Comprehensive PEST Analysis of Toyota for Global Business

This report provides a PEST analysis of Toyota, a leading global automotive company. The analysis examines the political, economic, social, and technological factors influencing Toyota's business operations. The political factors discussed include political instability and the development of free trade agreements. Economic factors such as recession and currency fluctuations are also considered. The report further analyzes social factors like changing customer preferences and the increasing awareness of environmental implications, as well as technological factors including the use of IT and investment in fuel-efficient car manufacturing. The conclusion summarizes how Toyota can expand its business by adapting to external factors and sustaining its brand image. References include academic journals and online sources.

Global Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PEST Analysis of Toyota............................................................................................................1
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Business environment plays an effective role in every business. The chosen company for
this report is Toyota which is global automotive company and ranked sixth largest company in
the world. The report present PEST analysis of the quoted firm in order to determine external
factors and the action to be taken to overcome it.
MAIN BODY
PEST Analysis of Toyota
Toyota is one of the global firm and its strategy or tactics is to minimize the production
cost in order to attain cost leadership and that is why the firm uses Just in time manufacturing
method. Further the PEST analysis of Toyota is as follows:
Political factor: Toyota is affected with the political factor of the country such that if
there is political instability then it affects the business in negative way and even political
disturbance also disturb the supply chain and distribution network (PESTLE Analysis of Toyota,
2018). To overcome such situation, quoted firm start developing the free trade agreement with
Japan and other countries that shows an opportunity for improved market penetration.
Economical factor: Recession affect the business of Toyota in negative way such that if
the there is stability in economic condition that means higher the employment which further
turns higher level of purchasing power of buyers (Tan and et.al., 2018). On the other side, if
there is slight fluctuation in currency of the country then it also affect the business. To overcome
this, Toyota has the opportunity in order to improve its export from Japan who is based on
weakness of Japanese Yen and even the quoted firm also grow its business in US also that helps
in rapid growth.
Social Factor: Social factor such as changing preference of customers creates direct
impact upon the business and even increasing awareness and concern related to environmental
implication of driving a vehicle is another most important tendency which is also addressed by
the firm. That is why to meet out the customer demands, Toyota start focusing on electric and
hybrid cars such as Toyota Prius (Leng and et.al., 2015). On the other side, aging population is
another social factor that affect its business and creates negative impact upon the sales of Toyota
as well.
Technological Factor: In modern era, every business use IT to grow their business, in
the same way the quoted firm is also based upon the technology, it has been analyzed that the
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better a brand, the better will be technology. That is why, Toyota is also investing on technology
and start manufacturing the cars which are low on fuel consumption and creates positive impact
upon the environment as well (Reinhardt and et.al., 2017). Further, technology is also used to
connect large mass of group through social media as a marketing tool and the firm also uses it.
CONCLUSION
By summing up above report it has been concluded that business of Toyota is also
affected by external factor such that better the political and economical factor, higher will be sale
and on the other side, report also concluded that by coping with social and technological factors,
Toyota will also expand its business in further countries by sustaining its brand image.
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REFERENCES
Books and Journals
Leng, K. C. and et.al., 2015. Understanding Generation Y Buying Intention Toward Hybrid Car
in Johor Bahru. Sains Humanika. 5(2).
Reinhardt, R. and et.al., 2017, June. Macro environmental analysis of the electric vehicle battery
second use market. In 2017 14th International Conference on the European Energy Market
(EEM) (pp. 1-6). IEEE.
Tan, J. and et.al., 2018. PESTLE Analysis on Toyota Hybrid Vehicles. J]. Academia Edu.
Online
PESTLE Analysis of Toyota. 2018. [online]. Available through:<http://panmore.com/toyota-
pestel-pestle-analysis-recommendations>.
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