Information Technology In The Banking Sector

Published Date: 02 Nov 2017

Ans 2: Marketing is one of the most important functions in any organization. The sales generated and sustained have been acknowledged as a direct function of the marketing process. According to Philip Kotler, "marketing is typically sennas the task of creating, promoting and delivering goods and services to the consumers and businesses".According to American Marketing Association "Marketing can be defined as the process of planning and executingthe conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives"The "Marketing Concept" is a philosophy or a frame of mind. According to the marketing concept, customer orientation, social responsibility, total company effort and profit are the four pillars of a successful business. The marketing concept is not a 'once in a lifetime' formulation for a firm. It needs to be revitalized. According to Peter Drucker, marketing is not only much broader than selling, it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of final result that is from the customer's point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise. The understanding of marketing is considerably aided once it is appreciated that the term implies both a business philosophy and frame of mind and a specialized functional area of management. The former implication is often referred to as the "Marketing concept". Numerous definitions exist which attempt succinctly to describe the scope and meaning of marketing at financial institutions. Marketing has been as described a business activity directed at satisfying needs and wants through exchange processes. In reality marketing as a management process is in essences simple concept, which holds that the orientation of a bank should be towards the customer's point of view, which in the past may have been neglected by many banks world over. Marketing environment Competition represents only a single force that operates in the marketing environment. The environment in which the marketer operates consists of the task environment and the broad environment. The task environment includes the main tasks of producing, distributing and promoting the offering. The main levers are the company, suppliers,distributors, dealers and the target customers. The supplier group includes material suppliers and service suppliers such as marketing research agencies, advertising agencies, banking and insurance companies, transportation and telecommunications companies. Today's marketing environment is influenced by the global marketplace and the explosion of the information age toa degree unprecedented in history. To be fully prepared, a company must recognize and understand:a)Cultural influences b)Governmental and political influences)Demographic and lifestyle trends)Local, national, and world economic trendse)The strengths of multi-national competitorsf)The influence of technology on physical distributionFactors that affect a financial institution's marketing strategy

(i) Political and regulatoryThe political and regulatory environment in which a bank operates in have a profound impact on its marketingdecision, among others. A stable political environment exudes confidence to the public. In particular, it facilitates the bank management to continue operations and possible expansion of their banking network without fear of beingnationalized. Legislation is aimed at protecting companies from hostile takeovers, consumers from unfair business practices and the interest of society against unbridled business behavior. The banking industry is one of the mostregulated because of the banks' fiduciary responsibility. This is to curb excessive risk-taking by banks, which mayundermine the stability of the economy in the event of bank runs caused by less than prudent lending policies.(ii) EconomicThe economic environment consists of factors that affect consumers' spending patterns and their purchasing power.Purchasing power is measured by the people's income, prices of goods and services, savings and credit, which can be augmented through borrowing. It is also influenced by government fiscal and monetary policies. Banks would bewell equipped to meet the needs of their target market by noting the changes in these major economic variables thatdrive the consumer loans market. This would also affect their pricing policies aimed at making it affordable for theaverage consumer to service their borrowings.(iii) TechnologicalOne of the most dramatic forces shaping people's lives is technology, which also affects other macroenvironmentforces, and creates spin-off changes. For example, the enforcement of intellectual property rights is a variable of theregulatory environment. The emergence and proliferation of information technology in today's business environment present both opportunities and threats to organizations, including banks. There is a shift in consumption patterns andmarketing systems have to be adapted to meet this shift. For example, people need not visit a bank for routinetransactions as they could link up with their banks through home-banking facilities.Citibank's telebanking service, Citiphone, for example allows its customers to perform various banking transactionsfrom practically anywhere through the phone. This displaces the traditional need to perform various transactions at branches. Customers can check their account balances, request for account statements, make fixed deposit placements and even request for a new chequebook without having to leave home. Banks that invest in thetechnology will have a head-start against their competitors and capture a larger share of the market segment whoseconsumers' lifestyle have changed with the convenience, delineated by technological changes that they are in a position to service.(iv) Social and culturalSocial and cultural determinant, in its simplest form, can be defined as a way of life. It can be distinguished in termsof people's ideas and values, beliefs and norms. A culture is learned through people's interaction with their environment, shaping their attitudes and behaviors and how the target market would respond to marketing mixelements. However, it changes as the society faces new problems and opportunities. Some people unconsciouslydefine their relationship with their environment, other people, nature and organizations. A marketing implication thatflows from people's attitude towards organizations is that banks need to find new ways to win consumer confidenceas more people are transacting with non-bank institutions.The macroenvironment is the uncontrollable forces that an organization has to monitor and adapt to, bymanipulating the marketing mix to best capitalize on the opportunities and minimize the negative effects that theenvironment has on the organization.The thrust of a financial industry is more difficult because it too is a service industry. Financial services areintangible and much more difficult to package, sell or be demonstrated to the consumers. It is important to identifyand develop a differential advantage. The differential advantage is to develop a strategy of favorable positioning for services where perception is so important to decision making. It is also important to make the service more tangible(e.g. features of an attractive deposit or housing loan). Such tangible positioning gives the customer a physicalassociation with the service and strengthens the chances of success.Apart from the above, the macro environment comprises six sectors of influence that needs to be carefullyconsidered while deriving the right marketing mix for services:Economy: Influences the ways in which scarce resources, such as personal income and corporate borrowings areused.Society: Influences the shift in personal values and preferences.Law: Laws and regulations govern the conduct of business in financial institutions.Technology: Refers to high technology equipment used to enhance or replace manpower in the provision of services,e.g. ATMs.Politics: Dictates the nature and types of financial services to be made available, e.g. the non-training position for financial services with countries such as Cuba.

