Essaywedstrijd Nrc 2013 Nissan

Nissan Cogent Case Study

2103 WordsJan 6th, 20139 Pages



CONTENTS Page number

1. AIM 3

2. INTRODUCTION 3 3.1. Supply Chain

3. NISSAN-An Overview 4 4.2. Mission 4 4.3. SWOT analysis. 4

4. Evolution of COGENT 5 5. COMPARATIVE CASE STUDY 7-8 6.4. Toyota 7 6.5. Nissan 8 6.6. Honda 8


*Quality, Experience.

*Strategic initiatives, vision. *Higher competition with Honda,
*Improved Supplier relationship Toyota and others. *Poor supplier quality standards. and development for own improvement.

Nissan’s SWOT analysis (datamonitor 2007 5-9) WEAKNESS STRENGTH



Nissan’s supplier improvement process started with formation of Supplier Development Team which concentrated on the overall capability and performance improvement of suppliers by identifying which areas needs improvement, providing education and training for the same and train to improve standards. Supplier award scheme was introduced for the same and monitoring mechanism and providing feedback for supplier’s performance was also part of improvement process. (Southey.P 2011).

Nissan used their supplier association to teach suppliers Just In Time manufacturing techniques allowing more frequent deliveries and reduced inventory levels. Nissan gave their suppliers training on quality control and industrial engineering methods, the despatch of industrial engineering teams to supplier factories and training of supplier engineers in industrial engineering in Nissan’s own sites.(Hines.P 1994) 4. COGENT workshop

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An analysis of Nissan

Executive summary

This report discusses the strategic analysis of Nissan. This work will examine the company’s environment and key strength and weakness that influence Nissan’s strategic design, conduct a corporate strategic and business strategic analysis of Nissan, and also provide some recommendations for the future improvement.

Brief company history

In 1933, Nissan was found in Japan, today the company ranked sixth amongst the largest auto makers in the world and Nissan is ranked second in Japan as car maker in terms of volume and offers large range of vehicle models such as Sentra cars, SUVs, and sports cars (Farfan, 2014).

Data and method

This study adopts the deductive research approach with the secondary research method. The study will be build up by the relevant business model such as PEST analysis, SWOT analysis, Porter’s five forces, Ansoff Growth Matrix, BCG, GenericCompetitive strategy through the literature review. These business strategy models are found from the business books and articles. Based on the theoretical building framework, this study also carry the secondary research method to collect the useful information about external business environment such as economic figure, population rate and so on, and also the Nissan’s company’s information. This useful information is obtained from various resources from the published articles and Nissan’s company homepage.      

Environment analysis

Strategic management is implemented at three levels, which include corporate level, business level, and operational level strategy. The effective strategic designing is according to the external and internal business environment analysis (Campbell and et. al., 2002: p.7).


Marc-environment analysis: PEST


Japan is a developed country among the G8 economies, due to the negative effect of global financial crisis, the global economic was going to recession. In the recent years, Japan’s economic is recover (Nakamichi and Warnock, 2014). And the increasing of fuel price encourages people to buy the fuel-efficient cars.


Japan has established maturity regulation and law to protect the copyright and human right. Japanese economic freedom score is 74.7 that ranks 25th freest in 2014 Index (The Heritage Foundation, 2014). But in the international filed, Japan faces the serious threats of relationship with its neighbouring countries such as China, South Korean and Russia.


Japan has small population and also faces great challenge due to decreasing of labour force. Japan has the oldest population in the world with almost 30% of Japanese people over 65 years old (World Population Review, 2013). And also Japan has the limitation in the geographic location due to the frequency of tsunamis and earthquakes.

Japan public has high level of social responsibility awareness; Japanese people are more interested in the eco products. In Japan, people wish to buy environmentally friendly vehicles.


Japan states in the leadership position in the world’s electronic and automotive industry. Nissan is benefited from the technological know-how and power manufacturing industry.

Macro-environment analysis: Port’s five forces

Competitive rivalry in the industry

There is extremely high competitive rivalry in the auto industry. Today’s auto makers face the great threats from the cost of competition, R&D, and advertising campaign.

Threat of substitutes

There are moderate threats of substitute products for Nissan. The more welcome public transport such as bus, tube and trains shape future challenge for vehicle transport.

Bargaining power of suppliers

This is low bargain powers of suppliers, because Nissan heavily relies on its major supplier in which keep its cost down and maintain the quality of products.

Threat of new entrants

The auto industry requires high level of capital investment, government support, and strong competence on R&D. Therefore; there is low level of threats of new entrants.

