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External Analysis of the Automotive Industry

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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 ...

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

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External Environment Analysis

SLP02 - External Environment Analysis (Do Not Select a Specific Company)
Note: Throughout this course, it is recommended that you complete the SLP before you undertake the case analysis. Before you begin the SLP, you need to read the background materials thoroughly.
Several of the background readings (Attached - SLP02 Background Material) referred to gathering data to support the external analysis. Be sure to review those readings so you know what kinds of data are used when conducting an external analysis. The purpose of this SLP is to develop the part of our strategic toolkit that deals with gathering information for a 5-Forces and PEST Analysis.
Step One: The first step in an external analysis is to determine to which industry your target business is classified. Usually this is done through North American Industry Classification System, or NAICS code. Find a website or library reference that would enable you to determine the NAICS code of any business (Do Not Select a Specific Company or Business - select an industry such as fast foods, retail, automotive, etc..).
Step Two: Research web and library sources that would give you the kinds of data you would need to conduct a Porter 5 Forces analysis. We are not looking for sites that describe the 5 Forces, but for sites that would have data that you could use to analyze the degree of competition in an industry, or the ease of substitution, for instance. You have undoubtedly run into such websites and publications before in your core courses. Typically, they are government sources providing statistical data, industry or trade magazines or journals, general business publications, financial websites, websites for trade associations, etc. This is a two step process: First figure out what kinds of information you would need to evaluate each of Porter's forces, and then find a source that will give you that information. Find a minimum of 2 different sources for each of Porter's Forces.
Step Three: Research web and library sources that would give you data to support a PEST analysis. Find at least 2 different sources for each PEST variable.
Step Four: In a 2 page paper (not including cover page or references), list your resources from steps 1-3 above. For each source, provide a title and a URL, if applicable. Write a short paragraph explaining what information is available, how it would be useful in an external analysis, and critiquing the source (for example, What are the limitations of the source? Is one better than the other? Why?)
SLP Expectations:
You may be concise in your presentation of this SLP. It does not have to follow the conventions of a written case paper. Tables or bulleted lists may help you present the information concisely and make it easy for the reader to quickly grasp the information. You do not need an introduction or conclusion, but I would like to see a complete references for each source on a separate reference page.
Turn in your paper in to Coursenet by the due date for this module.

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