 

Competition: Few organizations are left alone to match their capabilities with customers' wants. Competition comesfrom similar products or different opportunities, which all competes for the customers' limited financial resources.The critical success factors for banks, which are aggressively moving in the retail banking segment are wider distribution network, low cost of funding, low intermediation (operating) costs, marketing capability, large product portfolio, cross-selling, proper credit appraisal mechanism/risk assessment procedures, high service levels in termsof faster loan processing and disbursement, flexible technology across banking platforms, multi-distributionchannels, strong brand presence and good recovery mechanism. These success factors would ultimately transforminto how well banks understand their customers and how effective they are in meeting their new definition of access,convenience and value.

Information technology in the banking sector :

opportunities, threats and strategies.

The 21st century will bring about an all-embracing convergence of computing, communications, information and knowledge. This will radically change the way we live, work, and think. The growth of high speed networks, coupled with the falling cost of computing power, is making possible applications undreamed of in the past. Voice, data, images, and video may now be transferred around the world in micro-seconds. This explosion of technology is changing the banking industry from paper and branch banks to' digitized and networked banking services. It has already changed the internal accounting and management systems of banks. It is now fundamentally changing the delivery systems banks use to interact with their customers. All over the world, banks are still struggling to find a technological solution to meet the challenges of a rapidly-changing environment. It is clear that this new technology is changing the banking industry forever. Banks with the ability to invest and integrate information technology will become dominate in the highly competitive global market. Bankers are convinced that investing in IT is critical. Its potential and consequences on the banking industry future is enormous.

Technology and Banks Transformation

Computers are getting more sophisticated. They have given banks a potential they could only dream about and have given bank customers high expectations. The changes that new technologies have brought to banking are enormous in their impact on officers, employees, and customers of banks. Advances in technology are allowing for delivery of banking products and services more conveniently and effectively than ever before - thus creating new bases of competition. Rapid access to critical information and the ability to act quickly and effectively will distinguish the successful banks of the future. The bank gains a vital competitive advantage by having a direct marketing and accountable customer service environment and new, streamlined business processes. Consistent management and decision support systems provide the bank that competitive edge to forge ahead in the banking marketplace.

Major applications. The advantages accruing from computerization are three-directional - to the customer, to the bank and to the employee.

For the customer. Banks are aware of customer's need for new services and plan to make them available. IT has increased the level of competition and forced them to integrate the new technologies in order to satisfy their customers. They have already developed and implemented a certain number of solutions among them:

Self-inquiry facility: Facility for logging into specified self-inquiry terminals at the branch to inquire and view the transactions in the account.

