Assignment# 2

Subject:

Strategic Marketing
Topic:

Competitors Analysis of Nissan Co.

Submitted To:

Prof. Saquib Bhatti

Submitted by: TahirAslam Usman Akhtar L1S11MBAM2072 L1S11MBAM2158

Introduction:
Nissan's history goes back to the Kwaishinsha Co., an automobile factory started by Masujiro Hashimoto in Tokyo's AzabuHiroo district in 1911. Hashimoto was a pioneer in Japan's automotive industry at its inception and throughout its initial years of struggle. In 1914, a box-type small passenger car was completed based on his own design, and in the following year the car made its debut on the market under the name of Dat Car. It is a well-known story that the name Dat represents the first letters of the family names of Hashimoto's three principal backers: Kenjiro Den, Rokuro Aoyama and Meitaro Takeuchi. Nissan is the third largest Japanese car makers and one of the top 10 in the world. It was acquired by Renault group in 1999 when it ran into financial trouble. Having recovered quickly under the leadership of Carlos Ghosn, Nissan is now stronger than its mother company. Nissan Motor Company is a Japanese corporation manufacturing vehicles and maritime equipment. It was the sixth largest automotive company in terms of sales in 2011. Nissan motors is operating in two more brands as

Datsun:
Datsun is an automobile marque. The name was created in 1931 by the DAT Motorcar Co. for a new car model, spelling it as "Datson" to indicate its smaller size when compared to the existing, larger DAT car. In 1934, after Nissan Motor Co., Ltd. took control of DAT Motorcar Co., the last syllable of Datson was changed to "sun", because "son" also means "loss" in Japanese, and also to honor the sun depicted in the national flag, hence the name "Datsun" : Dattosan. Nissan phased out the Datsun brand in March 1986. The Datsun name is most famous for the 510, Fairlady roadsters and later the Fairlady (240Z) coupes. On March 20, 2012, it was announced that Nissan will revive the brand for use in Indonesia, South Africa, India and Russia.

Infiniti:
Infiniti is Nissan's luxury car division. Established in 1989 to compete on the US premium auto market alongside brands like fellow Japanese Acura and Lexus as well as European-based BMW, Audi and BMW, Infiniti managed to create a global network in a fairly little amount of time. Its history can be traced back two decades ago when the company's first vehicles were sold.

Now we are going to conduct the competitors analysis of Nissan, here we will not only study the global omage of Nissan but we will also study the image of Nissan in Pakistan.

SWOT Analysis:
Strengths Weaknesses
1. 2. 3. 4. Strong financial performance Strategic partnerships Innovative culture Growing brand reputation

1. Product recalls

Threats Opportunities
1. Growing global demand for environment friendly vehicles 2. Growth through acquisitions 3. Increasing fuel prices 1. Declining fuel prices 2. Global competition in automotive industry 3. Rising raw material prices 4. Natural disasters 5. Appreciating yen exchange rates

Strengths:
1. Strong financial performance: Nissans revenue has been growing over the

last few years from 7,517,277 billion yens in 2010 to 9,409,026 billion yens in 2012. Firms net operating income and net profit increased as well. Due to such strong financial performance, Nissan was able to achieve at least temporary competitive advantage over its competitors.
2. Strategic partnerships: Nissan has established more than one strategic

alliances and partnerships with other companies. The most successful was an alliance with Renault, which was established in 1999 and continues to date while benefiting both partners. Another notable partnership was created with Daimler AG. Nissan has acquired some very important technologies from this partnership and is working further to create even more synergies with both Renault and Daimler.

3. Innovative culture: The company invests 4.5% of its revenue to R&D. This

strategy helped Nissan to develop currently the most popular electric vehicle (LEAF) and some important innovations in production process. Nissans R&D capabilities are one of the sources of its competitive advantage.
4. Growing brand reputation: Nissans brand was the fastest growing

automotive brand in 2012, according to Inter brand. Its value rose by 30% to nearly $5 billion and became the 73rd most valuable brand in the world. Although modest position compared with other automotive companies, Nissans brand value growth proves significant improvement in quality, reliability, innovation and growing customer reach.

