NISSAN MOTOR COMPANY

INDUSTRY: PASSENGER VEHICLES IN U.S

BUS800 Strategic Management

April 17, 2015

Submitted by

Salman Saeed 5002345913

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INTRODUCTION

The U.S automotive market is the second largest after China. Passenger vehicle demand has
been on the rise since the recovery of the 2008 recession. Nissans recent sale figures shows an
increase in passenger vehicle demand in the U.S. Companies such as Ford, Toyota, GM and
Honda are the biggest players of the U.S market whereas Nissan is the six largest in terms of
the market share. Industrys macro environment shows strong rivalry amongst the competitors,
making the industry highly competitive. However, Nissan is caught up with its defect and
safety recalls issues. Nissans partnership with Renault has not really benefited the company in
America. Similar to Nissan, Renault has not focused on R&D in electric and hybrid technology
and both brands have been associated with negative publicity in the past. On a positive note,
Nissan has the most innovative plants in the industry in terms of efficiency; however quality
has not been its top priority.

ANALYSIS
Issue: How to reduce the number of recalls and improve quality to remain competitive as the
competition from the rivals intensify? What are the negatives involved with its brand name?
One of Nissans strengths mentioned in the SWOT analysis is that it has the most
innovative plants in the industry in terms of efficiency and adaptability to changes (A.4.1).
However its quality has not been top notch when compared with its rival companies in the
U.S. In order to remain competitive, Nissan needs to improve its quality and reduce the
recalls. In doing so, Nissan will further improve its brand image, which will result in more
sales for the company (A7.1, 7.3). Besides, recalls cost a lot of money that further affect the
companys profitability (A 6).
Nissan was recently named the most efficient manufacturer in America. Furthermore,
Nissan has also gained strength from the synergies created through the partnership with Renault
(B4.3). This partnership allowed Nissan to remain competitive and capitalize on the new
market segments in Europe and South America. However, the partnership did not improve
quality and safety recalls concerns it had from the start. As a result of not addressing the
concerns, recalls are still an issue for the Nissan Motor Company (B4.3). Most of the
recent recalls are related to air bags issue. There have also been numerous other recalls
regarding faulty fuel pump, etc.
Before being acquired by Nissan, Renault failed miserably in the U.S. market. Therefore,
the partnership has not helped Nissan become profitable within the second largest market in the
world. In fact, Nissan has further harmed its image by relating itself to an unsuccessful brand
(B4.2). It is crucial that consumers view the product line as high quality or they will not likely
purchase it, especially when such a high investment is at stake (A2.3, 3.2, 7.1, and 7.3).
As stated in the external analysis, one of the key success factor in the automotive industry
is positive brand image. Positive brand image is comprised of the product reliability, high
quality and an attractive styling (A2.3). Key success factors (KSF) are the must have factors
that shape whether a company can gain sustainable competitive advantage in the current
environment.
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The management team needs to review the stated issue as it is one the key success
factors of the industry. An alternative to the current strategy must be developed to sustain
growth and its competitiveness in the market.
ALTERNATIVES
1. Improve Quality Controls
To overcome the quality issue and reduce recalls overall, Nissan can simply improve quality
controls during the manufacturing. Quality control can be implemented at stage of the
production to ensure there are not any faulty products going out of the production house.
Independent test centres and in-house research and development departments should take the
responsible for ensuring that the quality standards are met. Furthermore, suppliers should be
held accountable for meeting the certain quality standards. Random sampling is a good way to
ensure that parts and components that are outsourced have met the quality expectation for
Nissan. Engineering and R & D budget will need to be adjusted accordingly to ensure the
highest quality standards are being followed in each manufacturing stage. Improving the
quality standards will not only eliminate the recalls but also improve Nissans car reliability and
thus, result in more satisfied customers. Additionally, brand loyalty will increase and therefore
a positive brand image in the minds of consumers (B7.1, 7.3).
Main disadvantage of this alternative is that employees training and developing new
methods for quality controls is a time consuming and requires more capital.
2. Alliance with the Industry Leaders
Another way to improve quality and reduce recalls is to pursue deeper alliance with
Toyota to benefit from their Total Quality Management program also known as The Toyota
Way. Nissan is currently in a partnership with Toyota for the alternative fuel research
(B3.2). Since this is another main area that Nissan-Renault lack in, Toyota offers a good fit
and more areas of alliance should be hunted for in order to overcome its quality issues.
The company should also look into the possibility of creating an alliance with other
