Environmental Scan

Topics: Strategic management, Toyota Production System, Hybrid electric vehicle Pages: 8 (1543 words) Published: December 12, 2014

Environmental Scan of Apple and Toyota
University of Phoenix
Strategic Management
November 28, 2014
Environmental Scan of Apple and Toyota
Toyota Motor Corporation is a leading automobile manufacturer in the world due to its unique principles and successful strategic management. Apple is an American company specializing in consumer electronics. The paper highlights the internal and external business environment of Toyota and Apple. The internal and external business environment of Toyota

The external business environment in the US affects Toyota’s operations. The external business environment is elaborated using the PESTEL Analysis. The PESTEL Analysis entails political, environmental, socio-cultural, technological, economic and legal factors. Political factors: Toyota’s operations in the US are affected by political factors like government policies. For example, the government policy is that all foreign companies must hire USA citizens to reduce the high rate of unemployment in the country. Furthermore, Toyota suffers from the high taxes levied by the US government to protect local automobile firms from foreign competition. Economic factors: the taxation rules, economic trends, the economic slowdown and recession affect business operations of Toyota. The above makes Toyota forced to change its operation such as recruitment policy to avoid losses during recession (Cachon & Olivares, 2010). Socio-cultural factors: Toyota must meet the demands and needs of the customers in the automobile industry because their tastes and preferences change very often. The rising rates of unemployment have forced consumers to purchase more economic vehicles that use fuel efficiently. Technological factors: the US government has invested heavily in technology development, information and communication, Innovations and research funding. There is a fast change in technological environment among the customers that call for Toyota to embrace technological advancement and hire skilled employees to cope up with the change so as to compete with the rivals. Environmental factors: the US government is keen on environmental conservation via the Vehicle Pollution and Control Act 1970 and the Clean Air Act. Toyota must comply with the above laws in order to reduce carbon dioxide emissions. Legal factors: Toyota must comply with the strict intellectual property laws and taxation laws in USA. The company must follow ethical practices where all employees are treated equally without discrimination. The internal business analysis of Toyota

The internal business environment of Toyota is analyzed using SWOT analysis that entails the strength, weakness, opportunity, and threat. Strengths: Toyota is a leading automobile manufacturer due to its strong brand name, good competitive advantage and production. It has invested heavily in research and development, Just-in-Time and Total Quality Management production line. The above has given the company a loyal customer base. Toyota manufactures high-quality products that satisfy the customers. Weakness: there are few assembling plants in USA leading to low production capacity. Also, Toyota has poor product differentiation. Opportunity: Toyota should embrace the new hybrid technology by competing with Honda Civic Hybrid model. The hybrid technology will give Toyota a competitive advantage. The company should take advantage of the rise in fuel tax by manufacturing models that consume low fuel. Threat: there is a constant shift in consumer taste and the emergence of substitute vehicle products. Besides, there is market saturation and stiff competition in the automobile industry. Furthermore, the inconsistency of the exchange rate FOREX affects Toyota's profitability (Hines, Found, Griffiths & Harrison, 2011). Porter's five forces analysis

The Porter's five forces analysis entails the threat of new entrants, the bargaining power of suppliers, the threat of substitutes, the...

References: Cachon, G. P., & Olivares, M. (2010). Drivers of finished-goods inventory in the US automobile industry. Management Science, 56(1), 202-216.
Hasan, M. R. (2013). Apple Inc.-An Analysis: PESTEL analysis, Porter’s 5 Forces analysis, SWOT analysis, Comprehensive analysis of financial ratios, and Comprehensive analysis of share performance of Apple Inc. NY: GRIN
Hines, P., Found, P., Griffiths, G., & Harrison, R. (2011). Staying lean: thriving, not just surviving. NY: CRC Press.
Monden, Y. (2011). Toyota production system: an integrated approach to just-in-time. NY: CRC Press.
Verlag. Zylla-Woellner, J. (2013). Business Analysis of Apple Inc. NY: GRIN Verlag.
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