Lexus Company's Global Business Environment Analysis Report

This report provides a comprehensive analysis of the Lexus Company's global business environment. It begins with an introduction outlining the scope and objectives of the report. The main body delves into the forces shaping the business environment, utilizing PESTEL analysis to examine political, economic, social, technological, legal, and environmental factors influencing Lexus. The report then assesses the opportunities and challenges faced by Lexus, employing Porter's Five Forces to evaluate industry competitiveness and analyzing the product life cycle to understand the stages of Lexus's products. SWOT analysis is used to evaluate the strengths, weaknesses, opportunities, and threats, and the Porter value chain model is applied to analyze Lexus's operational processes. The report concludes by summarizing the key findings and implications for Lexus's strategic decision-making, offering valuable insights into the company's position within the automotive industry and its strategies for navigating the complexities of the global market.

THE GLOBAL BUSINESS
ENVIRONMENT-1

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Forces shaping business environment..........................................................................................3
Opportunities and challenges factors present and competitive advantages.................................5
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is a sum of different internal and external factors influence the
overall operations of company. This report is based on the case study of the Lexus Company.
The organisation was established in the year 1989. Toyota Company is considered as the parent
company for the respective organisation. This report would evaluate the factors of business
environment in respect to the Lexus Company. Henceforth, report will emphasis over different
models such as PESTEL, SWOT,Porter five forces, product life cycle and value chain analysis.
Different aspects related to business operations functioned by company would be addressed in
this report.
MAIN BODY
Forces shaping business environment
PESTLE Analysis-
Political factor- Lexus car has expanded into various countries to increase the sales of vehicles
and begins the production in UK. The political factor affects many areas like labour force, the
quality of technologies and the health of human insurance. While dealing with the concept of
Brexit the Lexus facing uncertainty in their business as being imposed in imports of the
productions sites in England which are not able to control but there is a need to control the
uncertainty. As the UK leaves European Union which acquire political risk that are not expected
for the firm. In present era of plan the government changes its policies to support the companies
so that they can grow in the market. The political factor dealing have a positive effects in Lexus
performances which is happening in japan (Perera, 2017 ). The government who are investing in
the Japanese Hydrogen car Mirai as to complete the target.
Economical factor- Lexus faces economic issues under trump administration protectionist
policies and trade Border-tax. The import supplies will cost highly in Japanese market which will
reduce the profit of the company. Lexus ramp up its export out of japan and it will increase the
economies in US automotive market. The Lexus done most of their business with US and
stronger than Yen (considered to favour Japanese export). The improvement in the business will

increase the growth of the country and manage the economy issues and adopt opportunities to
build their brand image.
Social factor- This factor needs to consider all the situations which are affected to the
community socially and marketplace. The social and culture trends having an impact on the sales
of global market. The way to overcome the issue is to focus on localization in regional market.
As the maximum consumer prefer to the environmental friendly transportation so the company
focuses towards the demand of the customers and modify their product. The culture changes the
people's attitude towards the environment the company research towards the changes occurred in
trends and build competition.
Technological factor- the auto-mobiles industry are highly used technologies and modify their
business to work effectively. The Lexus focuses towards the safety of the customers riders (
Düerkop and Huth, 2017). They strongly focus by research and development so that they can
know the different demand arises in the market. New technologies can improve the quality of the
product and reduce the cost this factor having a benefit to the consumers and the company
providing a product. The different technologies provide an opportunity for the company to grow
their brand. Technologies are increases in marketing too where social media is used to connect
the customers and increase the company on global scale.
Legal factor- Organization also essential to adopt the rules, regulations and legislative platform
to govern the product and countries in which they are productive. There are various problems
occurred in legal factor. Passenger safety is important issue that have a deep legal impact
towards the auto-mobiles companies. The changes are affected on the rules and regulations while
importing the products.
Environmental factor- This factor is affected with the changes occurred in climate as the
environmental factor concern with the forefront customers content (Policy, 2018). Government
are encouraging the companies who are managing the environmental impacts better than other
organization. As the Lexus company take changes to use for further grow, they protect the
environmental agency by taking guidances and the company ethos to do what was safe and
correct for them.

Opportunities and challenges factors present and competitive advantages
Porter five forces-
Porter five forces is a key model used to assess about the market competitiveness of the
respective company. This model comprises with the forces that directly influence the overall
business operations of the organisation.
Competition in industry (High): Auto-mobile sector is among the highly competitive sector of
business environment. The sector is growing rapidly at a global level which allow different
stakeholders to come and initiate business operations in the respective market sector (Prajogo,
2016). This force is effective and high due to the healthy level of competition in market.
Potential of new entrant in industry (High): New entrants are identified as the new companies
who are looking forward to expanding the business operations or the companies aim to take
competitive advantage in the automobile market. AS the sector is growing rapidly at a global
level which contain a huge possibility of the new entrant to come and entertain huge business
growth possibility.
Power of suppliers (Medium): Suppliers are engaged in supplying and delivering the products
offer by company. AS the Lexus Company is associated with the Toyota Company that is a well-
established organisation and carry various options to supply its product. The over dependency of
the suppliers over company make this force medium in range.
Power of customer (High): Customers always contain the high and aggressive power in the
business. Company form all its policies and strategies on the basis of the customers of the
company. Involvement of customers in company's business make this force more effective.
Threat of substitute products (High): Substitute products are denoted as the product range that
can be used on behalf of the products offer by Lexus Company. Auto-mobile sectors directly
associated with the innovation and technology (Kokodey, Gnezdova and Lomachenko, 2018).
This force is high in the sector due to innovation and technological involvement.
Product life cycle-
Product life cycle denoted as the different stages of the life cycle of the product. Product
life cycle the entire concept denote about different sages of life cycle which are identified in the
following manner.

