Toyota Motors: Analyzing Business Environment with SWOT and PESTLE

This report provides a comprehensive analysis of Toyota Motors' business environment. It begins with an introduction to the concept of the business environment and its influence on organizational functions. The report then delves into a detailed PESTLE analysis, examining the political, economic, social, technological, environmental, and legal factors impacting Toyota Motors. Following this, a SWOT analysis is conducted to assess the company's strengths, weaknesses, opportunities, and threats. The report further explores the interrelation between the SWOT analysis and the macro environment, highlighting how external factors can influence the company's internal capabilities and strategic decisions. The report concludes by summarizing the key findings and emphasizing the importance of understanding the business environment for organizational success, and it includes a list of references used for the analysis.

Business and the Business
Environment

Table of Content
• PESTLE analysis
• SWOT analysis
• Interrelation between SWOT and macro environment
• Conclusion
• References

INTRODUCTION
Business environment is the term that refers to the internal and external
factors that influence the organisational functions such as management, supply,
etc. The report is about the British car company namely Toyota Motors
established in 1989 situated in England, and using PESTLE analysis, positive
and negative impact of macro factors will be concluded including company’s
SWOT analysis.

PESTLE analysis of Toyota Motors
• Political factors: - it has been determined that, automobile industry is highly
affected by country’s political environment. These factors include various taxes
which affect the working of Toyota Company negatively, as when government
increases tax rates automobiles, fewer buyers are not ready to spend on them.
• Economic: - in this automobile industry, increase in wealth in the country is
recognised as a plus for that industry. The reason for this is that it encourages
investment along with consumption. On the other hand, negative impact is that
when cost of oil increases, then the prices of automobiles and spare parts are
affected.

Cont..
• Social factors: - the type of vehicles which are sold by Toyota Motors in a
region are also determined by the social aspect. There are some customers
who prefer to buy vehicles at cheaper rates and consume less fuel while some
look at speed of it.
• Technological factors: - changes within the automobile sector new
technological advancement to be incorporated into manufacture of
automobiles. However, if the company adapts new technologies then it can
affect the company positively.

• Environmental factors :- changes in climate has adverse
effect on the Toyota company. If the organisation lean
towards designing environmental friendly vehicles then it
can influence the firm positively.
• Legal :- it has been determined that, every country has
its own legislations that regulates the manufacturing
companies such as; pollution laws, product quality &
safety. There are some laws that restrict importation of
cars in the country which affects the Toyota negatively.

SWOT analysis of Toyota Motors.
• Strengths: - Toyota Company is considered as the best car manufacturing company in the
world and is famous for its innovative culture. The organisation has proven to be a successful
strategy on being ahead of its competitors by launching some most innovative vehicles.
Moreover, it has been discovered that the company is considered as one of the valuable and
one of the most recognizable automotive brands in the world.

Weaknesses: - Toyota’s weakness is the possible
inefficiency in the company. Its main recognised
weak points are; hierarchical organisational
structure, secrecy in culture and influence of
product recalls in recent years. In addition, the
company does not have a strong existence in
emerging market despite chances of growth.

Cont..
• Opportunities: - the company will continue to expand its green vehicle focus customers
around the world are showing the bigger interest in hybrid and electric vehicles due to
increase in prices of petrol. One more opportunity is to progress and expand into the
emerging market place by acquiring other vehicle companies, in turn will increase market
share.
• Threats: - there is a threat of rising the cost of raw material to the company, and this has been
happening over last few years that is pushing Toyota to figure out more innovative ideas to
make the vehicles. One more threat that company faces is threat of natural disasters as many
of its manufacturing plants are situated in countries.

Strength and weaknesses interrelate macro
environment.
• Opportunities: - opportunities can arise due to numerous reasons, and may
reflect from alteration within the market, consumer lifestyle changes,
technology betterment, new production techniques, etc. These chances for
expansion can also occur from a solution of a problem related with the
current product. For example, Toyota’s market share increased considerably
once its cars were recognised to be reliable.

Cont..
• Threats :- threat are considered as external factors that affect the company from outside and
which states that organisation have either little or no control over them. Developing
contingency plan will help the company to ensure that they are not taken wholly by surprise.
The greater the capability of the company to identify threats, the more effective and
productive it will be for them.

Key points to state that there is interrelation
between SWOT and macro factors
• External factors that affect the business includes the environment in which
the company operates, its market and third parties involvement.
• Threats refers to external factors that are uncontrollable and can originate in
the supply chain, from alteration is buyer’s behaviour, economy changes, etc.
• Opportunities can arise from changes in the market, lifestyle of consumers,
technological development and latest manufacturing methods.