Case Study Description of Dongfeng Nissan's Venucia (B)
The (A) case describes the launch of a new passenger vehicle in China, produced jointly by Nissan of Japan and by Chinese automaker Dongfeng. Early sales results following the April 2012 launch were disappointing and the joint venture's managers had to decide how to respond. The case includes information on the structure of the industry, on government regulation, and on the preferences of Chinese purchasers of automobiles, including information about environmental considerations. The short (B) case, designed for distribution in class, describes further complications, as an international dispute between the Japanese and Chinese governments created further uncertainties for Chinese consumers and hence for the carmakers. The (C) case concludes the story; it too can be distributed in class.
Authors :: Forest Reinhardt, Mayuka Yamazaki, G.A. Donovan
Swot Analysis of "Dongfeng Nissan's Venucia (B)" written by Forest Reinhardt, Mayuka Yamazaki, G.A. Donovan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dongfeng Chinese facing as an external strategic factors. Some of the topics covered in Dongfeng Nissan's Venucia (B) case study are - Strategic Management Strategies, Crisis management, Cross-cultural management, Demographics, Marketing, Product development, Strategy execution, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Dongfeng Nissan's Venucia (B) casestudy better are - – increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption,
increasing transportation and logistics costs, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Dongfeng Nissan's Venucia (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dongfeng Nissan's Venucia (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dongfeng Chinese, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dongfeng Chinese 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 Dongfeng Nissan's Venucia (B) can be done for the following purposes –
1. Strategic planning using facts provided in Dongfeng Nissan's Venucia (B) case study
2. Improving business portfolio management of Dongfeng Chinese
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 Dongfeng Chinese
Strengths Dongfeng Nissan's Venucia (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dongfeng Chinese in Dongfeng Nissan's Venucia (B) Harvard Business Review case study are -
Ability to recruit top talent
– Dongfeng Chinese is one of the leading recruiters in the industry. Managers in the Dongfeng Nissan's Venucia (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Dongfeng Chinese is present in almost all the verticals within the industry. This has provided firm in Dongfeng Nissan's Venucia (B) 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Dongfeng Nissan's Venucia (B) firm has clearly differentiated products in the market place. This has enabled Dongfeng Chinese to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Dongfeng Chinese to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Dongfeng Nissan's Venucia (B) 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.
Low bargaining power of suppliers
– Suppliers of Dongfeng Chinese in the sector have low bargaining power. Dongfeng Nissan's Venucia (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dongfeng Chinese to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Dongfeng Chinese has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dongfeng Chinese to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Dongfeng Chinese 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
– Dongfeng Chinese is one of the most innovative firm in sector. Manager in Dongfeng Nissan's Venucia (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Dongfeng Chinese 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 Dongfeng Chinese is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Dongfeng Nissan's Venucia (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Dongfeng Chinese has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dongfeng Chinese 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
– Dongfeng Chinese 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 Dongfeng Nissan's Venucia (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Dongfeng Chinese
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dongfeng Chinese does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Dongfeng Nissan's Venucia (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dongfeng Nissan's Venucia (B) are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Dongfeng Nissan's Venucia (B), in the dynamic environment Dongfeng Chinese has struggled to respond to the nimble upstart competition. Dongfeng Chinese has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Dongfeng Nissan's Venucia (B), is just above the industry average. Dongfeng Chinese 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Dongfeng Nissan's Venucia (B) 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 Dongfeng Chinese 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Dongfeng Chinese is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Dongfeng Chinese needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dongfeng Chinese to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Dongfeng Chinese, firm in the HBR case study Dongfeng Nissan's Venucia (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Forest Reinhardt, Mayuka Yamazaki, G.A. Donovan suggests that, Dongfeng Chinese 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.
Aligning sales with marketing
– It come across in the case study Dongfeng Nissan's Venucia (B) 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 Dongfeng Nissan's Venucia (B) can leverage the sales team experience to cultivate customer relationships as Dongfeng Chinese is planning to shift buying processes online.
High cash cycle compare to competitors
Dongfeng Chinese 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.
Capital Spending Reduction
– Even during the low interest decade, Dongfeng Chinese 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.
Slow decision making process
– As mentioned earlier in the report, Dongfeng Chinese 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. Dongfeng Chinese 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Dongfeng Nissan's Venucia (B) 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 Dongfeng Chinese has relatively successful track record of launching new products.
Opportunities Dongfeng Nissan's Venucia (B) | 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 Dongfeng Nissan's Venucia (B) are -
Learning at scale
– Online learning technologies has now opened space for Dongfeng Chinese 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.
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. Dongfeng Chinese 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. Dongfeng Chinese 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.
Leveraging digital technologies
– Dongfeng Chinese 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.
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 Dongfeng Chinese in the consumer business. Now Dongfeng Chinese can target international markets with far fewer capital restrictions requirements than the existing system.
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 Dongfeng Chinese 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.
Using analytics as competitive advantage
– Dongfeng Chinese 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 Dongfeng Nissan's Venucia (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dongfeng Chinese to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dongfeng Chinese can use these opportunities to build new business models that can help the communities that Dongfeng Chinese operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Dongfeng Chinese 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.
Buying journey improvements
– Dongfeng Chinese can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Dongfeng Nissan's Venucia (B) 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dongfeng Chinese is facing challenges because of the dominance of functional experts in the organization. Dongfeng Nissan's Venucia (B) 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
– Dongfeng Chinese 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.
Loyalty marketing
– Dongfeng Chinese has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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. Dongfeng Chinese can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Dongfeng Nissan's Venucia (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dongfeng Nissan's Venucia (B) are -
Consumer confidence and its impact on Dongfeng Chinese 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 Dongfeng Chinese 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.
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 Dongfeng Chinese.
Regulatory challenges
– Dongfeng Chinese 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.
Stagnating economy with rate increase
– Dongfeng Chinese 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.
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.
Environmental challenges
– Dongfeng Chinese needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Dongfeng Chinese can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dongfeng Chinese 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 Dongfeng Nissan's Venucia (B) .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dongfeng Chinese with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Dongfeng Chinese business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Dongfeng Chinese has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Dongfeng Chinese 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.
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. Dongfeng Chinese 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Dongfeng Chinese can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Dongfeng Nissan's Venucia (B) 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 Dongfeng Nissan's Venucia (B) 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 Dongfeng Nissan's Venucia (B) 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 Dongfeng Nissan's Venucia (B) 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 Dongfeng Nissan's Venucia (B) 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 Dongfeng Chinese needs to make to build a sustainable competitive advantage.
