The unintended acceleration was attributed to floor mat issues, brakes and sticky gas pedal. The company has since recalled nearly 8 million cars of different models that were deemed to have potential problems with gas pedal mechanism which could lead to unintended acceleration (McKenzie & Scott, 2010). 2. Environmental scanning of the company Toyota has enjoyed an unblemished reputation within the auto industry. In the fast transforming business dynamics, the various environmental factors become crucial paradigms to maintain competitive advantage within the industry. PESTLE and SWOT analysis become vital tools for firms to identify and evaluate elements that can help them compete and succeed in the highly competitive business environment (Burnes, 2009). They promote the wider understanding of socio-political environment within which the firms operate. They were conducted to understand Toyota’s market position prior to the crisis and how it was impacted in post crisis period. (Refer to Appendix A) 2a. PESTLE analysis for America In the current environment of rapid globalization, practice of international businesses is considerably impacted by the different political, economic and legal systems of nations (Hills, 2004). The businesses therefore need to become more flexible and adapt to the changing technologies and work environments. PESTLE analysis of Toyota has been conducted for America because the case focuses on the Toyota’s American market and the performance and quality of its various models in America. PESTLE has emerged as critical issues that need to be incorporated within the business strategy when firms expand across globe. 2a.1 Political environment America is one of the largest democratic states of the world. The public is hugely empowered with information and the socio-political environment promotes proactive participation of people in issues which affect them. Thus, businesses need to be more accountable in their actions and take into account the expectations of the people at large. The sticky pedal case of Toyota had drawn more public attention towards the firm undermining it’s hitherto brand reputation of quality, dependability and value. 2a.2 Economic It is a very important factor because the market is driven by the demand and supply that is mainly dependent on the buying capacity of the consumers. It has big market in America. Despite the current environment of recession, the networking solutions have become the critical part of industrial success and therefore, an intrinsic part of business strategy. Toyota therefore has huge economic stake in the American market and needed to restore public trust by responding favourably to the crisis situation. 2a.3 Socio-cultural paradigm There is huge socio-cultural diversity amongst the masses. With multi-cultural society, the demographic factors are vital ingredients that have huge cascading effect on the market. The demographic changes vis-a-vis population size, age distribution, gender ratio, income group etc. have immense influence on the changing consumer preferences and consequently on the profitability of the firm. Kotler et al (2007) emphasize that in the fast changing global business, demographic compulsions have significant impact on market position and therefore, they need to become intrinsic part of the market strategy of the
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Part 1 1. Introduction Toyota is one of the best Japanese car manufacturers with high credibility in America. It is also the largest manufacturer of automobiles with production units in 28 countries across the globe (Toyota, 2011). Its brand reputation fundamentally relies on the quality, safety, reliability and customer focus that continuously strives for excellence in design and improvement (Quelch, Knoop & Johnson, 2010; Stewart & Raman, 2007)…
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ies, the company engages in the production of pleasure boats, building homes and development of intelligent transport systems that include the electronic toll collection system and cruise control. Toyota aims at maintaining market leadership position through enhancing
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