Strategic Analysis of Toyota's Market Positioning and Environmental Factors

The assignment content discusses the analysis of Toyota's business environment and its internal capabilities to position itself in the market. It highlights the bargaining power of suppliers as weak due to a large number of moderate-sized suppliers, while consumers' bargaining power is strong due to high information levels. The threat from substitutes is moderate, but new entrants are weak due to the need for significant marketing efforts. The company's internal capabilities include using generic and differentiation strategies, targeting a broad market, and focusing on product development. The macro environmental factors affecting Toyota include economic growth rate, inflation, trade practices, social factors like education and purchasing power, political factors related to public affairs, and technological advancements.

Running Head: MARKETING ENVIRONMENT 1
Marketing Environment
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MARKETING ENVIRONMENT 2
Task 1: Auditing internal and external environments of the organization
The organization that has been taken into account for performing the external, as well as
the internal audit, is Toyota U.K. However, some of the analytical tools will be used in the
above-mentioned process. Firstly, the internal audit of the organization will be performed. The
tools that will be used in these tasks are PESTLE, SWOT, Porter's Five Forces, McKinsey's 7-S's
and QUEST that is Quick Environmental Scanning Technique. Furthermore, the internal audits
regularly examine the business's actual operating methods of a company and contrasting them
with the environmental management system manual. The main aims of the internal audit in
Toyota are as follows: Firstly, to monitor where the environmental management processes are
working well. Secondly, the company also sees where it needs to be improved and lastly,
whether there are environmental risks that are potential in nature. On the other hand, the
company also observed the following when they are conducting the internal environmental audit:
If they are complying with the agreed objectives, policies, and targets of the EMS, the company
also makes sure that if the requirements are met in terms of the EMS standard, they also try to
make provision for the enough communication, and the company never fails to make sure that
their contractors, employees, and suppliers have enough training so that they have the necessary
skills. It has been observed that the company has also introduced the Environmental
Management Systems Training Courses. The course will provide the individual with the required
skills for identifying and implement necessary controls over the process with regards to the
environment and also to consider the life cycle of services, activities, and products (Soh and
Martinov-Bennie, 2011). The company also highlighted that the internal environmental audit
must contain the following points: Focusing on the critical issues and risks, managing and
engaging the stakeholders relationship, delivering the services that are cost-effective in nature,

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enabling a culture that is completely client service based, aligning the value proposition with the
expectations of the stakeholder's, leveraging technology in an effective and efficient way,
matching the talent model with the value proposition and also promoting innovation and quality
improvement.
The environmental audit of the Toyota is completely based on the environmental
management system that is of two types namely the external and the internal audits. The main
aim of the company is to verify their environmental initiatives statuses. It has been witnessed that
for implementing high-quality internal audit and highly independent environmental audit the
company has established a strong internal audit structure in which the director in charge if the
audits appoint a team leader who is directly tasked with the implementing audits. Additionally,
just under the team leader, there are auditors who are screened and selected from each and every
business division of the company. Moreover, the internal auditors in the company discovered
intrinsic and underlying problems at the respective firms and each company implemented the
measures that are corrective in nature (Simon and et al, 2011).
The internal environmental audit structure of the company is as follows:
 The responsible internal auditor: The main roles performed by the internal auditor are
devising internal audit plan, summarizing audit reports and results to the president and
appointing a suitable team leader.
 Team leader: The main roles performed by the team leader are holding auditor meetings,
responsible for implementing audit, planning audit schedules and selecting supervising
auditors and they are also responsible for reporting results to the auditor who is
responsible

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 The sub/junior team leader of the firm takes the initiative of assisting the team leader
 Subteam leader in the business division: The subteam leader in the business department is
responsible for reporting results to the team leader and conducting an audit of each and
every business division.
 Auditors and the supervising auditors: They are in-charge of reporting relevant results to
the team leader with regards to the company, implementing audits and confirming the
progress of the disciplinary measures.
The company has also commented in the recent times that the internal and the external
environmental audit is to develop a list of opportunities that would benefit an organization and
threats can be avoided by them to a great extent. The entire environmental audit is not only
aimed for developing an exhaustive list of likely factors that would influence their business
rather it is mainly aimed at identifying the important variables that can offer the responses that
are actionable in nature. In the other terms, it can be also concluded that the environmental audit
is performed by Toyota for identifying the main threats and opportunities faced by them and to
develop necessary strategies that will benefit from the opportunities and eliminate the company
from the impact of threats.
The PESTLE analysis of the firm is as follows:
 The political factors: Some of the policies and regulations laid down by the U.K.
government is affecting the business of Toyota to a great extent. The political
environment of the region is in which the company is operating also affects their own
company policies at an alarming rate

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 Economical factors: The economical factors have contributed towards the maximum
changes in the policies of HR in U.K. with regards to the Toyota. The other economic
factors such as consumer demand, GDP growth rate, inflation rate and the disposable
income has also an important impact on the policies of HR with regards to the company.
However, some of the main impacts of the economic policies of the company are as
follows: The change in the recruitment policy, relocations of the employees, layoffs,
 Sociological factors: The Toyota operating in U.K. experiences the effects of socio-
cultural or the social factors. The main opportunities in this segment for the firm are:
Increasing interest of the consumers in the hybrid cars are an important opportunity for
them because they can provide a lot of cars for satisfying their consumers and in case of
increasing interest of the consumers in the electric cars also gives a vital opportunity to
the company for serving their consumers.
 Technological factors: The technological factors effects the most to the business of
Toyota as there are mostly into the technological segment. The main opportunities for the
company in this segment are the rising use of the e-commerce by the people as they have
an opportunity for improvement in their e-commerce capabilities another opportunity that
Toyota has is the opportunity to enhance their mobile applications for increasing the
consumer engagement and also their loyalty.
 Environmental factors: It is suggested that Toyota must include the prime environmental
concerns in their strategic decision-making process. Climate change can be highlighted as
a major opportunity for the company because it can provide more environmentally
friendly products to their customers such as the cars that have a high level of fuel

