Running head: NISSAN SWOT ANALYSIS 1

Nissan SWOT Analysis

Yahaira Flatts

Southern New Hampshire University

April 26th, 2019

NISSAN SWOT ANALYSIS 2

Nissan SWOT Analysis

Background Information

Nissan, whose headquarters are in Nishi-Ku, Yokohama, is one of the leading

multinational automobile producers based in Japan. Founded in 1911, the Nissan company is

engaged in initial planning, development, manufacture, and marketing for automobile machines

and their repair parts across the whole world. The Company has an employee capacity in the

range of 150,000 ("Nissan Global", 2016). Its production line and boasts of several brands such

as Datsun, Infiniti, and in-house performance parameter control devices named Nismo. Nissan's

core values are based on its visionary desire to enrich people's lives by interlinking the

customers, partners, shareholders, employees, and the world at large by fostering trust among

these entities. To achieve its vision, in its daily engagement, the Company strives to provide

peculiar innovative automobile goods and services that offer excellent values to all parties of

interest. SWOT analysis for Nissan Company will be discussed.

Key Factors

Company Name Nissan Motors Limited

Headquarters' (head office) Nishi-Ku, Yokohama-shi

Kanagawa 2208686, Japan.

Phone address 81 45523 5523

Fax address 81 45 523 5770

Website http://www.nissan-global.com

Revenue turnover (JPY Mn) 9,409,026

Employees Range of 150,000

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SWOT Analysis

Nissan Company is wholesomely engaged in the whole process of planning,

manufacturing, strategizing, and advertising its automobile equipment, forklifts, and marine,

automotive products. Due to its strong research abilities and market strategy development

capability, the Company has built a wide range of vehicle calibers with an innovative

technological hedge, hence enhancing its competitive index. Nevertheless, due to the increase in

pricing competing and unpredictable market dynamics, it is inevitable to lower gross vehicle

sales and increase inventory hence resulting in fiscal pricing of its products due to lack of

monopoly.

Below is the SWOT matrix of Nissan limited company:

STRENGTHS WEAKNESSES

1. Well organized research capability

and development drive.

2. Several brand portfolios.

3. Different geographical markets.

4. Strong fiscal-market performance.

1. Frequent product retraction leading to

weakened public image.

2. Management issues.

3. Poor branding.

4. Deeming home brand value.

OPPORTUNITIES THREATS

1. Re-furbishing of the Datsun brand

2. Impressive outlook for the global

market.

3. Zero-emission technology focus.

1. The high global market competition.

2. Japanese Yen appreciating concern.

3. Increase in production cost due to

stringent environmental regulations.

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4. Untapped markets. 4. Unpredictable natural disasters

Strengths

Well Organized Research Capability and Development Drive

Nissan Company is well versed in its research and development drive capabilities. The

Company has invested considerably high amounts of its return revenues towards research

activities, which will ensure it has a market edge over its competitors. Ideally, in the year

financial year 2018, a financial investment from sales profits of around 54,000 million dollars

was geared towards research and development activities which marks a 7.2% of the total fiscal

revenues ("Nissan Global", 2016). Some of the facets the Company focuses on in its research

drive include information technology, the safety of automobile products, environmental

friendliness, and product manufacturing.

As a result, the Company has been able to invent several innovative categories of the

product like electric cars and hybrid fuel cell technologies which are eco-friendly. In 2009,

Nissan unveiled Nissan LEAF which is still a leading electronic vehicle product at the global

stage. Besides, Nissan has unveiled and commercialized other electronic oriented automotive

such as e-NV200 and the Infiniti van sedan concept ("Nissan Global", 2016). Thus, a strong and

formidable research front has helped the Nissan Company to remain upfront in the automotive

industry with new innovative technologies that augment its competitive fortitude.

Several Brand Portfolios'

Even though Nissan Company is majorly an automobile company, its product portfolio

ranges across different fields. In addition to automobiles, the Company has diversified its

production sphere by inventing forklift's, marine equipment, and spare parts. Some of the most

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common fabricated car models include, zero emissive automobiles, sedans, sport utility vehicle,

wagons, crossover vans, heavy and light commercial vehicles. ("Nissan Global", 2016) Besides,

the Company uses different brand names to market its products such as Cube, Titan, X-trail,

Maxima, Lafesta, Rogue, Leaf, and Micra. Moreover, its forklift market sales network span

across more than 80 countries across the globe making Nissan a global brand which ensures it

cuts through different economies of the world.

