it (Al-Doori and Areiqat, 2019).
 Technological: The company makes effective use of the technology in its business such
as mobile application, ecommerce, etc. It can bring improvement in it so that customer
engagement as well as loyalty is enhanced.
 Environmental: The company has the opportunity to provide the eco-friendly products
such as electric cars to people so that it can increase the sustainability performance.
Moreover, it can also bring improvement in the business process efficiency so that it can
attract customers.
 Legal: Toyota makes sure that it makes adherence to the laws so that no hardship is faced
by it. Moreover, it can make compliance with the intellectual property rights,
environmental laws as well as consumer law so that there is smooth functioning of it.
SWOT analysis
It is another tool which is used to make analysation of the external and internal factors of
company so that it can make use of its opportunities and strength in order to overcome threat and
weakness. In context to Toyota, it is discussed below-
Strength
 The strong brand value of Toyota is a
strength of it as it helps in attracting
more customers and retaining the
existing one due to brand loyalty.
 Toyota has good R&D team which
helps it to bring timely innovation in
the company so that it can stay in
competition.
Weakness
 As Toyota is large organization so there
is lack of flexibility in it which
possesses weakness in it to make
effective management of its working.
 The hierarchical structure of Toyota is
another weakness as it results in
delayed decision making due to long
chain of personnel.
Opportunities
 One opportunity for company is grab
the growing demand of the hybrid cars
and fuel efficient cars so that it can
bring sustainability in its products
Threats
 The rise is fuel prices possesses threat
on Toyota as it may affect the sales of
company.
 Another threat is the innovative

(Shawabkeh and Al-Lozi, 2019).
 Another opportunity is to expand the
business in developing markets of
emerging economy.
competitors like Tesla, etc. which may
affect the loyal customer base of
organization.
b. Implications of analysis to company’s operational planning.
The operational planning of the company includes a process which involves planning the
strategic objectives to the technical goals. There are different operational areas in Toyota such as
marketing, human resource, etc. which are affected by the environmental factors.
For instance, in the marketing operational areas, the brand value of the company helps in
promoting the products of the company as the people are attracted towards the organization and
its product due to its brand value which makes it marketing easy. Another factor is innovative
competitors of company as they pressurise the company to bring such marketing strategy which
can help in staying ahead of competitors.
Another operational area is human resource which is affected by many factors such as
excellent R&D team which is recruited by the company. The hiring of the talented and skilful
worker by the company helps it to take competitive advantage by brining such innovation which
can help it to stay ahead of competitors (Li and et. al., 2020).
c. Identify and explain two factors impacting on your chosen organisation’s industry.
There are many factors which are affecting the company Toyota, out of which the first is
technological factors. As nowadays, it has become essential for organization to bring innovation
in the firm so that it can battle the competition. The technological factor pressurises the company
to bring regular technological advancement in the firm so that there is competitive edge taken in
market. On one hand, it increases pressure on it to deploy technology and on other it makes its
functioning easy so that it can carry on its work effectively.
Another factor is environmental factor. If Toyota wants to stay in competition, it is
essential for it to bring such innovation in its working which is sustainable and eco-friendly so
that more customers are attracted. Moreover, brining sustainable innovation not only makes it
difficult for company to make compliance with laws relating to environment but also affects the
profitability of firm as introducing sustainable cars can increase its cost and price of products.

QUESTION 3
a. Discuss two main drivers of international trade.
International trade can be referred to as an exchange of the goods and services between the
countries. Trading at global level provides the countries as well consumers an opportunity to be
exposed to the products or services which are not available at their own countries. Two drivers of
the international trade include the following-
 Limited home market: When size of home market is limited may be due to small
population or due to less purchasing powers of people, the organizations can
internationalize their business. Moreover, the company which is mature is in its domestic
market may drive to sell in more than one of the country due to its sales number which is
achieved in domestic market is not enough to capture economies of scale so company
internationalise their business and trade.
 Global marketplace: Due to advancement in the internet and the ecommerce, the
international trade has become easier so that the business can be done easier. But it is
important for companies to have right product, strategy and the appetite so that risk is
taken in order to enter the global market (Pavlov, 2020).
b. Explain with specific examples how your chosen organisation has been impacted either
positively or negatively by international trade.
The international trade has impacted the companies both in positive and negative manner.
the negative impact by the international trade on company like Toyota is that there may
inequality in the wage system. As there are many countries whose minimum wage criteria is
distinct and varies so the expatriates may feel the inequality in wages which may affect their
effectiveness and performance. Another example in which international trade positively affect
the company Toyota is increased revenue as the organization gets new market to explore its
business operations and a new opportunity to fulfil the demand of new market so this can affect
the company positively in order to enhance its profitability and revenue generation (Raut and et.
al., 2019).
c. Assess the impact of globalisation on your chosen organisation’s industry.
Through globalization, merger and acquisition have created wave in the automotive
industry. There are many assembling and manufacturing plants which have become efficient in

