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Toyota

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This analysis will provide a background on issues that have negatively affected Toyota’s image as one of the most reliable cars on the market. Along with this a PEST analysis will be produced and the strengths, weaknesses, and outcomes expected will be shown in order to illustrate how our analyses and actions will help move Toyota past their reputational issues. Our goal is to take Toyota back to a place where they can move themselves back to a place of growth, innovation and one of positive consumer confidence. For over the past 70 years Toyota has been considered the leader in new technology development. The brand is renowned for quality and reliability across all their models. The company is also seen as the market leader and flag-bearer for greener, hybrid technologies. The firm’s performance in the global market in recent year has delivered mixed results. In the beginning of 2009 Toyota was confirmed as the world’s largest manufacturer by volume, partly due to the collapse of General Motors. But Toyota hasn’t had much time to celebrate. The carmaker has been plagued by a variety of setbacks, including slumping sales, under-utilized assembly lines and multibillion-dollar losses. But perhaps most worrisome of all are signs that the company’s flaunted quality has been slipping. Long hailed as the industry benchmark, some key Toyota products have suffered quality snags in recent years regarding the overall safety of their vehicles. The auto media seems to believe that Toyota’s reputation is ruined. Consumers, though, are still under the impression that Toyota’s quality is tops when compared to all other automakers. Toyota had a rough 2009, to put it mildly. Toyota didn’t have a much better 2010 since the company announced a voluntary recall of 2.3 million vehicles to correct “sticking accelerator pedals.” Oddly enough, that new recall has nothing to do with Toyota’s earlier recall of 4.2 million vehicles after the infamous “floor mat acceleration” fiasco. So that’s 6.6 million recalled vehicles, without even including the 110,000 Tundras recalled for rust problems. Now, to top it all off, Japan’s own Nikkei news organization is saying, as reported by The Truth About Cars, that the latest recall," is seen as a major dent in the side of the leading Japanese automaker’s reputation as a builder of reliable automobiles." Toyota, which had been viewed as a reputable, trustworthy company, is under a glaring spotlight for these huge recalls. The company’s spokespeople are saying the company’s doing everything it can to fix these problems and restore consumer confidence. It’s launched a major advertising campaign, admitting to product defects and promising to make things right again. Toyota is proactively trying to deliver a positive message – the company is working around the clock to fix the problems in their vehicles – but it has a very long road ahead. The PEST analysis below is a useful tool for understanding the “big picture” of the environment, in which you are operating, and the opportunities and threats that lie within it. By understanding the environment in which you operate (external to your company or department), you can take advantage of the opportunities and minimize the threats.

PEST Analysis
| | | | | | | | | | |
| |Political | | |Economic | | | | |
| | | | | | | | | | |
|Japanese made (different regulation) |expensive recalls | | | | |
|US political support for recalls and action |possible expensive legal action | | | |
|Will toyota put restraints on foreign imports |economic downturn tough on car sales anyway | |
|Environment regulations | | | |unemployment will cause missed payment | | |
|New safety regulations | | | |safety issues will negatively impact resell ability | |
|New tax policies | | | |Oil prices | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| |Social | | |Technological | | | | |
|loss of trust in brand | | |Redesigns needed? | | | | |
|bad perception | | |keep up with recalls | | | | |
|everyone knows about issues | |keep up with design changes | | | |
|toyota didn’t come forward until the problems got big enough |continue with innovation as well as fixing current issues |
|injury concerns | | | | | | | | |
|false claim concerns | | | | | | | | |
|Age of population | | | | | | | | | |

An assumption that was based on our PEST analysis is that we would be able to improve the reputation enough that they could move into a new market, or even launch a new product effectively without the attempts being seen negatively based on the current reputational conditions. We chose to launch a new, affordable, SAFE hybrid car in the United States. Even though the US market accounts for only about 37% of Toyota's sales this is a market that has been particularly troublesome. The US market was the primary source of Toyotas worldwide loss of $ 4.4 billion. We believe that by first implementing this model in the US it will positively affect the market. From there we will launch this model in other markets if we see an increase in customer confidence in our products and in sales revenue in the US. Before we made this decision we used the PEST analysis to decide if our strategic plan to enter the US market with Toyotas new model would help improve Toyotas tarnished reputation. When looking at the political aspects of the analysis

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