London School of Science and

Technology

Pearson BTEC Level 5 HND Diploma in

Business

Unit 1: Business Environment

BE
Assignment Title: Toyota

Module Leader: Shafqat Abbas

Internal Verifier: Dr. George Panagiotou

Issued on: 26th September 2016

Deadline: 21st December 2016

Submitted on:

Student Name:
Student ID:
Campus: Alperton/Luton/Birmingham (delete as appropriate)
Pearson Registration Number:

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 London School of Science & Technology
Introduction

The aims of this assessment are to provide learners with an understanding of different organisations,
the influence of stakeholders and the relationship between business and the local, national and
global environments. It also provides learners with understanding and skills relating to the
fundamental concepts and principles that underpin the marketing process.

The assignment is formed with Pass, Merit and Distinctiongrades combined together within the given
tasks. This shows the highest grade possible as you work along the tasks.

You are required to answer all Pass criteria to achieve the Pass Grade, all Pass and Merit criteria to
achieve the Merit Grade, and all Pass, Merit and Distinction criteria to achieve the Distinction Grade.

This assignment consists of four tasks, producing a report, Essay and PowerPoint presentation You
are advised to carry out in-depth secondary research as required by the questions and demonstrate
your practical application abilities to the given contexts.

Abstract:
Toyotas success both on the Japanese market and international market due to its desire to make
products with high quality. The Japanese believe that nothing is so good that it cannot be improved,
so they constantly struggle to increase the quality of everything they do. This attitude can be
expressed by a single word:Kaizen. It means continuous improvement and is the key word to
guide them towards perfection.
1. TOYOTA MOTOR COMPANY
Founded in 1937, Toyota Motor Corporation is a Japanese company that engages in the design,
manufacture, assembly, and sale of passenger cars, minivans, commercial vehicles, and related
parts and accessories primarily in Japan, North America, Europe, and Asia. Current brands include
Toyota, Lexus, Daihatsu and Hino. Toyota Motor Corporation is the leading auto manufacturer and
the eighth largest company in the world. As of March 31, 2013, Toyota Motor Corporations annual
revenue was $213 billion and it employed 333,498 people.
The success both on the Japanese market and international market dues to its desire to make
products with a quality. The Japanese believe that nothing is so good that it cannot be improved, so
they constantly struggle to increase the quality of everything they do. This attitude can be expressed
by a single word kaizen. It means continuous improvement and is the key word which guides them
towards perfection.
2. EXTERNAL ENVIROMENT OF AUTOMOTIVE INDUSTRY:
2.1. Industry Overview and Analysis
Toyota Motor Corporation competes in the automotive industry. The past five years were tumultuous
for automobile manufacturers. Skyrocketing fuel prices and growing environmental concerns have
shifted consumers' preferences away from fuel-guzzling pickup trucks to smaller, more fuel-efficient
cars. Some automakers embraced the change by expanding their small-car portfolios and

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diversifying into the production of hybrid electric motor vehicles. Other automakers were more
reluctant to shift their focus from big to small cars, expecting the price of fuel to contract eventually,
bringing consumers back to the big-car fold
2.2. Industry Life Cycle
This industry is in the mature stage of its life cycle.
2.3. Industry Demand Determinants
Worldwide automobile demand is tied to vehicle prices, per capita disposable income, fuel prices
and product innovation. On the supply end, vehicle prices stem from material and equipment costs,
with higher steel and plastic prices raising manufacturers' purchasing costs and, ultimately, retail
prices. During the past five years, automakers have been plagued with high steel and plastics prices,
which have raised manufacturing costs and product prices. On the demand side, per capita
disposable incomes determine affordability for consumers.
3. INTERNAL ENVIROMENT OF TOYOTA
3.1. Core Competency
The core competence of Toyota Motor Corporation is its ability to produce automobiles of great
quality at best prices, thereby providing a value for money to the customers. This core competence
of quality can be attributed to its innovative production practices. The quality aspect of Toyotas
products have revolutionized the automobiles in the past and almost all the automobile companies
had to try and better the quality of their products. It is a cornerstone of the cost leadership strategy
that the company pursues.
3.2. Distinctive Competency
Toyotas distinctive competence is its production system known as the Toyota Production System
or TPS. TPS is based on the Lean Manufacturing concept. This concept also includes innovative
practices like Just in Time, Kaizen, and Six Sigma and so on. Toyota has worked tirelessly over the
years to establish this distinctive competence. No other automobile manufacturer can do it as well
as Toyota does. This distinct comp
4. TOYOTAS STRATEGY IN INTERNATIONAL MARKETS
Strategies used by Toyota in order to get success on selected markets to develop business and to
impose on these markets are strategies most, created by Japanese specialists. The strategy that
generally based both Toyota Company and most Japanese companies is KAIZEN strategy which
means continuous improvement and the impact that it has on the level of product quality. KAIZEN
is an integrative strategy, which means a cross-functional strategy that appoints the gradual
improvement, management and continuous business activities and the parameters of quality,
productivity and competitiveness, with direct involvement of all staff.
The product strategy of Toyota is based on high quality, on developing new innovative technologies,
focusing on further research, creativity, but also hard work. Toyota is a world leader in research and
development of advanced automotive technologies. Toyota develops intelligent responses to the
challenges of the automotive industry today, while assuming responsibility for future generations.

