Nissan’s success story

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Nissans success story

Elgun seyidovBusiness administrationNissans success storyBeginning of nissanMasujiro Hashimoto founded theKwaishinsha Motor Car Worksin 1911. In 1914, the company produced its first car, called DAT

Founding Nissan motorIn 1934, Yoshisuke Aikawa separated the expanded automobile parts division of Tobata Casting and incorporated it as a new subsidiary, which he namedNissan Motor Co., Ltd.In 1935, construction of its Yokohama plant was completed. 44 Datsuns were shipped to Asia, Central and South America.

In 1931,DAT Jidosha Seizo became affiliated withTobata Casting, and was merged into Tobata Casting in 1933. As Tobata Casting was a Nissan company, this was the beginning of Nissan's automobile manufacturing. The shareholders of the new company however were not enthusiastic about the prospects of the automobile in Japan, so Aikawa bought out all the Tobata Casting shareholders.3Foreign expansionThey first showed cars at the 1958 Los Angeles Auto ShowIn 1960s, Nissan continued to improve their sedans with the latest technological advancements and chic Italianate stylingBy 1970, Nissan had become one of the world's largest exporters of automobiles

Oil crisisIn the wake of the1973 oil crisis, consumers worldwide (especially in the lucrative U.S. market) began turning to high-quality small economy cars. To meet the growing demand, the company built new factories in Mexico, Australia, New Zealand, Taiwan and South Africa.

Nissan's initial assembly plant, inSmyrna, Tennessee, at first built only trucks such as the720andHardbody, but has since expanded to produce several car and SUV lines, including the Altima, Maxima, Xterra, Pathfinder andLEAFall-electric car.5Renault-nissan allianceIn 1999, with Nissan facing severe financial difficulties, Nissan entered an alliance withRenaultof France.

The situationNissans problems before the alliance Company was falling apart $ 23 billion euros in debtInability to establish a purchasing policy or a system of relations with suppliers They were in case of loosing their identityIncreasing debtDeclining market shareHigh cost of productionJapanese recession

The situationThe reasons of the problemsRecession in early 90s in JapanThere was complacency and a lack of urgency in the cultureThere was no cross-functional and cross-regional communicationThe design of the cars was out of touch with the marketA high degree of bureaucracyThere was an emphasis on engineering culture rather than managerial culture and promotions Sticking in the Keiretsu model

Carlos ghosnBorn on 9th March, 1954, in Porto Bello, Brazil Joined Renault in 1996 as Executive Vice President of Advanced R&D, Manufacturing and PurchasingAppointed as COO of Renault in 1998In June 2001, Carlos Ghosn was named Chief Executive Officer of Nissan.In May 2005, Ghosn was named President of Renault. He was appointed President and CEO of Renault on 6 May 2009.Under CEO Ghosn's "Nissan Revival Plan" (NRP), the company reachedto record profits and a dramatic revitalization of its modelsHe is also a director of Alcoa and AvtoVAZ.

Swot external analysisAutomakers face legislation increasingly restrictively on the fuel consumptionMarket has become hyper-competitiveHeavy investment in R&DStrategy of cost becomes the major issue

Swot internal analysisNissans weaknesses are only due to a bad optimization from their resources and skills

The goalsCombine and utilize the resources to achieve economies of scaleUsing each others complementary strengths to improve the efficiencyProvide distinct brand name

Phases of agreementFirst phaseIn 1999, Renault took a 36,8% stake in Nissan for about 4.4 euros.3 executive directors was from Renault joined Nissan, and Carlos Ghosn was appointed as COO.Second phaseOn May 2002, Nissan took 15% stake in Renault, but they didnt have any voting rights.Renault-Nissan B.V. was formed.Carlos Ghosn strategyThe biggest challenge- cultural differences between companiesIndividual approach Closed 5 manufacturing factoriesLayoff 20000 employeesReduce Nissans own purchase costs and turn it global suppliersMaking English as a common work languageNissan Revival PlanCarlos ghosn

You have to be careful that at the end of the day, by trying to do more in the short-term you don't end up destroying what had been delivering so much result on the mid-term and long-term (Carlos Ghosn)The end