auto manufacturers like Ford. Ford has a better understanding of customer base in terms of
what features the U.S consumers prefer. Working together can help bother partners to reduce
their recalls and retain a positive brand image. Moreover, Nissan should also look into
creating alliances with Mitsubishi. This would create additional strengths between the two
members of different keiretsu to increase pressure on their supplier to provide the highest
quality products. This would allow for a good competition with Honda, a mutual competitor
(A6).
Nissan must stay ahead of the game, especially since the competitors are looking for
ways to exceed customers expectation in order to increase their brand loyalty (A2.3).
Cons of forming an alliance or alliances with industry leaders could result in an
unequal benefits, liability issues and loss of control.
3. Aggressive Marketing Campaign
Advertising campaigns to create the positive brand image and brand recognition could be a
short term solution to overcome the Nissans negative image due to a number of recalls.
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Positive brand image can be created with successful advertising of improved and advanced
functionality for the cars. Different media steams can be used to deliver its message to the
target audience. Magazines, YouTube, TVs and social media are some of the easily accessible
marketing platforms that can have a big impact on the companys brand image. Public relations
and celebrity endorsements also help to promote the companys positive image and efforts
taken to improve quality. Furthermore, having a Company website provides a way to connect
with consumers. Detailed information on the companys quality control methods and other
relative information can be presented in an interactive way to the consumers to show their
efforts towards customer satisfaction. Showing their efforts can also help improve the brand
image. Positive image is one of the KSF and therefore, having a positive image through the use
of aggressive marketing tactics can allow Nissan to outperform its rivals over a short run.
Long-term solution needs to be developed so that defects and safety recalls could be
minimized.
RECOMMENDATIONS
In order to improve quality and remain competitive in the U.S market, the Nissan
Motor Company should create alliances with the industry leaders. Since Nissan is already in a
partnership with Toyota for the alternative fuel research, it could deepen its ties with Toyota for
their well-known quality management system and learn the Toyota Way of doing things.
Toyota has teamed up with GM to collaborate on the quality management in the past. Nissan
can also form a similar collaboration. In return Nissan can provide Toyota with its efficient
plants technology. Nissan is also financially stable to implement the suggested changes
required to improve quality, reduce recalling and eliminate the negativity associated with its
brand. Industry is based on the learning and experience curve, therefore alliance with another
partner will be the fastest way to get to the bottom of the problem and fix issues from the base
so that the brand reputation remains intact for the upcoming years.
In addition, Nissan should also form an alliance with Mitsubishi to work together
against their main rival Honda. Honda is known to have a very strong foothold in the U.S
because of its brand loyalty with consumers and quality products. Alliance would create
additional strengths between the two members of different keiretsu to increase pressure on their
suppliers for providing the highest quality car parts and compete with Honda. Finally, there
should be a well-planned marketing tactic to let the consumers know about the efforts made to
improve quality. Well informed advertisement either on social media or public relation
campaigns are good ways to get the word out.
Subsequently, recalls for the faulty parts would reduce and consumers trust will be
built which will genuinely create a positive brand image and brand loyalty. It will allow Nissan
to reach new heights with regards to profitability and shareholders value.
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A. EXTERNAL ANALYSIS
1. PESTEL ANALYSIS
1.2 Political
- Tax policies fiscal policies and tariffs in U.S requires consideration.
- Politically stable environment in Japan and U.S.
1.3 Economics
- Automotive industry is a prime contributor to GDP in U.S
- Less than 6 million new passenger cars were sold in the United States, during 2008
recession.
- Auto sales in the U.S. grew 8% to a six-year high of 15.6 million vehicles in 2013.
- New auto sales came in at 1.04 million cars, largely due to strong pickup truck demand.
- GM, Ford Motors and Toyota saw decline in their January 2014 sales.
- Strong U.S dollar compared to Japanese yen.
1.4 Social
- Higher oil prices impact the users choices.
- Disposable incomes determine consumers purchasing decisions.
- Financing and leasing options for lower and middle class families.
1.5 Technological
- More fuel- efficient vehicles such as hybrids and electric models.
- High spending on R & D and Engineering.
- The vehicle industry has been showing continuous technological advancements mainly in
different powertrain segments.
1.6 Environmental
- Environmental regulations and pollution control are some factors in making business
decisions.
1.7 Legal
- Imposition of strict norms in regards with passenger safety and emission regulations.