Weaknesses:

Product recalls. Over 2011 and 2012, Nissan has recalled at least several
hundred thousands of various model cars. Although Nissan recalls comparably less cars than its competitors do, such situation still hurts firms brand reputation and customers loyalty.

Opportunities
1. Growing global demand for environment friendly vehicles : Vehicles

have been a major factor in intensifying greenhouse effect by emitting large quantities of CO2 and heavily polluting air. Consumers are more aware of this negative impact and are more likely to buy environmentally friendly vehicles that emit much less CO2 and are fuel-efficient.
2. Growth through strategic partnerships: Nissan has great experience in

creating strategic partnerships that bring synergy, new capabilities and technologies to the firm. In the current situation, where many firms seek ways to cut costs, Nissan should try to establish many more partnerships and alliances and benefit from the advantages that come with them.
3. Increasing fuel prices: For years, Nissan has been favoring fuel-efficient

cars with hybrid, hydrogen or electrical engines. Increasing fossil fuel prices encourages the consumers to buy such cars and Nissan is already in position to offer many car models with various environment friendly engines.

Threats
1. Decreasing fuel prices: There is high possibility that future fuel prices

will drop, as more shale gas fuels will be extracted. For this reason, hybrid, hydrogen or electric cars may become less attractive to cost conscious consumers. 2. Global competition in automotive industry: The competition between Nissan and other automotive companies will intensify in the future. GM, Toyota, Hyundai, Ford and other corporations will have to introduce new models faster and compete more on the price rather than differentiation, which lowers the profits and damages the results of the companies.
3. Rising raw material prices: Rising prices for raw metals will lift the

costs for auto manufacturers and result in squeezed profits.

4. Natural disasters: Nissan has manufacturing facilities in Japan,

Thailand, China and Indonesia. These countries, including others, are often subject to natural disasters that disrupt manufacturing processes and results in lower production volumes and losses.
5. Appreciating yen exchange rate Most of Nissans revenue comes from

foreign countries. Appreciating yen exchange rate against other currencies means lower profits for the company.

Now lets study the other competitors that what are the key strengths that they have and our company do not have, by doing this we will not only come to know our weak points but we will also be able to know what are the weaknesses of our competitors. It will also help us to catch the opportunities that may rise just due to the weakness of one or more competitors. The copetitors analysis is as;

SWOT Analysis of Honda:

STRENGTH
Diversified product portfolio. Honda unlike many other automotive companies does not focus only on selling vehicles. It is the largest producer of the engines and motorcycles as well. Therefore, the company is not as susceptible as its competitors are to market cycles or technology disruptions. Huge investments in R&D. Hondas investments in R&D reach as much as 5% of revenue. The company relies on these investments to achieve competitive advantage through various technologies, such as improved vehicle painting process, new hydrogen and hybrid engines or new welding technologies. In 2012, the company owned 42,000 patents and had pending applications for 29,000 more patents. Strong brand image. Honda has a reputation for producing the best quality engines around the world. The companys brand was the 21st most valuable brand in the world valued at $17 billion and was only behind Toyota, MercedesBenz and BMW, according to Interbrand. Motorcycle market share in Asia. In 2012, Honda sold 80.5% of its motorcycles in Asia, the market that has greatest growth potential. Having the largest motorcycle market share, Honda is well positioned to compete with other companies for the sales and profits.

Weaknesses
Product recalls. Over 2011 and 2012, Honda recalled more than 1,000,000 vehicles to fix various faulty parts and manufacturing defects. Car recalls severely damages firms brand reputation and future sales.

Weak position in Europe automotive market. Honda holds a very weak position in the Europes automotive market and has maintained only 1.1% market share in 2012. Although, Europes market share is declining at the moment and many companies experience losses, the market is huge and firms can benefit from the economies of scale. Decreasing sales. In 2012, Hondas revenue hit the lowest point in 4 years to 7.948 trillion. Honda sales were down by 11.2% in North America, which represents more than 40% of total Honda revenues. Revenue from Asia and Europe also declined by 21.3%, 15.5% respectively, signaling poor firms performance globally.

