S M-Presentation

Strategic Management Nissan

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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,with around of 155,099 Employees .

Company Background

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Name Nissan Motor Company LTD

Industries Served Automotive , finances

Geographic areas served

worldwide

Headquarters Japan

Current CEO Carlos GhosnRevenue ¥8.773 trillion

(2011)Profit ¥319.22 billion

(2011)

1- Strong financial performance. Nissan’s 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. Firm’s 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.

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Nissan SWOT Analysis for 2013/2014

Strength•Strong Financial Performance.•Strategic Partnership.•Innovative Culture.•Growing brand reputation.

• 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.

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•3- Innovative culture. The business 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. Nissan’s R&D capabilities are one of the sources of its competitive advantage.

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4- Growing brand reputation. Nissan’s brand was the fastest growing automotive brand in 2012, according to Interbrand. It’s 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, Nissan’s brand value growth proves significant improvement in quality, reliability, innovation and growing customer reach.

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1- 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 firm’s brand reputation and customers loyalty.

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Weaknesses

•Product Recalls

1- Growing global demand for environment friendly vehicles. Vehicles have been a major factor in intensifying greenhouse effect by producing 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

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Opportunities

•Growing global demand for environment friendly vehicles .•Growth through acquisition.•Increasing fuel prices.

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

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Opportunities


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

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Opportunities


3- Increasing fuel prices. For years, Nissan has been favouring 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.

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Opportunities


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

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Threats

•Declining fuel prices.•Global competition in the automotive industry .•Rising raw material prices .•Natural disaster .•Appreciating YEN exchange rate.

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

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Threats


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.

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Threats


4- Natural disasters. The business 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.

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Threats


5- Appreciating yen exchange rate. Most of Nissan’s revenue comes from foreign countries. Appreciating yen exchange rate against other currencies means lower profits for the company

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Threats


Corporate Governance Definition

The system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company - these include its shareholders, management, customers, suppliers, financiers, government and the community. Since corporate governance also provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.

Corporate Social Responsibility Corporate social responsibility is basically a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. Corporate social responsibility is represented by the contributions undertaken by companies to society through its business activities and its social investment. This is also to connect the Concept of sustainable development to the company’s level.Over the last years an increasing number of companies worldwide started promoting their Corporate Social Responsibility strategies because the customers, the public and the investors expect them to act sustainable as well as responsible. In most cases CSR is a result of a variety of social, environmental and economic pressures.The Term Corporate Social Responsibility is imprecise and its application differs. CSR can not only refer to the compliance of human right standards, labor and social security arrangements, but also to the fight against climate change, sustainable management of natural resources and consumer protection.The concept of Corporate Social Responsibility was first mentioned 1953 in the publication ‘Social Responsibilities of the Businessman’ by William J. Bowen. However, the term CSR became only popular in the 1990s, when the German Betapharm, a generic pharmaceutical company decided to implement CSR. The generic market is characterized by an interchange ability of products. In 1997 a halt in sales growth led the company to the realization that in the generic drugs market companies could not differentiate on price or quality. This was the prelude for the company to adopt CSR as an expression of the company’s values and as a part of its corporate strategies. By using strategic and social commitment for families with chronically ill children children, Beta pharm took a strategic advantage.

Nissan CSR Scorecard

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