Conclusion: Passenger vehicles demand is expected to increase as there are more financing
and leasing options are available for consumers. Energy-efficient vehicles demand is on the rise
and consumers will be willing to invest up front for a new car for potential savings on fuel
costs. Likewise, truck demand is on the rise in U.S. Government restrictions and emission
regulations could impact auto manufactures since the will have to obey those laws, therefore,
industrys potential for attractive profits is moderate based on the macro environment.

2. DOMINANT ECONOMIC FEATURES ANALYSIS

2.1 Market Size & Growth
- Demand for luxury vehicles increased in China; world largest auto market.
- 16.6 million vehicles sold in 2014 in the U.S, beating estimates.
- Annual U.S. new-car sales are 58 percent higher than they were in 2009.
- Industry is in the growth stage.
2.2 Number of Buyers
- Large number of buyers.
- Disposable incomes determine affordability for consumer.
2.3 Buyer needs & requirements:
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- Buyer needs are constantly evolving; demand for SUVs and truck.
- More price conscious consumers.
- The quality, service, brand recognition and brand loyalty are the decisive factors.
2.4 Number of rivals
- The industry is fragmented into many large companies with the top five in the industry
controls most of the market.
- General Motor Co., Ford Motor Co., Toyota Motors Co., Honda Motors Co., and Fiat
Chrysler Automobiles.
- Smaller player: Mahindra & Mahindra and Tesla.
2.5 Scope of Competitive rivalry
- The geographical area is global since large firms emphasis on expanding worldwide to
gain maximum market shares. Hence, presence in foreign country market is important
for a companys long term competitiveness.
2.6 Degree of product differentiation
- Product of rivals are becoming less differentiated; causing price competitions.
2.8 Product innovation
- Product innovation can increases demand, particularly with regard to more fuel-
efficient cars like hybrids.
2.9 Product capacity
- Surplus of capacity is pushing prices and profit margins low.
2.10 Pace of technological change
- Continuous technological advancements in the powertrain/fuel consumptions
2.11 Vertical integration
- Operate in different level of the industry including parts, components production,
manufacturing and assembly, distributions and retailing.
- Many partially or fully integrated.
2.12 Economic of scale
- Critical for driving the cost down.
- Parts/components are outsourced to cheap labour countries
2.13 Learning & Experience curve effects
- Industry is characterized by strong learning and experience curve.

Conclusion: China is the largest automobile market after U.S. Demand is expected to increase
especially in the developing nations. The more fuel-efficient a model are the more likely a
consumer will be willing to invest up front for a new car for potential savings on fuel.
Companies must invest in R&D and develop strong product innovation capabilities for their
survival in the industry. Buyers are price conscious and wants more value for their money. Cost
reduction and better customer service are possible way to increase profitability.

3. PORTERS FIVE FORCE ANALYSIS

3.1 Competitive Pressure for the Rival Sellers: STRONG
- Competition in the U.S auto industry is quite fierce.
- Many competitors with similar makes and models.
3.2 Competitive Pressure from the Buyers: MODERATE
- Excess capacity keeps consumers in charge of price and quality.
- Dealership are willing to price match.
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- Rising consumer debt.

- Consumer are picky with high expectation as it is second largest household spending

3.3 Competitive Pressure from the Suppliers: WEAK

- Low power in the auto industry.
- Auto part suppliers cannot afford to lose their biggest clients.

3.4 Competitive Pressure from the New Entrants: WEAK

- High start-up cost.
- Brand loyalty amongst consumers.
- Former R & D knowledge creates a heavy learning curve affect
3.5 Competitive Pressure from the Substitute Product: LOW
- Cars are the only way to travel in most of the cities in U.S and Canada.
- Alternative modes of transportation such as carpooling, public transit, bicycles,
subways are available in big urbanized cities.
- Fuel cost increase the possibility that consumers will use a substitute.