Remote banking: Remote terminals at the customer site connected to the respective branch through a modem, enabling the customer to make inquiries regarding his accounts, on-line, without having to move from his office.

Anytime banking- Anywhere banking: Installation of ATMs which offer non-stop cash withdrawal, remittances and inquiry facilities. Networking of computerized branches inter-city and intra-city, will permit customers of these branches, when interconnected, to transact from any of these branches.

Telebanking: A 24-hour service through which inquiries regarding balances and transactions in the account can be made over the phone.

Electronic Banking: This enables the bank to provide corporate or high value customers with a Graphical User Interface (GUI) software on a PC, to inquire about their financial transactions and accounts, cash transfers, cheque book issue and inquiry on rates without visiting the bank. Moreover, LC text and details on bills can be sent by the customer, and the bank can download the same. The technology used to provide this service is called electronic data interchange (EDI). It is used to transmit business transactions in computer-readble form between organizations and individuals in a standard format.

As information is centralized and updates are available simultaneously at all places, single-window service becomes possible, leading to effective reduction in waiting time.

For the bank. During the last decade, banks applied IT to a wide range of back and front office tasks in addition to a great number of new products. The major advantages for the bank to implement IT are:

Availability of a wide range of inquiry facilities, assisting the bank in business development and follow-up.

Immediate replies to customer queries without reference to ledger-keeper as terminals are provided to Managers and Chief Managers.

Automatic and prompt carrying out of standing instructions on due date and generation of reports.

Generation of various MIS reports and periodical returns on due dates.

Fast and up-to-date information transfer enabling speedier decisions, by interconnecting computerized branches and controlling offices.

For the employees. IT has increased their productivity through the followings:

Accurate computing of cumbersome and time-consuming jobs such as balancing and interest calculations on due dates.

Automatic printing of covering schedules, deposit receipts, pass book / pass sheet, freeing the staff from performing these time-consuming jobs, and enabling them to give more attention to the needs of the customer.

Signature retrieval facility, assisting in verification of transactions, sitting at their own terminal.

Avoidance of duplication of entries due to existence of single-point data entry.

A search of the banking literature reveals that banks are moving rapidly to take advantage of recent and new customer service and cost reduction opportunities that new technologies offer. A sampling is in the table below:

Technology Adoption. The vast majority of the Lebanese banks have set very high standards of excellence for themselves in terms of technology, state-of-the-art facilities, customer service and customer orientation with all facets of operations totally computerized. The banks also make extensive use of communication technology to provide off-site banking facilities including ATMs.

The competition. The Lebanese banks are also planning to offer the entire range of services like telebanking, ATMs, etc. They also respond very actively in the marketplace in introducing new products and services. Arab Bank was the pioneer in introducing ATMs in Lebanon. Arab bank started to install ATM machines in 1993. Other banks followed, by establishing in 1994 a network called Link Network, using Link cards. About 25 banks have joined this network and are sharing now its almost 60 machines located in the major cities of Lebanon. The central bank is expecting that about 700 ATM machines will be installed in Lebanon by the year 2000.

Strategy for the future

Banks face a serious challenge. The basic structure of the bank is increasingly in conflict with the changing product, delivery, and service needs of the customers The future belongs to financial service providers not traditional banks. The vast majority of large banks, will create value networks. Doing so presents tremendous challenges. Banks will have to first develop a comprehensive distribution system that will enable customers to touch them at multiple points. Banks must also create performance measurement systems to assure the mix products and services they offer are beneficial to both the customer and the bank. They must determine whether to deploy new technologies themselves or with other service providers. Nevertheless, technology alone will not solve issues or create advantages. This technology needs to be integrated in an organization, with the change management issues linked to people resisting new concepts and ideas. It also needs to support a clearly defined and well communicated business strategy.

