• Subject Name : Auditing

Hybrid Electric Vehicles Leadership



Pest analysis.










Internal analysis.






Key strategic challenges.


Introduction to Toyota Marketing Audit

Toyota is a Japanese automobile company. It is considered as the leader in hybrid electric vehicles. Furthermore, the company was founded by Kiichiro Toyoda in 1937. Some of the major competitors of the company are Mercedes, Hyundai, Honda, and many more (Corporation 2020). The company produces high-quality vehicles that are comfortable and reliable. Also, the company always focuses on understanding the needs and requirements of the customers to provide maximum satisfaction. The main aim of this analysis is to evaluate the macro and microenvironment of Toyota. It will further analyze the internal environment and the factors that affect the profitability of the company in the Asian market.

Pest Analysis


The political phase of the structure considers the factors like trade procedure, financial support, international pressure group, confrontation and conflicts, management guidelines, violence, political trend, government leadership, and arrangement in which a corporation is dealing (Madoh et al. 2019). The political setting of the county affects the company’s operations and profitability. The guidelines of the administration and taxes also influence the macro environment which results in more pressure on the company.


 The economic facet of the PESTEL environment looks into all the external economic factors linked with the company, the influence of these factors on the business positive or adverse. financial investigation in the PESTEL framework comprises financial state and trends in the domestic market, monetary trends abroad, excise system, market and trade cycle, disposable earnings of the clientele. All these factors are very significant to the business as they directly influence the profits of the company. For most of the growing economies of the world, Toyota is a pioneer as without Toyota in the vehicle industry it is not simple to expand the steel trade, glass sector, or plastic manufacturing. 


The sociological constraint of the macro-environment investigation of the corporation comprises the consumer attitude and performance, media news, tendency, diversity, learning, routine change, demographic alteration, moral concern, worker approach, administration approach, etc (Kreutzer 2019). Toyota Company works as part of the culture as it employs millions of citizens directly and indirectly. It has an assortment of products that have revolutionalized the society by altering trend in the mobility world. Ethically Toyota motors are taken as one of the strongest businesses as despite enormous losses they have recalled several car models and have refurbished numerous cars which were having minor faults free of cost.


 Technological feature of the structure comprises the competing technology expansion, research backing, replacement expertise, maturity of expertise, information and communication, modernism, research, etc. The technical investments made by Toyota are huge and it has always being a leader in the technical ground. It is always recognized for its innovation plan, replacement instrument, and research support, and another proposal. The huge reserves which Toyota has made in the technological field have augmented the threat and worries for the corporation.


Legal structure considers the factors like present guidelines in the domestic market, future legislations, authoritarian body and procedure, service regulation, etc. Toyota Company is subject to different legislations such as competition rules, intellectual property laws, consumer protection.


The microenvironmental factors include patrons, competitors, and the public.


Patrons are someone who purchases or rent from the corporation. Customers are the most significant microenvironmental factor that influences business. Toyota conducts extensive research about their clientele and understood that they required a car with superior fuel utilization and as an outcome, Toyota determined to make its initial hybrid car know as Pirus (Kreutzer 2019). The company deals with their clientele by a website to inform the customers about the Toyota Prius. They took benefit of Earth Day to offer green seed cards formed like Toyota’s symbol to potential consumers and they also gave offer some green Prius at Earth Day events. Though, Toyota did not identify that customers usually do not purchase cars for energy consumption so it becomes necessary to understand the attitude of customers. As an outcome of this Toyota has also requested the government to offer tax cuts to cars with superior fuel expenditure.


Competitors are a similar business in a similar market. In order of the business to arrive at your goals on the market place a competitor most grain a competitive gain over its opponents. The company has succeeded in preserving its competitive benefit. Though competition like Citron has a car which is as successful as the Toyota Prius considered as one of the leaders in this segment" 


Publics are any group that comes with a real or possible curiosity in a business capability to attain its aim. Good associations with the common public aid to improve the business status so supporting to augment in trade. The main factors of the company’s microenvironment are multimedia and the federal regime. Toyota has worked with administration organizations and has requested tax incentives to persuade citizens to purchase more ecological friendly cars to augment the number of hybrids sold. 

