Nissan strategic analysic

Brief: In the 1990s, Nissan’s debt amounted to more than $11 billion and lost $5.6 billion.
Nissan formed an alliance with French carmaker Renault in 1999. In March 1999, Renault
purchased 37% of Nissan's stock for $5.5 billion and effectively took over Nissan.

1/ Describe the generic strategy (Michael Porter framework: Cost leadership vs

differentiation, (cost or differentiation focused) ) that Companies follow ?
Nissan corporation was used strategy Differentiation and Cost leadership

Strategies helps nissan overcome challenge.

Broad Target on Cost Leadership and Retrenchment Stratergic:
 Carlos Ghosn, then second-in-command at Renault and dubbed “Le Cost Killer”.
 Ghosn cut more than 20,000 jobs, abandoning unprofitable car models, cutting adrift
suppliers, and shutting down factories.
 Nissan quickly returned to profit. maximize profits on cars.
Broad target on Differentiation:
 Improving car series to make a difference, release trendy new models.
 Four of these teams will focus on the following areas: “Product planning and related
strategy”, “Powertrains”, “Vehicle Engineering”, “Purchasing and logistics”.
Growth, Diversification Strategies:
 Marketing and sales in different geographical areas: Japan, Asia-Pacific, North and
Central America, South America, Europe, CIS -Turkey / Romania / North Africa, the
Middle East and sub-Saharan Africa.
Connective Strategic:
 The strategic alliance between the French and the Japanese corporations joint product
development, purchasing, quality and manufacturing and to combine complementary
firms.
 Renault bought 36.8% of Nissan's outstanding stock for $3.5 billion pending court
approval and Nissan vowed to buy into Renault when it was financially able.
 Nissan took a 15% stake in Renault, which in turn increased its stake in Nissan to 43.4%.
 The links between Renault, Nissan and Mitsubitshi allow each partner to derive
maximum benefits from each partner’s strengths. These strengths have been carefully
determined after eight months of joint assessments and will improve the competitiveness
of this new partnership.
2/ What are the challenges and problems of Companies before the turnaround strategy?
 Nissan’s debt amounted to more than $11 billion and lost $5.6 billion
 The employees’s spirit isn’t so high
 Design and modern that around late 70s and 80s became very commonplace and blend
looking.
  Need to increase productivity and profits they flooded the market with series of bland and
forgettable sedan that was aimed at the family market they were pratical cars but walk
away form the sleek design that company was established it reputation on first of all.
 There no association and through between regions, branches around the world. Marketing
unimaginative, excess staffing and over production parts, disputes between management
and unions
3/ Identify and describe the Corporate strategy that Brands/ Companies have used to
survive. What are the strategies| ways in which companies can attain the turnaround
strategy?
 Ghosn cut more than 20,000 jobs, abandoning unprofitable car models, cutting adrift
suppliers, and shutting down factories.
 Nissan had many no needed investment so that was why Carlos Ghosn started
dismantling their no useful investments. (their investment is about $4m)
 Nissan’s problems weren’t just financial, however. Far from it. Their most fundamental
challenge was cultural. Like other Japanese companies, Nissan paid and promoted its
employees based on their tenure and age. The longer employees stuck around, the more
power and money they received, regardless of their actual performance. So he decided to
ditch the seniority rule. If you do well in your jobs and your skills is g ood, you will get the
higher position and salary.
 Another deep-seated cultural problem is a culture of blame. If the company did poorly, it
was always someone else’s fault. So at Nissan, when something goes wrong, people now
take responsibility for fixing it.
 Mobilizing Cross-Functional Teams: a group of people with different functional expertise
working toward a common goal.[1] It may include people from finance, marketing,
operations, and human resources departments. Typically, it includes employees from all
levels of an organization. By contrast, working together in cross-functional teams helps
managers to think in new ways and challenge existing practices. Together, they addressed
all the key drivers of Nissan's performance.
 The CEO made his employees feel they can help steer the ship. He allowed them to join
in the voices to help the company. He boosted a volunteerism of employees.
After having stabilized:
 They modernized Nissan’s new cars: like Model Leaf (electric car), Versa, Maxima,...