Business Essay

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 Source Problem             The source problem is the unpredictable condition of the minicar segment in Europe. The minicar segment  in  Europe,  although  one  of  the  fastest  growing  segments  in  Europe,  there  are  different challenges  that  minicar  manufacturers  face.  The  minicar  segment  is  affected  by  different  business environment factors such as the economy, government regulations and policies as well as the demands and  requirements  of  the  consumers.  Although  there  is  increasing  support  for  minicars  in  Europe,  sales remain inconsistent. 2. Secondary Problems   Short Term Problems

            The short­term problems that TPCA faces in launching Aygo in the European market  revolve around manufacturing considerations. 2.1                   One problem is the changing regulations and government policies, which will have direct and indirect impacts on the operation and sales of minicars. For example, there is growing concern about the impacts of carbon dioxide to the environment. In order to alleviate the negative effects of carbon dioxide to the environment many countries and policy makers are imposing policies and regulations that seek to reduce CO2.             2.2                         Cultural  problems  are  seen  as  short­term  problems.    The  difficulty  of  integrating  Toyota’s Production  System  (TPS)  in  TPCA  arises  from  differences  in  organizational  as  well  as  country  culture. Integrating TPS in TPCA proved to be challenging, because of cultural differences between TPCA which is  located  in  Czech  Republic,  Peugeot  Citroen  (PSA)  which  is  in  France  and  Toyota  which  is headquartered in Japan. 2.3             Another short­term problem is that TPCA must embrace Toyota’s business philosophy and at the same time consider local demands and employment practices. This may cause conflicts in how business will  be  done  in  TPCA.  An  example  of  this  conflict  was  experienced  by  TPCA  concerning  its  workers. Implementing  Toyota’s  normal  shift  system  of  4­day  workweek  with  10  hours  each  resulted  in  high absenteeism. Long Term Problems 2.4                   The company needs to deal with marketing challenges. Toyota Aygo is similar with two other Toyota cars that are currently in production. Also selling to younger clients is seen as a challenge,  and Toyota has no strong background in selling to younger clients in Europe. 2.5      

            Another long­term problem is the changing customer demands and requirements. Toyota Aygo is focused towards generation Y that has unique characteristics compared to other market segments. Selling to A­segment consumers will be challenging for Toyota as the company has no recent history of selling cars in the A­segment nor a loyal customer base in that segment.   3. Analysis Table 1






  Toyota Aygo





  Peugeot 107






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