In conclusion, it is becoming harder to differentiate between cars of different brands that

share similar features. Manufacturers must continuously strive to outperform competitors with
unique styling, cost control measures for low prices and special financing needs. Overall,
competition from the rival is strong whereas, the competitive pressure from buyers is
considered moderate power in this case. Threats from new entrant and pressure of the suppliers
is weak in the industry. Lastly, substitute products are considered to be a low competitive force
as there are not many alternatives available in most of the cities in U.S and Canada. Overall, the
collective strength of the five competitive forces is in favourable to good profitability.
However, strong competition could take way some of the sale revenues.

4. DRIVING FORCES ANALYSIS

4.1 Changes in the long-term industry growth rate:
- Rising dollar price and low interest rate and longer new-car loan deals in America.
- Japanese auto makers are expected to outperform their American peers in terms of sales
growth on strong performance in their top-selling sedans and crossovers.
- Ford F series truck is one the bestselling truck in the North America.
- Toyota Motor Corp. is expected to see the largest increase in sales compared with last
February, by as much as 17 percent.
4.2 Increasing Globalization:
- $1 billion for a new state-of-the-art manufacturing plant at Gujarat, India.
- GM seeking a part of Chinas increasing luxury market demand with its 1.3 billion
investment in the Chrysler factory.
- The Chinese-owned car maker Volvo is planning invest $500 million to build the plant
in U.S.
4.3 Technological Change:
- Technological innovation is constantly changing the nature of the auto industry.
- Toyota's full hybrid system uniquely combines electric motor with gasoline engine to
create one of the world's most efficient vehicles.
- Teslas electric powered vehicle.
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- Googles self-diving car.

- Fuel efficient and Hybrid technology.
Conclusion: Low interest rates and rising dollar will definitely improve profitability for the
foreign companies in U.S. Overall, car sales are also expected to grow especially in the SUVs
and trucks market. Ford is expanding aggressively in India, China and other developing
nations. Similarly, GM plant in China would allow GM to avoid paying Chinas 25 percent
import tariff. Technology is also an important factor in the automobile industry as companies
have been investing heavily in the R & D programs. In conclusion, the driving forces analysis
shows that the automobile industry in the North American region is on a promising growth
track. However, its impact is going to increase competition and thus, the combined effect could
lead to intense competition amongst rivals.

5. STRATEGIC GROUP MAP ANALYSIS

- GM, Ford Motors

and Toyota are very
close competitors in
the U.S region.
- Nissan stands out as
it has a little higher
price ranges than the
top three.
- Toyota and Ford
growth rates were
slower in 2014.
- Ford expected U.S.
industry volume to
range between 16-17
million units in 2014,
while Toyota
assumes it to be about 16 million.
- GM expected industry sales in the range of 16-16.5 million in 2014.

In Conclusion, not all the positions in the strategic group map are equally attractive because of
the prevailing competitive pressure from the industrys five forces and driving forces may favor
some strategic groups and hurts others.

6. FRAMEWORK FOR COMPETITOR ANALYSIS

Framework of competitive analysis provides are clear picture of the Nissans competitor
strategic moves, strength, weakness and their current performance. As stated in the table below,
General Motors is facing possible legal problems regarding 1.62 million models with faulty
ignition switches that killed number of people. Similarly, Toyota agreed to a $1.2 billion
penalty to settle a criminal probe. Therefore, safety and quality should be the top priority for
the companies in the auto industry to avoid the penalties and negative publicity that can harm
the brand image.
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FRAMEWORK
FORD GM HONDA TOYOTA
INDICATORS
Detroit-based GM owns 18 Focusing on Topped 10
STRATEGY/ General Motors brands, including Localizing, Honda million units in
POSITION reported a Chevrolet, GMC, invented the global
nearly 12 Cadillac, Buick, flexible factory production last
percent decline Opel and many through an year
in sales in others. innovation known
January, 2015 as synchronized
engineering

