Toyota's Business Environment: A Comprehensive Analysis Report

This report provides a comprehensive analysis of Toyota's business environment, examining various aspects that influence its operations. It begins with an introduction to the concept of the business environment and its impact on organizational decisions. The report then delves into the types of organizations, including public, private, and voluntary sectors, and their respective purposes. It explores the size and scope of different organizational types, such as sole proprietorships, partnerships, and companies, and their implications. The analysis further examines the relationship between organizational functions, including marketing, production, human resources, IT, and customer service, and their alignment with business objectives. The report also investigates the macro environmental factors, using the PESTLE framework (Political, Economic, Social, Technological, Legal, and Environmental), and their impact on Toyota's operations. Furthermore, it includes internal and external analysis of the company, along with the relationship of strengths and weaknesses with the external macro environment. The report concludes with a summary of the key findings and their implications for Toyota's strategic decision-making.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P1 Types of organisation and their purpose................................................................................1
P2 Size
and scope of a range
of different types of
organisations..............................................................................................................................2
LO2..................................................................................................................................................3
P3 Relationship between organisational functions and objectives.............................................3
LO3..................................................................................................................................................5
P4 Macro environmental factors that make an impact on the business operations.....................5
LO4..................................................................................................................................................7
P5 Internal and external analysis of an organisation...................................................................7
P6 Relation of strength and weakness with external macro environment..................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
....................................................................................................................................................11
.......................................................................................................................................................11

INTRODUCTION
All the internal and external factors that can influence performance of an
organisation are considered under business environment. They can made a huge
impact on decisions taken by an enterprise. Toyota is a leading company in auto-mobile
industry, they have more than 3.5 million employees worldwide. Their vision is to enrich
lives across the globe by finding safest way of moving people. They want to hire
talented and passionate people who firmly believe that there is always a better way to
do a task. The mission is to create vehicles that can get popular among consumers
(Arasti and et.al,. 2014). This file will include various types of organisation and their
purpose of their existence. Different organisational functions and relation between them
will also become part of this file.
LO1
P1 Types of organisation and their purpose.
In business environment, there are various types of organisation like public,
private and voluntary. If a company is operating in more than one nation than their
structure will be more complex compare to a firm who is dealing in only local areas.
Public companies are made by government, their main target is to make product and
deliver services at an economic rate so laymen can get basic goods for living. Profit is
not their priority, they want to provide affordable facilities to the society. Their legal
structure is very strong because representatives of government authorities hold key
position in board of management. Revenue is the prime objective of private
organisations, they want to deliver quality products and services to the customers and
charge a competitive price against it (Boons and Lüdeke-Freund, 2013). They have to
follow legal system that is present in a country or state. If they are operating in more
than one nation than they also have to obey rules and regulations of other economies.
They have high growth opportunities which is the core reason that they make strategies
for expansion and perpetual succession.
Normally an organisation is run by more than one person, but a private
organisation can be managed by an individual. Sole trader, partnership, company are
main types of private organisations. In sole proprietorship, single person management
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all the operations of a business. Their main objective is to earn money for living, they do
not make strategies and plan for expansion or technology development. Chances of
conflict in this kind of business form is negligible because one person is responsible for
the acts performed in an enterprise. Plumber, electrician, etc. are some example of sole
proprietorship. In partnership, 2-20 partners make an alliance so they can achieve
common objectives. Their registration is not compulsory but in order to gain trust of
customers most of the organisation register their business (Cantwell, Dunning and
Lundan, 2010). This also help them in reducing conflicts in their collaboration. Recently
government made some rules which state that registration of some partnership like in
case of limited liability is compulsory.
Voluntary organisation is different from above mentioned types of enterprises,
maximisation of profit is not their main objective, they want to solve various issues
which are present in society. These topics are generally related to politics, culture, etc.
Their registration is not compulsory but sometime they register their organisation in
order to get financial or any other type of assistance from government. Their size and
scope varies according to the resources available to them.
P2 Size and scope of a range of different types of organisations.