Opportunities
Increasing fuel prices. Hondas strong emphasis on engineering fuel-efficient vehicles (Honda Insight and Honda Civic) with flexible fuel, hybrid and hydrogen engines will pay off due to increasing fuel prices. Positive outlook for global motorcycle industry. Motorcycle industry grew by 4.2% from 2011 to 2012 and is expected to grow by at least 6% to 2016. Honda is the worlds leading producer and seller of the motorcycles having more than 29% of the market share. Growing demand for the motorcycles is a great opportunity for the company to expand its global market share and grow sales. Growing global demand for environment friendly vehicles. The declining levels of fossil fuel sources and the rising CO2 emissions became a major concern for many people and many governments. Therefore, ecologically friendly cars, powered by hybrid, hydrogen or flexible fuel engines became very popular. The market for such cars was $33 billion in 2010. Hondas focus on hybrid and hydrogen fueled engines is a great opportunity to capture the market share for this new demand.

Growth through acquisitions. Honda could greatly benefit from strategic partnerships or acquisitions of smaller competitors. The company would add new brands to its portfolio, achieve greater economies of scale and would benefit from synergies between different firms.

Threats
Intense competition. Honda faces more intense competition than ever. New small entrants are disrupting the market with their capabilities in producing electric vehicles or alternative fuel engines. Big companies are restructuring themselves to become more efficient. As a result, firms like Honda are suffering from competition from both big and small players. Decreasing fuel prices. Some analysts forecast that future fuel prices will drop due to extraction of shale gas. This would negatively influence Honda because the company is focusing on hydrogen fuel, hybrid and flexible fuel engine cars, which are not so attractive to consumers when fuel prices are low. Rising raw material prices. Metals are the main raw materials used in vehicle and motorcycle manufacturing and the rising price of the raw metals raises overall production costs for Honda. Natural disasters. Honda has manufacturing facilities in Japan, Thailand, China and Malaysia. These countries, including others, are often subject to natural disasters that disrupt manufacturing in the facilities and decrease Hondas production volumes.

SWOT Analysis of Toyota:

Strengths
Innovative culture. Toyota is one of the most innovative auto companies and has a strong culture that is focused on constant innovation. The company was the first to introduce Kaizen, Kanban and Total quality Management systems widely in their organization. The company was the first to mass-produce and sell hybrid vehicles too. Brand reputation valued at $30 billion. Toyotas brand is the most valued automotive brand in the world. The company is known for its environmentally friendly, safe and durable cars that are sold in more than 170 countries. Industry leader in production and sales. Toyota was the first company to introduce lean manufacturing and total quality management practices in manufacturing process. For some time, the company was the only practitioner of these practices and had the lowest manufacturing and production costs worldwide. Although many manufacturers were able to replicate Toyotas lean manufacturing system, the company is still one of the most profitable manufacturers in the world. Strong brand portfolio. Toyota currently sells about 70 different models of cars under its namesake brand. This does not only increase brands awareness but also satisfies nearly every consumer group needs. Toyotas flagship models are Corolla and Prius. The leader in green cars development. Toyota understands that environmental friendly cars are the necessity nowadays. Consumers are more selective in terms of CO2 emissions and fuel-efficiency of the cars they buy and Toyotas early move towards selling hybrid and efficient cars is the strength few competitors can match.

Weaknesses
Large-scale recalls. Toyota had quite a few large-scale vehicle recalls over the past few years. The company recalled 9 million vehicles in 2009-2010 and 7.43 million cars in 2012. Such recalls does not only hurt the firm financially but significantly damages firms brand.

Weak presence in the emerging markets. Toyotas main markets are Japan, US and Europe, while such emerging economies as China or India make only a small percentage of all Toyotas sales. Due to poor presence in the largest automobile market (China), Toyota will find it hard to compete with GM that has huge market share there.

