Nissan Motor Co., Ltd. (A): The Hakone Pilot SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nissan Motor Co., Ltd. (A): The Hakone Pilot
Nissan Motors Ltd. went through a spectacular turnaround led by Carlos Ghosn. Nevertheless, in spite of strong growth in new car sales, "After Sales" of automobile parts in Japan did not keep up, hurting dealer profitability. Since dealer profitability is a key success factor in the auto industry, Nissan decided to lead its Japanese dealers to (1) improve their cost structure, (2) improve their management methods, and (3) stimulate "customer traffic" via better marketing strategies. The After Sales department identified a Toyota dealership that actually managed to increase its profitability by working on these three factors, and its president agreed to let Nissan benchmark with his operation. The department decided to replicate this Toyota dealer's management methods, costs and strategy. The latter includes significant price reductions on fees for road worthiness tests, which dealers are authorized to perform on behalf of the Japanese government. Many Nissan dealers raised objections to this pricing approach and, in order to convince them, the company executes the strategy on a "pilot" basis, in Hakone, testing the approach and, hopefully, creating a showcase. While initial results were encouraging, the growth in market share seems to flatten, possibly vindicating the doubting dealers' arguments. The case, generates considerable controversy in both MBA and executive classes, includes discussion on market segmentation, pricing strategy, channel design and dealer network management issues. The case includes a detailed discussion of the dealers' "business model", allowing the class to inspect the financial impact of various strategic scenarios for both Nissan and its dealers.
Swot Analysis of "Nissan Motor Co., Ltd. (A): The Hakone Pilot" written by David Weinstein includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nissan Dealers facing as an external strategic factors. Some of the topics covered in Nissan Motor Co., Ltd. (A): The Hakone Pilot case study are - Strategic Management Strategies, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Nissan Motor Co., Ltd. (A): The Hakone Pilot casestudy better are - – geopolitical disruptions, increasing government debt because of Covid-19 spendings, technology disruption, there is backlash against globalization, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is increasing trade war between United States & China, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Nissan Motor Co., Ltd. (A): The Hakone Pilot
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nissan Motor Co., Ltd. (A): The Hakone Pilot case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nissan Dealers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nissan Dealers operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Nissan Motor Co., Ltd. (A): The Hakone Pilot can be done for the following purposes –
1. Strategic planning using facts provided in Nissan Motor Co., Ltd. (A): The Hakone Pilot case study
2. Improving business portfolio management of Nissan Dealers
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nissan Dealers
Strengths Nissan Motor Co., Ltd. (A): The Hakone Pilot | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nissan Dealers in Nissan Motor Co., Ltd. (A): The Hakone Pilot Harvard Business Review case study are -
Strong track record of project management
– Nissan Dealers is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Nissan Dealers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nissan Dealers has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Nissan Dealers is present in almost all the verticals within the industry. This has provided firm in Nissan Motor Co., Ltd. (A): The Hakone Pilot case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Effective Research and Development (R&D)
– Nissan Dealers has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Nissan Motor Co., Ltd. (A): The Hakone Pilot - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Nissan Dealers
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nissan Dealers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Sales & Marketing field
– Nissan Dealers is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Nissan Dealers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Nissan Dealers is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by David Weinstein can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Successful track record of launching new products
– Nissan Dealers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nissan Dealers has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Nissan Dealers has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Nissan Motor Co., Ltd. (A): The Hakone Pilot HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Nissan Motor Co., Ltd. (A): The Hakone Pilot Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Nissan Dealers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Nissan Dealers is one of the leading recruiters in the industry. Managers in the Nissan Motor Co., Ltd. (A): The Hakone Pilot are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Nissan Motor Co., Ltd. (A): The Hakone Pilot | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nissan Motor Co., Ltd. (A): The Hakone Pilot are -
High operating costs
– Compare to the competitors, firm in the HBR case study Nissan Motor Co., Ltd. (A): The Hakone Pilot has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nissan Dealers 's lucrative customers.
High cash cycle compare to competitors
Nissan Dealers has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Nissan Dealers supply chain. Even after few cautionary changes mentioned in the HBR case study - Nissan Motor Co., Ltd. (A): The Hakone Pilot, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nissan Dealers vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Nissan Dealers has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Nissan Motor Co., Ltd. (A): The Hakone Pilot should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Nissan Motor Co., Ltd. (A): The Hakone Pilot, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Nissan Dealers has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Nissan Dealers even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, Nissan Dealers needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nissan Motor Co., Ltd. (A): The Hakone Pilot, it seems that the employees of Nissan Dealers don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Nissan Motor Co., Ltd. (A): The Hakone Pilot HBR case study mentions - Nissan Dealers takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nissan Motor Co., Ltd. (A): The Hakone Pilot HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Nissan Dealers has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, David Weinstein suggests that, Nissan Dealers is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Nissan Motor Co., Ltd. (A): The Hakone Pilot | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Nissan Motor Co., Ltd. (A): The Hakone Pilot are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nissan Dealers to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Nissan Dealers to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Nissan Dealers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nissan Motor Co., Ltd. (A): The Hakone Pilot suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at Nissan Dealers can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Creating value in data economy
– The success of analytics program of Nissan Dealers has opened avenues for new revenue streams for the organization in the industry. This can help Nissan Dealers to build a more holistic ecosystem as suggested in the Nissan Motor Co., Ltd. (A): The Hakone Pilot case study. Nissan Dealers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nissan Dealers can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Nissan Dealers can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Manufacturing automation
– Nissan Dealers can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nissan Dealers can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Nissan Motor Co., Ltd. (A): The Hakone Pilot, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Nissan Dealers can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nissan Dealers can use these opportunities to build new business models that can help the communities that Nissan Dealers operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Learning at scale
– Online learning technologies has now opened space for Nissan Dealers to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Nissan Dealers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Nissan Dealers to increase its market reach. Nissan Dealers will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nissan Dealers in the consumer business. Now Nissan Dealers can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Nissan Motor Co., Ltd. (A): The Hakone Pilot External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nissan Motor Co., Ltd. (A): The Hakone Pilot are -
High dependence on third party suppliers
– Nissan Dealers high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Nissan Dealers has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Nissan Dealers needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Nissan Dealers needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nissan Dealers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nissan Dealers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Nissan Dealers demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Nissan Dealers business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nissan Dealers in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Shortening product life cycle
– it is one of the major threat that Nissan Dealers is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nissan Dealers can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Nissan Dealers
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Nissan Dealers.
Stagnating economy with rate increase
– Nissan Dealers can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Nissan Motor Co., Ltd. (A): The Hakone Pilot Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Nissan Motor Co., Ltd. (A): The Hakone Pilot needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Nissan Motor Co., Ltd. (A): The Hakone Pilot is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Nissan Motor Co., Ltd. (A): The Hakone Pilot is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Nissan Motor Co., Ltd. (A): The Hakone Pilot is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Nissan Dealers needs to make to build a sustainable competitive advantage.