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Overview of Toyota in the United States.
Economic Environment.
The United States has a strong economy because of its economic freedom. According to the 2013 Index of Economic Freedom, the U.S scored 76 and was ranked in the 10th place out of 179 countries. Although the U.S.'s score is lower than last year 0.3 point, it still remains well above the world and regional average. In addition, the U.S's economy is diversified that has abundant natural resources, a well-developed infrastructure, and high productivity. When referring to economic system, the U.S has a mixed economies. Additionally, the U.S is also a market economies since all productive activities are privately owned and production is determined by the interaction of supply and demand. This will be a good opportunity for Toyota to enter into the U.S market. .
However, the worldwide automotive industry has to deal with various laws and government regulations, such as vehicle safety and environmental matters. Therefore, Toyota is required to implement safety measures to fit with the U.S's safety standard of laws and governmental regulations. When Toyota enters into the U.S market, the company also has to confront with many barriers. Language is Toyota's first barrier since most Japanese do not use much English in their country. In addition, at that time, Toyota's reputation in the U.S market was low for its poor quality. As a result, Toyota has to hire manufacturing and quality control consultants from the U.S. to pass these barriers. In term of trade, although there is a Free Trade Agreement among the U.S and Japan on the U.S Automotive Industry, Toyota has to consider trade barrier such as tariffs and quotas.
Political Environment.
The U.S has a democracy system, a political system in which government is by the people, exercised either directly or through elected representatives. Moreover, different from other countries, the U.S government has stable policies that will not influence corporations like Toyota.