Nissan Strategic Management Report

3777 WordsApr 7, 201216 Pages
1.0 INTRODUCTION 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…show more content…
On the 27th of march 1999 a unique business model was launched. Renault and Nissan combined their forces in an alliance that had important value the companies and by combining their resources they have succeeded in developing a more competent organization. The results of this alliance for Nissan was the reduce in productivity costs and in the negotiation power of their providers. Threats: The UK sterling is one of Nissans main threats. The constant currency fluctuations have forced not only Nissan but other companies such as Ford to make cuts in their workforces because of fear that Nissans productivity in particular could drop by 50% in years to come. Nissans Carlos Ghosn (2000) says that they cannot make a decision until they have some guarantees they can count on for future. Rising Commodity Prices: - Due to the economic expansion of China, changes in commodity prices could affect the costs incurred by Nissan. Over the past 12 months, the price of steel used in car production has risen by nearly 30% (London Metal Exchange, 2006). Nissan has taken steps to reduce the effect of rising steel prices; in 2000, Nissan began using hot dip zinc coated steel and converted to less expensive steel in 2002, which saved about $16 million per year (Nissan Motor Co., 2004). This however, has done little to reduce the upward pressure on vehicle costs and prices. As this increase in cost has been passed on to the consumer,
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