Opportunities
Positive attitude towards green vehicles. Today consumers are more aware of the negative effects (air pollution) caused by cars. Large quantities of CO2 emissions intensify greenhouse effect and negatively impact the life on earth. Thus, consumers are more likely to buy new hybrid and electric cars that emit less CO2. Increasing fuel prices. Increasing fuel prices open up large markets for Toyotas hybrid cars as consumers shift towards efficient cars. Changing customer needs. By introducing new car models, Toyota could satisfy varying consumers tastes and needs and access wider customer group. Growth through acquisitions. Toyota has successfully acquired other car companies in the past and should continue doing so to grow, gain new skills, assets and access to new markets.

Threats
Decreasing fuel prices. There is high possibility that future fuel prices will drop, as more shale gas will be extracted. For this reason, fuel-efficient hybrid and electric cars will become less attractive to cost conscious consumers that are the main customer group for Toyotas Prius model. New emission standards. New emission standards introduced by the government would require more investments into producing cleaner engines. More investments mean less profit for Toyota. Rising raw material prices. Rising raw material prices are especially important to automobiles manufacturers. Higher prices mean higher costs and less profits for Toyota as the raw metals are the main components in car manufacturing. Intense competition. Toyota faces more intense competition from other auto manufacturers more than ever. Volkswagen group is strongly growing and GM steps up after its reorganization to become more competitive than ever.

Natural disasters. Toyotas has manufacturing facilities in Japan, Thailand, China and Indonesia. These countries, including others, are often subject to natural disasters that disrupt manufacturing in the facilities and decrease Toyotas production volumes. Appreciating yen exchange rate. Most of Toyotas revenue comes from foreign countries. The profits earned abroad must be sent back to Japan and converted to yen. Appreciating yen exchange rate against other currencies means lower profits for Toyota.

SWOT Analysis of Mazda:

Strengths
o Currently sole manufacturer to produce cars with Wankel engines Ability to survive the protectionist policies of the US govt. in the late 70s & 80s where Japanese cars were overly taxed o Its ability to produce cars iconic cars like the RX-7, Rx-8 & Mazda speed, the crossover CX-Miata MX-5 and so on. o It has been successful across the globe o One of Japans top five largest car producer o Mazda cars are fuel efficient & have adequate power as well o Ability to comply to strictest emission norms like the Euro stage 5

Weaknesses

o o o

It has not established itself as a major global player Lack of sufficient branding & marketing exercise, i.e. the growth has not been because of marketing but in spite of poor marketing its Brand perception is not as strong as competitors

Opportunities:

o o

The growing acceptance of the SKYACTIV technologies will be a great opportunity that Mazda can tap, as these technologies can give efficiency equal to that of a hybrid drive train It can further strengthen its brand through activities like race weekends

The Bio-Car that is being developed, has potential to change the definition of an environmentally friendly car as it would be completely made of mostly biologically produced materials

Threats

o o o

Failure of people to accept the Wankel engine in newer markets due lack of manpower trained to service them, as the hybrid failed in the Indian markets Protectionist policies of the governments of countries where they are not currently present Rising fuel prices are hampering automobile sale

SWOT Analysis of Daewoo:

Strengths
1. Strong Brand portfolio 2. Market Share 3. Quality product 4. Technology potential

Weaknesses
1. Huge debt 2. Aggressive expansion 3. Lack of proper marketing strategies 4. Became a cheap brand

Opportunities
1. Few players in mid size segment 2. Tapping un tap market

Threats

1. Strong competitors 2. Fluctuation in price of fuel and raw material 3. Government policies

SWOT Analysis of Suzuki:

Strengths
The Suzuki motors have following strengths o o o o o o o o o o o Highest Market Share Low Price Vehicles Resale of Local Assembled Cars Large Distribution Channels Rising per capita income with changing demographic distribution Highly Innovative and deep product line Highly maintained supply chain Well Managed and highly competitive staff Well defined and bureaucratic organizational structure Complete understanding between Distributors Easy availability of spare parts

