Business Environment Analysis Report for the Toyota Company

This report provides a comprehensive analysis of the business environment impacting Toyota, a global automotive company. It begins with an introduction to the company's focus on product development, fuel efficiency, and its commitment to environmental responsibility. The report then delves into the organizational structure of Toyota, including its various types of organizations, and identifies key stakeholders such as employees, customers, and suppliers, and examines Toyota's responsibilities to each. The analysis further explores the economic systems relevant to Toyota, differentiating between command and market economic systems and assessing their impact. It examines the influence of fiscal and monetary policies, including tax rates and interest rates, on Toyota's operations. Finally, the report evaluates Toyota's competition policy, emphasizing the importance of fair practices and reducing barriers within the industry. The report concludes with a summary of the key findings and their implications for Toyota's business strategy and performance in the international market.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1...........................................................................................................................................3
1.2...........................................................................................................................................4
1.3...........................................................................................................................................5
TASK 2............................................................................................................................................6
2.1...........................................................................................................................................6
2.2...........................................................................................................................................7
2.3...........................................................................................................................................8
TASK 3............................................................................................................................................9
3.1...........................................................................................................................................9
3.2...........................................................................................................................................9
3.3.........................................................................................................................................10
TASK 4..........................................................................................................................................11
4.1.........................................................................................................................................11
4.2.........................................................................................................................................12
4.3.........................................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
A company is having their personal environment which makes an impact on the
activity of the company. This report is based on the Toyota company and they are
dealing in international markets. They are making cars, mini trucks, trucks etc., they
believes in to make a regular development in their products and they are believing in to
make their products better and more better(Trkman.2010.). So they are making regular
changes in their cars and this is making them best. They are making cars which is
having a better fuel efficiency and better aerodynamics in their design. Which is making
their cars smoother, faster and lighter. This report is having content related to the
environment of the Toyota. It is having a lot of factors which is having affecting on their
work. External factors having a big impact on their production. Global warming and
polluted air having a lot of impact on the work and production of the company. This is a
company who does not want to increase the air pollution so they are making cars which
have effective fuel consumption. This report is having factor related to the purpose of
the organisation. This is having focus on the nature and national environment of the UK.
Company is engaged in to maintain the healthy environment in the country.
Organisation is having their focus on their stakeholders and they are managing their
relationship with them to achieve their organisational goals(Johnson, Lenartowicz and
Apud.2006.). They are dealing in international market so they have to make their
policies according to the international economical conditions and changes.
TASK 1
1.1
Organisation: It refers to a group of people or association come together for a same
purpose and make a organisation in order to earn more profit. The main purpose is
earning profit and provide good costumer services. It may be various types like
government, non government, international, charity etc. Government organisations are
funded by the legal authority and main purpose is provided social services. Non profits
entities are incorporated for earning profits not for local public. In the case of charity is
funded by voluntary by any person.

Types of organisation: Four types of organisation are given below which are having
their legal existence;
Sole Traders: It refers to a single person incorporate a organisation for earning profit
and making planning in order ton get more benefits. A single person can handle whole
company and self manage overall performance.
Partnership: In this type of entities only two people can make a company and give
there efforts to make profits. Whatever the benefits they earn distribute equally. Two or
more persons can make a company and run it by their collective efforts. It may be
incorporated for a some stated purpose and can be close when purpose is
accomplished.
Company: In general sense, it is a huge sector of working. It consists lots of staff
members like managers, senior officers, director and many more. It may be a public or
private ltd. Company. Public is incorporated and funded by the government. The main
purpose of these organisation is providing social service not a making profits through
local people. But on the other hand, private ltd organisations are incorporated only for
earning profits through offering goods and services to people. (Johanson and
Vahlne.2009.).
Public Sector Company: These organisation owned by the government and offering
special benefits to people. Making profits is not a aim of these entities.
Toyota is having their own purpose to make their vehicles more better and they
are having a lot of engineering in the engine and design but they are making their more
efforts to make their car fuel effective and give a relax feel to their customer. Moreover,
they used a advance technologies to make their product and provide a good costumer
services. It gives full comfort level in their vehicles and maintain their performance in a
market.
1.2
Stakeholders are the important part of the company. They help to company to meet
goals and objectives. Through which entities will improve their work performance in a
market. It includes employees, costumers, government, finance provider and suppliers.
Toyota have some stakeholder are as aligned below:

