Running Head: EXTERNAL ANALYSIS (PESTLE) ON TOYOTA: THE ACCELERATOR

CRISIS

External Analysis (Pestle) On Toyota: The Accelerator Crisis

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EXTERNAL ANALYSIS (PESTLE) ON TOYOTA: THE ACCELERATOR CRISIS

EXTERNAL ANALYSIS (PESTLE) ON TOYOTA: THE ACCELERATOR CRISIS

Introduction
Any Analysis that is performed or takes place is often meant to give an insight to a
particular occurrence, by detailing the cause of the occurrence, hence the leading also to a
possible a solution to a particular crisis or that strange occurrence. In the case of Toyota: the
accelerator crisis several questions by various stakeholders were poised to Ako Toyoda the
grandson of the renowned business man Kiichiro Toyoda, in regard to a discovery that was made
in the U.S about the vehicle recall in 2009-2010(Greto, 2010). Apparently, the Toyota had
dispatched vehicle either unknowingly or not to various consumer, who note that there were
problems in relation to sudden acceleration and the entity gradual response to crisis. Anyhow,
with this in mind, the essay seeks to develop an external analysis (PESTLE): Political, Social,
Economic, Technological, And Ecological in regard to the Toyota: the accelerator crisis article:

Political aspect:
The Toyota Motor Corporation developed close links to the countries in which they sold
their product. For instance, it made trade ties with Canada and U.S government in order for it to
proliferate its income and presence in the mature U.S market (Greto, 2010). Nevertheless, the
companys prominence in vehicle production is in encouragement by the Japanese state that
applauded and inspired their Type A engine and proceeded to make car Toyota AA (Greto, 2010)

Economical aspect:

EXTERNAL ANALYSIS (PESTLE) ON TOYOTA: THE ACCELERATOR CRISIS

Toyota however, delved in to economical investment in nonautomotive

businesses, such offering higher education for various stakeholders, developed more
robotics, finance, and invested in agricultural biotechnology (Greto, 2010).
Including aerospace, higher education, robotics, finance, and agricultural biotechnology
Social aspect. Conversely Aggressive plant and model rollouts in new markets from
India and China to the U.S. and Brazil had strained the companys resources, led the
company to misread the market, to produce faulty products, and to build underutilized
plants (Greto, 2010).
Equally the entity faced deteriorating sales, and in an economical reaction
Toyota began working on a crisis approach and embarked on penny-pinching procedures,
such turning down thermostats, curbing invention, slashing administration bonuses, and
laying off many of the temporary workers(Greto, 2010).
In 1950, Toyota exchange rates affected the organization negatively, this is because it was
losing ground on market share and there were friction with its partners the United States
even in this case of acceleration crisis(Greto, 2010). In spite of the major
Challenges, Toyotas advertising as well as marketing strategy often was used to augment
the high-quality image (Greto, 2010).
In addition to the crisis, Toyotas market capitalization had fallen 21 percent,
and its inventory position skyrocketed since the problems became public in late January
2010.30. Toyota has 8,900 U.S.-based employees, 14 regional offices, and 1,500
dealerships across all 50 states hence depicting that it greatly contribute to economic
development (Greto, 2010). Despite the acceleration crisis Toyota has increased it
dividends per share ($) from 0.9 to 2.1 form 2005 -2009(Greto, 2010).
Social aspect:
Consumer seemed to be endangered with the slow response of the entity into
acceleration crisis. As a result AkoToyodamade a rejoinder in order to retain its customer
confidence (Greto, 2010). The recall by Toyota is an ideal customer responsive approach

EXTERNAL ANALYSIS (PESTLE) ON TOYOTA: THE ACCELERATOR CRISIS

(Finch, 2010). In establishing subsidiaries, the Toyota Company has been able to offer
employment within its environment despite of the Toyota: the accelerator crisis that its
trying to salvage. Even tasks and processes are the foundation for continuous
improvement and employee empowerment. It uses visual instructions to guide its
employees in producing efficient and customer centric products. Toyota employs
professionals in its operation hence have remained strong despite economic challenge
with regard to competence in its production.
Technological aspect:
There had been a technological disparity among the automakers during the global
economic aspect. Upon investigation, it was found that the disparities were caused by
burdening by legacy costs on automakers in regard to expensive pension fund, unionized
workers, and the insistence that customers would always demand big vehicles (Greto,
2010). Nevertheless, Toyota had developed a revolutionized form of management,
manufacturing production procedures. Toyotas Production
System (TPS) was conventional and was developed based on two concepts: automation
with a human touch, and the concept of just-in-time, that help in continuous flow of production
of Toyota products (Greto, 2010). The company referred to the action as a special policy
adjustment, not a recall, hence protecting its image in its market (Finch, 2010). Toyota uses
pull systems to exclude excessive production of its products (Greto, 2010)
Legal aspect:
The congress of united state became the legal body that was and became the
body that called to account the Toyota poor response. However, the entity has in legal
defense employed the use of lawyers in defending it image and its cause in its operations.

EXTERNAL ANALYSIS (PESTLE) ON TOYOTA: THE ACCELERATOR CRISIS

For instance in 2002 the entity hired lawyers to defend against oil sludge and customers
complain with regards to their products (Greto, 2010). U.S. House of Representatives
Investigators were used to deliver justice to the stakeholder in the Toyota: the accelerator
crisis.
Ethical aspect:
Each employee was and is bound by a production philosophy of the company.
Equally: the company officially launched the Toyota Way 2001 that included 14
management principles (Greto, 2010). Toyota responded slowly to acceleration crisis
hence posing less confidence in its consumers gradually.
Nevertheless, the Toyota Company uses Customer First management committee to
assess its customer queries. In fact, it coordinates engineering, production, sales, and
service issues related to quality (Greto, 2010). In spite pf these challenges nevertheless,
Nepotism is not encouraged in the operation management of the Toyota Company.
Conclusion
Toyota could still salvage its emerge as it has proven to be a key influencer in the diverse
economies that it has invested such as Canada and the U.S. among others. It may have to develop
quicker responses to customer recall, and emphasis of customer welfare than mass production
and possible carry out pestle analysis of various quarters of a financial year among other better
marketing strategies.

EXTERNAL ANALYSIS (PESTLE) ON TOYOTA: THE ACCELERATOR CRISIS

References
Finch, J.2010.Toyota Sudden Acceleration: A Case Study of the National Highway Traffic Safety
Administration - Recalls for Change, 22 issue 4. Retrieved from
http://lawecommons.luc.edu/cgi/viewcontent.cgi?article=1055&context=lclr
Greto, M., Schotter, A and Teagarden, M.2010.Toyota: the Accelerator Crisis .Retrieved from:
https://brainmass.com/file/1447111/Toyota-+the+Accelerator+Crisis.pdf