Critical Analysis of Toyota Motors' Business Environment

This report critically evaluates the business environment of Toyota Motors, focusing on both micro and macro environmental factors. It utilizes business models such as SWOT and PESTEL analysis to assess the company's performance. The report examines Toyota's strengths, weaknesses, opportunities, and threats, highlighting efficient operations management, lean operations, and the importance of research and development. Macro factors, including legal and environmental sustainability considerations, are also analyzed. The report provides recommendations for market research, feedback mechanisms, and identifying key performance factors, concluding with the significance of adhering to regulations for sustainable business operations. The references include various academic sources supporting the analysis.

Running head: BUSINESS ENVIRONMENT
Business Environment
Name of the Student
Name of the University
Author Notes:

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Table of Contents
Introduction................................................................................................................................2
Macro and Micro factors........................................................................................................2
Micro factors..........................................................................................................................2
Macro factors.........................................................................................................................3
Recommendations......................................................................................................................3
Conclusion..................................................................................................................................3
REFERENCES...........................................................................................................................4

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Introduction
Business models such as SWOT, Porter’s five forces can be used to arrive at strategic
decisions. The paper will critically evaluate the performance of Toyota Motors with respect
to Micro and Macro Environmental factors. The followings sections will critically evaluate
the scope operations of the company with respect to the Micro and Macro environmental
factors.
Macro and Micro factors
There are various factors that companies have to adhere to in order to sustain
themselves in the short run and long run (Muda 2018). Toyota has been recognised all over
the world for the quality of the vehicles that they offer in the automotive industries
throughout the globe (Wilberforce 2017). The company was founded in 1965 and since then
they abide by the Toyota Production System. Kaizen, lean and agile operations are some
values that are followed by the company while they operate throughout the globe.
Micro factors
The micro factors affecting the operations of an organisation can be determined with the help
of a SWOT analysis. Following is the SWOT analysis of Toyota;
Strength: Efficient Operations management with the help of the TPS. Effective practices in
the form of Lean operation and agile manufacturing.
Weakness: High expenditure in research and development.
Opportunity: Capitalizing on issues such as environmental sustainability and innovative
technology.
Threats: Highly competitive automotive industry.

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Lean operation refers to ensuring that there is minimum wastage while the operations
are being carried out by the company (Ayeni, Ball and Baines 2016). With the help of lean
operations, the company is able to comply with the environmental sustainability standards.
The minimisation of wastage helps in ensuring that there is minimum release of harmful
material into the environment. Thus, the aim of the company is to reduce the amount of
impact that the operations of the company is not affecting the environment in any way.
Moreover, the company has been able to realize importance in research and development.
With the help of the same, the company has been able to develop technology that the
company has been incorporated into their vehicles (Jeong and Ko 2016). The company has
been able to develop vehicles that consume minimal amount of fuel and that that have lowest
possible impacts on the environment.
Macro factors
It is with the help of a PESTEL analysis that one can identify the key factors that might affect
the operations of a company. Hence, it is important to carry out the same and following are
the key macro environmental factors affecting the operation of Toyota;
The legal factor is an important factor that assimilate to form an idea about the legal
framework existing in a particular market. It can be said that the success of the company is
perhaps due to the efficacy of the company identifying the key external factors with the help
of which they could comply with the requirements of that particular market. The company
has been successful in complying with the legal frameworks and the external factors that
could bolster or hinder the proceedings of the company while operating in the industry.
In the United Kingdom, there exists favourable attitudes towards environmental
sustainability and operations comply with the needs of environment sustainability. The
government has presented various levies on the operations of companies that comply with

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environmental standards. Hence, companies must be able to satiate the legislative needs that
have been established by various regulatory bodies and organisations of the United Kingdom.
Toyota Motors operates globally and in the United Kingdom with affiliation towards the
environment.
Recommendations
Following can be recommended;
 To carry out market research regularly.
 To establish 360-degree feedback with the organization
 To identify the key factors associated to effective organizational performance.
Conclusion
On a concluding note, it can be said that there are various regulations that are present
in the United Kingdom which companies have to comply with in order to ensure that they are
able to sustain themselves while operating in the local markets of the country.

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REFERENCES
Ayeni, P., Ball, P. and Baines, T., 2016. Towards the strategic adoption of Lean in Aviation
Maintenance Repair and Overhaul (MRO) industry: An empirical study into the industry's
status. Journal of Manufacturing Technology Management, pp.38-61.
Jeong, H.J. and Ko, Y., 2016. Configuring an alliance portfolio for eco-friendly innovation in
the car industry: Hyundai and Toyota. Journal of Open Innovation: Technology, Market, and
Complexity, 2(4), p.24.
Muda, S., 2018. Establishing Long-Term Partnership to Achieve Effective Partnering. Is It
Necessary?. Jurnal Komunikasi: Malaysian Journal of Communication, 34(2).
Wilberforce, T., El-Hassan, Z., Khatib, F.N., Al Makky, A., Baroutaji, A., Carton, J.G. and
Olabi, A.G., 2017. Developments of electric cars and fuel cell hydrogen electric
cars. International Journal of Hydrogen Energy, 42(40), pp.25695-25734.