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efficiency in them and another opportunity is to increase their sustainability performance
via improvements in the business process efficiency. There is no major threat in this
particular segment of the company
 Legal factors: The legal factors also tend to affect the business of Toyota to a great
extent. In this particular segment, Toyota has the opportunity for improving the
intellectual property rights because it has been observed that the U.K. government is
working hard towards improving the intellectual property protection
The SWOT analysis of the company is as follows:
 Strengths: Global supply chain, fast innovation capabilities, and strong brand image
 Weakness: There is a lot of secrecy in the organizational culture mainly that is not at all
transparent, the organizational structure is also hierarchical in nature and in the recent
times it has been observed that there are effects of the product recalls
 Opportunities: They have one of the main opportunities that are the growing markets in
the U.K. and there is also a growing interest by the consumers in the advanced electronics
in vehicle, and it has been also observed that there is also a high-rate of demand for the
fuel-efficient cars that can be a major opportunity for Toyota (Gnanaguru, 2011).
 Threat: The main threats that are faced by Toyota are the increasing innovation of the
competitors and there is also an increasing market presence of their low-cost competitors
in the marketplace.
Porter’s Five Forces of Toyota are as follows:

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Firstly, in terms of the competitive rivalry, it is recommended that Toyota must deal with
their strong force of competition. Arguably, there are main global players present in the
automotive industry that can be small but the competition in this industry is predicted to be quite
high in nature. The companies are highly aggressive in nature in terms of both marketings as
well as business. Secondly, the bargaining power of the suppliers in U.K. is assumed to be weak
because there are a large number of suppliers present in the U.K. market and their moderate size
is also one of the main reasons why they cannot influence Toyota. Thirdly, the bargaining
strength of the consumers is also assumed to be quite strong in nature because each and every
consumer are highly informed so they have got the free choice of making their own decision and
these increases the bargaining strength in Toyota. Fourthly, the threat from the substitutes of
Toyota is also assumed to be quite moderate in nature. Toyota in the recent years have produced
some of the models that are low in terms of the fuel consumption and the smaller family cars are
also priced less so the that the middle-income group consumers can afford it. Lastly, the threats
from the new entrants are also assumed to be quite weak because most of the new entrants
cannot innovate like Toyota. Additionally, for any new entrant for growing the market share, it
needs to spend a lot of money on their promotions and marketing segment. The above-mentioned
elements also create main obstacles in the path of any new type of company trying to find their
spot in the automotive industry (Hassan and Ibrahim, 2012).
Task 2: Understanding the impacts of the environment
The impact of the internal capabilities on the positioning of the Toyota in the marketplace
is as follows. Firstly, it has been observed that the company successfully uses both of the generic
as well as the differentiation strategies for trying to gain a competitive advantage over their
potential competitors in the entire automotive industry. Secondly, the market scope that is used

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by the company is quite a broad one that encompasses almost each and every consumer segment
that is present in the market for purchasing a large variety of automobile. Thirdly, Toyota mainly
targets a large market so that the company has something for every individual. In the recent
times, the current positioning of the company includes are the product development strategies
and other strategies for being in the topmost position in the company. The entire success of the
Toyota depends upon their innovation and detailing their ideas and the company uses the Lean
Manufacturing system so that they can be differentiated from their potential competitors in the
marketplace (Toyota Industries Corporation, 2018).
Figure 1: Brand positioning of Toyota
The macro environmental factors have a direct effect both on Toyota as well as on their
customers. Firstly, in terms of the economic factors the company is affected by the growth rate,

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inflation and the trade practices with regards to U.K. Secondly, in terms of the social factors the
educational background and the purchasing power of the consumers affect the business. Thirdly,
the political factors such as that are related directly to the management of the public affairs also
affects the business of Toyota. Fourthly, in terms of technology, the changing technologies do
not affect the company so much because they keep pace with the changing technologies. The
consumers are also affected by the above-mentioned factors to a great extent.

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References
Gnanaguru, R. (2011). Investigation into 6S auditing system and introduction of Toyota s A3
report for improving 6S performance.
Hassan, A., and Ibrahim, E. (2012). Corporate environmental information disclosure: Factors
influencing companies' success in attaining environmental awards. Corporate Social
Responsibility and Environmental Management, 19(1), 32-46.
Simon, A., Bernardo, M., Karapetrovic, S., and Casadesús, M. (2011). Integration of
standardized environmental and quality management systems audits. Journal of Cleaner
Production, 19(17-18), 2057-2065.
Soh, D. S., and Martinov-Bennie, N. (2011). The internal audit function: Perceptions of internal
audit roles, effectiveness and evaluation. Managerial Auditing Journal, 26(7), 605-622.
Toyota Industries Corporation, (2018). Environmental Audits. Retrieved from <
https://www.toyota-industries.com/csr/environment/management/inspection/index.html
>Accessed on (March 13, 2018).