Employees: They are a important part of the company through which companies can't
run or survive in a market. They make their collective efforts to meet the goals of the
entities. Employees of Toyota make parts and assemble them. They work hard in order
to put a company in a beneficial position. (Gebauer, Paiola and Edvardsson.2010.).
Customers: Toyota is engaged a business of making vehicle for their costumer and try
to meet with their taste and demands. Organisations produce product according to
demands of the costumer in a market. Entities will have to meet with their choices and
try to fulfil the need to their costumers. (Enshassi, Al-Hallaq and Mohamed.2006.).
Suppliers: Suppliers provide a raw material to their companies whenever they wanted.
They provide a stuff for production and get a benefit against them. When stock of the
company is going to reduce then they call to suppliers for raw material and start for a
further production.
Government: Government of UK framed some rules and regulations for companies
which every organisation is have to follow them. If ignore those rules, they may be face
consequences for it. Companies must take care about pollution and never used
technologies which effect the environment.
Companies need to communicate with their costumer and get a feedback about
their product. (November.Teece.2010. ). They interact with costumer in order to make
changes in their vehicle and to meet their demands and tastes.
1.3
Toyota is having many stakeholders and they are having a lot of expectations with them
so this is a responsibility of the company to fulfil their expectations.
Responsibilities of the Toyota to their stakeholders:
Employees: Toyota is having a legal responsibility to give them a honourable salary
and incentives for their overtimes. Toyota is having a another duty regarding to
employees they have to give them a good working conditions. So they have to manage
proper database for their work and overtime to give them proper incentives. Another
duty of the HR department to give them all facilities in their work place.
Customers: Company is having duty to make their vehicles as the customer's orders
and demands. So they have to make proper communication with them to find out what
they want in they want in their car(Kang and Han.2008,).

Suppliers: Toyota is having many suppliers and they have to give them proper order
brief what they are ordering and they have to make their payments and transactions on
time. So they have to make proper written communication with them and also formal
meetings to give them a brief for the future needs.
Government: Toyota is highly responsible for the government of the UK and they have
to follow their rules and regulations and make their cars according to the government
policy. They have to use legal adviser which give them informations in the changes of
the rules related to the vehicles.
TASK 2
2.1
Economic System: Each and every system is having their own economic system
which can allocate their resources, trade goods and services. A country is having limited
resources and they have to make their proper utilisation which can give some extra
benefits for them. A country is having a limited scope of resources related to the labour,
capital, physical resources to generate the power and information
system(Popescu.2013.). So this is a policy which can distribute these all resources
perfectly.
Basically two types of economic system is in the exist and they are:
Command Economic System: It is a type of communist system and all resources are
owned by the government. They distribute their resources as it make more profitable for
the peoples are living in this economic system. In this system Toyota have a lot of
impact on their activities, they have to use their resources more impressively and they
have to make their products more profitable for their customers and users. They have to
use fix pricing of their cars and their prices are never affected by the demands and
supply factor.
Market Economic System: This is a system where all resources are owned by the
peoples and they decide how to distribute them. So who is having more resources are
the powerful person in this system. This is not a good type of economic system in the
current world scenario. Toyota have to make their more efforts to collect the resource
and may be their production goes slower in this(Ayyagari, Beck and Demirguc-

Kunt.2007). Demands and supply makes a lot of impact in this type of economy and
company can get higher prices of their cars because production is slow and demands
are higher.
Economic system is having a lot of impact on the companies activities so they
have to make changes in their working styles and use their mind to make their
production better and more better.
2.2
The great impact of the fiscal and monetary policy which is followed by the
management of the Toyota. In this way, fiscal policy composed by the government
which includes the tax policy and other (Ahmad, 2009). Organization follows this policy
and employees pay the amount of the tax which helps government to developing the
economy. In this context, if the changes in the tax policy which directly impacts on the
activities of the company. Government increases the tax rate wherein organization also
increases the product prices. As per this, customers not able to purchasing the products
and dismiss the activities the work place. Manager unable to produces the products and
services and do not accomplishing the demand of the customers. It negatively impacts
on the company and decline the market share in same industry. On the other hand, if
the fix tax rate which creates the satisfaction of the management and customers. They
easily allocate the resources and produces the goods and services which directly
impacts on the activities of the firm. As per this, it positively impacts on the activities of
the firm wherein manager easily operate the activities at the work place (Mayfield and
Taber, 2010). Corporation gain the advantage in the market and maximizing the overall
productivity of the firm.
Apart from this, other policy like monetary policy is formulated by the central
government and reserve bank wherein organization requires to follows this policy. It
includes the flow of money, statutory liquidity ration (SLR) and cash reserve ratio
(CRR), interest rate etc. In this way, if these factors are changed is directly affected the
activities of the Toyota under which manager unable to produces the products and
services. Moreover, increasing the flow of money wherein customer easily purchase the
product and manager easily operate the activities of the firm. On the other hand,
decreases the flow of the capital wherein organization easily fulfils the demand of the

