Toyota: Government Spending Essay

Submitted By mimino123456
Words: 5457
Pages: 22


Pass: 21701000245835

I. Company Background (Profile and history)

II. Environmental Analysis
A General Environment
B Industry Environment, as appropriate and applicable
C Internal Environment - Examination of Current Strategy
1 Strategy Formulation a. General analysis: Examination of current strategic themes, goals, objectives, action strategies, & their corresponding implementation and evaluation considerations b. Value chain analysis
2. Strategy Implementation - Critique of present structure, culture, leadership, processes, and systems
3. Strategy Control
a. Recent organizational performance (Financial, HR, legal, other)
a. Key symptoms and problems
b. Control Mechanisms
c. Key control questions and answers
d. Overall evaluation D. SWAA Analysis

III. Strategic Issue Analysis (Focus on the future!) Preview – Set up the strategic planning context
A. Direction 1. Mission, goals, and values
2. Strategic themes, goals, objectives, action strategies, and their corresponding implementation and evaluation initiatives B. Strategy Implementation
1. Structural attributes
2. Cultural attributes and commitment
3. Governance & Leadership attributes
4. Other infrastructural issues
C. Strategy Control
1. Control mechanisms 2. Balanced Score Card 3. Problem forecast D. Sectional Summary

I. Company Background (Profile and history)

II. Environmental Analysis
D General Environment
Economic factors.
Major economic key indicators such as gross domestic product (GDP), consumer income, the Consumer Price Index, consumer confidence, unemployment rate, consumer spending, stimulus and tax breaks, and lending standards, stock market, housing, etc. have great influence on a company’s performance and therefore need to be studied and analyzed by managers.
GDP. In the second quarter of 2014, US economy grew much faster than expected. According to the Bureau of Economic Analysis, in the second quarter of 2014 real gross domestic product – the output of goods and services produced by labor and property located in the United States – increased at annual rate of 4.2 percent.

Source: Forbes,

Important for the auto manufacturers statistics: the price index for gross domestic purchases — which measures prices paid by U.S. residents — increased 1.9%, compared to 1.3% growth in the first quarter. Real personal consumption expenditures increased by 2.5%, up from the 1.2% increase in the first quarter.
According to Forbes, 2014, the increase in real GDP in the second quarter of 2014 was largely due to growing personal consumption expenditure, private inventory investment, exports, nonresidential fixed investment, and state and local government spending and residential fixed investment.
Imports, which negatively impact GDP, increased. Gains were also partially offset but a 0.8% decrease in federal government spending. (Samantha Sharf, 2014).
Although, the real GDP growth is positive last few years, the low rate of growth is a concern. In 2011, real GDP grew an estimated 1.8%. In 2012, the number improved to 2.8%, and in 2013, the GDP growth rate was 1.9%. This numbers indicate a very slow rate of economic recovery. An expected growth rate after a recession as severe as the country went through in 2008-2009 should be around 5%.
Another concern is that the payroll tax holiday was not extended in 2013, resulting in 2.0% tax increase for most workers (thus decreasing disposable income). The auto industry has yet to see the effect of this tax increase on the discretionary consumer spending.
Slow consumers’ wage growth also puts pressure on discretionary spending and will affect future sales.

Source: Economic