Internal Analysis


The major strength of the company is an approach known as just-in-time. Just-in-Time spirit involves the opposite forces of offering quick reaction, and development tools and system that are resourceful and waste-free (SAHIL 2017). The idea is to offer the correct creation and information, at the correct time, in the accurate quantity, in an accurate way, while sustaining high principles of competence and cost management. JIT has helped the company to maintain records and massive cutbacks in the cost. Also, it is considered as one of the leading automotive product names in the world. It is position well ahead of its opponents like Mercedes, BMW, Honda, Ford, Hyundai, Porsche, and Nissan. The business has an effective brand representation provide its substantial competitive benefit and assist the corporation to record superior sales expansion in-home, as well as in international markets.


The large companies face troubles throughout oversupply so it becomes necessary to ensure that the model will meet the needs and requirements of the customer. Toyota markets the majority of its products in different countries like the United States and Japan due to which they are constantly affected by unpredictable financial and political circumstances. As a result, the business is starting to move its business to the rising Chinese market.


The company must focus on manufacturing cars to preserve its operational competence. Automobile plants symbolize an enormous venture in fixed cost and elevated expenses of training and retain manual labor. Worldwide requirement for a light hybrid electric car is predictable to increase (Udagawa et al. 2019). Increasing energy cost and augmented emission rules are probable to augment the need for HEVs, as hybrid engines are more fuel proficient and less polluting than conservative gasoline and diesel engines. The main markets for HEVs will be in the US, Western Europe, and Japan. Though the swiftly rising Chinese marketplace is also predictable to witness comparatively strong requirements for this fuel proficient and environmentally-friendly vehicles.


The international auto market is extremely aggressive. Toyota Motor business is witnessing tough rivalry from other vehicle producers in its different markets. The rivalry amongst different auto companies is feasible to amplify in light of ongoing globalization and consolidation in the international automotive business (Gürel et al. 2017). The factors distressing rivalry comprise product superiority and characteristic, the total time necessary for modernism and growth, cost, dependability, security, economy, client service, and finance terms. The augmented rivalry may lead the corporation to inferior vehicle unit sales and augmented record, which may result in further descending cost pressure and can pessimistically influence the business fiscal state and consequences of operations.

Tows Matrix

Internal factors

External factors


Diversified market

Strong research and development base

Loyal employees

Effective suppliers

Intellectual capital


Intense competition

Geographical disadvantage


International production facilities’

the enormous demand for compact cars

SO strategies

Producing green cars with the help of strong research and development base

WO strategies

Focusing mainly on the growing market

Cutting down environmental disadvantage


Competitors performance in increasing market

Bargaining power of the dealer

ST strategies

Loyal suppliers are less likely to bargain

WT strategies

More significance in the rising marketplace than saturated market

diversify manufacturing process

Key Strategic Challenges

In the extremely competitive business, Toyota has been successful in reminding other cars than any other rival working in a similar business, which can even be considered as unsuitable administration or lack of concentration from the business side. Although, the corporation has a status to sustain being the major car producer, the lack of aptitude to promise the superiority of products to its clientele to depict incompetency of the complete tactical organization layer. Marketing has also turned out to be an increasing concern for the international corporation (Phadermrod et al. 2019). Because the business has been repeatedly recalling products for a variety of issues, the clientele has moved its concentration from the purpose of Toyota over other obtainable competitors in the marketplace. The low-pricing approach has turn out to be a tactical concern for the company for a variety of causes. For example, the low price approach has influenced the business to buy poor quality airbags and accelerators, which eventually resulted in the product recall from across the globe. Even though, clientele desire low-cost automotive in financial insecurity, but they have ignored the corporation for the utilization of poor quality materials. This has eventually become an increasing concern for the company, which ultimately condensed the devotion and dedication of the clients concerning the product offered by Toyota.

Reference for Toyota Marketing Audit

Corporation, T., 2020. Annual Financial Report | Toyota Industries Corporation. [online] Toyota-industries.com. Available at: <https://www.toyota-industries.com/investors/library/reports/> [Accessed on 9 July 2020].

Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International Social Research, 10(51).

Kreutzer, R.T., 2019. Tools for the Strategic Analysis. In Toolbox for Marketing and Management (pp. 89-142). Springer, Cham.

Madoh, A., Alenazi, J., Alkhamees, L. and Panwar, A., 2019. Case Study on Market Mix Strategies of Toyota Motor Corporation. Asia Pacific Journal of Management and Education, 2(3), pp.70-78.

Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, pp.194-203.

SAHIL, M., 2017. Implications of Just-In-Time System of Toyota: A Case Study.

Udagawa, Y., Tanimoto, M. and Amano, M., Toyota Motor Corp, 2019. Autonomous driving system. U.S. Patent Application 16/243,613.

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