clients as well customers. It positively impacts of the company which helps to increasing
the market share and maximizing the overall productivity of the firm (Savolainen, 2012).
2.3
In order to evaluate the competition policy which is followed by the management
of the Toyota company. In this way, organization responsible to managing the all the
activities of the firm and reducing the barriers is occurred at the work place. Through the
completion policy, manager reduces the unfair practices which creates the positive
environment in the firm. It helps workers to focuses on their work and gives the best
result of the work to the corporation. As per this, company increases the overall
productivity and manager easily promote the market. On the other hand, organization
requires to fair completion with the another company which helps to easily promote the
market as well as products and services (Alcidi and Gros, 2011). In this way, if the
organization adopts the wrong full practices and activities which directly negative
impacts on the image of the firm and decreases the overall productivity. Moreover,
corporation unable to merger and acquire with the another company because
management follows the completion policy which helps to maintains the environment of
the firm. In this context, company requires to follows the Enterprise Act, 2002 which is
formulated by the UK government. As per this act, company fair trade with the another
organization and promote the market without wrongful practices. It develops the good
relation between companies and customer trust on the management. It assists manager
to increasing the overall productivity of the firm in the industry and maximizing the sales
turn over (Dickinson, 2013). With the help of this policy, company charge the extra
amount of the products and services and sale the reasonable prices which helps
customers to easily buy the products and services.
TASK 3
3.1
Market structure plays important role in the organization wherein manger
produces the product and services as per the customers needs and sale in the market.
The market structure can be categorised into sub groups like monopoly, perfect
completion in the industry that are explained below:

Perfect competition- In this industry, there are various buyers and sellers in same
industry under which firm produces the same product in the market. In this way, many
firm sale the homogeneous products in the field and buyers get the information about
the products and services. In this situation, the seller easily enter into this market and
they decides the product price same because many firm dealing the same price of the
product. In this way, if the seller increases the product prices under which consumer
shifted in other seller. Henceforth, Toyota company decides the product price as per the
consumer needs and fix pricing (Fernando, 2011). It helps customers to easily
purchases the products at the reasonable price and accomplish the demand of them.
Monopoly- This type of the market structure under which there are one and more seller
in the industry under which they produces the single product in the market. In this way,
there are various buyers in the market under which company set the prices as per the
demand of the product. In this market structure, no competition between the
organization and easily increases the profit margin.
3.2
Market force as the function wherein demand and supply of the products which
directly affects the quantity and prices of the goods. Organization responses of the
market force as per the demand of the product in the market. In this way, if the demand
of the products in high in the market in this situation management increasing the prices
of the goods. On the other hand, the demand of the product is low wherein company
decrease the product price which helps management to responds as per the market.
Moreover, demand and supply of the products and services is depend upon customers
needs under which manager takes the responsibility for identify the needs of the
consumer. In this context, if the company produces the goods and services which
directly affects the sale of the firm will increase (Gottheil, 2013). Apart from this,
manager of the Toyota requires to analyses the current position in the market and
evaluate the demand and supply in the market. It helps to increasing the profit margin
and maximizing the sales turn over. In this way, develops the needs and requirements
of the company which helps to follows the Porter five force that are given below:
Threat of the new entry- There are various firm dealing the same products in the
industry and produces the products and services. In this context, company requires to

