Toyota UK Business Environment Analysis: Semester 1 Report

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BUSINESS AND BUSINESS ENVIRONMENT
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Table of Contents
Introduction......................................................................................................................................3
LO1..................................................................................................................................................3
LO2..................................................................................................................................................6
LO3..................................................................................................................................................8
LO4................................................................................................................................................10
Conclusion.....................................................................................................................................12
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Introduction
Different types of companies are available like public, private, voluntary structures and legal
structures and among them Toyota has been selected here which is a public sector company. It is
a large multinational organization and they are available in many countries. It is a Japanese
companies and it’s headquarter is available in Toyota, Japan. It is the world sixth largest
company by its revenue and it is also available in UK. However Toyota needs to analyze internal
and external business environment carefully for doing their business successfully in foreign
country. They can use different situation analysis tools like PESTLE, porter five forces tool and
SWOT analysis tool to identify the issues in the internal and external environment easily. Both of
these tools can provide positive and negative impact towards the business. All these things are
available in this study.
LO1
P1 Various purposes of business organizations, legal structures and private, public and
voluntary sectors
There are various types of activities as well as work processesregarding both the skills and
materials in a business organizations. There are multiple types of business firms in market and
their entire work process is based on the needs of customers and their changing demands. Some
of the organizations that run business in various sectors accordingly, possess certain business
structures of their own. As per Bell et al. (2018, p.56), this organizational structure determines all
the business activities of that company. In case ofa global organization like Toyota, they try to
achieve competitive advantage in global marketplace with the help of product quality, price,
market segmentation and strategy of marketing. On another hand, government interventions,
changes in technology and other social factors also contribute on the organizational changes.
However, customers are the most important externalstakeholders of an organization. There are
five different types of business firms including public, private, government establishments,
NGOs, social charities and many more. As stated by Dyllick and Muff, (2016, p.156), a company
needs to face competition with two types of competitors – direct and indirect.
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There are few differences between the business structures of private and public sector
companies. Ownership or the overall controlling system of a private sector company depends on
either a group of people or individuals. The primary objective of these private sector companies
is to enhance their profitability. Sainsbury UK is one of the prominent examples of private sector
companies.
Government is responsible to control and monitoring the business activities of the public sector
companies along with the government agencies throughout the country. An example of UK’s
public sector company is its National Health Service.
One of the most effective business sectors is voluntary sector in UK and the companies belong to
this sector are associated with various activities of voluntary bodies and charitable activities in
business community. According to Maier, et al. (2016, p.64), therefore, this particular industry
and the regarding companies are considered as non-government establishments and non-profit
organizations. For instance, Cancer Research center can be regarded as a voluntary organization
in UK.
Toyota UK has been selected here to discuss about their business activities in UK marketplace.
Toyota is one of the private sector companies that has the aim to improve their profit margin,
serve the customers as per their needs and gain competitive advantages in industry. The company
mainly focuses on the factors including technical excellence, productivity, profitability,
corporate social responsibilities and market share. Toyota is an organization of sole traders so it
can be stated that, the company can proactively improve their business activities by avoiding the
legal formalities (Bromley and Meyer, 2017, p.939). The owner or authoritative body of the
company keeps complete control on their business and other relevant activities.
The overall activities and business process of Toyota are governed by the headquarters and these
headquarters of the company are located mostly at Japan. The organization proactively achieves
huge profit rate in marketplace. Moreover, they have effective marketing strategies that help
Toyota to maintain a strong competitive position among rival companies. In this way, the
impactful business strategies and skillful management of Toyota benefits its business process and
overall profitability.
P2 Scope, size and range of different kinds of business organizations
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It has been identified in the above section that, the business organizations can be classified into
five categories such as public, private, co-operatives, government bodies, charities and NGOs.
A group of people sometimes acts as the owner of private organization or these can be organized
by individual person as well. Customer satisfaction, maintaining the quality of products and
services are the main concerns of private companies. Apart from that, these private sector
companies may also offer huge share among the people, who are interested to sign any business
contract with them. The private sector company, Toyota offers cars of unique design to the
customers and LSE, TYO and NYSE are some of the important shareholders of this company.
As per Monden, (2018, p.78), the company involves efficient directors at each of their branch in
order to monitor the business and operational activities of Toyota in proper manner. The
company has now the shared capital of $1.5tn in UK. The overall business process even the
decision making of the organization are determined by its management body although it
completely depends on the stakeholders. The government of UK as well as the stakeholders have
strong impacts on the business of Toyota and the sometimes organizationalso requires to
maintain certain regulation and legal rules of UK.