Heterogeneous Geographical Market

Nissan Company has a broad geographic base, with its manufacturing frontiers set in

more than 20 countries ("Strategic Management Insight"). In addition, more than 160 nations

have access to their products and services resulting in Nissan being one of the key players in the

global economic matrix due to its access to major continental markets. Hitherto to this, revenue

overturns have been diversified across the globe resulting in increased financial returns. In turn,

this cushions the Company from unfavorable economic conditions in some markets, resulting in

the Company enjoying a stable returns scale in both emergent and mature markets.

Strong Fiscal-Market Performance

Over the past few years, Nissan Company has witnessed consistent fiscal performance.

For example, in 2012, the Company's financial revenue overturns increased by a margin of 12%

from 95,243 million dollars to about 120,000 million dollars. Also, the gross operating cost grew

by a margin of 33% while the net income trebled to about 537,000 million dollars ("Strategic

Management Insight"). As a result, a robust financial return revenue enhances the operational

efficacy and strategic positioning apart from fostering growth.

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Weaknesses

Frequent Product Retraction Leading to Weakened Public Image

Nissan Company has issued several product retractions, which in turn has declined its

public image. Over the years, several brands such as Altima sedans, pathfinder, Xterra, and

frontier have been recalled due to their inability to meet specific design demands, for instance,

toughness and durability. In 2012, Nissan Company recalled the juke brand due to un-complete

welding in its design ("Strategic Management Insight"). Earlier in 2011, more than 30,000 Sentra

cars were retracted from the market due to a faulty design in their battery system that could cause

the engine to stall ("Strategic Management Insight"). Further, in the same year, Nissan recalled

120,000 juke crossover SUVs due to a faulty door locking system. Continuous and significant

product retraction like these deter the Company's public image and reduce customer's confidence

in Nissan's products.

Management Issues

Nissan Company has been rocked with financial scandals over the recent past. The arrest

of Carolos Ghosn, the chairman of the Company, oversea dal, has weakened the Company's

corporate image and governance structure. The capture of Carolos Ghosn has revealed several

struggles and internal disputes within the Company's board of directors ("Strategic Management

Insight"). As a result, the relationship between the Company and its internal partner organs like

Renault weakened. Despite several measures being put in place to overcome these challenges,

Nissan Company has a long way in terms of global corporate governance.

NISSAN SWOT ANALYSIS 7

Poor Branding

Due to inferior marketing and advertisement strategies the Nissan Company has suffered

poor brand awareness across the world. In 2015 alone, the Company has utilized more than 3 US

billion dollars in its advertisement drive ("Strategic Management Insight"). Nevertheless, after

carrying out a fiscal audit of the impact of the advertisement, the money spent couldn't be

substantiated, when compared to equivalent market matrix. Nissan is not considered among the

top five automotive brands implying that there is unfavorable brand imaging across the world.

The Decline in Home Brand Value.

Over the recent past, Nissan's sales have gradually reduced in Japan. Furthermore, due to

subsequent product recalls, people in Japan have mostly lost faith in the brands' durability and

quality features ("Strategic Management Insight"). Research by NTH in japan shows that these

drops translate to about 300 million US dollars loss annually.

NISSAN SWOT ANALYSIS 8

Opportunities

Re-Furbishing of the Datsun Brand

In a bid to enter the ultra-low-cost car design segment Nissan Company has re-launched

the Datsun brand. Ideally, this brand has been re-introduced in wider market scopes from

Indonesia, Russian, India, and African to meet the cost demand curve of medium earners. By re-

introducing cheaper car brands, Nissan aims at penetrating fast-growing markets marked by

middle-income earners ("Strategic Management Insight"). In India and Russia, Nissan has a

market share of about 43% and aims at increasing its influence in emerging markets ("Strategic

Management Insight"). Therefore, the re-launching of cheaper car brands has presented Nissan

with an opportunity to grow its market influence in the automotive industry.