1. IMPACT OF GLOBALIZATION ON BANKING SECTOR :

2. PRE-GLOBALIZED SCENARIO OF SERVICE CULTURE IN THE INDIAN BANKS SERVICE CULTURE WAS EXTREMELY DEMOTIVATED & NON INTERESTED EMPLOYER& EMPLOYEE. NON COMPETETIVE ATTITUDE. PRODUCT FOCUSED & NOT CUSTOMERSERVICE FOCUSED. CUSTOMER UNFRIENDLY FORMALIZED

3. LIBERALIZATION & GLOBALIZATION MEASURES WERE INTRODUCED IN INDIA IN 1991-92. SHRI M.NARASIMHAM RAO

4. Globalization Process TWO WAY PROCESS . INDIAN BANKS . FOREIGN BANKS .

5. BANKS IN GLOBALIZED COMPETITIVE WORLD. Foreign Banks in India Indian banks abroad ABN AMRO BANK CITI BANK BANK OF CEYLON PUNJAB NATIONAL BANK BANK OF BARODA ICICI BANK.

6. GLOBALIZATION IMPLIES TO EXPOSURE TO COMPETETION

7. Today’s customer likes, Flexibility. Answering the phone calls promptly. Meeting commitments. Courtesy . Updates On Progress. Pleasant Attitude. RATER technique by Parshuraman, Reliability. Assurance. Tangibles. Empathy. Responsiveness. What do Customer Like Most??? Customer service personnel ask

8. COMPETETION FOCUSED ON CUSTOMER SERVICE INNOVATION GOODS SERVICES

9. Innovation In Banking Product. Occasional greeting at home Surprise gifts. Good waiting rooms friendly employees Welcome note. Timely service Long banking hours. Low interest Rate. Safety of deposits Loanable funds etc. The basic necessity to use banking services in order to handle finance more efficiently Potential Product Augmented Product Expected Product Basic Product Core Product

10. Flower of banking service Mobile & Internet banking ATM Network Good Waiting room Promotional discounts Low interest rates Intro. Of new schemes Change in Product line Consultancy service Financial service

11. External drivers compel banks to leverage the developments in Information Technology and continuously innovate. Regulatory change and consolidation Competitive forces. Changing Consumer Preference. Technological developments.

12. Technological innovations in Banking sector. Data Mining. Tie up Arrangements Plastic money. Virtual banking- don’t visit the branch ATM Insurance Product Marketing Agents for Distribution of Products Mobile Banking Phone Banking

13. ADDITIONAL FINANCIAL SERVICES AVAILABLE TO BANKING SECTOR : Merchant Banking Loan Syndication. Mutual Fund Factoring. Forfeiting. Venture Capital.

14. These services are being initiated by banks like , ICICI Bank Ltd., Citibank, Global Trust Bank Ltd., UTI Bank Ltd., Bank of Citibank Bank of Madura Ltd., Federal Bank Ltd., etc.

15. Negative Impact of Globalization on Banking Sector. Cyber crimes are, therefore difficult to be identified and controlled. Volatility or shackles in global markets have direct impact on the banking sector globally. Theft

16. Conclusion The opening up of economy in 1991 paved the way for the next revolution in Indian Banking: the emergence of private banks. It has changed the face of retail banking , bringing in enhanced competitiveness, product mix & customer satisfaction. The emergence of retail banking has also brought into focus the performance of the private banks & their aggressive banking practices. The new private banks have used technology to grow. The PSUs are now becoming more customer centric & tech savvy. The battle for the Indian consumer’s mind is in full swing.

RURAL MARKETING OF BANKING SECTOR

The Banking sector has woken up to the potential in the rural sector. More and more specialized and innovative schemes are there to improve rural penetration as such. There are rural credit cards and ATMs, a franchisee network, supply chain financing for agriculture, investments in rural infrastructure and cross selling of products are only some of the schemes that are directed at the village folks. Building a specialized products for rural banking and improving awareness can help reduce default and make these schemes more effective. Do share your views on this.

 

What is Rural Marketing?

Increase in purchasing power of rural masses in recent past has fuelled lot of interest in rural India. Hitherto considered a market only for low end products, today companies are seeing rural market as the new growth avenue. Rural Marketing is an evolving concept, and as a part of any economy has untapped potential; marketers have realized the opportunity recently.

The concept of rural marketing in Indian economy has always played an influential role in the lives of people. In India, leaving out a few metropolitan cities, all the districts and industrial townships are connected with rural markets. The rural market in India brings in bigger revenues in the country, as the rural regions comprise of the maximum consumers in this country.