On another side, there are 3 different kinds of public sector organizations in UK and these
categories include small, medium and large scale firms. Small size organizations face various
issues to maintain their position in market and compete with large scale companies. It is because,
their business is small in size with limited number of workers. In most of the small size
organizations, the number of workers is less than 50. Therefore, the scope of business growth is
also limited for these organizations (Boon and Wynen, 2017, p.214). Moreover, these small size
companies also face fierce competition with the medium scale organizations and it is one of the
major threats for these companies. The medium size companies not only have larger business
and working structure than the small companies but their number of workers is also high. The
number of workers in medium scale companies is almost 100. On the other side, these medium
size companies face tough competition with the large scale organizations. These business firms
need to develop proper strategies to improve their business but at the same time. The large scale
organizations implement impactful strategies and the advantage is that they have worldwide
business. They have adequate resource availability and strategies to protect their businesses from
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rival companies with the help of their effective marketing strategies and efficiency. In fact, these
large size companies have sufficient amount of resources to sustain their protection.
The large size companies are classified into primary, secondary and tertiary according to their
production, profitability and competitive position in marketplace. It has been identified in this
context that, development of raw materials is the main focus of primary companies and these
materials are sent to other secondary firms. These raw materials are mostly natural and the
secondary organizations convert them into various products and finally sent then to tertiary
companies. As sighted by Mas-Verdú et al. (2015, p.793), these tertiary companies are regarded
as the retailers and they sell these products directly to customers. At the same time, they offer
different types of customer services along with these products.
The overall opportunities and scopes of these companies mainly depend on the quality of
products and product types. The companies try to meet the needs of customers because when the
consumers prefer their products and start purchasing their products then it enlarges the scope of
the companies to achieve success and competitive advantages. The companies make their own
mission, vision, business objectives and certain aim in order to run their businesses properly. The
success of these companies depends on obtaining these aims. Additionally, the vision of the
company is identified as per the position the organization wants to obtain in future. The overall
business purposes of an organization determine its mission (Burns, 2016, p.78). In this way a
business organization achieves its business objectives through fulfilling the vision and mission.
Business growth of a company also depend on both the stakeholders and shareholders of that
organization. Therefore, the company requires to concentrate on the activities, needs and
demands of its stakeholders and shareholders. There are robust effects of both internal and
external business environment on an international company like Toyota. These environments are
changed time to time and the company needs to consider these changes to maintain stability of
their business.
LO2
P3 Analysis of relationship between functions of organizations and the way they link it with
objectives and structure.
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A business organization needs to operate different types of operational activities such as sales,
marketing and Human Resource Management, manufacturing, production, accounts, research
and development and many more. A company uses its marketing strategies to reach to its
customers as well as the suppliers. Toyota provides detailed information of their available
products and services to the customers through marketing. As stayed by Noe et al. (2017, p.67),
on another hand, the organization can easily draw the customers’ attention by maintaining
competitive pricing of the cars. In this way, high demand of products and their pricing strategy
also helps the company to grow the business throughout UK.
In addition to this, accounting department and their decision as well as the overall financial
activities of the company also determine their success. Proper management of financial activities
allow the companies to take decision regarding further investmentand they can also calculate
their profits. The other activities such as HR management, sales, operation, and marketingare
interlinked with the functions of finance department (Dyllick and Muff, 2016, p.156).
The international company, Toyota has a strong team of human resource management and this
team helps to train the employees and enhance their performance. This improved performance of
the staffs enables Toyota to increase their sales rate and overall profit. Therefore, financial
functions are associated with the other activities of the organization.
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(Source: Noe et al. 2017, p.156)
It can be notified through analyzing this above section that, Toyota has already implemented its
corporative objectives which are associated with the other activities of the firm. Every single
activity has been applying these objectives and developing their Functional Strategic Action
Plan. As stated by Wheelen et al. (2017, p.55), the plan is concerned about the development of
business along with the changes in time. Toyota actually applies a bureaucratic strategy of
leadership for managing their operational activities. It helps the company to meet all its business
objectives properly to obtain success in market along with running all its operational activities.
LO3
P4 Identify the positive and negative impacts the macro environment has
upon business operations, supported by specific examples.
The macro environment can provide different kinds of effects on the business process. In this
case it can be seen that the company can get positive and negative both kinds of effects which
have given below
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Political factors
The political factors can give some opportunities and threat to the business of Toyota such as
Opportunity
 UK government provide proper supports to the business
 Free trade agreements between the countries can also help the organization to run their
business successfully in this competitive business environment
 They also can provide some economical helps to the companies
Economic factors
Many external economic factors affect the business process of Toyota. Such as
 This is a developed nation
 Proper development of the UK market (Adegbite et al. 2018, p.11).
