Case Study Description of Redesigning Nissan (A): Carlos Ghosn Takes Charge
This is the first of a two-case series. When Renault sent Carlos Ghosn to turnaround its alliance partner Nissan, observers were skeptical of his chances. After soliciting recommendations from the employees, he unveiled a three-year plan involving plant closures, job cuts, and a refocus on design. Within two years, the company had achieved a dramatic recovery, posting record profits and proposing a dazzling array of new models. Note that there are two versions of the case: 'Redesigning Nissan (A) & (B)' covers the dynamics of taking charge (case A) and the process of leading change (case B). There is also a combined and condensed version of the cases: 'Nissan's U-Turn: 1999-2001', for instructors wishing to cover the material in a single session.
Swot Analysis of "Redesigning Nissan (A): Carlos Ghosn Takes Charge" written by Jean-Francois Manzoni, Jean-Louis Barsoux, Kathryn Hughes includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nissan Ghosn facing as an external strategic factors. Some of the topics covered in Redesigning Nissan (A): Carlos Ghosn Takes Charge case study are - Strategic Management Strategies, Cross-cultural management, Design, Joint ventures, Leadership, Product development, Productivity, Reorganization, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Redesigning Nissan (A): Carlos Ghosn Takes Charge casestudy better are - – central banks are concerned over increasing inflation, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, wage bills are increasing, cloud computing is disrupting traditional business models,
banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Redesigning Nissan (A): Carlos Ghosn Takes Charge
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Redesigning Nissan (A): Carlos Ghosn Takes Charge case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nissan Ghosn, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nissan Ghosn 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 Redesigning Nissan (A): Carlos Ghosn Takes Charge can be done for the following purposes –
1. Strategic planning using facts provided in Redesigning Nissan (A): Carlos Ghosn Takes Charge case study
2. Improving business portfolio management of Nissan Ghosn
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nissan Ghosn
Strengths Redesigning Nissan (A): Carlos Ghosn Takes Charge | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nissan Ghosn in Redesigning Nissan (A): Carlos Ghosn Takes Charge Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Nissan Ghosn 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 Ghosn in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Nissan Ghosn has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nissan Ghosn 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.
Operational resilience
– The operational resilience strategy in the Redesigning Nissan (A): Carlos Ghosn Takes Charge 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Nissan Ghosn digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nissan Ghosn 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.
Cross disciplinary teams
– Horizontal connected teams at the Nissan Ghosn are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Nissan Ghosn 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 Redesigning Nissan (A): Carlos Ghosn Takes Charge HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Nissan Ghosn has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Redesigning Nissan (A): Carlos Ghosn Takes Charge Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Nissan Ghosn
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nissan Ghosn does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Nissan Ghosn is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Nissan Ghosn is one of the most innovative firm in sector. Manager in Redesigning Nissan (A): Carlos Ghosn Takes Charge Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Nissan Ghosn 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 Redesigning Nissan (A): Carlos Ghosn Takes Charge - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Nissan Ghosn 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 Jean-Francois Manzoni, Jean-Louis Barsoux, Kathryn Hughes 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.
Weaknesses Redesigning Nissan (A): Carlos Ghosn Takes Charge | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Redesigning Nissan (A): Carlos Ghosn Takes Charge are -
Skills based hiring
– The stress on hiring functional specialists at Nissan Ghosn has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 Ghosn supply chain. Even after few cautionary changes mentioned in the HBR case study - Redesigning Nissan (A): Carlos Ghosn Takes Charge, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nissan Ghosn vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Nissan Ghosn has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Products dominated business model
– Even though Nissan Ghosn 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 - Redesigning Nissan (A): Carlos Ghosn Takes Charge should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Jean-Francois Manzoni, Jean-Louis Barsoux, Kathryn Hughes suggests that, Nissan Ghosn 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Redesigning Nissan (A): Carlos Ghosn Takes Charge, it seems that the employees of Nissan Ghosn 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.
High cash cycle compare to competitors
Nissan Ghosn 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Redesigning Nissan (A): Carlos Ghosn Takes Charge, is just above the industry average. Nissan Ghosn needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nissan Ghosn is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Redesigning Nissan (A): Carlos Ghosn Takes Charge can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Nissan Ghosn 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 Ghosn 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Redesigning Nissan (A): Carlos Ghosn Takes Charge, in the dynamic environment Nissan Ghosn has struggled to respond to the nimble upstart competition. Nissan Ghosn has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Redesigning Nissan (A): Carlos Ghosn Takes Charge | 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 Redesigning Nissan (A): Carlos Ghosn Takes Charge are -
Manufacturing automation
– Nissan Ghosn can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nissan Ghosn 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 Ghosn 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nissan Ghosn 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 Ghosn to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Nissan Ghosn has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Redesigning Nissan (A): Carlos Ghosn Takes Charge - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nissan Ghosn to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nissan Ghosn can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Nissan Ghosn has opened avenues for new revenue streams for the organization in the industry. This can help Nissan Ghosn to build a more holistic ecosystem as suggested in the Redesigning Nissan (A): Carlos Ghosn Takes Charge case study. Nissan Ghosn can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Nissan Ghosn to increase its market reach. Nissan Ghosn 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Nissan Ghosn can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nissan Ghosn is facing challenges because of the dominance of functional experts in the organization. Redesigning Nissan (A): Carlos Ghosn Takes Charge case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Nissan Ghosn can develop new processes and procedures in Strategy & Execution 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nissan Ghosn 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, Redesigning Nissan (A): Carlos Ghosn Takes Charge, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Nissan Ghosn to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nissan Ghosn can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Redesigning Nissan (A): Carlos Ghosn Takes Charge External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Redesigning Nissan (A): Carlos Ghosn Takes Charge are -
Increasing wage structure of Nissan Ghosn
– 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 Ghosn.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nissan Ghosn can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Redesigning Nissan (A): Carlos Ghosn Takes Charge .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Ghosn business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Nissan Ghosn 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Nissan Ghosn needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Nissan Ghosn has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nissan Ghosn needs to keep up with the evolution of technology in the Strategy & Execution 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.
Shortening product life cycle
– it is one of the major threat that Nissan Ghosn is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Nissan Ghosn 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 Strategy & Execution industry regulations.
Consumer confidence and its impact on Nissan Ghosn 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nissan Ghosn in the Strategy & Execution industry. The Strategy & Execution 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Redesigning Nissan (A): Carlos Ghosn Takes Charge, Nissan Ghosn may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nissan Ghosn in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Redesigning Nissan (A): Carlos Ghosn Takes Charge 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 Redesigning Nissan (A): Carlos Ghosn Takes Charge 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 Redesigning Nissan (A): Carlos Ghosn Takes Charge 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 Redesigning Nissan (A): Carlos Ghosn Takes Charge 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 Redesigning Nissan (A): Carlos Ghosn Takes Charge 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 Ghosn needs to make to build a sustainable competitive advantage.