Their are various factors which make significant impact on size and scope of an
organisation. In sole proprietorship, individual has very limited scope because their main
target is to earn money for his/her living. They use their skill and talent so they can
provide goods or service to their customers. They do not get big amount in terms of
fees. They do not have high growth opportunities because they have finite funds. They
hardly make any expansion plan or strategies and they do not believe in perpetual
succession of their business (Carroll and Shabana, 2010). Another form of business in
private organisation is partnership, in normal case either their size is small or medium.
They have limited resources which is the main reason that they do not earn enormous
revenue. They have more growth opportunities compare to sole trader but their pace of
development of their business is slow.
Company is most popular type of private organisation, their size can be small,
medium or large. Normally they have more money in their business if it is compared
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from partnership or sole trader. They have enormous opportunities of growth as
because their main aim is to expand their enterprise by earning more and more profit.
Government, consumers, employees are their stakeholder who made huge impact on
their business operation. They have capability to give employment to thousands of job
seekers (Cavalcante, Kesting and Ulhøi, 2011). Toyota is a private company, they have
more than 3.5 million employees in their organisation and they are considered at world's
8th biggest enterprise in terms of revenue. This is a proof of their gigantic size, they are
operating across the globe which depict range of their business.
Size of public organisations depend on they task and resources given to them by
government. Their growth opportunities depends on the need of society, if demand of a
product or service made by them is growing than authorities can think about their
expansion plan but if they fail to fulfil needs of social groups than they may face
problems relating to survival.
Size of voluntary organisations depend on purpose of their existence and
resources available to them. If they achieve their short term target than they may start
delivering their services or goods to more people. They can register their enterprise as a
NGO if they want to take financial aid from government.
LO2
P3 Relationship between organisational functions and objectives.
All the functions performed in an organisation either have direct or indirect
connection with the objectives of a company. These goals help in achieving mission and
vision of a firm. Following are some activities done in cited enterprise.
Marketing: In auto-mobile industry, finding needs of customers is very important
so firm can make vehicles according to the need of buyers. They give vital data and
information to the production department so in future they can manufacture product
which can fulfil all the demands of their customers. This help organisation in achieving
their targets in short period of time. Advertising and promotion is another work which is
done by marketing wing (Chen, Chiang and Storey, 2012). In order to increase sale of a
commodity, they have to tell potential buyers about the special feature of cars and other
supporting items. This task play crucial role in minimising confusion that can arise in
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mind of consumers. It provide an indirect help to the customer service department
because they have to face less queries from service users.
Production: This department is responsible for manufacturing of vehicles. They
communicate with marketing team so they can get details relating to demand of various
products. Suppose market of a particular product is growing, than this wing of
organisation will increase supply of that item so proper chain of demand and supply can
be maintained. Nowadays most of the production is done through automation which is
the main reason that need of manual labour is going down but procurement of raw
material and servicing of machines is still a job which has to be done by human being.
For this task, assembling team talent employees who possess good communication and
negotiation skill (Christopher and Holweg, 2011). If manufacturing and human resource
department cooperate each other in this task that they can reduce cost of the production
which is prime objective of most of the companies who are operating in auto-mobile
industry.
Human resource: This wing of an organisation is responsible for recruiting right
person at correct position. They communicate with various department like marketing,
IT, production so they can choose proper candidate which can assist them in attaining
their short as well as long term objectives. They take feedbacks from all the division so
they can hire workers according to their need. Toyota is expanding their business in
developing countries like India, China, Brazil etc. They have to hire local talent because
they understand domestic market better than everyone. If HR department recruit right
candidates than than they achieve high growth in short period of time. This will also
assist cited company in optimum utilisation of available resources.
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Illustration 1: Organisation functional chart

Information technology: Most of the experts in auto-mobile industry believe that
they enterprise who will have strong IT department will become table leader in
upcoming time (Haidar, 2012). This division provide indirect assistance to various wings
of organisation. Toyota has adopted automation process of manufacturing, now they
don require labour for production procedure, they need IT professional who can speed
up and process of manufacturing so and remove different types of hurdles at the point
of their generation so cited company make more vehicles in less time. This activity will
assist a firm in synchronising all the functions they are performing. This will help cited
organisation in retaining their position of table leader.
