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Table of Contents
External Environmental Factos........................................................................................................4

Internal Environmental Factors.......................................................................................................4

Internal and External Factors Affecting Business...........................................................................4

Micro-Environmental Analysis.......................................................................................................5

Macro-Environmental Analysis.......................................................................................................7

PESTLE ANALYSIS......................................................................................................................8

Porters Five Forces Model.............................................................................................................11

SWOT Analysis of Toyota............................................................................................................12

References......................................................................................................................................15
Figure 1: External and Internal Critical Factors..............................................................................5
Figure 2:Micro-Environmental Analysis.........................................................................................6
Figure 3:Macro-Environmental Analysis........................................................................................8
External Environmental Factos

When a firm is unable to manage external events, they might have an impact on the business
choices made by its owners and stakeholders. Your company's capacity to fulfil its strategic
goals might be adversely affected by a wide range of external events.

For example, Import prices and the sorts of items that may be imported might be significantly
affected then if the the government changes its regulations on the matter, which could have
serious ramifications for your online company.

Internal Environmental Factors

There are different variables inside an organisation that may impact or be affected by, the
company's choices, actions, and decisions. The internal environment is indeed a component of
the overall business environment.

Employees and management behaviours are also included in the definition of workplace culture.

Internal and External Factors Affecting Business

As a result, companies do not function in a vacuum but rather the way companies do business not
whether they succeed must adapt to a continuously shifting environment. will achieve their
objectives. It's possible to divide the outside business environment into seven main
subenvironments, as shown in the illustration: economics and law; demographic; social;
international competitive; global technological; and political and legal. Businesses in each of
these fields have different problems and possibilities.

Owners and managers of businesses have considerable influence on the day-to-day operations of
their organisations. Every choice is made by them when they comes to their goods, their
workforce and their retail locations. Products or services that fulfil the demands of both present
and future customers are created by these experts and their resources. As a consequence,
management struggles to have an effect just on external environment that affects the success of a
firm. Keeping an eye on your competition and adjusting your business accordingly is essential
for success in the market arena.

Figure 1: External and Internal Critical Factors

Micro-Environmental Analysis

A company's microenvironment is its immediate surrounding environment. An organization's

performance including day operations are affected by this grouping of forces or components.

Figure 2:Micro-Environmental Analysis

The Company

Many departments within a company must be considered when developing marketing strategies,
such as the top management team, financial planning and operations staff as well as R&D and
accounting departments. This information will be useful to marketing managers as they make
decisions on larger-scale strategies and plans.

Suppliers

Customers see suppliers as an integral element of the chain of value delivery. For enterprises,
they provide raw materials and components, as well as cutting tools and other equipment. The
success of every organisation is dependent on the quality and reliability of its vendors..

Marketing Intermediaries

The value distribution network can't function without marketing intermediaries. With their help,
they help the company sell and distribute its products to end consumers.

Competitors

Competitors fight each other in both market or resource competition. To be successful, a

company must offer more value and satisfaction to customers than its competitors.

General Public

"The public" is a term for people who are interested or could be interested in the company's
product or who could have had an impact on the company's ability to reach its goal. major
financial publics, media publics, government publics, citizen-action publics, internal publics,
local publics, and the general public are all types of publics that a company can market to.

Customers

In the company's "microenvironment," the most important people are the people who buy from
it. The whole value delivery network wants to connect with the customers and build strong
relationships to them. It's possible for businesses to try to reach five different types of people.
The consumer market, business market, government market, reseller market, and international
market are all included in this group.
Macro-Environmental Analysis

People who work for an organisation call this the "macro environment." This refers to the main
things that an organisation can't control that affect its decisions. A company doesn't work alone
and in its business environment. It works in a bigger picture. It is made up of things that can be
good for a company, but also bad for it..

Figure 3:Macro-Environmental Analysis

Demographic environment

Demography is the study of how the size, density, age, location, gender, race, occupation, and
other statistics of the human population change over time, as well as how they change over time.
The demographic environment is important to marketers because it is made up of people, and
people are what make markets grow. Having a lot of people who are different from each other
can be both good and bad for businesses.

Economic environment

The economic environment is made up of things that can affect people's purchasing power and
how they spend their money. There are many reasons not to start exporting your goods to a new
country until you know how the people there spend their money. This includes GDP, GNI, the
Import Duty Rate (which is how much the government charges businesses for importing goods),
unemployment, inflation, spending habits, and disposable personal income.

