Nissan Motor Company Ltd is a Japanese car company constructed in 1930s with its new company’s president Yoshisuke Aikawa. The company flourished in its primary years and even after the World War II was highly successful.
Its former car brand name was “Datsun” and was and still is one of the largest car manufacturers having major markets in Europe, North America, Africa, New Zealand and China. The company’s main offices are located in the Ginza area of Chuo, Tokyo. The major production sites are situated in Japan with additional manufacturing sites in United States, Mexico, Spain and the United Kingdom. With its associated brands, designs, produces and sells more than 3. 7 million passenger cars and commercial vehicles in more than 190 countries.
The company is also engaged in the manufacturing and sale of passenger automobiles, as well as supplying automobile parts. Above all, it made the company to be a part of the top three car manufacturers in Japan and the top five in the world. Keeping in mind of the company’s products, it also implements interests in much heavier vehicles and equipment like vans, trucks, buses, aerospace, industrial and marine machinery or equipment. During the year of 1999, Nissan Motor Company was deeply in debt and lost marketing shares in both Japan and the US which were the main markets for selling Nissan brands.
This also led to a little product development. Due to their severe financial difficulties they had to conglomerate with Renault SA and making it subsidiary towards the larger famous French motor company. This alliance was primary implemented to achieve profit and to balance growth for the two partners through the association of a bi-national group by also applying two different business worlds (Europe and Asia) together. The new CEO of Nissan was then appointed Carlos Ghosn who is born in Brazil of Lebanese parents and raised in France.
He also speaks five languages fluently and has a rich business management background of transforming ailing companies throughout the world. Having a man with a rich international background has helped Nissan to improve and become better. In 2004, the company reported that sales have risen by 8% over the previous year, and by that profits have also risen. It had the highest operating profit of any other world’s car companies and by that it was no longer in debt. The magic of it all was very hard especially for the CEO. Since the leader was a westerner trying to implement ideas into the Japanese closed, tradition -bound business environment.
He also implemented a cost-cutting which was highly controversial in Japan since it involved closing surplus plants and leading to 23000 employees redundant. He also reorganized the company and applied a promotion system replacing it from seniority based to performance. The approach he used to make this company successful was that he intensified the importance of transparency in all business dealings, extensive usage of cross-functional teams, breaking the cultural barriers between employees and sparking innovation through empowerment.
S. W. O. T Every organization no matter if its business company or a none profit organization has and uses its environmental opportunities to spread its word of representation. These environmental opportunities are therefore only potential unless it can smartly exploit the resources given by the referred opportunities and hence take advantage of them until it’s agreeable to follow the certain opportunity.
For this reason it is understandable that every environmental opportunity has to be carefully evaluated in relation to the strengths and weaknesses of the organization’s resources and towards the organizational culture meaning what the organization is kin to. Since real opportunities only exist if there is close relation between environment, values and resources, the evaluation of the organization’s strengths and weaknesses referring to the environmental opportunities and threats is called SWOT analysis. SWOT means Strengths, Weaknesses, Threats and Opportunities. Strengths: Strengths determine the organization’s strong points.
The strengths are applied for both internal and external costumers. Strength gives a resource and a comparative advantage to the organization in relation with other organizations. The strength of an organization is seen from the resources and competencies that are available to it. Weaknesses: The weaknesses of an organization are seen from the reaction of the costumers and from its point of view. The weakness is usually a limitation or a deficiency in some resources of the organization in relation to its competitors which makes the organization or firm with less successful performance.
Opportunities: Opportunities are everything that a company can use or handle for its own personal needs are make it in its advantage to become different and more powerful towards the other organizations or firms. It is very important to determine how the organization can continue to grow in its own field of competition. Opportunities are everywhere; they can be changes in technology, government policy, social patterns, etc. An opportunity is very important and a major creditor in a firm or any kind of organization. Threats: A threat is a unwanted situation in any organization’s environment.