COMPETITIVE "One Lead in Product and Strong financial Very Strong

ADVANTAGE Manufacturing" Technology. performance and brand image
strategy, which
innovative culture. worldwide.
aims at
Leader in
producing
hybrid
multiple models
technology.
in worldwide
plants in order to
reduce
production. General Motors and
its joint venture
INVESTMENT
partners in China
S
plan to invest $11
Ford plans to billion in the
triple its line-up country by 2016.
in the nation by
introducing 15
models by 2015.
Yes Yes Total sales, Higher than
MEETING including the luxury expected.
OBJECTIVES? Acura brand, came
in at 91,631 units,
comprised of a 4
percent decline in
Honda brand
vehicles and a 14
percent increase in
Acura.

The popularity of Constant recall and Diversified product Hybrid market

STRENGTHS Ford's expanded brand dilution. portfolio. Strong is ruled by
& product lineup in brand. Toyota which
China boosted includes Prius
WEAKNESSES
the automaker's and Camry)
Decreasing sales is
sales by 49% in
their current
2013.
weakness.
Ford in particular
Recalls issue lead
has been having
to $1.2 billion
problems with its
penalty to settle a
popular sports
criminal probe
utility vehicle.
ASSUMPTION No information No information No information No information

7. KSF ANALYSIS
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KSFs that companies in the passenger auto industry must have are as followings:
7.1 Positive Brand Image:
- Reliable product with less breakdowns.
- Number of safety recalls.
- High quality of product is crucial.
- Attractive styling.
7.2 Lean Production Method:
- Effective cost control in manufacturing. Cost control is crucial because automakers
must often squeeze profit margins to stay competitive.
7.3 Brand Loyalty & Advertising:
- Firms willing to spend a lot of money to advertise brand image.
- Advertising must reach the targeted market and then resonate a strong brand image.
- Brand loyalty is currently is one of the bigger barrier for new entrants in the family
clothing industry.
7.4 Attractive Style
- Important purchasing factor.
Conclusion: Key success factors are must have factors that shape whether a company can gain
sustainable competitive advantage in the current environment It is crucial that consumers view
the product line as high quality or they will not likely to purchase it, especially when such a
high investment is at stake. If a company can cut cost, it can beat competitors and still maintain
reasonable or high profit margins which are crucial for continuous reinvestment in the industry.

8. INDUSTRY OUTLOOK
U.S is the second largest automotive market after China. General Motors was the leading
automaker in the U.S. in 2013 with annual sales of 2.8 million units. Ford Motor Co. came in
second with 2.5 million units, while Toyota slipped into the third position with registered sales
of 2.2 million units. Auto sales in the U.S. grew 8% to a six-year high in 2013 that shows that
industry is sales are still increasing overall. Furthermore, safety-related recalls have been a
major issue in the auto business over the past couple of years.
The energy and environmental policies of different countries will play a major role in
shaping the future of the auto industry. As mentioned earlier in the five-force model of
competition, the industry is not highly attractive mainly because of heavy rivalry among
competitors. Currently, automotive industry is in the growth stage and there are many markets
opportunities for additional revenue streams such as Latin America and Asian markets.
Ultimately, a Japanese automaker that relies upon sales across the globe, particularly in the US,
companies like Nissan will be greatly affected by changes in exchange rates. To conclude,
industry outlook is not conducive to high probability. However, with a good strategic approach
and with the help key success factors companies can still outperform its competitors to achieve
higher returns and create wealth for its shareholders.

B. INTERNAL ANALYSIS
1. FINANCIAL ANALYSIS
- Common Sized Income Statement
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Earning per Share

400

300

200

100

0
2010 2011 2012 2013 2014
Basic Diluted

2. KEY FINANCIAL RATIOS

2.1 Profitability
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- Gross Margin, COGS, Operating Margin, Return on assets seems to stay to be maintain.
2.2 Liquidity
- Current Ratio is higher than 1.
2.3 Solvency
- Debt-to- equity ratio shows the balance between debt and the amount that stockholder
have invested in the firm.
- D/E was 0.75 in 2014.
- Lower is better
2.4 Activity
- Average 48 days
Conclusion: Nissan is in a good financial health based on the above mentioned probability
measures. Liquidity ratio of higher than one means Nissan able to pay current liabilities using
its assets that can be converted to cash in the immediate future. Similarly, average days it takes
Nissan to sell its inventory is 48. Industry average is about 60 days in the auto industry, thus
inventory management is efficient in the case.