Natural environment

Is a word that refers to things like natural resources and the physical environment, which are
used by marketers or that are affected by marketing activities. Environmental issues have
become more important in the last few years because people are more concerned about the
environment. The air and water are polluted by things like floods, droughts, and so on, so these
things can happen.

Technological environment

Technology has a big impact on the world as a whole. It's important for an organisation to do a
lot of research about how technology spreads and how people use it before it invests in
marketing. The company deserves to learn how much technology there is in the area and how
people interact with it, so they can plan their communication or campaigns accordingly.

Political environment

The political environment has a big impact on marketing decisions. There are also rules and
government agencies, and also pressure groups, that can have an impact on or limit people and
groups in a given society.

Cultural environment

In this way, the cultural environment is a group of things that have an impact on a society's basic
values, preferences and behaviour. Organizations need to know about the cultural beliefs or
practises that people have in order to make good marketing decisions. Companies that don't
understand foreign cultures can make a lot of cultural mistakes if they don't pay attention.

PESTLE ANALYSIS

The PESTEL analysis of a automobile industry shows that different things outside of their
business can affect them. As people's lives change, the automobile industry also starts to grow. It
shows how the automobile industry could have problems in the future when they do a PESTEL
study. This way, businesses can figure out how to solve them, which is good for them.

Political Factors:

When a country has bad politics, it has a direct impact on the businesses that work there. Inside
the Pestel of a automobile industry, we see how politics can affect the industry.

 In most nations, governments have set rules about how car parts are made to keep
passengers safe. If any company doesn't meet these rules, their licence could be
revoked.
 It also takes a lot of time for the company to do a lot of testing first, which can be very
expensive at times. People in charge of the government also want to limit the amount of
fossil fuels that are used, which make more pollution.
 A country's automobile industry also depends on the government's decisions about
export and import, which can affect how many cars the country makes and how much
money it makes from them. If a company could indeed buy foreign elevated parts at a
rate lower, it can make more money.

Economic Factors:

There are a lot of things that affect how people live in a country. So, it could also have an effect
on the automobile industry. The following are some economic concerns that could hurt the auto
business:

 There is a steady rise in the income of people who live in stable or emerging economic
zones every day. As a result, they have more money to spend. There are more people
buying cars because of this.
 Many countries have put taxes on things like cars, which has made them more
expensive, so some people may not want to buy one. It could make some countries less
interested in buying luxury cars. However, if a lot of companies start making cheap
cars, more people might buy them.
  To put it another way, if the cost of automobile parts goes up, so does the price of cars.
It could be a reason why there is less demand for cars.

Social Factors:

They have an effect on businesses in a land because of how it is social and cultural. Social trends
have a big impact on how many cars are made. There are certain sociological factors that could
hurt the automobile industry, which can be found through a PESTEL study of the industry.

 People don't just use cars to get around; they also use them as fashion statements. So,
the companies to think about what people want when they make new cars. Otherwise, it
could go out of style and not sell well.
 Another thing that affects the selling of cars is how many people live in a country.
There are a lot of big automobiles like SUVs sold in states with a lot of people and a lot
of families.
 Communities also have an impact on the automobile industry because of their culture
and habits. If, for example, a country has a good bus system, then less people might
own cars. Developed countries are also more likely to own at least one or more cars.

Technological Factors:

The state of technology has a huge impact on the sales of car companies. Here are a few
technical things that could hurt the business of a automobile industry:

 The automobile industry relies a lot on new technology to keep people safe. It is
important for companies to keep their technology up to date so that their cars can be as
secure as possible.
 Companies need to focus on cutting down on emissions, not on making more money.
Keep this same emission rate in check: They can use new technology to do that. Cars that
drive themselves are already on the market, so you can buy them.
 People might want to buy them in the future. The business needs to get the word out
about these self-driving cars and electric cars, which could help them get more
customers.
Porters Five Forces Model

Decisions are the way to turn information into practice, which can have a good or bad effect. For
business leaders, there are many steps in the process of making decisions. In the business world,
the most important risk is losing money. So, business leaders take steps to reduce its risk and
reach their goal of making the most money possible. This is how General Motors tried to reach
their goal of more revenue.

The Threat of Substitute Products

When automakers make their products, they have to be careful not to make their products better
than their competitors'. General Motors had to make sure that the quality or uniqueness of their
cars were enough to beat their competitors, no matter how much they cost. Customer loyalty is
built whenever a company provides high-quality resources at a fair price. Competitors, on the
other hand, have an advantage whenever the product could be replaced and still be used for the
same amount of time at a lower price. This happens when products don't have a lot of uniqueness
or quality.

