Case Study Description of Nissan Motor Co. Ltd.--2002
Carlos Ghosn, a former executive vice president of Renault, became the COO of Nissan Motor Co., a troubled auto company in Japan when Renault bought 38% of the company in 1999. This case deals with how Ghosn turned the company around. Examines in considerable detail how he went about successfully energizing and mobilizing the demoralized employees after a decade of failed efforts. Having successfully transformed itself, the company faces a series of major challenges in the global marketplace.
Swot Analysis of "Nissan Motor Co. Ltd.--2002" written by Michael Y. Yoshino, Masako Egawa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ghosn Renault facing as an external strategic factors. Some of the topics covered in Nissan Motor Co. Ltd.--2002 case study are - Strategic Management Strategies, Globalization, Leadership, Leadership development, Mergers & acquisitions, Organizational culture and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Nissan Motor Co. Ltd.--2002 casestudy better are - – there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, 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, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, increasing commodity prices, etc
Introduction to SWOT Analysis of Nissan Motor Co. Ltd.--2002
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nissan Motor Co. Ltd.--2002 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ghosn Renault, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ghosn Renault 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.--2002 can be done for the following purposes –
1. Strategic planning using facts provided in Nissan Motor Co. Ltd.--2002 case study
2. Improving business portfolio management of Ghosn Renault
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ghosn Renault
Strengths Nissan Motor Co. Ltd.--2002 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ghosn Renault in Nissan Motor Co. Ltd.--2002 Harvard Business Review case study are -
Highly skilled collaborators
– Ghosn Renault 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.--2002 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Ghosn Renault 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 Michael Y. Yoshino, Masako Egawa 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.
Innovation driven organization
– Ghosn Renault is one of the most innovative firm in sector. Manager in Nissan Motor Co. Ltd.--2002 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Ghosn Renault 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 Ghosn Renault is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nissan Motor Co. Ltd.--2002 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Ghosn Renault digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ghosn Renault 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.
Low bargaining power of suppliers
– Suppliers of Ghosn Renault in the sector have low bargaining power. Nissan Motor Co. Ltd.--2002 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ghosn Renault to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Leadership & Managing People field
– Ghosn Renault 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 Ghosn Renault in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Ghosn Renault is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Ghosn Renault 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.--2002 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Ghosn Renault has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nissan Motor Co. Ltd.--2002 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.
Operational resilience
– The operational resilience strategy in the Nissan Motor Co. Ltd.--2002 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 Ghosn Renault in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Nissan Motor Co. Ltd.--2002 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nissan Motor Co. Ltd.--2002 are -
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 Ghosn Renault supply chain. Even after few cautionary changes mentioned in the HBR case study - Nissan Motor Co. Ltd.--2002, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ghosn Renault vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nissan Motor Co. Ltd.--2002 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 Ghosn Renault has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Ghosn Renault, firm in the HBR case study Nissan Motor Co. Ltd.--2002 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Nissan Motor Co. Ltd.--2002 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 Ghosn Renault 's lucrative customers.
Lack of clear differentiation of Ghosn Renault products
– To increase the profitability and margins on the products, Ghosn Renault needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Nissan Motor Co. Ltd.--2002 HBR case study mentions - Ghosn Renault 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.
Increasing silos among functional specialists
– The organizational structure of Ghosn Renault is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ghosn Renault needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ghosn Renault to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Nissan Motor Co. Ltd.--2002, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nissan Motor Co. Ltd.--2002, is just above the industry average. Ghosn Renault 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nissan Motor Co. Ltd.--2002, in the dynamic environment Ghosn Renault has struggled to respond to the nimble upstart competition. Ghosn Renault has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Ghosn Renault 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.
Opportunities Nissan Motor Co. Ltd.--2002 | 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.--2002 are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Ghosn Renault 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.
Using analytics as competitive advantage
– Ghosn Renault 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 Motor Co. Ltd.--2002 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ghosn Renault to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Ghosn Renault can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Ghosn Renault has opened avenues for new revenue streams for the organization in the industry. This can help Ghosn Renault to build a more holistic ecosystem as suggested in the Nissan Motor Co. Ltd.--2002 case study. Ghosn Renault can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ghosn Renault in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ghosn Renault 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.--2002, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Ghosn Renault can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nissan Motor Co. Ltd.--2002 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ghosn Renault can use these opportunities to build new business models that can help the communities that Ghosn Renault operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Developing new processes and practices
– Ghosn Renault can develop new processes and procedures in Leadership & Managing People 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ghosn Renault is facing challenges because of the dominance of functional experts in the organization. Nissan Motor Co. Ltd.--2002 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.
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 Ghosn Renault in the consumer business. Now Ghosn Renault can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Ghosn Renault 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 Leadership & Managing People segment.
Better consumer reach
– The expansion of the 5G network will help Ghosn Renault to increase its market reach. Ghosn Renault 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.
Threats Nissan Motor Co. Ltd.--2002 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.--2002 are -
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. Ghosn Renault needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Ghosn Renault has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ghosn Renault needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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 Ghosn Renault business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ghosn Renault 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 Motor Co. Ltd.--2002 .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ghosn Renault can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Ghosn Renault 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 Leadership & Managing People industry regulations.
Increasing wage structure of Ghosn Renault
– 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 Ghosn Renault.
Consumer confidence and its impact on Ghosn Renault 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 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.
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. Ghosn Renault 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ghosn Renault with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Ghosn Renault in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Ghosn Renault.
Weighted SWOT Analysis of Nissan Motor Co. Ltd.--2002 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.--2002 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.--2002 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.--2002 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.--2002 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 Ghosn Renault needs to make to build a sustainable competitive advantage.
