Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission
This case details the strategic decisions that went into Nissan's development of the LEAF, the first mass- produced all-electric car. Carlos Ghosn, president and CEO of the Renault-Nissan Alliance, was making a $5 billion bet that electric cars would be the wave of the future. The Alliance was building capacity for 500,000 zero-emission vehicles in Japan, the United States and Europe. The case covers the inception and launch of the LEAF; Nissan's marketing strategy for the car; the building of charging stations; and Nissan's electric car strategy in the context of the Renault-Nissan Alliance. It also discusses the challenges caused by the high cost of electric vehicle batteries, as well as the advantages of Nissan's joint venture with Japanese battery maker NEC. To handle battery reuse and recycling, Nissan created a separate company called 4R Energy Corporation. The case also provides an overview of the electric car industry and the different economic, psychological and political forces that could either advance or impede the success of the electric car. It discusses Nissan's competitors, including: General Motors, which came out with its plug-in hybrid vehicle the Volt at the same time the LEAF was launched; Tesla; China-based BYD; and the upcoming electric cars promised by Ford, Volkswagen and Toyota.
Swot Analysis of "Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission" written by Robert A. Burgelman, Debra Schifrin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nissan's Electric facing as an external strategic factors. Some of the topics covered in Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission casestudy better are - – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing commodity prices, increasing energy prices, wage bills are increasing, technology disruption,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nissan's Electric, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nissan's Electric 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's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission can be done for the following purposes –
1. Strategic planning using facts provided in Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission case study
2. Improving business portfolio management of Nissan's Electric
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's Electric
Strengths Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nissan's Electric in Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission firm has clearly differentiated products in the market place. This has enabled Nissan's Electric to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Nissan's Electric to invest into research and development (R&D) and innovation.
Learning organization
- Nissan's Electric is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Nissan's Electric is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission 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.
High switching costs
– The high switching costs that Nissan's Electric has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Nissan's Electric 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's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Nissan's Electric in the sector have low bargaining power. Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nissan's Electric to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Nissan's Electric has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nissan's Electric 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.
Ability to recruit top talent
– Nissan's Electric is one of the leading recruiters in the industry. Managers in the Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Nissan's Electric 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's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Nissan's Electric is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Nissan's Electric 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.
Diverse revenue streams
– Nissan's Electric is present in almost all the verticals within the industry. This has provided firm in Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission 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.
Weaknesses Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission, in the dynamic environment Nissan's Electric has struggled to respond to the nimble upstart competition. Nissan's Electric has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert A. Burgelman, Debra Schifrin suggests that, Nissan's Electric 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.
Low market penetration in new markets
– Outside its home market of Nissan's Electric, firm in the HBR case study Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission, is just above the industry average. Nissan's Electric 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission, it seems that the employees of Nissan's Electric 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.
Lack of clear differentiation of Nissan's Electric products
– To increase the profitability and margins on the products, Nissan's Electric needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission 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's Electric 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission can leverage the sales team experience to cultivate customer relationships as Nissan's Electric is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Nissan's Electric has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission 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's Electric has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Nissan's Electric is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Nissan's Electric needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nissan's Electric to focus more on services rather than just following the product oriented approach.
Opportunities Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission | 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's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission are -
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's Electric 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.
Manufacturing automation
– Nissan's Electric 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.
Developing new processes and practices
– Nissan's Electric 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nissan's Electric can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nissan's Electric 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.
Building a culture of innovation
– managers at Nissan's Electric 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 Strategy & Execution segment.
Leveraging digital technologies
– Nissan's Electric can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nissan's Electric 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's Electric to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nissan's Electric is facing challenges because of the dominance of functional experts in the organization. Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission 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.
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's Electric can use these opportunities to build new business models that can help the communities that Nissan's Electric operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Nissan's Electric to increase its market reach. Nissan's Electric 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.
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's Electric can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Nissan's Electric 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 Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nissan's Electric to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nissan's Electric 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.
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's Electric business can come under increasing regulations regarding data privacy, data security, etc.
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's Electric.
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's Electric in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nissan's Electric 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 Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission .
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's Electric needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Nissan's Electric
– 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's Electric.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nissan's Electric with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Regulatory challenges
– Nissan's Electric 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Nissan's Electric will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Nissan's Electric 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.
Technology acceleration in Forth Industrial Revolution
– Nissan's Electric has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nissan's Electric 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.
Weighted SWOT Analysis of Nissan's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission 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's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission 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's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission 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's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission 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's Electric Vehicle Strategy in 2011: Leading the Way Toward Zero-Emission 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's Electric needs to make to build a sustainable competitive advantage.
