Introduction
When analyzing a company’s operations and strategies, it is essential to understand its vision and mission, as well as its strengths, weaknesses, threats, and opportunities. For example, Nissan Motor Corporation is a global automotive company with a strong presence in the international market. It is among the most well-known manufacturers; yet, some areas still require improvement and discussion. As a result, to understand the corporation’s perspective, an analysis of its strengths and weaknesses, supply chain management, prospects, and risk indicators is crucial.
SWOT Analysis
The first element that must receive attention is the SWOT analysis, which focuses on the company’s strengths, weaknesses, opportunities, and threats. As shown in Table 1, Nissan Motor Corporation possesses several strengths that provide it with a competitive advantage. At the same time, failing to capitalize on its opportunities may result in a significant loss of market share.
Starting with the strengths, the first one is a strong global presence. When reviewing the official reports of the business, it becomes clear that Nissan is present in all parts of the world, spanning North and South America, Africa, Europe, and Asia (Nissan Motor Co., 2022). Moreover, the company demonstrates innovation by launching new, competitive vehicles with the newest technology, such as vehicle intelligence and electrification (Gupta, 2023). Finally, in addition to owning the Nissan brand, the corporation also owns the Infiniti and Venucia brands, which highlights the diversity of its portfolio (Gupta, 2023). The mentioned factors are crucial to the success and recognition of the brand.
At the same time, the organization experiences several weaknesses, with product recalls being the most notable. For instance, in the summer of 2023, an incident occurred at Nissan, suspending 236,000 vehicles in the U.S. due to safety issues, which negatively impacted the brand’s reputation (CBS, 2023; Gupta, 2023). Furthermore, Nissan’s dependence on the U.S. market, with a significant portion of its revenue coming from this region, can make it vulnerable to economic fluctuations (Nissan Motor Co., 2022). At the same time, as the organization emphasizes, there are significant opportunities. First, as mentioned in its annual report, the demand for electric vehicles is increasing, with Nissan taking measures to capitalize on market trends (Nissan Motor Co., 2022).
Additionally, expansion to emerging markets can be beneficial, considering their immense reliance on American markets. Finally, technological advancements, such as autonomous driving, connectivity, and alternative fuels, can be significant organizational opportunities (Nissan Motor Corporation, n.d.d). In this case, properly leveraging such trends and possibilities will allow the corporation to mitigate its weaknesses.
Nevertheless, there may be significant threats if efforts are not made to improve its operations. First, intense competition with other vehicle manufacturers can reduce the market share. Moreover, economic uncertainty, which can stem from a reliance on one region, can reduce the corporation’s revenues. Finally, government regulations in the industry can limit the company’s operations and opportunities. Thus, approaches to mitigate the risks are required for Nissan.
Table 1 – SWOT Analysis for Nissan Motor Corporation
BCG Growth-Share Matrix
Another section that allows analysts to see the prospects and weaknesses in Nissan’s operations should be devoted to the BCG Growth-Share Matrix. The matrix demonstrates the correlation between each product, market share, and growth. For example, the first product is called a dog, with a low market share and low possibilities for market growth. In Nissan’s case, this type of product is the Datsun brand, which is popular in South Africa, Russia, Indonesia, India, and other lower-cost markets (Shimamura, 2023).
Datsun’s approach of considering entry-level as a rigid pricing point rather than developing entry-level products based on market segments is the cause of its failure (Kant, 2022). According to the firm, vehicle sales are expected to continue (Kant, 2022). However, it also states that the corporation is currently concentrating on the key models and market areas that offer the most significant advantages to customers, dealer partners, and the business as a whole (Kant, 2022). Therefore, while the brand has not been discontinued, it offers no prospects.
Another type of product is a question mark, which implies that, despite having a low market share, there are significant opportunities for growth. Currently, such a product within the corporation can be observed in autonomous driving technologies. Nissan has been developing the technology necessary to achieve autonomous driving (Nissan Motor Corporation, n.d.d). Nissan’s central tenet is that its autonomous drive technologies must be safe, simple to use, and understandable so that consumers can utilize them in various scenarios with complete trust (Nissan Motor Corporation, n.d.d). Thus, with Nissan’s clear vision to pursue this area, it will likely continue to develop, permeating the corporation’s operations.
The third product is a cash cow, characterized by a high market share and low market growth, indicating it generates stable revenue. In Nissan’s case, the cash cow is an exclusive electric-drive system, e-POWER, combining a gasoline engine and motor (Nissan Motor Corporation, n.d.a). Customers can experience operating an electric vehicle since the engine only produces energy, and the system is powered entirely by a high-output motor (Nissan Motor Corporation, n.d.a).
Ultimately, a star is a product with a high market share and significant growth, which drives customer demand and influences market trends. Nissan, regarded as an innovator in electric vehicle technology, unveiled the Nissan Leaf, the first mass-produced electric car in history, in 2010, making it a star (Shimamura, 2023). Still, Nissan’s sales are considerably lower than those of its competitors. For example, by 2020, the tenth anniversary of the model’s debut, Nissan sold 500,000 units globally (Shimamura, 2023). Meanwhile, with over 230,000 Model 3 and Model Y sales each quarter worldwide, Tesla is the largest EV seller in the world (Shimamura, 2023). Consequently, Nissan Motor Corporation has many opportunities in the market.
