The Impact of Environmental Issues on Toyota's Strategy

Résumé du document

This thesis will seek to understand the controversial relationship between environmental factors and Toyota. Indeed, motor vehicle exhaust-emissions notably that of carbon monoxide pollution, is caused directly by the automobile industry. However, these negative impacts changed the position of the automobile industry when in the 70's the Japanese government started to react and apply regulations to reduce emissions. Toyota, like the other Japanese automobile manufacturers, began with agreeing to collaborate in protecting the environment, and today it has considerably developed the environmental aspect to a marketing tool, and a competitive advantage in the automobile industry.

It is a fact that today, environmentalists are eager to develop relationships to promote environmental causes, not via governments but with diverse firms. However, we will see in this thesis how Toyota managed to understand environmental problems, analyze them, develop their own strategy towards emission control, and how they applied these fundamental problems in management and competitive marketing strategies. Furthermore, this thesis will not analyze the philanthropic effort of Toyota but rather elaborate different commitments of environmental support under the company's operation systems. This thesis will be based on primary sources collected during the direct interview with the director of Toyota in Venezuela, Mr. Aranguren, and secondary sources based on published items, notably from internet sources and Toyota's 2005 social report. In addition, other sources are personal observations and experience, notably in Caracas. This work will be presented in three stages in order to understand how environmental issues dominate the company's worldwide strategies:
Part I- Presenting the background of Toyota's commitment for environmental support, in addition, to understanding to what extent the company has incorporated environmental issues into their management operation systems.
Part II- To explore Toyota's hybrid- vehicle product positioning, and target group consumers. Part III- We will present suggestions to the company, on how to promote hybrid models in Venezuela, an example of a country where environmental protectionism is undeveloped and hybrid cars cannot be found on the market.

The fundamental problem of this thesis will be to analyze how the environmental issue plays a symbolic part at TOYOTA, and how it affects the company in different domains, notably in management and marketing.

Extraits

[...] Toyota can play an important role in Venezuela by offering their sponsorship and giving hybrid cars in different fund raising events and also vice versa. This should be a fundamental support in helping the product development of hybrid cars. In Venezuela, it is common to find coupons as a sales promotional method in shopping malls, and car manufactures are the first one's in the country to organize such events. Indeed, it is an efficient approach to introduce products in public places and a good method for advertising. [...]

[...] We live in a world where multinational firms possess as much influence as national governments and it is important to incorporate environmental support fully into business for a successful and sustainable future. [...]

[...] Part I TOYOTA and the Environment Protection Policy in Japan In Part the introduction of Toyota's environmental consolidation with the Japanese government will be presented. Furthermore, specific types of environmental systems will be highlighted in this part, in order to guide us to an understanding of how the company was able to produce hybrid cars under a consolidated management system, which assures environmental protection. Background The technological innovations and heavy industrialization enabling Japan's rapid economic growth between the 1950's and the 1960's, also brought with them the deterioration of environment. [...]

[...] The technique is to endure a united environmental management system from production to sales. Organization Framework for environmental responsibilities Toyota possesses 563 companies which cover the EMS system including financial subsidiaries, production companies, overseas distributors and other that are not subject to consolidated accounting. Types of consolidated EMS companies are, for example, the one's financially direct under Toyota Motor Corporation, production companies and overseas distributors which are not affected by TMC accounting, or corporations from other types of businesses, such as universities and other subsidiaries which are under the indirect control of TMC. [...]

[...] In November 1993, the basic environment law in Japan was enacted. For the first time in judicial history, the government successfully convinced the businesses and private organizations to carry out actions concerning environmental policies by the beginning of the 21st century. In addition, the law also describes the specific roles of parties involved, and the ways and means for effectively pursuing environmental regulations. Indeed, these regulations were designed to establish a consensus between the local governments and enterprises such as Toyota so as to coordinate actions on national and international levels to effectively respond to environmental protection. [...]