Weaknesses:
The Suzuki motors have following weaknesses o o o o o Scarcity of raw material Lack of coordination and linkage with Government/semi government supporting bodies Less focus on Looks and Design Less Technical Training Institutes Less distribution channels in sub urban areas

Opportunities:
The Suzuki motors have following opportunities o Increasing Demand for Cars

o o o o

Efficient EFI engines Large Market size to operate Global spare part market Space saving Small size CNG cylinders

Threats:
The Suzuki motors have following threats o o o o o o o Tough Competitors like Toyota and Honda Foreign Investment and setup production facilities Smuggling of Auto Parts Inflation rate Heavy Taxes Competition from cheaper imported cars Increase in Fuel Price

SWOT Analysis of Hyundai:

Strengths Growing brand reputation. Hyundais brand is the second fastest growing
brand in the automotive sector. In 2012, Hyundais brand value grew by 24% to US$ 7.43 billion and became the 53rd most valuable brand in the world, according to Inter-brand. This is a result of Hyundais excellent quality cars, marketing efforts and growing customer base.

Strong focus on R&D. Hyundai has established R&D centers in 6 different

locations and has smaller R&D offices all around the world. Firms commitment to innovation yielded positive results and the company has become one of the automotive leaders in producing high quality, reliable, durable and safe cars. It has received many rewards including the latest North American Car of the Year reward in 2012.

Effective resource allocation. For the 2011 financial year, Hyundais ROE was
20.6% compared to GMs 19.9% and Toyotas 4%, generating very high returns for

the shareholders. In addition, Hyundai was using its assets more efficient than competitors with 7% ROA compared to GMs 5.2% ROA and Toyotas 1.4% ROA.

Growth in Europe. While the Europes car sales were falling in 2012, Hyundai
was experiencing significant growth in the region. It grew its market share in Europe from 2.9% in 2011 to 3.5% in 2012. This growth led to a competitive advantage over its rivals, Toyota and Volkswagen that were incapable to grow their operations.

Successful marketing campaigns. Hyundai has launched many successful

marketing campaigns through their CSR programs, sponsorship of many sport events and using celebrities to promote their products, which resulted in increased brand popularity.

Weaknesses
Product recalls. Over 2012, Hyundai recalled more than 300,000 cars in
different regions to fix manufacturing and design defects. Product recalls negatively impact Hyundais reputation and could erode its competitive advantage.

Hyundai has no presence in Japans car passenger market. Hyundai has

pulled their passenger car division from Japan in 2009 due to low sales and weak brand perception. Japan represents a large automotive market and performing poorly in this market leaves Hyundai at competitive disadvantage.

Negative publicity. In 2012, Hyundai has been accused over inflated fuel
economy numbers. Now the company will face federal lawsuit and will have to reimburse all the damage done to the customers.

Opportunities
Increasing fuel prices. Increasing fuel prices open up large markets for
Hyundais hybrid, electric and hydrogen fueled cars as consumers shift towards cheaper fuel types.

Global demand for ecological vehicles. Cars that emit large quantities of CO2
pollute air and negatively affect the environment. Consumers are aware of this negative impact and will likely choose fuel-efficient hybrid, electrical or hydrogen fueled cars that Hyundai is currently offering.

Changing customer needs. By introducing new car models, Hyundai could

satisfy varying consumers tastes and needs for more fuel-efficient, ecological cars and access wider customer group.

Threats
Exchange rates. Hyundai earns more than half of its revenue outside the South
Korea. Exchange rate fluctuations threaten Hyundais profits if the KRW would appreciate against other currencies.

Rising raw material prices. Raw metal prices (main raw material for car
manufacturers) are rising due to increasing global demand, negatively affecting automotive firms profits.

Decreasing fuel prices. Some analysts argue that due to shale gases future fuel
prices should drop as a result making hybrid and alternative fuel cars less attractive to consumers.

Intense competition. Hyundai faces strong competition from other automotive

companies and more than ever competes on price rather than differentiation lowering firms profits.