3. COMPANYS PRESENT STRATEGY

3.1 Identify Companys Vision, Mission, and Objectives
- Vision: Enriching peoples Lives.
- Our mission is to enrich people's lives, building trust with our employees, customers,
dealers, partners, shareholders and the world at large.
- Corporate Mission Statement: Nissan provides unique and innovative automotive
products and services that deliver superior measurable values to all stakeholders in
alliance with Renault.
- Nissan targets to achieve sustainable, profitable growth.
- Reducing purchasing costs by 20%, increasing operating margins to 4.5%, and cutting
the company's debt by half.
- Contribute to social development as a valued and trusted fellow of society.
3.2 Competitive approach
- Nissan holds a 15% non-voting stake in Renault, Carlos Ghson serves as CEO of both
companies.

- The RenaultNissan Alliance makes them the worlds fourth largest automaker.

- Nissan completed the Nissan Revival Plan (NRP) and began Nissan 180.
- Partnership with Toyota for hybrid vehicles.

- Nissan Motor sells its cars under the Nissan, Infinite, Datsun and NISMO brands.

- Sentra, Altima and Rouge crossover top seller.

- Nissan was the sixth largest automaker in the world in terms of market share.

3.3Key performance indicators

Solvency & Liquidity:

- Solvency and liquidity indicators are following the industry trend.
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Profitability & Growth

- Nissan had a huge growth increase in the past three years.
- Net come growth 11%
- Revenue up by 8%
Nissan Motor Company is a global brand that competes worldwide. Nissan and Infinity are the
most popular ones in North America. Nissan has marketed itself for the lower and middle class
market with prices starting from $15000. Its ccompact size Sentra sales very successful as the
brand looks to increase its market share in the region and overtake Honda as the fourth biggest
seller in the U.S. Nissans strategy of focusing on its compact car. Nissan also plans to take
away consumers who would otherwise shop for luxury vehicles. Nissans Rogue crossover and
Versa subcompact are new revenue generator.When compared with the leading industry
indicator company is performing well above the average. It has not yet reach its full potential as
of its competitor. Nissan plans of further expanding its operating worldwide and as well in the
developing nations where the demand is higher than the developed countries.

4. SWOT ANALYSIS
4.1 Strength
- Japanese automaker Nissan is one of the most profitable automakers in the world. A
strategic alliance with Renault has proven to benefit the company in some areas.
- Innovative culture.
- Growing brand reputation Nissan and Infinity Brand.
- Nissan Green Program 2010.
- Part of Japan Automobile Manufacturers Association, Alliance Rostec Auto BV and
European Automobile Manufacturers Association.
4.2 Weakness
- Smaller in size compared to Toyota or Ford.
- Latecomer in the Hybrid technology.
- Most recent recalls includes, 1 million vehicles due to airbag flaw.
- Renault failed in U.S
4.3 Opportunities
- The top 10 global automakers account for nearly 94% of total vehicles sold in the U.S.
- Economic vehicles that cater to consumers in both mature and emerging markets.
- Demand of environment friendly vehicles
- Growth through acquisitions/ partnerships.
4.5 Threats
- Higher fuel prices
- Rising raw material prices such as Steel.
- Appreciating yen exchange rate against other dollar means low profits
- Intense competition from global players.
- Various substitutes such carpooling apps, Uber, reliable transport system.
- R & D has yet to come up with its homemade electric and hybrid car.
Conclusion: Nissan is somewhat able to seize the market opportunities and overcome the
external threats however, there is a huge untapped market opportunity for the company. Nissan
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is financially stable and have the assets to compete with its rivals. One of the major weakness is
its name being associated with negative publicity due to high number of recalls. Nissan also
seems to be behind in terms of R & D sector. To remain competitive, automakers need to
constantly improve technologically designs and economic vehicles that cater to consumers in
both mature and emerging markets.

