Essay, Pages 6 (1484 words)
The excerpts of the Strategic Management Insight present Nissan’s 2013 SWOT analysis. As part of its resources, we have critically understudied the company. A SWOT analysis is an analytical method used to determine and define several key characteristics such as Strengths, Weaknesses, Opportunities, and Threats – SWOT (Shewan, 2018). This analysis can be useful to an individual, department, or an entire organization. Often, SWOT analysis are used in organizations to determine how close a business is aligned with its growth trajectories and target benchmarks (Shewan, 2018).
Conducting a SWOT analysis is a dynamic way to appraise your project or company, even if you are 2 or 500 people. However, a better SWOT will begin with a brief information of my choice organization – Nissan. Nissan is headquartered in Nishi-ku, Yokohama, Japan is a multinational automobile manufacturer ranked among the largest in the world (Strategic Management Insight (2016). In 2013, Nissan was ranked sixth after Toyota, General Motors, Volkswagen Group, Hyundai Motor Group, and Ford, as the largest auto manufacturer in the world.
In 2019, Nissan formed an alliance with Renault and Mitsubishi called “the Renault-Nissan-Mitsubishi Alliance” (Nissan, 2018).
Organizational Change Due to Strategic Management Strategy
Nissan just like most other companies face organizational change challenges due to some form of human resistance. However skilled managers are usually conversant of this fact, surprisingly in some cases before an organizational change resistance and the intents can be revealed, it may take longer time. Instead, using past experiences as guidelines, managers should carefully examine the process and approach. Any wrong approach instead of solving problems may create more problems.
There are different ways in which individuals and groups can react to change, correct assessments are often not intuitively obvious and require careful thought. When correct assessments are ascertain positive but rapid changes are inevitable as will be observed from Nissan’s case.
The Main Changes in Nissan’s Company from 2013 up to Today
From the SWOT analysis we see the positive changes that had occurred at Nissan. These changes is credited to Carlos Ghosn, Nissan’s CEO, who has given visionary and dynamic leadership, and has piloted the affairs of the company from 1999 when Nissan formed the Renault-Nissan alliance. In 2013, Carlos leadership took the credit for the 18% increase in revenues. It was also observed that Nissan’s net income and operating profit grew by 16% and 26.4% annually respectively. In November 2018, CEO, Carlos Ghosn was fired for devaluing Nissan’s financial statements (income) in Japan18 (Nissan, 2018; Jurevicius, 2016). Before this time, Carlos brought a major change in the research and development of the Nissan Leaf, a fully electric vehicle which has been the most successful EV so far in the world. By late 2018, the Leaf sold over 350, 000 units around the world (Nissan, 2018). More so, the Renault-Nissan alliance has allowed the alliance to capture 10% worldwide market share and become the 4th largest vehicle manufacturer as a group, in the world, this is another great change.
The Weaknesses of Nissan During this Period
According to several analyst, the main weakness that Nissan had was its inability to present a formidable and popular brand image as should be expected to be proportional to its successive annual advertising budgets. For example, in 2015, Nissan spent US$2.85 billion on advertising alone, the company spent more than other visible brands like Audi and Honda, yet Nissan didn’t record any significant brand presence amongst consumers in that same year. According to Jurevicius (2016), no brand rating agency has included Nissan among the world’s top 100 most revered brands. This means Nissan has more work to do in the advertising and marketing department. The other weaknesses experienced by Nissan is its poor marketing strategy and massive product recall in the U.S. Normally, automotive companies are affected by product recalls. However, Nissan’s massive recalls is very pronounced and one of the biggest in the industry, thus, damaging the company’s brand significantly. For example, in 2015 the company issued recalls for 930,000 Nissan Altima’s models and 768,000 various SUVs and crossovers models over safety.
