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External Analysis of the Automotive Industry

Toyota operates in a complex global industry, and in order to develop and execute a successful strategy, the company must take into account the global automotive environment.

What are the current opportunities for Toyota, what threats are they facing, and what actions are they taking to respond to these environmental contingencies?

Identify two main threats and two major opportunities facing the automobile industry.

Do the executives at Toyota and the independent analysts agree?

Browse through the annual report and locate ways that Toyota is addressing these threats and opportunities.

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What are the current opportunities for Toyota, what threats are they facing, and what actions are they taking to respond to these environmental contingencies?

The opportunities that Toyota is facing emerge from the present economic situation. The gasoline prices are unpredictable and family incomes are low and so the families want cars that cost less and consumer lower fuel. The opportunity for Toyota is that if it can design and produce low cost cars, small cars and fuel efficient cars, it can increase its revenues and protect its position as a market leader. Even electric or hybrid cars are in demand provided they help save gasoline and are not very expensive. The threats that Toyota is facing emerge from the weak economy. There is overall weak demand for cars. Individuals are not willing to write off old cars and are continuing with old cars. Further, the 2009-2010 recall of cars has placed Toyota under a cloud. The $16.374 million penalty imposed on Toyota for its delay in information NHTSA about stuck accelerator pedals has given a poor name to Toyota. Consumers have started doubting the design, and safety of Toyota cars.
Toyota decided to recall its cars with 'defects'. In November 2009, Toyota began is recall. It also made recalls for floor mat, accelerator pedals, and hybrid anti-lock brake software. By February 2010, the number of worldwide recalls hit 9 million. The recalls actually increased the problem of ...

Solution Summary

This solution gives you a detailed discussion on environmental contingencies in 912 words with 6 references.

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