SWOT Analysis
Nissan's key strengths include technological innovation and strategic alliance. The company understands that technological innovation is key to attaining a sustainable competitive edge and faster growth in the automobile industry. Therefore, it invested heavily in R&D. in 2017, Nissan allocated ¥495.8 compared to the previous year's ¥490.4 and further establishing seven more research centres (MarketLine, 2020) . Besides its partnership with Renault, Nissan also has leveraged an alliance with Mitsubishi (Cröger, 2016). The coalition works to the corporation's advantage by enabling operational efficiency, superior products, and an expanded market.
A significant weakness the company faces is the problem of repeated product recalls. The automobile company is highly competitive, sensitive and subject to several regulations relating to quality and safety issues. The past three to four years have seen the company experience significant product recalls over quality and safety issues. For instance, in 2016, more than three million vehicles were recalled over airbag issues (MarketLine, 2020) . 215,000 and 91,300 others were recalled in 2018 and 2019, respectively (MarketLine, 2020) . Repeated recalls are detrimental to an organization's brand image.
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The opportunities Nissan stands to benefit from including the growing market and the emergence of electric vehicles. Asia, particularly China, is a promising market for rising brands like Nissan. China is currently the largest automotive market presenting an opportunity for Nissan to improve sales and grow. The global market is also promising, especially in regions considered emerging economies. The demand for electric cars is increasing rapidly. Even though Tesla outperformed all significant brands in electric cars, Nissan also benefited from its electrical models. As the need for cars increases, Nissan looks to take advantage to improve sales.
Competition is a leading threat for Nissan, followed by the changing automotive industry. Competition is fierce in the automobile industry. Nissan is forced to compete with more prominent brands with a more extensive global presence, such as Toyota, Honda, Ford, and even Tesla, on electric products (MarketLine, 2020) . Apart from the competition, the automobile environment is no longer predictable. The increasing demand for electric vehicles has driven sales down significantly. Brands like Nissan are forced to adapt to the new reality or risk being kicked out of business.
Nissan Motor Company History
The beginnings of Nissan Motor Corporation go way back to the early 1900s. Takeuchi (2012) traced the company's origin to 19911 when Masujiro Hashimoto founded Kwaishinsha Motor Car Works. The journey began with a simple dream of a U.S.-trained engineer known as Masujiro Hashimoto, wishing to build the first Japanese automobile (Schmidt & Simchi-Levi, 2013). Since he lacked capital, he contacted Den Aoyama and Takeuchi for financial support. He later honoured them by naming the company's first car DAT—initials of their last names (Horniman & Sekiguchi, 2004). DAT was built in 1914 and sold as a runabout.
The company operated under different names in its early years. For instance, between then and 1925, when it was renamed DAT Motor Co., the company underwent several rebranding (Horniman & Sekiguchi, 2004). Until the 1930s, the name "Nissan" was first used, and the company renamed Nissan Motor Co. Ltd (Schmidt & Simchi-Levi, 2013). The company produced small passenger cars until World War II, when it began producing trucks and military vehicles. The war impacted the business negatively.
Nissan's post-war journey is impressive. During the war, in 1945, its production operations were seized by allied forces and only resumed complete control a decade later (Horniman & Sekiguchi, 2004). In the 1960s, the automaker's sales grew exponentially following the decision to venture into the overseas markets. It became the first Japanese automobile brand to be recognized for its engineering excellence by Deming Prize (Schmidt & Simchi-Levi, 2013). A significant force contributing to Nissan's rapid growth in the overseas market was the energy crisis of the 1970s. The energy crisis increased the demand for affordable cost-efficient Japanese cars. Nissan's products had a greater preference after passing the United States' fuel economy tests.
By the 1990s, the brand was struggling with sales and production plummeting, forcing it to enter into an alliance with Renault. The deal with the French automaker was a success and also responsible for Nissan's growth today. The company's strategic alliances were part of its revival plan. Termed the Nissan Revival Plan (NRP), Nissan's goal was to combine strategic business initiatives to grow the business and market presence (Wei, 2007). The partnership saw Renault hold 43.4 percent of Nissan's shares, and Nissan holds 15 percent of Renault's (Schmidt & Simchi-Levi, 2013). The alliance meant the two companies could leverage each other's core competencies to turn their business around.
Following the partnership's success, in 2012, Renault-Nissan Alliance made a joint undertaking with a Russian carmaker AvtoVAZ. Other alliances include Mitsubishi Motors, Dongfeng Motor Group, and Daimler AG (Schmidt & Simchi-Levi, 2013). Nissan's success since its unexpected decline in the 1990s is attributed to its strategic alliances. Today, Nissan has grown into a global leader in safety technology, fuel effectiveness, and alternatively power-driven vehicles. Its recovery has seen it go from one of the worst-performing automakers to one of the world's best automobile brands. It is also projected to surpass some of its major competitors within the next decade.
Main Focus
Nissan's main business focus can be summarized as becoming a leader in all its high priority markets. According to Toma and Marinescu (2013), Nissan's global strategy comprises a mix of three key strategies. First, a strategy to aggressively penetrate emerging economies. Second, the approach to promote zero-emission and smart automobiles. Third, a strategy to support business partnerships. As shown by the strategy above, Nissan's primary focus is essentially strategic responses to changes surrounding the auto industry.
For instance, the idea to expand to emerging markets comes after realizing that emerging markets are leading consumers of automobiles. As Toma and Marinescu (2013) further explain, the brand's major target markets include China, India, Brazil, and Russia. These markets share common characteristics, and they have a large and growing population and tremendous economic growth. They make suitable markets for the nature of the products Nissan produces and sells.
The strategy to venture into zero-emissions products and smart technologies comes from the increased demand for an electric vehicle. The growth of brands like Tesla is attributed to the global shift in automobile consumption following global warming and other climate change issues. Already, Nissan's sales, like every other company, have been affected by the change from gas-powered vehicles to electric and highly innovative electric cars. Nissan must make the same move to secure its position in the changing industry.
Every automaker focuses on downsizing and cost-cutting measures to improve its profitability. As existing brands grow and new ones emerge, competition intensifies. Thus, winning customers involve improving quality and minimizing price. Since the early 2000s, Nissan has been responding to the pressures of competition through strategic partnerships. According to Toma and Marinescu (2013), strategic alliances help the brand drive its costs down and localize its products to specific markets.
References
Cröger, N. (2016). The Renault-Nissan Alliance. A Case Study . GRIN Verlag.
MarketLine. (2020). Nissan Motor Co., Ltd .
Horniman, A., & Sekiguchi, I. (2004). Carlos Ghosn and Nissan Motor Co., Ltd.(A).
Schmidt, W., & Simchi-Levi, D. (2013). Nissan Motor Company Ltd.: Building Operational Resiliency.
Takeuchi, A. (2012). Nissan motor company. The Corporate Firm in a Changing World Economy: Case Studies in the Geography of Enterprise , 36 , 166.
Toma, S. G., & Marinescu, P. (2013). Global strategy: the case of Nissan Motor Company. Procedia Economics and Finance , 6 , 418-423.
Wei, J. (2007). Examining the lean action plan with the Nissan revival plan: a case study. In Proceedings of the Sixth International Conference on Information and Management Sciences .