The Strengths of Nissan that Evolved Since 2013
Despite Nissan’s weakness associated with poor marketing and brand challenges, the Renault-Nissan alliance in 1999 has enabled Nissan engage in costly R&D activities, convey better contracts and easy penetration into new markets, invest in new global projects, strong presence in the leading and emerging automotive markets like the U.S and a well-managed company operation (DiChristopher, 2018). In addition, Nissan has created a niche for itself and has become a major player in the electric vehicle (EV) market. With the introduction of the Nissan Leaf into the Japanese and US markets in 2010, it has gotten massive approval and support around the world. Nissan has not relented its effort or in building on its honors to remain a market leader in the EV sector. As a result of Nissan’s innovation in this area, she won the World Car of the Year award (2011), the Car of the Year Japan (2011 & 2012) and the European Car of the Year, 2011 (Nissan, 2018). According to the International Energy Agency (IEA), it is projected that the number of EV vehicles on the road will increase to 125 million in 2030, especially as many consumers demand products with energy efficiency and green energy, it is smart for auto manufacturers to move in this direction of which Nissan has a head start (DiChristopher, 2018).
The Nissan Opportunities Since 2013
The US government under the presidency of Barack Obama from 2008 and 2016, placed regulations and policies to control carbon emissions and thus gave incentive to companies that uses green energy. Companies like Tesla in the auto industry performed well with their touting of electric vehicles as the more environmentally friendlier option. This also was projected to give the Nissan Leaf for example, an advantage. The story is a bit different since Donald Trump became president, rolling back some of these regulations through the US Environmental Protection Agency, the growth of the market has not slowed down. However, Nissan must adjust to these market trends accordingly and seize other opportunities of widening its market for EV and non-EVs especially in Europe and African continents (Holden, 2018; DiChristopher, 2018). In addition, timing and frequency of new model releases is a great opportunity for Nissan to harness larger market share because of the rising consumer appetite in car technology and the competitive nature of the industry there is a need to release upgraded models more frequently and Nissan is well-positioned to take this opportunity.
The Threats Experienced by Nissan Since 2013
With inefficient advertising and poor marketing skills, it is dreaded that Nissan may lose market share to more visible brands like Mercedes-Benz, Ford Motors, Toyota, etc. More so, the auto market is now flooded with more units than the market needs. For example, in 2015, an excess of 31 million vehicles on the global market was recorded. However, in the EV sector, companies such as Tesla and other old auto manufacturers like Ford, Audi, Toyota, and Mercedes-Benz are all introducing EVs which are strong competitors to Nissan’s Leaf market share if intensive and aggressive marketing is not implemented (Jurevicius, 2016; Strategic Management Insight, 2016). In addition, rising exchange rate especially the yen against the dollar will be another threat to Nissan. This is because over 50% of its revenue come from the international markets, which means that the company has to convert foreign currencies to Japanese Yen in order to calculate its revenues and send profits back to Japan. Nissan cannot control exchange rates, hence a major threat to its business as money will be lost annually on exchange rates. Other threats may include fall in the price of petrol and the risks of natural disasters. Most of Nissan’s manufacturing plants are located to disaster prone area (Nissan).
The SWOT analysis has given a detailed appraisal of Nissan business in the automobile industry, identifying its strengths, weaknesses, opportunities and threats. In some SWOT analyses, there may be some overlap between your opportunities and threats. For example, in the analysis above, the move of Nissan into EVs was identified as an opportunity, and increasing competition due to auto makers now moving into EVs as identified as a threat. In this example, highlighting the Nissan’s effort to improve brand with users and marketing strategy will further reinforce the Nissan’s competitiveness in the EV sector and existence in the automobile industry. This may be an effective way for Nissan to overcome the threat posed by the increasingly companies coming into EV sector. Largely, the Nissan brand has a favorable image although not a very strong one. It is important that Nissan sharpens its marketing edge so as to give it a competitive advantage. No matter how good a product is, it is not of much value unless consumers are convinced of the company’s value proposition (Shewan, 2018).