Case Analysis : How Nissan achieved its success.

(Analysis on A Nissan Case Study)

 Prepared by

Jeramie G. Alag

STI Academic Center

Cubao, Quezon City

Summary

The competition in automotive industry is existing for decades now. Many companies
and organizations launch new innovations for the design, manufacturing, marketing and
selling of motor vehicles. This industry known to be one of the world’s largest economic
sectors of revenue, except from the industries dedicated to vehicle maintenance,
deliveries, repair and fuel refilling.

Automobile is a primary mode of transportation for countries with developed

economies. Together with oil and fuel companies they raise a country’s economy. The
demand for these industries are growing especially in countries like Brazil, Russia, India
and China. It is predicted that the emerging auto markets will buy more cars than the
existing markets which already bought previous models.

In this kind of scenario, it can bring struggle not only to the consumers but also to the
companies. There is a huge risk that could lead to over production or decline of the
market. There are many companies competing to sell and produce products according
to the market’s demand that is why a strategy must be formulated in order for these
companies to survive.

Nissan Motor Manufacturing (UK) Ltd, or NMUK is car manufacturing plant in

Sunderland, England. It is a operated by the European division and is a subsidiary of
Japanese car manufacturer Nissan. With the land area of 300 hectares which was a
former airfield, it is said to be UK’s largest car manufacturing plant founded on 1984.
NMUK has 7000 employees contributing on the massive annual production of cars that
made them recognized as Europe’s most productive plant for the past seven (7) years.

After the huge success of their main factory that was dated back in 1986 when they
first launched their Bluebird Model, NMUK continued to produce other models. On
1991 they launched their first and official car, P10 Primera which turned the plant’s first
profit of 18.4 million euros. Last 2003, NMUK produced 331,924 vehicles, and 70% of
the output was exported worldwide. The reason behind the success of Nissan Motor
Manufacturing (UK) Ltd, or NMUK is no miracle. They implemented what they think
were the best strategies that could help them attain there goals. From the location,
production and management of employees, NMUK made sure that they know what
they are doing.
They chose Sunderland as a location for the car plant for its easy access to good roads
and rail links to all major UK areas. The fact that the site was also near the Port of Tyne
makes it easy to import vehicles to UK and to export to possible markets.
Manufacturing was already a part of tradition in the area which makes it easy to find
skilled workers for the company. Government also plays a role in this set up by
providing financial and incentives to manufacturers that could provide employment
opportunities to the locals.

Under NMUK are four (4) other sites responsible in keeping NMUK one of the most
productive subsidiaries of Nissan Motor Company.

1. Nissan Design Europe (NDE) - This Nissan subdivision is responsible for detailing and
designing product not only for the European Market but also for the global design

2. Nissan Technical Centre Europe (NTCE) - This Nissan subdivision in Cranfield, is one of
Nissan’s development centers that focuses on the engineering performance and
classification of product for its market. It also concentrates on European customers
requirements.

3. Nissan Motor (GB) Ltd (NMGB) - Stands as the sales and marketing division for UK

4. Lutterworth Parts Distribution Centre - This is an alliance between two companies

Nissan and Renault. It is responsible in distribution and storage facilities. Renault is a
dealer routed throughout UK and South Ireland.

Altogether, these subdivisions or sites function as a whole to suffice the production of

the company. In this subdivisions are employees responsible for the work under three
(3) main areas of operation namely, the administration, maintenance and quality
assurance, direct manufacturing and assembly. To ensure that the flow of production
will go smoothly, NMUK requires its employees to undergo training and also by
practicing the open communication policy.

The strategy that made a huge impact on NMUK’s success is their use of Total Quality
Management (TQM). Nissan believes that “Going for quality” emphasizes “building
good quality in” rather than “inspecting poor quality out” which means, by making sure
that the quality of the product is good they could avoid throwing out poor quality
output that was invested money on. In short, by applying this principle they can avoid
the risk of losing too much from the production.

Therefore, what Nissan did to their subsidiaries is an example of how people and
machines work together if there is an improvement culture.
S.W.O.T. Analysis

Strengths Weaknesses

*First to establish *Distance from main branch

*Location *Misunderstandings

*Flow of production *Riddance of Quality Control

*Highly trained employees

*Practice of improvement culture

Opportunities Threats

*Communications *New brands in the market

*Manufacturing as a tradition *Natural Calamities

*Government support *World war

Questions

1. Enumerate and describe, with examples, which critical components of total quality
management did Nissan use in its operations?

2. Research on Nissan’s vision and mission. How did they incorporated these in the
company?
3. What are the core values that can be seen in Nissan;s total quality management? Use
examples to defend your answers.

4. Describe how Nissan used just in time management to ensure quality in its products.

5. Based on the case, how does Nissan define quality?