The Global Business Environment Essay Example | Topics and Well Written Essays - 2500 words

The Global Business Environment - Essay Example The environment in which Toyota operates is becoming extremely tough every day. All businesses are facing problems today due to increasing costs, cultural diversity, globalization and decrease in global demand. The world has seen a great financial crisis in recent years and economies are still to recover from it fully. In such environment companies are finding it hard to produce and sell its product to customers. The external environment is also affecting organizations in new ways because media and communication technology has developed so much and any ethical issue can seriously hurt the reputation of the company. Competition is also increasing in business environment as companies are trying to innovate and market their products in better ways. In this report we will conduct an external environmental analysis for Toyota. We will talk about markets, competition and regulations that can have an impact on the company. The ethical issues, corporate social responsibility and environmenta l policy and its affect on Toyota will also be discussed. This paper will deal with the external environment and not with the strategy of Toyota. Markets, Competition and Regulation Markets are evolving at a great pace in today’s fast moving world and it is important to keep in mind the changing demand of target market. Competition is also increasing as companies are trying to increase efficiency by decreasing costs and improving quality of their products. Regulations are also getting stern everyday and automobile companies have to keep in mind the safety standards set by the companies. This means increase in testing of cars which will lead to greater costs. In this section the impact of markets, competition and regulation on Toyota will be discussed. Markets and its Impact of Toyota The main target market of Toyota is the middle class income group of the world. These are the people who cannot afford luxurious cars but want vehicles that are cheap but durable vehicles. Toyota provides cars to middle income people of the world and prices are also lower in comparison to BMW and Mercedes. Over the years this target market has been consisted as they cannot switch to expensive cars and they also don’t switch to cheaper manufacturers. This is why this market of Toyota was considered relative safe and loyal to Toyota. But this is changing because now the target market of Toyota is also evolving. The target market is demanding innovation in designs and specifications. The medium income group target market has become more aware of the different brands in the market. They have also become more design oriented and are demanding newer and better designs. Car movies and games have informed the market about fast cars and sleek designs therefore they want these things in their cars. This problem is staring Toyota in the face because design was never a strong point of the company and its focus was on durability and prices. Evolving markets are in this way impact ing the business strategy of Toyota. The main strategy of Toyota is that of reducing service costs by giving customers quality and durability (Harrup & Janssens, 2008). This is causing problems because the markets of Toyota are evolving and they are demanding better designs from the company. The external environment is therefore impacting the strategy of Toyota. The increasing focus on design and specification of the market can decrease the demand of Toyota cars. Customers will look for new car manufacturers