Rural marketing in Indian economy can be classified under two broad categories. These are:

The market for consumer goods that comprise of both durable and non-durable goods

The market for agricultural inputs that include fertilizers, pesticides, seeds, and so on

The programme is targeted for the middle level executives like Product / Brand Manager, Sales Manager, Marketing Analyst and so on. The programme is also designed to suit the executives from non profit organisations with interest in rural markets. Middle managers from other functional area or a nonmarketing background who support the marketing activities would also find the programme relevant.

The objectives of the programme is to explore the potential of rural markets, critically analyse the rural market opportunities so as to formulate better marketing programmes. It also involves concepts related to processing of data and analysis, segmenting the market, targeting, and positioning and other key strategic issues.

The programme covers some of the key aspects of marketing research both conceptual and application. The information revolves around some of the key issues like;

Understanding what is ‘rural’ ‘market’

Analyzing rural market potential

Environment scanning of rural markets (competitive analysis and consumer behaviour)

Problems in Rural Marketing

Role of Financial Institutions in Rural Marketing

Role of Cooperative Institutions in Rural Marketing

Rural Marketing Strategies

Marketing environment of electro industry

 The marketing  environment consists of five sub-environments, each of which have an impact on how an organization markets its product.  This marketing environment is also sometimes referred to as the man-made environment. 

 

The competitive environment, one of the sub-environments, has a great impact on how a organization markets products.    In some industries, it is more common to compete in terms of product features, rather than price.  We often see this in the electronics industry, the apparel and accessories industries, the cosmetics industry, the athletics shoe industry, etc.  Some companies prefer to deal with competition by  cooperating with potential competitors through strategic alliances.  Strategic alliances can be short-term agreements where both companies in the agreement retain autonomy and only cooperate on that small part of their business.  They can also be full-scale mergers and acquisitions like we have seen in many industries.  One industry that has experienced much of this merger and acquisition action is the automobile industry.

 

I once heard a story about Toyota and Chevrolet wanting to go into a strategic alliance on developing, building, and marketing a one-seat electric car.  The proposed name of this new car was to be the "Toy-let."  Of course, no such deal has ever been in the works, but if it did happen, it would be a strategic alliance.  Though the "Toy-let" agreement is  fictional, in reality, Toyota and General Motors have been in partnerships in the past.  I once had a friend who owned a Geo Prizm, and another friend who owned a Toyota Corolla.  Having had the chance to ride in both vehicles, the interiors were identical and it was clear that some type of alliance was in force.  In fact, the Prizm was a U.S.-market entry-level compact car produced for the 1989 through 2002 model years. The Prizm was a rebranded version of the Toyota Corolla. All Prizms were built at the New United Motor Manufacturing Facility, a joint venture company between Toyota and General Motors in Fremont, CA. 

Factors influencing the business environment of toyota

This report aims at understanding the business environment and the various factors that influence the business environment of a company. The main objective of the report is to evaluate the various challenges faced by Toyota Motor Corporation (TMC) over the last 5 years and how the company dealt with those challenges. To achieve the aims and objectives of understanding the business environment of TMC, SWOT analysis will be conducted on Toyota Motor Corporation. The analysis will be followed by conclusions and recommendations for Toyota Motor Corporation.

Introduction

Business Environment is defined as a set of various political, economic, social and technological forces which impact business processes of an organisation in a positive or a negative way and these forces are largely out of control of the business organisations. It involves both the internal and external environment of an organisation and refers to those aspects of the surroundings of business enterprise which have influence on the functioning of business (Jain et al. 2006).

The Business Environment can broadly be categorized into two different categories of:-

1. Micro Environment ' The internal factors or elements that are close to the company and are under the immediate area of operation of an organisation which have a direct impact on the performance and organisational strategies constitute the Micro Environment of a business enterprise. Micro Environment is also known as the operating environment of a company and may include Suppliers, Customers, Shareholders, Competitors and Media (Jain et al. 2006).