Threats are key problems to the organization’s current position. Some general threats of an organization or firm’s success are the entrance of new competitors, slow market growth, increased bargaining power of key buyers or suppliers, technological changes, and new or revised regulations. After saying all this about Nissan’s brief history as a Motor Company and after introducing you with the SWOT analysis I will write and assess the Nissan Motor Company Ltd in relation with the SWOT analysis that I have tried to explain in all of my understanding about its meaning and its usage. Nissan Motor Company Ltd SWOT analysis Strengths:
The first important strength that Nissan as a company has is its global brand. According to business Week Global Brand Scorecard Nissan is the fastest growing automotive brand. Its brand equity was valued at 3,108 million dollars in 2006. The brand’s strength provides a competitive advantage on the other companies from the same field of interest. Also the company has focused much on the importance of the global brand because it establishes easy communication about the specific features that the company has to offer which makes it different than the other competitors. The second strength is the Renault SA and Nissan alliance or conglomeration.
This conglomeration has provided advantages to both companies. They can easily shift to new markets faster and with lower costs because they don’t have to build new plants. The companies collaborate on building common platforms, components and engines, and each leads engine design in their area of knowledge for example Renault in diesel and Nissan in gasoline. Also they have increased the purchasing of power. The alliance has so far boosted the profitability, market capitalization and sales in 192 countries for both partners especially for Nissan since in 2004 the sales had risen by 8%.
It is very interesting how Carlos Ghosn has managed to incorporate the French innovation in concept stages and Japanese dedication to process in manufacturing. Weaknesses: The first weakness is its dependence in overseas market, the company has produces more vehicles and other units abroad than at home. This actually shows their pace of globalization since it increasingly becomes more dependent on overseas production than in its own home. The overseas dependency of their operating income is over 50% which indicates that they are in the fast lane of globalization.
The major risk of increasing dependency in other market than its own is the danger associated with the home country in operation, financial transaction, and government policy. The second is the product innovation deficiency. Nissan has difficulties with its model strategy in the United States since it cannot draw more costumers. Like the other Japanese automakers, the company was a late-comer to US’s high-profit margin and high-volume pick-up markets. This late entry meant that it suffers from the decline in the sector as a result of rising fuel prices in the United States.
In this case Nissan yet has no competitive offering in this segment. The lack of diesel technology in the Japanese market is the third weakness since diesel is very popular and its share in overall sales has been increasing. Some analysts believe that the diesel market will account for more than 80% of total vehicle sales in Europe by the end of 2008. The diesel technology has been improving significantly and because of the environmentally friendly issues the companies dealing with this have worked in reducing emissions, fuel consumption and cost.
Since Japan has a low demand for diesel engines, Nissan lacks the technology and experience to produce diesel engines of comparative quality. Opportunities: Asia market is a big opportunity not only for Nissan but any other car makers or business companies. This is because Asia is an unexplored region in the field of business and economy and due to the rapid modernization and economic growth of some Asian countries it’s a good investment. The strong rise in income levels of car sales in China and India has led to continuous jumps in profit.
It is necessary for any global competitor to be present in these countries. This also gives an opportunity to relocate the manufacturing in these Asian countries to reduce the cost of production. An opportunity for Nissan was the Renault alliance which was established in 2001 when Nissan needed help the most because of its financial difficulties. This also provided to combine the resources of the two automakers and to create a better and more efficient organization. This led Nissan to gain a much greater purchasing power and to reduce costs and the argaining power of suppliers. This conglomeration also has increased the competitive advantage. Threats: Even though sometimes it is said that cultural differences can bring to a betterment of a company for Nissan this can bring to a disharmony. Since Nissan and Renault become further integrated with one another, the risk of cross-cultural disharmony increases. If disharmony is present then the overall company performance may be reduced and the current strengths that the organizational alliance has or provides may turn into instabilities.
Due to the changes in commodity prices all around the world because of the economic crisis it affects the costs not only by Nissan but also from other global companies. It makes pressure to the company in the field of vehicle costs and prices. As the cost increases because of the current situation in the world it affects on to the consumer, hence the demand for new vehicles reduces. This threatens not only Nissan’s viability but any other business company. Conclusion In my opinion Nissan Motor Company is and still will be a successful and one of the most famous motor companies in the world.
Even though it has its weaknesses and threats Nissan still can thrive and maintain its position on the global market. The important thing is to notice that every big company has bad characteristics whether they are big or small, the one thing that makes the company big and important is that it’s always trying to solve these problems and maintain its existence. Having said all this Nissan is a perfect example of a thriving company that due to its history would never fail again in its field of knowledge.
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