Customer service: Toyota is selling more than 10 million vehicles in a years.
Buyers of these product have various queries regarding cars and other items that
company sell in market. They also want to know about polices relating to discount,
loans, servicing etc. Customers service division is responsible for answering all the
questions asked by buyers in order to provide better customer satisfaction. Cited
organisation believe in making strong relationship with their clients so they can become
permanent costumers of firm. This will help Toyota in maintaining trust and goodwill in
industry.
LO3
P4 Macro environmental factors that make an impact on the business operations.
External elements present in business environment has capacity to influence
decisions taken by an organisation. In favourable condition company can earn high
revenue but if situation is unfavourable than they may suffer huge loss.
PESTLE analyse of Toyota:
Political: Government make various rules and regulations which can made a huge
impact on business of an organisation. Recently, authorities in Japan are giving
subsidizes on cars run by hydrogen gas (Harrison, 2011)). This made a positive
influence on operations of Toyota because they were the first manufacturer of this type
of vehicle. They were also planning to increase the production of this product. Cited
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company was going to invest around 20 billion in Thailand but after some time they
analyse that this country is facing problems relating to political stability so they drop this
long term vision. They were going to increase their annual production from 800000 to
1000000. This decision made a negative impact on Toyota because they wasted 2
years and some financial resources for planning of this project.
Economical: European countries allow Toyota for setting up a manufacturing unit in
Britain. This made a positive influence on business of cited company because this move
will remove their overall cost of production (Kian Chong, Shafaghi and Leing Tan,
2011). They were also getting various types of exemption in taxes which make prices of
their product more competitive. At the time of economic recession sale of cited firm went
all time like of other players in industry. This made a negative affect on their long term
plans because they in this time period they failed to achieve their short term goals.
Social: Couple of years ago car of a person get out of control and started
malfunctioning, this vehicle was made by Toyota. This made an adverse impact on cited
company and they suffer loss of more than a billion. They are going to provide millions
of jobs in UK which will improve their image and goodwill in market because
unemployment is a big issue for most of the countries in this world (Klapper and Parker,
2011).
Technological: This company is doing lot of research and development which is the
main reason that they have highest number of patent rights in auto-mobile industry. This
factor is getting them extra edge on its competitors. They have some permanent
customers who do not want any technological change in their current vehicles, these
buyers have started purchasing cars of other companies. This is going to made a
negative influence on long term performance of cited enterprise.
Legal: A person was driving car made by Toyota, accelerator pedal got stuck on the
way and driver got severely injured. To settle this case, they have to pay 1.1 billion in
lawsuit. Cited company accept their mistake and promise that they will follow all the
rules and regulations in future (Lee, Olson and Trimi, 2012). This made a positive
impact on their business because since this incident they do not face any major legal
trouble and save billions of money.
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Environmental: Toyota is making green products because they are aware of various
challenges relating to global warming. They are targetting zero carbon dioxide emission
by 2050. This decision improve their image in public and they get lot of free publicity.
Nowadays people support companies who are making products without doing any
damage to environment. But in some countries they are still planning to increase sale of
cars which are run by diesels and petrol (Moutinho, 2011). Customers are shifting
towards other manufacturers in these nation which is making an adverse effect on
business operation of the firm.
LO4
P5 Internal and external analysis of an organisation
Covered in PPT.
P6 Relation of strength and weakness with external macro environment.
Covered in PPT.
CONCLUSION
From the above report it can be concluded that business environment made a
huge impact on performance of an organisation. Size and structure of a company
depend on the its purpose of existence. Functions performed in an enterprise either has
direct or indirect connection with objectives of a firm. PESTLE and SWOT analyse is
done for understanding external and internal atmosphere of an organisation. If a
business want to attain their long term goals than they have to synchronise all the tasks
performed by various departments.
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