adopts the innovative features in the product which helps customers to easily buy the
goods and services.
Threat of the substitute products- In order to various firm provides the same
products to the customers wherein Toyota company increasing the product prices. In
this situation, consumer sifted the other brand so they company requires to sale the
goods at the reasonable cost.
Bargaining power of customers- The bargaining power of the customers is moderate
because many firms dealing the business in same industry. In this way, company need
to develops the advance features in the products which helps customer to attracts
towards the products.
Bargaining power of suppliers- There are various suppliers who provides the raw
material to the company wherein it is the moderate (Haigh and Brubaker, 2010).
Rivalries- In order to various competitors of the Toyota company which produces the
products at the reasonable prices as per this they increases the market share.
3.3
In order to impact of the business and culture environment in the UK that they
shape the behaviour of the Toyota. In this way, manager requires to analyses the
external environment under which includes the PESTLE analyses that are given below:
Political factor- These factors effect more to the existence of the organisation. Like tax
policies, tax rates, labour law and foreign trade policies through which they effect
performance of the company. It impact on businesses and it gives a way how to perform
and manage their work accordingly.
Economical factor- It defines the actual position of the company and evaluate how
organisation get more profits. Some economic factors like interest rates, economic
growth rates, inflation and so on. It consists macro economics and micro economics . In
this government framed interest rates, taxation policies etc. Through which entities will
find out the how much profits they earned and will be earn. (Halbert and Ingulli, 2014.).
Social factor- Toyota produces a product as per costumer requirement and need to
meet their demands and taste. It produce a vehicle with keep in mind the costumer
comfort. They have to provide vehicle on the basis of comfort level of people.

Technological factor- Toyota needs to use a advance technology for the production of
their vehicle. If they can't use latest technology surely they will loss the trust of their
costumer and reduce working performance as well.
Environmental factor- Organisations are need to use the pollution free or less machine
In order to maintain eco friendly environment. They have to use technologies which may
not effect the environment.
Legal factor- These factors include health and safety equipment. Also it provides a
rules of equal opportunities and equal rights for both men and women. (Hurn, 2011).
TASK 4
4.1
Toyota is an international brand and they are making their vehicles for various
types of countries. This is basically a Japanese company and they are making their
vehicles for UK, China, India, Brazil and Russia. So they are making their partners and
infrastructure to develop their vehicles in that particular country(Beck and Demirguc-
Kunt.2006.). In the international trade company have to use their potential to find out
what are their risks and what they get by this.
Toyota is enlarging their business to make more vehicles for those countries who
have some geo-grophicle challenges for them because they want that their vehicles
have to be best in each type of conditions. So they are finding more challenges for them
and their cars. This is having another advantage for the company that it provide a larger
market for the company and it gives a chance to add more customers by various
countries. Right now company is dealing in the UK and having a limited scope for the
sale and comparing it to the international trade company can a big area and a large
number of their customers. But it is having a lot risk also for the company. Financial
crisis of a nation can take them in the loss so they have to make their proper analysis of
their market(Aterido, Hallward-Driemeier and Pagés.2011.). So Toyota have to make
proper research for the markets where they are working so the company have to
analyse their potential of each country.

4.2
Globalisation: A procedure to develop an organisation to take challenges of
international trade.
It is a way which opens limit and they can make their moves without any hesitation. A
company can easily make their trade in several countries where they found
opportunities. Toyota can easily transfer their goods and services in multiple countries.
There are two factors for Toyota to drive the globalisation and these are cross cultural
factors and technological aspect. Here is their brief;
Cross Cultural Factors: Toyota is mainly from the Japan and they want to make best
cars and vehicles in the world. So this is a driver for them to go in the international
trade. Each country is having their own culture and they are having their own language.
So their living standards also having some differences, in the UK most of the person
wants to live single not with the family. And they want cars which have speed and
stylish so they are making these types of cars for them(Chavis, Klapper and
Love.2011). But in the context of the India, they want to live with the families so they are
making family cars for them.
Technological Aspects: Toyota is a company who is open for new challenges so they
are going for international trade. This is giving them more challenges which making
them better in the technological aspects. They are making their cars which can survive
in bad conditions also. So this a challenges for them to make better cars and they are
making their cars according to the needs of the customers.
4.3
European Union is having a single purpose to make coordination with in the Western
Europe nation. They are dividing their resources and assets to make better conditions in
these countries(Wu.2009.). European Union wants to make a proper economical
stability in the Western Europe countries. EU wants to make a collective efforts from
them to make them in a stronger position in the world. They made many types of
policies related to the economics and finance:
Global financial stability: This is a policy which is making financial stability of their
participating countries. This policy is making them stronger for their future. This policy is