Prius Case Study

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Prius: Leading a Wave of Hybrids
1. The first generation Prius was small, cramped, and not very attractive. It was the first of the hybrid model and launched in 2001 in the United States. However, the second generation Prius was introduced three years later, which was much more pleasing to certain players of the microenvironment. First of all, the first generation Prius greatly affected the company. Toyota wants to promise its customers a car that will save them money and be environmentally friendly. They cannot promise it until their manufactures can create a car that can do those things, like run on an electric motor and be much more efficient with gas. The company has to get on board with the top management, finance, R&D, purchasing, operations, and accounting before they can work on the new Prius model. They all have to “think consumer” while performing these functions within the company. Toyota also has to be in good relationships with its suppliers, those who provide resources needed for the company to produce its goods and services. Without the suppliers, Toyota would not be able to produce the first or second generation Prius. The United States, without marketing intermediaries, would not have to privilege to sell the Prius. Since they are Japanese cars, they usually are not bought directly from Japan, which means Toyota would need resellers in the U.S. They sell the cars in the states to help the company find customers and make sales. The first generation did not have any competitors because at the time it was the only hybrid. However the second generation Prius started to face its competitors such as the Civic. Although the Honda Accord, Mercury Mariner and Ford Escape were competitors as well, they still were not near as successful since they were less efficient and more expensive hybrids. Other cars of the Toyota family, such as the Camry are more competitive with the Prius than models outside of Toyota. However, there is continual growing competition with the hybrids outside of Toyota, like GM models, Lexus, Subaru, Hyundai. While other models, in different markets, like Audi and BMW are working on their own hybrids. The public aspect of the microenvironment includes the general public. The company has to be concerned with the attitude the general public has towards their product. The Prius is widely accepted in the general public because it is environmentally friendly, cost efficient, and designed in different ways for different people. Last but not least are the customers in the microenvironment. Customer markets, Business markets, international markets, and reseller markets are what make the customers capable of buying the Prius. The second generation Prius was much more consumer friendly. They were made in 7 different colors, much more spacious, with more storage and much more practical. Also, to make the customers even happier, the second generation Prius had expensive touches like many cars in the more expensive market had. These touches include a monitor touch screen that portrayed the gas consumption, battery charge level and outside temperature. The second generation Prius also could tell you when the car was running on fuel or battery. Last, the second generation Prius was checking in at 48 miles per gallon, whereas the first generation was at 42 miles per gallon. 2. Demographics are a major factor in the macroenvironment because it kind of is the base of it. I say that because demographics are made up of people. A company cannot operate without people and there would be no markets without people. Demographics cover a large span of categories including age, gender, race, family, and many other trends. The demographic aspect of the macroenvironment helps Toyota target certain markets. With demographics, the Prius was able to target “techies” or people who were impressed with the new technology of the hybrid car. Then with the second generation Prius, Toyota was able to create more colors...
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