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Regarding the problem of pollutant emissions, Toyota explores simultaneously a variety of solutions
for designing less polluting vehicles as well. Toyota has committed to develop hybrid systems as a
basic factor in manufacturing clean technology cars, combining different sources of power. It has
made significant progress in designing engines that use alternative energy sources. One of the most
promising approach is combining two different sources of energy in a single system with the potential
to use both. This solution is known as hybrid technology and is the most promising way to achieve
Toyotas green machine. Search for innovative solutions is based on new technological concepts of
this company. Unconventional ideas need a way of expression, and future technologies has to be
tested in terms of daily life. Therefore, Toyota develops concepts such as the Fine-N engine powered
by a fuel cell or CS&S roadster powered by a Hybrid Synergy Drive system.
The fabrication technology of engines is one of the most valuable property of Toyota. Toyotas
performance range of engines and advanced design reflects the high standards set by engineers.
Toyotas engines are designed for comfort and performance, Toyota makes independent studies on
consumer needs, getting the vote of confidence on their part. Also, this is reinforced by the
exceptional results of Toyota vehicles in Euro NCAP safety tests. Consumers trust Toyota cars and
feel safe in their wheels. This trust is the result of the highest standards of quality which Toyota
designs and produces its cars.
The Japanese have turned their attention to markets with significant growth potential. In Europe car
manufacturers have invested substantial amounts to build production plants, research centres and
design workshops. Toyota designers from three continents are exploring ideas, visions and desires
in order to design advanced machines and new technologies bringing more quality of life.
5. CONCLUSIONS
Taking advantage of the opportunities of a global market, Toyota has adopted a global strategy, but
considering the characteristics of markets in which it acted. The slogan think global, act local
implies the need to think market and business in global terms, and in the same time to achieve
adapting to the local consumers demands. Toyotas success both on the Japanese market and
international market is due to its desire to make products with high quality, always perfecting and
innovating automotive technologies, creating new models, showing concern for consumption, but
also for the environment surroundings, focusing on the consumer. Thus, Toyota has committed to
develop hybrid systems as a basic factor of the eco-car technology. The company set up design
labs in Europe and USA for a better understanding of local influences and preferences of current
and potential clients, showing care for their needs.
Toyotas global strategies are considering entering the international growing market, stable, slowly
and surely (the European market case). Also, Toyota took advantage of the opportunities offered by
emerging countries with growing economies, lower wage costs and more flexible markets of new
EUs member countries. Japan plans envisage expansion in emerging markets like Brazil, Russia,
India and China. The main weapon Toyota uses in order to conquer these markets is the low-cost
cars. Even if global economic crisis has affected the entire automobile industry, affecting Toyota too,
the company remains on the top of the most successful multinationals companies of the auto
industry. Toyotas emerging market sales have increased significantly in the period 2000 to 2011,
from 18.6% to 45%. If this trend continues, Toyotas sales in emerging markets will shortly surpass
its sales in developed markets. Toyota successfully observed and responded to the needs of the
rising of middle class in the emerging markets. Through localization initiatives, Toyota designs and

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produces cars in these markets to meet these consumers unique needs.

Source: Adapted from http://scholar.harvard.edu/files/tnkomo/files/analysis_of_toyota.pdf

Scenario:

You have recently been employed as assistant manager consultant for Toyota UK. Your line
manager has asked you to carry out a secondary research on environmental analysis and the
fundamental concepts and principles of the marketing process applicable to the given organisation.
Based on the findings of your research, provide answers on all of the following tasks:
Task 1& 2 Produce a report

LO: 1- Understand the organisational purposes of businesses.

LO: 2 - Understand the nature of the national environment in which businesses operate.

