One of the most successful and wealthy industries globally is the Automotive industry which includes companies and their activities that have to do with the producing of motor vehicles (main parts such as bodies-engines). The history of this specific industry differs comparing it with the history of other industries because of the effects it had on the global economy throughout the 20th century. Despite the fact that the industry’ s origins was in Europe in the first half of the century, it was dominated by the U.S and later on Japan and countries of west Europe developed and became chief manufacturers and exporters, giving them the chance to develop their economies. Nissan is one of the largest companies in the Automotive industry. The company was founded in 1933 named as Jidosha Seico Co., Ltd and was renamed the following year after merging with another Japanese producer, the new name was Nissan Motor Company, Ltd. The company produces and sells over 3.7 m cars in more than 180 countries worldwide. It is amongst the three biggest companies in Japan and in the five largest in the global market, producing not only passenger cars but a wide variety of vehicles to. Nissan by developing a unique strategic plan is aiming to develop and increase further their market share in order to be more successful in the future not only in the domestic market but in the global market too. As we can see Nissans market share is shown in the figure below.
2.1 GENERAL ENVIROMENT
2.1.1 SWOT ANALYSIS
According to Grant, M.(2002), the allocation of the external and the internal factors of a company is commonly used for analyzing business strategies. The SWOT analysis (strengths-weaknesses-opportunities-threats) intends to point out the most important external and internal factors that are essential for the organization to accomplish their objectives. This analysis groups important information into to major categories, the external factors (opportunities-threats) and the internal factors) strengths-weaknesses). A SWOT analysis for Nissan Ltd. will be carried out below:
According to business Week Global Brand Scorecard Nissan is the fastest growing automotive brand. The companies equity valued in 2006 was over 3000 million dollars. The strength of their brand gives them the competitive benefit towards their rivals and can prevent them from developing faster than them The strong financial position of the company is one of their main strengths. Nissan experienced a huge growth between the years 2002 and 2006 and that gave the opportunity to compete in the European market despite the markets saturation. Nissans financial growth is shown below (figures are in USD Millions): - Source: Nissan annual report 2005-06
Analysists believe that diesel market is going to increase rapidly in Europe in the next few years and by the reason that Nissan’s lack of diesel technology conducts one of the companies’ weaknesses. This fact, lead us to the fact that diesel accounts only the 0.4% of the vehicles that are sold in Japan and this kind of technology is very increasing and already more developed than Japans in Europe, Nissan will be confronted and face problems when wanting to dominate the European Market, as it is referred by Rowley, (2006). A second weakness of Nissan is that they depend to much on markets away from their headquarters. Over half of their production units are sold abroad and less are sold at home. The risk that is taken by the company is that by depending on markets of foreign countries they might face a decrease in their revenues because of financial dealings (currency ups and downs) or the different government policy changes. Opportunities:
Because of Nissans headquarters being in Japan an opportunity for further expansion is automatically born. Because of employees gaining higher payments the demand for luxury items such as cars has increased rapidly. In the broader Asian market but in China...