Prius: Leading a Wave of Hybrids.

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Question 1 - What microenviromental factors affected both the first generation and second generation models of the Toyota Prius? How well has Toyota dealt with these factors.

Microenvironment is defined as forces that are close to a company yet outside its internal environment that influence the ability of a business to serve its customers. Entities such as customers, suppliers, competitors, and other businesses that assist or influence a business’s ability to sell, distribute, promote, and develop products or services. (Marketing - defined, explained, applied, p.15, 2010). Based on this definition and the facts provided in the case study, the factors that affected the first and second generation Prius models are as follows: Consumers: The Gen I Prius was a “small, cramped, slow compact car with a dull exterior” which US based consumers did not find appealing since the US industry has always thrived on the “muscle car” look and feel. This prompted Toyota to re-design the to the Gen II Prius which was more appealing based on several factors such as boost in power, a sleek exterior design, roomy interior with plenty of rear leg room and storage space, and advance technological features typically found in luxury vehicles. The target market was for early adopters and techies who were attracted to the advanced technology and the environmentally friendly consumers. Suppliers: The suppliers had a major role in the success of the Prius by being able to design and manufacture batteries that were used in the hybrid vehicle. Without the aid of these suppliers Toyota would not be able to introduce the first hybrid car in the industry. Competitors: Toyota did not have any competitors with the Generation I Prius but they knew that competition was around the corner and dealt with pending competition by improving to the Gen II Prius which had better fuel economy, and better cost. They also continued to increase their hybrid models and now supply 6 of the 15 U.S. hybrid...
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