Bargaining power of buyers

There is wide variety of auto products in the market. In that case, customers have more opportunity to compare the variation in value. The customer loyalty is easy to switch off in the auto market. Therefore, there is high level of threat on the bargaining power of buyers

Internal analysis: SWOT



l  International operation

l  Advanced technology in manufacturing

l  Strong capacity of R&D

l  Diversification products

l  Quite strong brand

l  Decreasing of company reputation

l  Low level of brand loyalty






l  Emerging of international markets such as China and India

l  Increasing demand on eco-friendly auto products

l  Innovation zero emission auto product

l  Opportunity growth through acquisition

l  Increasing of the fuel price


l  The increasing value of Japanese currency against the USD marketing Japanese products more expensive for foreign importers, which lead Nissan in the disadvantage position in the world’ auto market

l  Unstable political climate with neighbouring countries

l  Increasing of rivalry in the world’s auto market

l  Rising of the material prices

l  Declining of labour force in Japan

l  Bad domestic geographic condition 

l  During 2011 and 2013, Nissan has recalled several hundred thousands of cars, which damage company’s brand image and strength.

Strategic analysis of Nissan

Nissan’s corporate-level strategy

Diversification strategy

Nissan applies the diversification strategy in which the company offer and operates in a wider range of products and services. Nissan operates in two segments: automobile segment and sale financing segment. In the automobile segment, Nissan operates in such areas such as Infiniti car, Passenger cars and electric vehicles, Marine and Forklift industry. And in the sale financing segment, Nissan offers the property and insurance service and leading service.

Ansoff Growth Matrix

Alliance strategy

Accomplishing the company’s corporate strategy and staying ahead of the competition require Nissan to acquiring competence and resource to enhance it competitive advantage. Therefore, Nissan adopts alliance strategy involves in synergy, R&D/ technology synergy and marketing-based synergy. Nissan has established more than one strategic alliances and partnership with other companies. Nissan alliances with Renault and Daimler bring improvement on company competitive advantages. 

Nissan’s business-level strategy


Infiniti car has future potential growth space. Nissan plans to make the sale 500,000 units of Infiniti cars by 2016 (Yahoo! Finance, 2014). And Nissan adopted the new product development strategy that helps the company to be the zero emission leaders in the world auto industry. The electric vehicles will dominate in auto market in future with extremely fast growth rate. Nissan has introduced its electric vehicle product Nissan Leaf, which as the first electric vehicle to be manufactured in large scale in the world.

Cash Cows:

Nissan is the world’s biggest forklift maker, which the company offers a complete range of forklifts. And also the ‘Passenger cars’ is the company’s major business that generate great valued for the company. But, these kinds of product have long-term product life cycle, as a result, the market growth sale rate is becoming declined.

Question mark:

Marine business is Nissan’s affiliated business sector. However, Nissan’s marine business does not occupy strong market share, but, this product sector is kind of product diversification that alliance with the company’s international strategy.

Strategic recommendations for Nissan in the future

In order to pursue company future success, Nissan needs to attain sync with its strategy (Jindal and et. al., 2011: pp.195-201). The challenge is to enhance its corporate value and capacities to win the competition battle. Currently, Nissan’s diversification strategy involves with high risk and high level of competences. How to allocate the company’s resource and maximize its profitability are extremely important. As the automobile industry is Nissan’s main market segment, therefore, the company has to focus on this market at most. In the future Nissan has to adopt market penetration strategy in the automobile market through the effective marketing strategy such as promotion strategy, price strategy and so on. Specially, in the rapidly developing international market such as in China and India that aims to allow Nissan to has a rapidly market penetration in these potential international market.

Business-level strategy

In the future, Nissan firms needs to be careful to achieve a competitive edge in automobile market, the company needs to define its organization’s mission and realize the diverse means for formulating a thriving business strategy. The company must consider changing needs of the customers and the boundaries trade surroundings created by the intent. Nissan must be clever enough to determine the market entry time. Nissan needs to recognize when the company has got a star and when the company got a dog, when to hang on and when to let go (Kurtz, 2009: p.53).

Operational-level strategy

In the future Nissan has to continue its cost-leadership and differentiation strategy. But, Nissan needs to enhance its supply value chain to accomplish its competitive strategy. Based on the differentiation strategy, Nissan has to extend its sustainable mobility technology to all Nissan cars through using their hybrid technology that aims to respond to the environmentally friendly trend and reduce the operation costs to achieve the low price advantage in the world automobile market. The supply chain management consist of two different activities and is amalgamated into the present time of a strategic and holistic approach to material, logistics, and operation management (Tan, 2001: pp.39-48). Improving each logistic function’s performance can help Nissan to gain more competitive advantage in the market. And the maturity and advance logistic system are main element in the success. In the world automobile industry, Nissan has to be better understanding of the changing of market trend through the effective market research. Further, to identify the opportunities and threats it is essential to analyse customers and suppliers so as to determine supply and demand. This will also help in enhancing overall operational process of the company which will enable it to significantly reduce costs and advance consistency of materials supply, stock holding and distribution. Further it will also assist it in recuperating the customer service and cash flow.