 The people of UK are effectively developed
Social
This factor also can give proper opportunities to Toyota such as
 Increasing interest of hybrid cars
 Increasing interest in the electric cars
Technological factors
As stated by Amankwah‐Amoah et al. (2018, p.72), day by day UK has been developing
technologically and they are also developed as well. Like this the Toyota can get opportunities
from the technological factors. Such as
 The uses of the e-commerce has been increasing
 Uses of mobile technology
Environmental factors
The environmental factor also provides opportunities (Beatty et al. 2018, p.90). Such as
 Climate change
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 Development of the emphasis the business sustainability
Legal factors
The legal regulation is also providing some opportunities which are given below
 Development of the environment protection acts
 Increasing complex consumer protection laws
LO4
P5 Conduct internal and external analysis of specific organizations in order to
identify strengths and weaknesses.
SWOT analysis
Strength
• Effective chain management
• Proper brand image
• Proper innovation
• Experienced workers
•
Weakness
• The business environment has been
changing rapidly
• Hierarchical structure
• Unemployment issues
• Enhancing the legal cost
Opportunity
• They can develop more innovative cars
• They can provide some motivation
approaches to their workers
• They can provide some offers to their
customers
Threat
• Facing issues with market share
• High competition
• Issues with the management decisions
Five forces model
Threat of substitute products
This threat is high for the company. There are several competitors of Toyota are available in the
market of UK market. As stated by Bratianu, (2018, p.3), thus, the customers are getting proper
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chances of getting substitute products. This can provide some threats to the business of the
company.
Power of rivalry
This threat is also high for the business. As per early discussion it can be seen that, there are
several competitors of Toyota are available in the market of UK market. Thus, it can provide
some negative issues on the business of Toyota.
Bargaining power of buyer
The bargaining power of the buyers in UK is also high compare to the countries. As per early
discussion there are several competitors of Toyota are available in the market of UK market.
Thus, the companies are trying to attract the customers with their effective approaches. As per
Calabrese et al. (2018, p.223), like this the customers get more chances of buying the products
from other companies and it increases their power.
Bargaining power of suppliers
This power is low compare in UK for Toyota. There are several suppliers available in the UK.
Thus the company can get the chance of selecting the suppliers as per their choice.
Threat of new entrants
This threat is low for Toyota in UK. Basically, Toyota is a successful as well as international
well established company. They have effective value in the local as well as in the international
market. Therefore any new company cannot capture the market of Toyota just by entering in the
market. This can provide effective competitive advantages for the company.
P6 Explain how strengths and weaknesses interrelate with external macro
factors
The strength and weaknesses interrelate with external macro factors can be identified as
Strengths
 As stated by Solodilova et al. (2018, p.5), politically United Kingdom is a very stable
country and this helps the company Toyota to do their business successfully in this
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country. Toyota is a multinational company and this company is getting many help from
the UK government. This helps them to run their business successfully in this country
(Trad and Kalpić, 2018, p.23).
 Economically UK is also a very developed country and therefore multinational
companies like Toyota is getting many benefits from this country.
 People of UK are following rich lifestyle and therefore Toyota can sell more cars easily
in this market.
 UK people like fuel efficient cars now days and therefore Toyota can also get this
advantage in their business.
 The demands of electronic vehicles are increasing now days in UK and therefore Toyota
is getting many benefits here.
Weaknesses
 Many car companies are available in UK and this can provide negative impact towards
the business process of Toyota. Many low cost companies are available in this
competitive environment of UK and therefore Toyota is facing tough competition here.
Now day’s customers want high quality cars in low prices and many low cost providers
are selling cars in low price. Therefore this creates negative impact towards the business
process of Toyota.
 As per Zhao et al. (2018, p.7), the market share of car industry is increasing in the
competitive market of UK and in this case many large companies are focusing on
innovations for gaining competitive advantages among each other. This also creates
negative impact towards the business process of Toyota.
 In this case the need and demand of the people is changing in UK and therefore Toyota is
facing difficulties to fulfil the need and demand of the people successfully. This can
create negative impact towards the business process of Toyota. This is the one of the
main weaknesses of this company.
Conclusion
After analyzing the study it can be said that Toyota is a multinational company and they are
doing their business successfully in UK. However Toyota needs to analyze internal and external
environment market of UK carefully for doing their business successfully in this country. Porter
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