The Bargaining Supremacy of Customers

Customers can have an impact on how competitors fight for money. They have what is called
bargaining power, which allows them to demand better products and lower prices. Customers
often have a lot of power when it comes to bargaining, which can make competitors play each
other off in order to make money. There are many times when businesses lose money when they
do this.

Bargaining Control of Suppliers

There are several suppliers in the automobile sector. According to the 2018 Automotive News
list, five of the world's largest suppliers were Bosch, Denso, Magna, Continental, and ZF
Friedrichshafen. Suppliers attempt to keep negotiating control by raising prices or decreasing the
quality of products for cost efficiency. Material costs have increased over the years, or the quest
to find a happy medium among consumers and management is the ultimate obstacle.

The Threat of Entry from New Competitors

Toyota is indeed a sensation in the automobile business, actually reshaping the future with its
revolutionary market strategy. As a new rival from the technological sector, the corporation
entered the industry, leveraged their resources, and produced a massive upheaval. Their
launching of a car technology based and driven by electricity established it as an industrial
powertrain.

The Intensity of Competitive Rivalry

'Competition begets greatness' is a motto I've always used to motivate myself to work hard and
achieve my goals. The level of competition in the automobile sector in in United States is rather
high. There are rules and regulations in place to ensure fair competition among firms; yet, rivalry
between corporations may frequently be fierce. When there are multiple competitors of
comparable size and strength, one of the primary elements that promotes rivalry in competition.
General Motors, Ford, and Chrysler are great examples of huge rivals vying for market
dominance.

SWOT Analysis of Toyota

Toyota’s Strengths

Because of Toyota's capabilities, the business can continue to be a global leader in the
automotive industry. Using the Swot model, the internal strategic factors that serve as a
company's strengths are identified in this section. The following are Toyota's main advantages:

1. A strong brand identity

2. Chain of distribution across the world
3. The ability to quickly develop new ideas

Toyota is one of the world's most powerful carmakers. Another advantage of the firm is its
global supply network, which helps to reduce business risk and gives a level of resilience.
Moreover, Toyota has a corporate culture that promotes rapid innovation, which is essential for
maintaining a competitive advantage over the long term. SWOT analysis shows how Toyota's
strengths contribute to its position as one among the world's biggest carmakers..

Toyota’s Weaknesses

Toyota's problems hint to organisational inefficiencies that may be lurking in the shadows. Firm
success is hindered by internal strategic factors, which are identified in a SWOT analysis model.
The following are some of Toyota's most serious flaws:

1. The hierarchical structure of an organisation is a given.

2. A culture of secrecy in the workplace.
3. Products that have recently been recalled and their effects

Toyota's global hierarchical organisational structure impedes localised operations from being as
flexible as feasible. Another problem is that the corporate policies of secrecy hinders response
times to developing crises. To add insult to injury, Toyota started recalling huge quantities of
products in 2009. Since the recall processes take corporate capacity that could otherwise be used
for product distribution, these recalls weaken the firm's overall strength. Using the strengths and
weaknesses of Toyota's organisational structure and culture, this component of the SWOT
analysis shows how the company might improve performance.

Opportunities for Toyota

Toyota's potential is largely dictated by advancements in technology and economics. External

strategic aspects that the organisation may use to improve operations are revealed in this SWOT
analysis model component. Toyota's most crucial opportunities are as follows:

1. Market expansion in developing countries

2. The demand for fuel-efficient automobiles is increasing.
3. Escalating need for high-tech auto electronics
4. As the dollar strengthens versus the yen, the value of the yen drops.
Toyota has an opportunity to increase sales by expanding into new areas. Furthermore, Toyota
has an opportunity to focus its innovation in such areas because to the present trends of increased
demand or interest in better fuel efficiency and advanced technology. In addition, a weaker
Japanese yen against the US dollar means that Japanese products and components shipped to the
US are much more competitive. SWOT analysis shows that Toyota must focus on market growth
and innovation so order to take advantage of its potential.

Threat for Toyota

There are several threats to Toyota's business from a competitive environment. In a SWOT
analysis, the external strategic factors that might affect the success of the company are identified.
The above are the most significant dangers facing Toyota at this time:

1. Increased competition in the market from low-cost competitors

2. The speed with which rivals innovate.

Low-cost automobiles from Korean, Chinese, or Indian manufacturers are putting pressure on
Toyota's global market share. Toyota also has to contend with competitors like GM, Honda, and
Ford, who are known for their rapid innovation. If Toyota wants to stay on top, this component
of the a SWOT analysis shows how they may, for example, innovate.
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