order to face the competition which can result from the advanced technology. Toyota is such
organization which has the ability to grow in the international market to greater extent. The more
of the expanded market simply implies that there is increase in the sales which results in high
annual returns for the company. It has resulted in increasing the cross border economic flow,
socio economic and financial aspects which may result in economic interdependence among the
distinct national economies, the flow of capital in the globalized manner have helped Toyota to
respond to the changing environment.
QUESTION 4
a. Two operational activities undertaken by company.
The Toyota company undertakes different operational activities which includes firstly the
designing of its car so that the attractive model is launched which can attract the customers. It
makes use of the technological advancement and the quality so that advanced features are added
in its offering. The second operational activity of Toyota is capacity and process design wherein
it makes use of the lean manufacturing so that there is minimum wastage and maximum
efficiency of process and utilization of capacity. Thus, the company supports the efficiency of
business and is cost effective in terms of process as well as capacity design (Tron, 2021).
b. Based on the two operational activities identified, provide a brief operational plan with an
explanation of how they are used to achieve its corporate objectives.
For the two operational activities identified above includes designing of car and process
and capacity design. The operation plan for Toyota includes the following-
Objectives:
 To increase the sales of the company.
 To bring improvement in the quality of offering.
Timeline:
In order to achieve the above mentioned objectives, Toyota company would take the time
period of 12 months so that it can carry out its operational activities.
Procedures:
Toyota will firstly recruit the talented and skilled employees at its workplace so that there
is quality enhancement in the process and manufacturing of its products. There must be sufficient

funds for the organization to carry on these two operational activities so that there is no
compromise with the quality and resources are utilized to the fullest with minimum wastage.
With the help of the following procedure, the company can achieve its objectives by way
of these operational activities so that its overall business objectives are accomplished. The skilled
human resources and appropriate budget will help in performing well.
c. Explain three key considerations required for managing and leading effective operational plans
within organisations and discuss two techniques used for evaluating the outcomes of
operational plans.
When preparing the operational plan, three considerations which are required to be
considered by company Toyota for leading and managing the operational plan includes the
following-
 Tracking the performance on regular basis by using appropriate tools such as
benchmarking so that the actual performance is matched with planned and corrective
measures are taken in order to bring the performance as per the plan.
 Eliminate the wasted resources so that the focus can be made in optimum utilization of
useful resources so that the plan can be carried out effectively.
 Use the efforts of human resource effectively leading them with great enthusiasm and
make use of the participative leadership so that the members have freedom to express
their views, ideas and opinions (Ahmed and et. al., 2020).
Techniques used for evaluation of the outcome of operational plan:
 The company must make sure that its targets are real in terms of the past performance.
The realistic and measurable goals will help in evaluating the outcome of the operational
plan.
 Another technique is make sure that a benchmark is set by the company for the plan so
that actual performance is compared with the standard set which will help in evaluating
the outcome of the plan.

CONCLUSION
It is concluded from this report that there are various types of business organizations which
are prevailing in today’s time which includes public and private. Each type of organization has
distinct legal structure such as partnership, companies, sole trader, etc. The business operates in
the external environment which is being analysed by using the PESTLE and SWOT analysis.
There are many drivers to international trade such as limited home market, global market, etc.
The globalization has a positive as well as negative impact on the companies as it affects their
functioning due to cultural change and other aspects.

REFERENCES
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