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The Toyota Company

← EconomicsPrice Elasticity of Demand →

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The main cause of the toyota company being recalled was as a result of mechanical problem which involved accelerator pedals this have affected very many countries which has let down many of their customers.The recall has affected almost eight million toyota cars wordwide.

The company has faced alot of complains due to brake failure.The recall has led to some accident which have taken place to the problem.The models that had been mostly affected were 2009-2010 rav4,2009-2010 corollar,2009-2010 matrix,2005-2010 avalon,2007-2010 camry,2010 highlander,2007-2010 tundra and 2008-2010 sequioia.

Some of the difficulties facing toyota as a result of the recent mass recall are that its  competitors are  taking advantage of the whole situation which stains the name of the company.Some of its competitors are General motors,Ford motor and Honda motor.

They sayed that the recall on toyota is not a good sign for the industry.Other problems facing toyota are that it has lacked to focus to its customers,they are also holding from telling or showing their customers that they care,also they have lacked to help customers who are already driving affected toyotas all these maylead to lot of loses from its customers.

The mass recall of toyota will affect the demand of its cars in this way in the short run.If they do not show fairness to both its customers and employees these will affect demand in that by being unfair their customers will turn to other companies and will buy the cars they need from them.This will include their share holder ending up in other companies.

For the customers demand will be affected in the following ways,The customers are very worried about the brand and might fear to continue purchasing their cars form toyota for the time being so toyota needs to be extra carefull with how they handle their customers.

However toyota has been a good company this is clearly shown by how it has offerd its customers quality and reliable cars for decades.Also toyota has been known for having stylish cars which are dependable and are of quality so if it can go back to enhancing its dependability in the short run its customers will remain.

In the short run the company can avoid less demand by maintaining its fame through reservicing the affected toyotas which will lead to people remaining in the company.At the end of the day people need to understand that human is to error and every body else can do the same so the company needs to prove this by solving the problem at hand and in the short run demand will not be affected.

When it comes to long run it is possible for the company demand to be affected depending on the strategy they use to solve the crisis hoeever there are situations that can avoid demand to be affected by the crisis.In japan the company is already experiencing financial crisis due to loss of 7.7 billion loss in 2009 and already it has slashed 6000 jobs due to global economic crisis.

However right hand drive toyotas have not been affected which lessens the effect of demand.The recall is a major dent to the companies reputation,financialy the recall is not seen to have major effect on toyotas earnings for the current year because the company had money in stall for dealing with the recall.

It is very sad that toyota has undergone a big blow on its sales in the global financial crisis but this recall will do worse because it wiil turnish its reputation giving space to other car manufactures.

However this is not an assuarance because the company is still checking out for simmilar problem in other countries so with time the recall may end up being extended which makes it critical at the long run.Elasticity effect would be less because toyotas are known for durability.

The theory of supply and demand supply is the level or amount of product that someone or a company is able to sell or supply.Demand is amount of product or supply that a buyer is willing to buy.So the two show the availability of the product and the intrest of the product from the buyer.

The theory explains how products are produced and supplyed and in it there is no group of sellers or buyers that can affect the price.

The demand goes up at a lower price point and the curves shift according to consumers general confidence levels in the economy.

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