This task offers you an opportunity to achieve LO1: AC 1.1, 1.2, 1.3, 2.1, 2.2, 2.3 M1, M2, M3,
D1, and D2.

In your role as an Assistant Manager consultant, you have been asked to produce a report
discussing the following:

Identify the purposes of different types of organisations. (AC: 1.1)

Guidelines:
A description of an organisation;
Identification of at least four different types of organisations in the U.K. This could
include defining their legal structure;
Identification the purpose of TOYOTA in above context.

Describe the extent to which TOYOTA as an organisation meets the objectives of different
stakeholders. (AC: 1.2)

Guidelines:
Describe the meaning of a stakeholder;
Identify the different stakeholders of TOYOTA and its likely objectives;
Describe how TOYOTA attempts to meet the objectives of its different stakeholders.

Explain the responsibilities of TOYOTA and the strategies employed to meet the expectations of
different stakeholder groups. (AC: 1.3)

Guidelines:
Identification of the various responsibilities TOYOTA has on its stakeholders;
Explanation of how TOYOTA meets these responsibilities.

Explain how economic systems attempt to allocate resources effectively. (AC: 2.1)

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Guidelines:
An explanation of what is meant by an economic system and identification of at least
two economic systems; how they can influence on TOYOTA and its activities.

Assess the impact of fiscal and monetary policy of UK onTOYOTA and its activities. (AC: 2.2)

Guidelines:
A brief background of the UK economy, in terms of size, GDP, GNP, growth etc;
An explanation of fiscal and monetary policy in the UK;
Explanation, how the UKs fiscal and monetary policies could impact TOYOTA and
their activities in the UK.

Evaluate the impact of competition policy and other regulatory mechanisms on the activities of
TOYOTA in line with Competition Act, 1998 and Enterprise Act, 2002.(AC: 2.3)

Guidelines:
An explanation of competition policy and how this could impact TOYOTA activities;
An evaluation of competition policy in terms of negative and positive impact on
TOYOTA.
Identification and explanation of other regulatory mechanisms within the UK and an
evaluation of these in the context ofTOYOTA as a business.

MERITS AND DISTINCTIONS:

M1and D1 - Use critical reflection to evaluate your answer to AC 1.3 and M1.

Guidelines:
In your reflection, critically evaluate TOYOTA responsibilities.
Are the responsibilities achievable?
Critically evaluate the strategies the chosen organisation is using; are they appropriate
and sustainable?
What challenges is it likely to encounter in its attempt to fulfil and mitigate these
responsibilities?

M2- Relates to AC 2.2: Complex information/data has been synthesised and processed. You will
have described the UK economy, using up-to-date economic indicators (e.g. GDP, unemployment
rate, inflation rate, CPI, RPI, PMI, consumer spending, budget deficit, trade deficit, etc.).

Guidelines:
Conduct some research into the factors that impact on the UK economy.
Identify the various sources of data which you have consulted to provide you with a better
understanding of the UK economy.

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D2Relates to AC 2.2
Critically evaluate the relationship between fiscal policies and monetary policies and assess
the issues business organisations might experience as a consequence. Recommend how
this might be overcome.

M3 - Present the report in an appropriate structure for a clear communication including table of
content, title, and introduction, main bodies with headings and sub-headings and conclusion.

Scenario:
After writing up an environmental analysis report for Toyota your manager has asked you to answer the
following questions meticulously in an essay format AC by AC. It is recommended that you carry out
alternative research into Toyota international operations to gain a better understanding of automotive
industry where Toyota is a key player globally.

Task 3 Essay

LO 3 - Understand the behaviour of organisations in their market environment.

This task offers you an opportunity to achieve LO3: AC 3.1, 3.2, 3.3 and M3

The essay should cover the following topics:

Explain how market structures and market conditions determine the pricing strategies of an
organisation like TOYOTA. (AC: 3.1)

Guidelines:
Explanation of market structures; this should include examples of at least two types
of market structure;
Explanation of how market structures could determine the pricing and output
decisions of a businesses.

Illustrate the way in which market forces shape organisational responses using a range of
examples.(AC: 3.2)
Guidelines:
A description of market forces with at least 2 market forces identified in the UK. One
example of a market force is demand.
An illustration of the way in which your identified market forces impact on TOYOTA
and its activities. How the organisations attempt to respond to these market forces.