Impressive Outlook for the Global Market

Over recent years, the introduction of new cars into the global market is marked by

moderate growth. Market dynamic forecasts suggest that in four years, this growth will increase

in repeated measures due to the introduction of cheaper cars into the automobile business

("Strategic Management Insight"). With an anticipated CACR of 9.2%, the market revenues are

expected to shift from 1,430 million dollars to around 2,150 million dollars ("Strategic

Management Insight"). Each year Nissan introduces new brand car models that serve to attract a

considerable amount of the global revenue share. These models include a fully redesigned Nissan

Latino, Venucia R50 car, new Serena S-hybrid in japan ("Strategic Management Insight").

Furthermore, at the Tokyo auto salon exhibition, Nissan introduced the Nismo car model, which

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is a unique high-performance automotive machine. Therefore, the sharp public image in addition

to refurbishing and re-launching new automotive models each year provides Nissan with an

opportunity for global growth in the automotive industry.

Zero-Emission Technology Focus

Nissan Company is one of the largest producers of eco-friendly cars with its research and

development drive focused on innovating automobiles with zero emissions. In the Company's,

drive to ensure the stability of the market structure of the electric vehicles, Nissan has signed

several agreements amounting to 60 contracts around the world to prepare markets for hybrid

electronic cars ("Strategic Management Insight"). In its development strategy, Nissan has

launched several eco-friendly brands such as Nissan LAEF 2012 and an all-electric premium car

Infiniti. Nissan Company plans to manufacture and sell over 1.5 million hybrid electronic

vehicles yearly in a bid to breach the demand gap; balance consumer needs and satisfy pre-

existing regulations. Therefore, Nissan Company s able to diversify its product portfolio

globally, as a result of its investment in zero emissive technologies.

Untapped Markets

African countries present some of the emergent economies. With the rise in the number

of middle-income earners, the desire to own automobiles is going to increase. Nissan Company

has set different up different market divisions in African countries like Kenya and Nigeria, which

boasts of massive economic growth in the recent past ("Strategic Management Insight"). The

Company has also made efforts to establish its market influence in other upcoming automobile

markets like Mexico, Indonesia, and Brazil.

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Threats

The high global market competition.

There is high competition in the automotive world. Companies such as Toyota Motors,

Suzuki motor, general motors, Volkswagen, Ford Company, Yokohama motors hand Chevrolet

among others, foster a severe competition in the automobile markets (Tukdeo, 2015). Ideally,

this competition is expected to intensify as more companies and world economies move towards

globalization and consolidation of economic resources in the general worldwide automobile

industry. Several factors influence global industrial competition in the automotive sector include

brand qualities and features, innovation and development timelines, and product market prices.

Reliability and durability, safety and security, fuel cost and consumption capacity, customer

service delivery, and product payment terms. As a result, of increased market competition,

general market sales have gone down with an estimated increase in inventory cost for the Nissan

Company. Furthermore, this has increased pricing pressure for the Company. To remain

economically viable and competitive in the automotive market, the Company has occasionally

lowered the prices of its products, hence influencing its financial condition.

Japanese Yen Appreciating Concern

Nissan Company offers its services in more than 120 countries around the world with its

manufacturing base in over 20 countries. Besides, Nissan Company procures and purchases its

raw materials from different countries that have different tax rates. Since the Company is

exposed to different economies, it is bound to experience fluctuations in the forex exchange

markets against the Japanese Yen. Generally, since the total yearly revenue overturns are

consolidated in Japanese yen, its appreciation against other worldwide currencies immensely

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affects their fiscal results at the end of the year (Tukdeo, 2015). The company’s competitiveness

is adversely affected when the money of the countries where their production plants are located

appreciates. Furthermore, the valuation of the Nissan Company may be negatively affected if the

Japanese Yen appreciates against the US dollars due to adverse material control.

Increase in Production Cost Due to Stringent Environmental Regulations

Nissan Company operated within different environmental jurisdictions across the world.