5. VALUE CHAIN ANALYSIS

5.1 Primary Activities
I. Supply Chain: Nissan aims to achieve sustainable growth and built on a foundation of
mutual trust between its suppliers. The company works together with suppliers and
dealers as equal partners, developing and maintaining cooperative and competitive
relations that enable it to implement best practices.
- 7,700 suppliers.
II. Operations Nissans value chain today extends around the globe due to its expanded
business interests.
- Alliance with Renault, Nissan has realized a 20% reduction in purchasing costs.
- Plants in Spain, U.S, Mexico and India
III. Distribution
- Nissan manages and maintains a database of basic information about its suppliers
worldwide, such as the locations of suppliers' plants and the total value of purchases.
IV. Sales & Marketing:
- Presence at auto shows held worldwide.
- Online presence with comparison tools.
- Nissan promotes consistency in the CSR activities undertaken throughout the supply
chain.
V. Service
- After service warranty
- Trade-in policies for consumers
5.2 Support Activities
- Suppliers are partners in the R&D of strategic systems.
- Involved in the manufacturing and supply of high-technology parts and components.
- Continuous improvement
5.3 Human Resources Management
- 142,925 workers worldwide.
In conclusion, the company costs Structure and value proposition is competitive, value chain
analysis and benchmarking determine that company is performing functions are in line with its
competitors.
6. WEIGHTED COMPETITIVE STRENGTH ASSESSMENT

KSF NISSAN FORD GM HONDA TOYOTA

Brand 0.4 5 2.4 6 2.4 6 2.4 5 2.0 6 2.4
Lean 0.3 5 1.5 6 1.8 6 1.8 7 2.1 8 2.4
Production
Positive 0.2 6 1.2 5 1 6 1.2 6 1.2 5 1
image
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Attractive 0.1 6 0.6 4 0.4 4 0.4 5 0.5 5 0.5

Style
Sum of 1
weights
TOTAL 5.7 6.6 5.8 5.8 6.3

On an overall basis, the company is competitively in a good position when compared to its key
rivals. Honda and GM seems to be the closest competitor based the weight competitive strength
assessments. Whereas, Toyota has the highest ranking with a score of 6.3.

7. ONE STRATEGIC ISSUE

Issue: How to reduce recalls and remain competitive as the competition from the rivals
increase? Nissan has the most innovative plants in the industry in terms of efficiency. What are
the negatives involved with its brand name?
In the past Nissans got a bad reputation due of major recalls which could be one of the reason
that Nissan has not reach its full potential in U.S. With an increased competition from its rivals
Nissan could lose it competitiveness in the market. Nissans partnership with Renault puts
Nissan behind major competitors. Like Nissan, Renault has not focused on R&D in electric and
hybrid technology and both brands have been associated with negative publicity in the past.
Nissan has the most innovative plants in the industry in terms of efficiency, however quality
has not been its top priority.

8. RELEVANT FACTS
A. Macro-Environment
1.3 Higher Passenger vehicle demand.
1.5 Companies are spending in R & D and engineering.
2.1, 2.2 2.4: Suggests increase in demand and therefore Nissan should capitalize on the growing
demand.
5.1 Five Force Model: the collective strength of the five competitive forces is favourable to
good profitability. However, strong rivalry amongst competitors could impact Nissan
profitability.
6. Competitors Analysis: Sets benchmark and an overall pictures of what happening in the
industry. It also shows how important safety is and recalls could cost a lot of money.
Ford and GM are expanding worldwide, mostly in developing nations. Honda has diversified
products and strong brand imagine in U.S
7. KSF: Key factor required to be successful in the industry. Positive brand image and brand
loyalty. Therefore product is necessary is tool.
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B. Internal Environment
1. Financial Analysis: Company is in good financial position to expand further and make
necessary change to improve quality.
4.1, 4.2 4.3 4.4 Value Chain Analysis: Primary and support activities are available to improve
the quality and reduce the number of safety recalls.
5. Competitive Strength analysis: Very close to competitors like Honda. Honda is known for
their quality products.
4.1, 4.2, and 4.4 SWOT Analysis: Opportunities are there and as well as some threat. Nissans
Global workforce could tackles threats and increase it bottom lines numbers. Renault exist from
U.S. Airbag recalls

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