Value Chain Analysis
Beginning with the value chain analysis, it is essential to emphasize that sustainability and technological innovation are the preferred approaches. It is imperative that Nissan identifies and addresses pertinent problems at every point in the supply chain and works continuously to resolve them. Nissan’s vision and policies are disseminated to business partners, with whom it engages in strategic collaboration to achieve its objectives by advocating for uniform procurement practices on an international level (Nissan Motor Corporation, n.d.c).
The first point to be discussed is inbound logistics, which is closely connected to supplier selection, as well as other aspects of supply chain management, as illustrated in Figure 2. The company’s goal is to achieve long-term, steady growth with its partners, based on mutual trust (Nissan Motor Corporation, n.d.). The Alliance partners founded the Alliance Supply Chain Management Purchasing Organization (APO) to streamline purchasing operations (Nissan Motor Corporation, n.d.c). With the aid of economies of scale and the Alliance’s continuous growth, the new organization hopes to assist each member company in achieving sustainable performance (Nissan Motor Corporation, n.d.c). Therefore, Nissan’s supply chain management is a comprehensive process.
Another aspect that must be discussed in Nissan’s case is outbound logistics. Distribution and delivery of manufactured automobiles to dealerships and clients are included in outbound logistics. Only after tests, examinations, and other quality control procedures are finished are cars transported from Nissan’s plants (Nissan Motor Corporation, n.d.b). Nissan has a nationwide distribution network to deliver its cars to service centers (Nissan Motor Corporation, n.d.b). When vehicles are transported within the plant or placed onto trailers and ships for transportation, the company ensures they are not damaged so that they arrive at customers in the same immaculate condition (Nissan Motor Corporation, n.d.b). As a result, Nissan’s outbound logistics ensure a holistic evaluation of vehicles to reduce the risks of poor quality.
Organization Structure for Decision-Making
As in many large organizations, Nissan Motor Corporation’s organizational structure for decision-making is hierarchical. First, at the top of the hierarchical pyramid are officers, including the CEO and other top-level executives. Their responsibilities involve honestly addressing the monitoring, reporting, and auditing of the corporation (Nissan Motor Corporation, 2023a). Below the officers is the Board of Directors, along with other corporate bodies. They supervise, oversee, and audit the company to ensure that its control system, legal compliance, and risk management framework are functioning effectively (Nissan Motor Corporation, 2023a).
The organization has three statutory committees that enable it to distinguish between administrative, managerial, oversight, and auditing responsibilities (Nissan Motor Corporation, 2023a). At the same time, departmental decision-making is evident, with each department within the corporation having its own duties and responsibilities (Nissan Motor Corporation, 2023a). In this case, the top of the hierarchical structure ensures a seamless flow of operations.
Nevertheless, it is noteworthy that, in addition to hierarchical decision-making, Nissan encourages cross-functional collaboration. This implies that all stakeholders collaborate and engage in effective teamwork to make vital decisions (Nissan Motor Corporation, 2023a). Such an approach ensures that well-informed choices are made. The final pillar of organizational structure is the communication channel. Regular meetings, reports, and presentations, as well as other communication channels, are crucial tools for conveying progress, vision, mission, and expectations to employees at all levels (Nissan Motor Corporation, 2023a). The given structure ensures a proper distribution of control and responsibilities.
Nissan’s Crises and Risk Indicators
Key Performance Indicators (KPI)
Key performance indicators are essential tools for Nissan to evaluate its operations and monitor risks and potential crises. For example, the first type of KPI is connected to sales and revenue growth. This type of performance indicator focuses on changes in revenue and areas where improving sales levels through cost-cutting or other strategies is essential for sustaining growth (Nissan Motor Corporation, 2023b). In this case, a notable drop in revenue and sales may indicate a serious issue that requires immediate attention due to pressure (Krasodomska & Zarzycka, 2021).
Another key performance indicator for Nissan is its market share. Competitive advantage is essential to a company’s success, which is why using performance indicators is crucial (Porter, 2008). Currently, Nissan’s goal is to achieve a 6% sustainable worldwide market share, with a target share above 5% (Nissan Motor Corporation, 2023b). When there is a trend of continuous decline in market share, it may signal a potential reduction in competitive advantage.
Finally, financial ratios can be among the key performance indicators of Nissan, demonstrating its efficiency and profitability. For instance, among the most common indicators are operating profit margin, liquidity ratio, and debt levels (Nissan Motor Corporation, 2023b). Here, excessive levels of debt and insufficient revenue could indicate a significant burden on the company, potentially leading to a crisis, and necessitate specific measures to mitigate the risks.
Key Business Indicators (KBI)
Key business indicators (KBIs) are integral components of the company that assess its success. The first KBI is connected to revenue, specifically the level of growth in particular segments. For example, Nissan’s revenue has grown from ¥8,424 billion to ¥10,596 billion, representing a 24% increase (Nissan Motor Co., 2023). In this case, the company’s revenue metric demonstrates strong growth and business health, driven by the sale of vehicles, spare parts, and other related services.