According to Philip Kotler, Micro Environment refers to the operating environment of an organisation and consists of the factors within the immediate environment which affect the business processes of the organisation. Some components of the micro business environment are discussed below:-

a. Suppliers ' Every business organisation requires suppliers to supply raw materials and components to the company. An organisation should look for a reliable supplier of raw materials and components and should have multiple suppliers providing them with the materials required since it is a risk to depend on a single supplier (Jain et al. 2006).

b. Customers ' Every business revolves around customers. The success of any business depends on the identifications of its customer groups, their needs, tastes, etc and also by providing high levels of customer service. Companies should segment their customer markets and supply those goods that best suits the segment of customers identified (Jain et al. 2006).

c. Competitors ' Organisations have to modify and adjust their activities based on actions and reactions of its competitors. In order to have competitive edge, organisations need to understand the strategies formed by their competitors and respond timely by modifying their strategies to be the leader (Jain et al. 2006).

2. Macro Environment ' The external and uncontrollable factors that affect the performance, strategies and decision making power in an organisation are known as Macro Environment Factors. The Macro Environment include the forces that create opportunities and pose threat to enterprises and constitutes economic, demographics, legal, political, social, technological and environmental factors.

a. Economic Environment ' Economic Environment refers to the economic factors such as the economic system and policies, nature of economy of a country, trade cycles, level and distribution of income which impact the working of business enterprises (Jain et al. 2006).

b. Political Environment ' The political environment of a country greatly affects the business processes of an organisation and this environment may include political ideology of government of a country, Centre State relationship, etc. If there is lack of political stability in the country or region of operation of a business enterprise, long term plans cannot be formulated due to frequent changes in the policies of the government and leads to uncertainty in business (Jain et al. 2006).

c. Social Environment ' It refers to the influence of certain social and cultural factors on an organisation. The factors affecting the social environment of an organisation are usually beyond the control of the company and may include factors such as attitude of people to work, religion, caste, etc (Jain et al. 2006).

d. Technological Environment -The fast advancements in the field of technology creates problems for business enterprises as these make plans and products of the company obsolete. The business companies should evaluate and analyse the changes in the technological environment quickly and should be able to adapt the new technology (Jain et al. 2006).

All these factors or elements create opportunities and posses threats to the business. Therefore, the elements of macro environment of a business enterprise directly impact the performance of a company in a positive or a negative way (Jain et al. 2006).

In order to understand the business environment of an organisation to generate successful strategies and plans while keeping in mind the threats involved and various opportunities available, companies use the PESTLE analysis technique as this enables them to understand the various external factors that have a direct impact on the performance of the organisation. This analysis provides an insight on the macro environmental factors such as Political, Economic, Social, Technological, Legal and Environmental factors affecting business organisations and this helps in decision making for a company.

Organisations can also use SWOT analysis which helps them to understand their strengths and weaknesses and also helps in analysing the opportunities or threats for the company.

Company Information and Background

Toyota Motor Corporation (TMC) commonly known as Toyota is a multinational company founded by Kiichiro Toyoda as an independent company in 1937 and is headquartered in Japan. Toyota Motor Corporation group companies are Toyota, Lexus, Daihatsu and Hino Motors. There are several non-automotive companies as well which form the TMC. The company mainly deals with manufacturing of automobiles with factories in six continents around the world and is the world's largest automobile maker in terms of sales and production. Apart from manufacturing automobiles, TMC also provides financial services through its Toyota Financial Services Division and also deals in building robots. Fortune Global 500 companies for 2008 listed Toyota as the fifth largest company in the world (Toyota Website).

(The First Toyota Model AA, online http://en.wikipedia.org/wiki/Toyota accessed on 25/07/2010)

Toyota Business Environment

Every company, irrespective of the nature of the business they are dealing with, is exposed to various factors which influence the changes in the company and also influences the decision making and strategies of the organisation. It is of great importance to companies to keep themselves updated on these factors in their business as they greatly influence the strategies and plans within a company which in turn affects the overall performance and position of the organisation.

Challenges faced by Toyota Motor Corporation

Toyota Motor Corporation being a company with global presence has faced various challenges and has been exposed to various forces that have impacted the plans, strategies and decisions of the company and also impacted the automobile industry as a whole. Some of the challenges faced by Toyota are listed below:-

' Toyota has presence all around the world and supplies automobiles to almost every country on the globe. The company has to deal with high competition since the worldwide automotive industry is highly competitive and Toyota faces strong competition in the respective markets it operates. The factors that affect the competition include the product quality and features, innovation and development time, pricing, reliability, safety, fuel economy, customer service and financing terms. Toyota has always been offering best in class products to be the world leader and the products manufactured by Toyota always had a leading edge over competitors and the same was evident when company was awarded number one in global automobile sales for the first quarter of 2010 (Toyota Website).