Judge how the business and cultural environment in the UK can shape the behaviour of TOYOTA
as an organisation.(AC: 3.3)

Guidelines:
A description of culture and an appreciation of its impact on the business ;
A description of business environment (PESTEL) and its impact on the business;
An assessment of how TOYOTA could adapt its business activities in response to
cultural factors.

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MERITS AND DISTINCTIONS:

M3: Coherent, logical development of principles/concepts for the intended audience. You will have
explained economics concepts and theories in 3.1, 3.2 and 3.3, clearly and coherently.

Scenario:
You have been asked by senior management to write a report to the board meeting assessingthe
significance of the global factors that shape national business activities. Using a coherent business
report to explain each point of the following assessment criteria.

Task: 4 Report

LO4. Be able to assess the significance of the global factors that shape national business
activities.

This task offers you an opportunity to achieve LO3: AC 4.1, 4.2, 4.3 and D3
Your Report should cover the following items:

Discuss the significance of international trade to TOYOTA UK business. (AC: 4.1)

Guidelines:
Description of the meaning of international trade;
Discussion of the significance of international trade to TOYOTA organisation
operating in the UK, include the positive as well as negative impact on local
businesses.

Analyse the impact of global factors on TOYOTA UK business. (AC: 4.2)

Guidelines:
A description or definition of globalisation;
Identification of two drivers to globalisation;
An analysis of at least two global factors which affect or could affect TOYOTA UK
businesses.

Evaluate the impact of policies of the European Union on TOYOTA UK business. (AC: 4.3)

Guidelines:
A brief description of the purpose of the European Union;
An identification and description of at least two European Union policies;
An evaluation of how these policies impact on TOYOTA UK business.

MERITS AND DISTINCTIONS:

D3: Effective thinking has taken place in unfamiliar contexts. You will have explained in 4.2 how
Toyota has confronted the three international factors

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Assessment Criteria (Pass, Merit and Distinction); Unit 1: Business Environment

Learning Pass Criteria Merit Criteria Distinction criteria

Outcomes

LO1 1.1 Identify the M1 Descriptor: (Identify D1 Descriptor: (Use critical

Understand purposes of and apply strategies to reflection to evaluate own work
the different types of find appropriate and justify valid conclusion).
organisation.
organisational solutions).
1.2 Describe the Learners evidence: Write an
purposes of extent to which an
businesses. Learners evidence: evaluation of the strategies
organisation meets
Write an evaluation of employed to meet the
the objectives of
different the strategies employed responsibilities of the TOYOTA
stakeholders. to meet the (AC 1.3). In your evaluation,
1.3 Explain the responsibilities of the assess the advantages and
responsibilities of TOYOTA in (AC 1.3). disadvantages of these
an organisation In your evaluation, strategies. (Task 1/1.3)
and strategies assess the advantages
employed to meet
and disadvantages of
them.
these strategies. (Task
1/1.3)

LO2 2.1Explain how M2 Descriptor: D2 Descriptor: (Take

Understand economic systems (Select/design and apply responsibility for managing and
the nature of attempt to allocate appropriate methods/ organising activities).
the national resources techniques).
Learners evidence: Critically
environment effectively.
in which 2.2 Assess the Learners evidence: evaluate at least two economic
The economy of any indicators. In addition, critically
businesses impact of fiscal and evaluate the relationship
operate. monetary policy on country is impacted by a
between fiscal policies and
business myriad of factors. monetary policies and assess
organisations and Conduct some the issues business
their activities. research into the organisations might experience
factors that impact as a consequence.
2.3 Evaluate the
on the UK Recommend how this might be
impact of overcome.
competition policy economy.
(Task 2/2.2)
and other Identify the
regulatory various sources of
mechanisms on data which you
the activities of a have consulted to
selected provide you with a
organisation. better

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Unit 1: Business Environment Sept 2016
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understanding of
the UK economy.

(Task 2/2.2)

M3 Descriptor: (Present
and communicate
appropriate findings).

Learners evidence:
Present the report in an
appropriate structure for
a clear communication
including table of
content, title,
introduction, main bodies
with headings and sub-
headings, and conclusion
or summary. (Task 1&2)

LO3 3.1Explain how M3: Coherent, logical D3 Descriptor: (Demonstrate

Understand market structures development of convergent/lateral/creative
the behaviour determine the principles/concepts for thinking).
of pricing and output the intended audience.
organisations decisions of You will have explained Learners evidence: Draw a
in their businesses. economics concepts and coherent conclusion or
market 3.2 Illustrate the theories in 3.1, 3.2 and summary on the behaviour of
environment. way in which 3.3, clearly and organisations in their market
market forces coherently (Task 03) environment with your
shape convergent and lateral thinking
organisational in summary section of the
responses using a report. (Task 2)
range of examples.
3.3 Judge how the
business and
cultural
environments
shape the
behaviour of a
selected
organisation.
LO4 Be able 4.1Discuss the Or D3 Descriptor:
to assess the significance of (Demonstrate
significance international trade
of the global