Support Activities:

Firm infrastructure:

Nissan has to design cost-effective management information system with good understanding of customers’ purchasing preferences in the automobile market. 


Nissan has to offer the most confident shopping environment for the customers through simplified managerial layers and offering the high-quality products

Human Resource Management

Nissan has to design effective reward strategy to encourage its employees and reduce the turnover rate, adopting the effective training program to improve workers efficiency and effectiveness. Nissan also needs to adopt some especially human resource management strategy e.g. Nissancan take help of professional consultants to deliver the professional knowledge, experience and service.

Technology development

The great advantages of adopting the advanced IT involvingin Nissan’s operation process are reducing the operational costs and enhance the marketing performance. Nissan has to build strong capability in market research through using the advanced IT technology. Nissan also efforts on investments in technologies to reduce costs associated with a firm’s operational processes and also enhance the company’s service quality.


In order to respond the company’s business strategy, Nissan puts heavily investment in the R&D to face the market needs and enhance competitive capacity in battery engineering technologies. As the organisation concept is generated form the research and development (R&D) department. Nissan should develop new knowledge and idea to grasp any opportunity from the changing of market environment.


Under today’s globalization trend, Nissan builds up global supply chain that aims to enhance the company value chain strength and support company’s business strategy. In order to maintain company’s competitive state through cost-leadership strategy, Nissan has to stress its well-known standardization of operations, design the effective evaluation processes to monitor suppliers’ performance. And also, building the deep relationship with the international suppliers in which find the lowest-cost products.


In order to meet the international quality standard to recover the company’s brand reputation, Nissan has to build effective inventory management system, in which to improve its inventory control performance such as Just-in-time and EOQ that can direct to remarkable improvements in Nissan’s return on investment through reducing inventory level, reducing the waste, and reducing in the amount of space required.

Primary Activities:

Inbound logistics

In order to achieve the company’s cost-leadership competitive, Nissan has to utilize the economies of scale to reduce costs. And also, building efficient system is to link suppliers’ product with the firms’ production processes in which effective response to customers’ unique manufacturing specifications. E.g. Nissan should apply the international strategy that purchases the cheap products from overseas suppliers. 

Outbound logistics

Nissan needs to select the low-cost transportation carriers and design the accurate order processing procedures and delivery schedule

Marketing and sales

The product diversification strategy should be carried out focusing on understanding the target market. In that case, Nissan needs to design appropriate market research and apply the effective marketing strategy ultimately helps to create a suitable strategy for success. Today, the ecommerce provides a very convenient pattern for customer shopping in Nissan.


The excellent marketing plan can help Nissan products to meet the needs of the clients which its competitors are not able to fulfil and to generate sustainable and profitable relationship with the clientele, and assist company to recognize whole new markets that company can effectively aim at. The concept of marketing strategy will help company in delivering satisfaction to the customers which could benefit Nissan in achieving its expected business objectives.


Nissan should establish CRM and service recovery system in whichcreating and delivering excellent products and services to satisfy customers’ needs.


Business strategy is extremely important for today’s business firms. Design the effective strategy should unify with the business environment and the company’s unique capacity and competence. But, the business firms face the rapid changing of the environments that force them to adjust their corporate, business and operational strategies. The company needs to define its organisation’s mission and understand the different methods for formulated a successful business strategy. 


Campbell, D. Stonehouse, G. and Houston, B. (2002). Business Strategy: an introduction. 2nd ed. MA: Butterworth-Heinemann.

Farfan, B. (2014). Nissan Motor Co. Mission Statement Enriching Lives with Value. [Online]. Available through: <> [Assessed on 25th March, 2014].

Jindal, D. Jee, C. and Thakur, R. R. (2011). Nissan: go-global strategy", Business Strategy Series. 12(4). pp.195-201.

Kurtz, D. L. (2009). Contemporary Marketing. OH: South-Western Cengage Learning.

Nakamichi, T. and Warnock, E. (2014). Japan’s Economy Shows Renewed Strength. [Online]. Available through: <> [Assessed on 25th March, 2014].

Tan, K. C. (2001). A framework of supply chain management literature. European Journal of Purchasing & Supply Management. 7(1). pp.39-48.

The Heritage Foundation (2014). 2014 Index of Economic Freedom: Japan. [Online]. Available through: <> [Assessed on 25th March, 2014].

World Population Review. (2013). Japan Population 2014. [Online]. Available through: <> [Assessed on 25th March, 2014].

Yahoo! Finance. (2014). Industry Center: Nissan Motor Co., Ltd. Company Profile. [Online]. Available through: <> [Assessed on 25th March, 2014].

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