' Toyota being the world's number one car maker with a turnover of over $17 billion in 2008 was hit hard by the economic downturn that started in autumn of 2008 in the US. The main reason for the impact on Toyota Motor Corporation was the fall in the consumer spending during the downturn. The global presence of TMC and also the other division of TMC such as financial services and biotechnology helped the company to survive during the economic slowdown. Also the company cut down on many of its temporary as well as permanent workers and also cut down on car production as a response to the economic downturn (Ezin Articles).

' Toyota recalled around 4 million Camry Solara and Lexus vehicles since there was unintended acceleration problem discovered in this model of automobile manufactured by TMC. The problem was related to unintended sudden acceleration of the vehicle by itself while driving on slow speeds. This lead to many accidents and also resulted in death of few customers. This was a serious issue in the manufacturing of the car and the company recalled all Camry Solara's manufactured during that time as safety measure to fix the problem for the customers. Also as an interim solution to the problem, the company advised all its customers to take out any removable driver's floor mat and not replace it with any other floor mat until a vehicle based remedy was developed to address the issue (Toyota Website). The company has now been able to identify the cause of the unintended acceleration problem and is focusing on developing and testing the remedies of the problem. TMC is also working with their pedal suppliers CTS on a revised design that effectively remedies and resolves the problem (Toyota Website).

' Since November of 2009 till the first quarter of 2010, the company had recalled over 8 million of various different car and truck models manufactured by Toyota Motor Corporation in the USA for brakes and acceleration related issues. The company was penalised for USD $16.37 million by the US government for its delayed response to notify about the defect to the National Highway Traffic Safety Administration. The company halted it sales and production of new models and utilised all energy and resources available to identify the cause of the problem and resolve the same. In a recent press release, the company acknowledged that the cause of the problem has been identified and the corrective actions and steps are being taken to remedy the problem (Toyota Website).

' In order to respond to the customer queries and the problems faced by the customers, Toyota Motor Sales USA, Inc. Announced in July 2010 that they are expanding their Product Quality Field Office Program through which more Field Offices will be established with the mandate to investigate specific field quality issues related to unique regional, geographical or environmental conditions in each area. These offices will also provide technical service and support to dealers and regional field staff. Company has taken this step to help ensure their customers that they are a quality-focused and responsive organisation and that they are ready to provide assistance to their customers and address issues whenever required (Toyota Website).

Despite of various problems that the company has dealt with, Toyota has always focused on resolving those issues and being focused on serving their customers in the best possible manner.

In order to understand the Business Environment in details, SWOT analysis will be performed on Toyota Motor Corporation that will provide us the details on the Strengths, Weakness, Opportunities and Threats in Toyota's Business Environment.

Strengths

Global Presence and Customer Satisfaction ' Toyota Motor Corporation has worldwide presence with production plants in 6 continents around the globe. TMC is one of the largest automobile manufacturers in the world and has always worked on providing highest standards of customer service and addressing issues to all customers. This high level of customer service at all Toyota plants, dealers and service centre has enabled them to be the market leader in automobile industry and despite of various issues being found in their products, the company has been able to retain its position as a global leader and also received a top ranking gin the Fortune list of Global Most Admired Companies where TMC was named the most socially and environmentally responsible automaker (Toyota Website).

The primary and major strength of Toyota is the quality product that it manufactures to offer to people. The initial price to purchase automobiles manufactures by Toyota may not be affordable by people as compared to other automobile manufacturers however the company is still able to succeed and grow because of their quality products which are reliable and dependable. And it is only because of reputation of the quality products manufactured by Toyota that the company has been able to achieve the position of number one carmaker in the world in the year 2007 and retained in 2008 (Toyota Website).

Toyota Motor Corporation manufactures large range of automobiles and this diversified range with highest standards of quality helps the company to serve both the private customers and the commercial organisations, thus capturing almost all sectors of the market (Toyota Website).