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Unit 1: Business Environment Sept 2016
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factors that to UK business convergent/lateral/creative
shape organizations. thinking).
national 4.2 Analyse the
Learners evidence:D3:
business impact of global
Effective thinking has taken
activities. factors on UK place in unfamiliar contexts.
business You will have explained in 4.2
organisations. how Toyota has confronted the
4.3 Evaluate the three international factors
impact of policies
of the European
Union on UK
business
organisations.

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Learning In this assessment you will have the opportunity to

AC
LO Outcome present evidence that shows you are able to:
LO1 1.1 Identify the purposes of different types of organisation.
Understand the
organisational Describe the extent to which an organisation meets the
1.2
purposes of objectives of different stakeholders.
businesses. Explain the responsibilities of an organisation and
1.3
strategies employed to meet them.
LO2 Explain how economic systems attempt to allocate
Understand the 2.1
resources effectively.
nature of the
Assess the impact of fiscal and monetary policy on
national 2.2
business organisations and their activities.
environment in
Evaluate the impact of competition policy and other
which businesses
2.3 regulatory mechanisms on the activities of a selected
operate.
organisation.
LO3 Explain how market structures determine the pricing and
Understand the 3.1
output decisions of businesses.
behaviour of
Illustrate the way in which market forces shape
organisations in 3.2
organisational responses using a range of examples.
their market
Judge how the business and cultural environments shape
environment. 3.3
the behaviour of a selected organisation.
LO4 Be able to assess Discuss the significance of international trade to UK
4.1
the significance of business organisations.
the global factors Analyse the impact of global factors on UK business
4.2
that shape organisations.
national business Evaluate the impact of policies of the European Union on
4.3
activities. UK business organisations.

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Reading List and Sources of Information

There is a large number of textbooks available covering the areas in the units. These include:

BPP Organisations, Competition and Environment (BPP Publishing, 2003) ISBN: 0751712469
Brewster D Business Economics (International Thompson Business P, 1998) ISBN:
1861524250
B014393 Guidance and units Edexcel Level 4 BTEC Higher Nationals in Business
Issue 2 September 2004
Dawes B International Business: A European Perspective (Nelson Thornes Publishers, 1995)
ISBN: 0748718605
Dicken P Global Shift Transforming the World Economy (Paul Chapman Publishing, 1998)
ISBN: 1853963674
Dunnett A The Macroeconomic Environment (Prentice Hall, 1997) ISBN: 0582305810
Griffiths A and Wall S Applied Economics (Financial Times Prentice Hall, 2001)
ISBN: 0582025036
Hill B The European Union (Heinemann, 1998) ISBN: 0435332147
Hornby W Business Economics (Financial Times Prentice Hall, 2001) ISBN: 0273646036
Hurl B Privatisation and the Public Sector (Heinemann, 1995) ISBN: 0435330322
Lipsey R Principles of Economics (Oxford University Press, 1999) ISBN: 0198775881
Needham D et al Business for Higher Awards (Heinemann, 1999) ISBN: 0435453149
Parkin M European Economics (Pearson Education, 2002) ISBN: 0201596083
Samuelson P Economics (McGraw Hill, 2001) ISBN: 0071180648
Sloman J Economics (Financial Times Prentice Hall, 2002) ISBN: 0273655744

Journals

British Economy Survey basic subscription and also single-user electronic and network
electronic subscription (YPS Ltd, York)
Harvard Business Review
The Economist

Websites

http://businesscasestudies.co.uk/Toyota /
www.bized.ac.uk provides case studies appropriate for educational purposes
www.carol.co.uk provides company annual reports online
http://catalogue.bized.ac.uk part of Bized website, provides useful web links
www.census.gov/ipc/www Census data
www.corporateinformation.com provides corporate information and company reports
www.ecowin.com global financial and economic data
www.ermuk.com/ERM/LOC/erm_uk.NSF website of ERM, environmental management
consultancy
www.oheschools.org Economics of Health Care
www.sosig.ac.uk Social Science Information Gateway
www.statistics.gov.uk National Statistics
http://mason.gmu.edu/~montecin/powerpoint.html

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