Internal & External Factors of Toyota

About this essay

Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people. Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile. We will meet our challenging goals by engaging the talent and passion of people, who believe there is always a better way. Our Mission

Toyota South Africa is dedicated and committed to: * Supplying the range of vehicles, parts, accessories and services to meet the requirements of the South African and export markets that it services * Ensuring that products are of outstanding quality, value for money and instil pride of ownership Internal & External Factors

Internal Factors The best thing about internal factors is that you can control many of them.

Some factors, such as your business’s reputation, image and creditworthiness, are a result of the way you run your business. Other factors, such as your organization’s management structure and staffing and the physical decor of your business, are based on your business decisions, and you can change them as you see fit.

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Changing internal factors usually involves some indirect costs, such as lost productivity while new employees are trained, some direct costs, such as a penalty for terminating a lease before it expires, or some combination of the two.


Customers are anyone who buys or rents from the company. Customer are the most important micro environmental factor that affect company as they survive on meeting the wants and needs of the customer and failure to do so will result in the company failing.

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Toyota studies their customers and saw that they wanted a car with better fuel consumption and as a result Toyota decided to make the Prius, their first hybrid car. Toyota dealt with their customers by setting up website to educate the customers about the Toyota Prius. They took advantage of Earth Day to send out green seed cards shaped like Toyota’s logo to prospective buyers and they also gave away some green Prius at Earth Day events. However, Toyota did not recognize that consumers normally don’t buy cars for the saving in the long-run so “fuel savings are not going to be the key it convincing people to purchase the Prius” [principles of marketing]. As a result of this Toyota have asked governments to give tax cuts to cars with better fuel consumption


Are any companies in the same market place as your company? In order of a company to be successful in the market place a competitors most grain a competitive advantage over its competitors. Toyota has been successful in maintaining its competitive advantage although competitors like Citroën have cars which are just as efficient as the Toyota Prius, “Toyota is still the market leader in this segment” [principles of marketing]. They have done this by capturing people imagination by being the first Hybrid car on the market and through the effective use of advertisement.


One reason many Business fail is a lack of adequate capital. For example, you might have good sales but slow receivables. If you don’t have adequate cash reserves or access to credit to pay your bills while you wait for customers to pay invoices, you might lose access to your suppliers, have to cut back on marketing or take out costly loans to make payroll. Work with your financial manager to create internal controls that help you maintain adequate working capital.


Are any group that has an actual or potential interest in an organization’s ability to achieve its objectives. Good relations with the public help to enhance the company’s reputation so helping to increase in sales. The biggest factors of the Toyota Prius’ microenvironment are media and the government

External Factors

External factors are all those things that are beyond your control. Tight lending conditions, government regulations and competition are some of the external factors that affect virtually BOC bank. Strategic planners anticipate and manage some of the circumstances that affect their business. Exploring alternative financing sources until lending restrictions ease, developing plans for compliance with regulations and enhancing innovation and service to stay ahead of the competition are forward-thinking ways to keep external factors from threatening the survival of your business.

Demographic factors

The Toyota Prius is such a highly technologically advanced vehicle with its four cylinder petrol engine and 33-kilowatt electric motor. This could be one of the demographic factors that prompted the introduction of the Prius for Toyota. The Prius appeals to Generation Y also known as the “echo boomers” who were born between 1977 and 1994. Their comfort with computers, digital technology and overall technical advances prove they are and attractive target for marketers wanting to create a device at the high end of new, innovative devices on the market today e.g. iPod, Toyota Prius.

The economic environment

The economic environment consists of the factors that affect consumer buying power and spending patterns. With many countries experiencing economic recession, consumer purchasing power is reduced. People have less money and now have to spend more carefully. The recent high petrol prices are causing a rising demand for greener, more fuel efficient cars that are cheaper to run. Several governments are providing incentives to people to buy these hybrid cars. In the UK, the government is offering reduced car tax on initial purchase. Electric car drivers can also avoid the £8 per day Congestion Charge in London.

Technological environment

Toyota must be aware of and keep up with the technological environment which includes the forces that create new technologies, creating new product and market opportunities. This is the most rapidly changing environment. By introducing the Toyota Prius, the company has gained a technological initiative in the hybrid market. Toyota knew that their target market for this product would include technology enthusiasts, or ‘techies’ as they are known, and included reference to the cars leading technology in their advertisements.

Natural forces

Natural forces also affected Toyotas decision to manufacture a hybrid car. Consumers are becoming more concerned about the environment and about how the products they purchase have an effect on it. Petrol and diesel are both non-renewable fossil fuels which release carbon emissions that contribute to global warming. Therefore there is a demand in the market for alternatives to petrol-powered vehicles, such as electric cars. Hybrid cars like the Toyota Prius offer improved gas mileage and emissions standards. Toyota have used this opportunity to position themselves in the market as an ‘environmentally concerned company’

Cultural environment

Cultural values have an effect on the products people choose to buy. Although core values and beliefs held by society are quite persistent, secondary cultural values are more open to change. Recent changes in cultural values include a greater appreciation for nature. People are starting to realize that nature is finite and fragile. They are beginning to seek out more environmentally-friendly products, one of these being fuel-efficient cars. Toyota has responded to this by introducing the Toyota Prius onto the market. Even in Hollywood it seems that it is now cool to be environmentally responsible as a range of A-liters are now owners this hybrid car.

The political environment

Toyota needs however, to be aware of the political environment which may pose restrictions on its business activity. The political environment includes laws, government agencies and pressure groups that influence and limit various organizations and individuals in a given society. Recently, the EU commission announced new legislation which will be brought in that requires all manufacturers selling cars in the European Union to lower average CO2 emissions of new cars. The governments of some countries have intervened and offered tax incentives to stimulate the purchase of clean-fuel and high-mileage hybrid cars

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Internal & External Factors of Toyota. (2016, Nov 13). Retrieved from

Internal & External Factors of Toyota

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