Weaknesses

Toyota is one the leading and the biggest automobile manufacturer in the world. The company manufactures large range of vehicles to serve different market segments in different countries around the globe. Since the world market for cars is in a condition for oversupply, the company needs to understand the demand of customers in a particular country depending upon demographics of the country and preferences of the people in that country in order to capture the market and increase customer base. The company has worldwide presence however TMC markets its products mainly in the US and Japan and the economic and political situation in these countries greatly affect companies plan. The company needs to continue focusing on these markets and at the same time enhance marketing of their products in other emerging economies as well (Toyota Website).

Toyota currently manufactures products that meet the demands of the customers. However, along with satisfying the current needs, TMC also needs to focus on building a legacy for their products and the company. The company needs to invest and work on building dream machines while continue to work on meeting the current demands (Leikanger 2006).

Opportunities

Toyota Motor Corporation has the reputation for manufacturing automobiles that are eco-friendly with less emission and therefore helps in protecting the environment. Eco-friendly vehicles from Toyota are based upon the advanced technology that has been developed by the company itself. The rising oil prices and awareness to protect the environment from pollution has resulted in increase in the sale for hybrid vehicles. With development of more advanced models and designs for eco-friendly automobiles, the company has the opportunity to set the standards for hybrid vehicles (Toyota Website).

Also, the global presence of Toyota provides advantage to the company to expand themselves in the growing economies such as China, India, etc. TMC needs to recognise the population in such countries and manufacture products that suit the people of the country (Toyota Website).

The brand image of Toyota also provides the company with an opportunity to capture the 'urban youth' market. The company has launched few new models such as Aygo that specifically are manufactured taking into consideration the wants of the young people and it attempts to capture the youth segment of the consumer market. Toyota has adopted effective marketing techniques and also provides credit assistance and helps in customising automobiles as per demand of the youth at a low cost which no other competitor is able to offer. This could prove to be the greatest opportunity for Toyota in the future (Toyota Website).

Threats

The threats to Toyota are mostly related to economic stability. The economic slowdown and recession has affected the sales of the automobiles that are manufactured by the company in the Americas and the other parts of the globe as well. This has significantly impacted the company in the international market as well. In such situations of economic slowdowns, the consumers try to save every single penny and buying a new car becomes almost impossible for the general public (Ezin Articles).

The company had to recall many of its sports utility vehicles and pickup trucks due to problems reported in the front suspension systems. The company did not reveal the cost involved in the recall however while manufacturing the vehicles, the company needs to rigorously test their automobiles since it's a matter of safety of the customers buying those manufactured vehicles. Also such recalls involve huge costs and penalties, therefore the Toyota needs to be focused on maintaining the image of the quality products they manufacture. This will help the company in retaining and expanding in markets worldwide (Toyota Website).

Toyota also faces tremendous competition in the car market. The level of competition is increasing day by day with new car manufacturing companies entering into the market from different countries of the world. Company needs to adopt plans and strategies to be the market leader worldwide. Also, the company needs to continue manufacturing quality products that will help in maintaining the reputation of the company and also needs to offer new products in the market in order to serve the demands and wants of the customers (Toyota Website).

Conclusion

Toyota Motor Corporation being one of the leading companies in the automobile manufacturing industry has dealt with several challenges over the past few years. These challenges which were mainly related to technical issues in the manufacturing of cars resulted in recalls of the manufactured automobiles from the market and impacted the reputation of this leading company. Since the company is highly customer centric, TMC spent huge amounts in order to resolve the problems in the automobile that were already sold out to customers and also provided timely updates to all its customers. The company also made sure that the cause of the issue was analysed deeply and that it was fixed so that such issues can be prevented in the future and the company is able to retain its position of being the global market leader in the automobile industry.

Recommendations

Toyota Motor Corporation should implement more stringent in-house quality checks on the production of all of its automobiles. This would help in detecting any technical faults in the manufactured automobiles while the product is still within the company and has not been sold out to customers. By implementing more severe quality checks, the company can save on huge costs involved in recalls and detection of problems and most importantly, it will help Toyota Motor Corporation to retain its position of being the market leader at all times.