Several countries have set various statutory measures to regulate the level of atmospheric

emissions from companies, fuel consumption and pricing, noise levels, safety, and

conduciveness of its manufactured commodities. For instance, in Japan, there exist several

regulations such as, the air pollution statutory law, road usage law, and total emission reduction

of nitrogen oxides from vehicles that regulate automobile emissions (Tukdeo, 2015). Similarly,

in the United States, the clean air act protection agency directs environmental arms to enforce air

quality standards by monitoring and controlling emissions from automobiles.

Furthermore, these regulations are subject to change hence becoming stricter. Thus, the

measures adopted across different regions to control the level of atmospheric emissions can

result in increased production cost for the development, testing, manufacture, and operation of

Nissan automobiles. Further, this affects the total cost of operating margins for the Company.

Unpredictable Natural Disasters

Nissan Company has production facilities across more than 20 countries worldwide (Tukdeo,

2015). Due to the different weather conditions experienced across the world, Nissan's

manufacturing centers are prone to experience natural disasters such as earthquakes, heavy rains.

("Nissan Global", 2016) As a result, the manufacturing, processing, and marketing of the

Company's products are majorly affected.

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Prioritized Listing: Exploitable Internal Strengths

Well Organized Research Capability and Development Drive

Due to the massive technological advancements in the automotive industry, research and

development are one of the significant facets the Company can exploit. The automotive world is

undergoing rapid innovations and events which are geared towards achieving an eco-friendly

world. As a result of investing in research and innovation, Nissan has become one of the most

significant players in the electronic vehicle production. Furthermore, due to the Company's

extensive research, new hybrid technologies have been introduced into the automobile industry.

These technologies include the development of light materials with high formidability and high

tensile strength, leading to an increase in fuel consumption efficiency. Thus, if Nissan company

is to remain viable and competitive in the automotive industry, research, innovation, and

development should be its highest priority.

Several Brand Portfolios'

Nissan Company produces a range of products that span from automobiles, forklifts,

marine equipment's and their spare parts. As a result, the Company has been able to tap into

several markets across different domains. Therefore, Nissan has a massive capacity to diversify

its line of production even further due to its robust production capacity and financial capabilities.

Broad Market

Due to flexibility in their products, Nissan has been able to breach several market gaps.

Nissan has expanded its network base across China, Mexico, India, South America, Europe, and

Africa. There are still more untapped markets across the world which the Company can exploit.

NISSAN SWOT ANALYSIS 13

Prioritized Listing: Weaknesses to Mitigate

Frequent Product Retraction Leading to Weakened Public Image.

Nissan Company has recalled several brands of automobiles as a result of faulty design

specifications. As a result, the Company's public image has weakened over time, with customers

losing confidence in the brand. For the Company to remain afloat, more emphasis should be put

on the design and testing of the automobiles before being unveiled into the market.

Management issues.

Management issues can be resolved by employing new emergent ways of management,

which will result in improved corporate image.

Poor branding.

Improving the quality of the advertisement and using new methods of public awareness

can increase the sales of the Company by creating a rapport with the customers.

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Final Company Assessment

As revealed in the SWOT analysis above, Nissan Company enjoys several internal

strengths such as a well-organized research capability and development drive, several brand

portfolios’, geographical markets' broad, and strong fiscal-market performance. When these

strengths are exploited, Nissan Company will continue to serve the automotive industry on a

large scale across the globe. Nevertheless, the Company has several internal weaknesses such as

product retraction leading to weakened public image, management issues, poor branding, and

deeming home brand value which, can be mitigated. Besides, Nissan Company is exposited to

several opportunities which, as well, can be exploited. Thus, Nissan Company will remain to be

a globally competitive brand in the automobile industry.

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References

Nissan Global (2016). Alliance Facts & Figures: Retrieved from

http://www.nissanglobal.com/EN/DOCUMENT/PDF/ALLIANCE/HANDBOOK/2016/

Bookle Alliance2016_GB.pdf

Strategic Management Insight (2016). Ford SWOT analysis, 2016. Retrieved from

https://www.strategicmanagementinsight.com/swot-analyses/ford-swot-analysis.html.

Tukdeo, R. (2015). International business assessment of Renault/Nissan, Japan.