Customer satisfaction is another essential indicator that serves as a warning of a crisis and a necessity for action. A crisis can arise from unethical actions and regulatory infractions, which can harm a firm’s reputation and financial standing (Potocan et al., 2021). As a result, Nissan constantly pays attention to surveys, feedback, and ratings collected from customers regarding the company’s services.
Ultimately, the corporation’s market share is a key indicator of its strength and financial health. With this metric’s help, the company can assess its competitive position (Nissan Motor Co, 2023). Consequently, with the help of this tool, it becomes possible to evaluate the effectiveness of business operations.
Familiarity Matrix
The Familiarity Matrix is among the established models that companies use to identify areas that offer prospects and those that are unfamiliar, and therefore might involve risks. The Matrix was introduced by Roberts and Berry in 1984 and is illustrated in Table 2 (Roberts & Berry, 1985). New products, new markets, or both may be the focus of new business development (Roberts & Berry, 1985). Furthermore, a corporation may be acquainted with these new areas or not (Roberts & Berry, 1985). As a result, as shown in the Table below, markets and technology are connected based on the company’s knowledge and experience.
Regarding Nissan, the corporation is familiar with autonomous driving technology, internal combustion technology, as well as acquisitions, licensing, and ventures. At the same time, some areas may not have been fully explored, such as hybrid vehicles and fully electric vehicles, as well as joint ventures in emerging countries where investments are made, as shown in Figure 3. Meanwhile, Figures 4 and 5 serve as indicators of its capabilities.
Table 2 – Familiarity Matrix for Nissan Motor Corporation (Source: Roberts & Berry, 1985)
Innovation Process Diagram
Currently, Nissan Motor Corporation’s innovation process is centered on transitioning to more electric cars and establishing the corporation’s presence in this market. As a result, the company adheres to a specific innovation process, as illustrated in Figure 6. First, the company generates an idea, such as manufacturing more EVs.
Next, the following two steps involve screening for opportunities and developing concepts. Here, the company is eager to expedite electrification ambitions by allocating a two trillion yen investment within the next five-year period (U.S.A. Nissan, 2021). The following steps are to test and validate the chosen path, which Nissan has proven by creating 15 new EVs already (U.S.A. Nissan, 2021). After this step, Nissan Motor Corporation will implement and launch the program to achieve a 50% electrification blend by fiscal year 2030, introducing 23 attractive new electric models (U.S.A. Nissan, 2021). The final step for the corporation will be to evaluate and continue improving its initiatives, increasing accessibility to innovation, and protecting the global ecosystem.
Innovation Strategies and Cycles of Nissan
Nissan has employed various innovation strategies and cycles over the years to drive its growth and competitiveness in the automotive industry. The company’s initial struggle was linked to the Revival Plan of the 1990s. Due to its large number of outdated models with minimal range differences, insufficient investment in the development of new, improved models, and a poor brand reputation, Nissan Motors was compelled to offer discounts (Hirasaka et al., 2021).
The corporation reported a ¥ 14 billion loss in 1998 as a consequence (Hirasaka et al., 2021). In response to a corporate crisis, Nissan formed a partnership with Renault, and its new president started implementing structural changes (Hirasaka et al., 2021). Such a moment marked the beginning of the corporation’s shifting mindset.
Another innovation strategy is connected to the introduction of a new program focused on autonomous driving. Under the umbrella of Nissan Intelligent Mobility, Nissan has been relentlessly striving to develop and adopt cutting-edge technologies. Nissan Intelligent Mobility is a global suite of integrated technologies that connects drivers to their cars, enhancing safety, comfort, and functionality while driving (U.S.A. Nissan). With this approach, Nissan introduced its new concepts and entered a new market.
Finally, a focus on electric vehicle technologies demonstrates the company’s commitment to sustainable mobility. With its all-battery Leaf, Nissan Motor Corporation pioneered the way in electric vehicle technology (Shiraki & Swift, 2023). However, it has struggled to compete with more dynamic new competitors, much like many conventional car manufacturers.
Nissan stated that it will now aim to account for over 55% of global electric vehicle sales by 2030, up from its initial target of 50% (Shiraki & Swift, 2023). It is noteworthy that this includes its cutting-edge hybrid e-power automobiles. Nissan stated that the EV mix will rise from its initial goal of 40% to 44% by the fiscal year 2026 (Shiraki & Swift, 2023). As can be seen, for Nissan, innovation is an ongoing process that continues exploring various areas.
Conclusion
In summary, examining the company’s prospects, supply chain management, its strengths and weaknesses, and risk indicators is essential to understanding Nissan’s perspective. Nissan Motor Corporation has numerous market prospects, including the demand for electric cars and the opportunity to expand into new markets. Still, there are vulnerabilities and dangers associated with fierce rivalry. Currently, Nissan Motor Corporation is basing its innovation strategy on expanding its electric vehicle lineup and establishing a foothold in the relevant market.
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