Introduction: This is the initial stage of the product. At this level company try to focus over its
marketing and promotions so that effective success can entrain even at the initial stage of
business (Syazali and et.al., 2019). This is the initial stage of the product where company
promote and launch its products to engage the attraction of potential level of customers
associated in the market.
Growth: This is the stage that indicate that product is growing in the market. Under this stage
company entertain competitive advantage against to the prior operations channelised by
company. Once the company totally initiate its product initial point it switches to entertain the
profitability against the introduction stage.
Maturity: This is the most profitable stage. Under this stage company need to invest less in the
marketing and promotions and it effectively allows to sale its products at this level. This is the
best stage part of product life cycle. Under this stage company entertain profits as it get to attract
customers very easily (Popescu and Popescu, 2019). At this level brand value has also
established in the market which also help organisation to get engage with the potential customer
in the market.
Decline: This is the post maturity stage. Under this company face decline in its sales.
Lexus Company is a part of the growth stage. All its products are getting success in
market. At this level market sales of the product is completely decline. Competition ion the
automobile sector also influence this stage.
SWOT Analyse-
It is established to manage the structure which enables a brand like Lexus to benchmark their
business and performance as compared to competitors. Lexus is a leading brand in Automotive
sector. Swot analyse is a planning strategy the company can use to manage the situation analyse
of the company-
Strength- The Lexus is extremely reputable in the luxury segment. As the Toyota is parent
company which is best in technology and production mechanism (Sarsby, 2016). As the japan
are more predecessor in vehicle technology and the Japanese car are used all across the world.
The company focus towards the innovation of their product make it more stylish and dynamic ,
alternate energy vehicle, safety system etc., the objective of the Lexus car is to achieve

maximum power with minimum fuel consumption. They also focus in racing events so that more
customers will connect, and they can build wide range product portfolio.
Weakness- There are limited product portfolio available for Lexus car in the growing market.
They provide limited services and network distribution in market share. The luxury cars are not
advertised their products in media they have not been get the necessary visibility by low
branding. The luxury cars always having a expectation of different and exciting driving
experiences, but they seen to be same with not too many exciting driving prospects.
Opportunities- Lexus car always focuses towards the new technologies' adoption for future
driven and research on the key areas included safety system, robot-driven cars, alternate energy
vehicle, interconnected traffic etc., There are some countries which are increase in spendable
income of people so that the company get an opportunity to increase their sales by producing
more attractive design of vehicle (Elavarasan and et.al., 2020). The demand of luxury cars are
expected to grow in developing countries they expand their business globally and build their
brand image. The new technology provide an opportunity to Lexus to distinguish pricing scheme
in the market and increase their market share.
Threat- For auto-makers it's a difficult challenge to buy the resources as the cost of raw material
increase. The company have a threat of competition from big Auto-mobiles giants which provide
innovative products and faces a stiff competition in today's luxury market for auto mobiles with
strong presences like BMW, Audi and Mercedes-Benz. And perceived very costly brand which
can lead to exposure the actual customer ( Teoli and An, 2019). The price of fuel increases and
the customers prefer alternative cars.
Porter value chain model-
This is a model of operation management. It indicate the complete process that start from
the initial point and end with the final sale of company. This model indicates about the process
follow by company to cover the raw material into sales and also involve the post sale stage
where company try to cherish the customer experience point. IT comprises with the stages like
inbound logistic, operations, outbound logistic, sales, marketing and service. All these stages
play different role in process that the company get to achieve the business objectives.
Inbound logistic: This is the initial stage of production. Under this level company try to collect
al resources and raw material that will be a part of this process. At the level operation team of

Lexus Company collect all raw materials (Okeyo, Gathungu and Peter, 2016). Lexus Company
has established a strong supply system that support the organisation to deliver all raw material on
time at all factories of company or work station.
Operations: This is the stage that convert raw material into the finished products. Operation is a
key stage in the entire operation. This involves conversion of raw material into the finished good.
Lexus Company has installed all latest technology equipments that support the company in
delivering the best outcomes against the process.
Outbound logistic: At the level operation team supply all finished products at all the showrooms
of company. Company supply chain system support in delivering products at all stores.
Marketing and sales: This is a stage where company promote its products and try to sale them
to potential customers. This is the significant stage as it allow company to meet all its objectives.
Service: This is a post sales stage of company. At this level company try to give service to
customers in the market. IT involve dealing with all the issues customers are facing in against to
buy company's products.
CONCLUSION
It can be concluded from the above information that this report is for studying the global
business environment by examine the SWOT and PESTLE analysis of the organization “Lexus
car”. This report is also included the changes obtained by the industry in last five years and
discussed the opportunities and challenges by product life cycle, porters value chain model and
porters five forces that are focuses present position and gain a competitive advantage.

REFERENCES
Books and Journals
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review. European Scientific Journal October 2016. 12(28).
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Policy, P., 2018. What is pestle analysis.
Popescu, C. R. G. and Popescu, G. N., 2019. An exploratory study based on a questionnaire
concerning green and sustainable finance, corporate social responsibility, and
performance: Evidence from the Romanian business environment. Journal of Risk and
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Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International journal of production Economics. 171.
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Sarsby, A., 2016.SWOT analysis. Lulu. Com.
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industrial revolution 4.0. Management Science Letters. 9(11). pp.1875-1886.
Teoli, D. and An, J., 2019. SWOT analysis.