Target Costing: Nissan vs. Olympus

The last several years were also tumultuous for the U.S. auto industry. After dominating the market for decades, American automakers had grown complacent about product development. At the same time, rising gas prices and uncertainty about the economy caused consumer preferences to shift from SUVs to more fuel efficient vehicles. Foreign competitors entered the U.S. market offering more reliable, higher quality and more fuel efficient vehicles at a lower price and began to steal market share away from American automakers. In order to remain competitive, U.S. automakers need to focus on increasing production efficiencies and developing innovative product offerings. Firm Analysis

The initial results revealed that in order to reduce the production costs they needed to work with the customers to change some of the previous behaviors that increased the production costs. These changes included ordering behavior as well as reducing the demand for customized products. The data obtained also revealed that prior decisions could also affect the full implementation of the system. In this case, prior commitments did not allow the company to take the necessary steps to completely reduce the costs as suggested by data obtained from the

Nissan is guided by the corporate vision of enriching people's lives and contributes to the sustainable development of society through global activities. The company’s mission is to provide innovative and unique automotive products and services that deliver superior values to all stakeholders in alliance with Renault. As the world's leading automotive manufacturer, Nissan is also committed to providing solutions for human being. The company is committed to providing better, more valuable and sustainable mobility for all stakeholders - including customers, shareholders, employees and communities engaged in business activities. According to its business activities, Nissan not only create economic value, but also for the sustainable development of society to make a positive contribution.

With the increase of global competition, the manufacturers of vehicles in the US had been negatively

As any other industry, the automobile industry is not without its fair share of global challenges. In 1982, Honda opened the doors to its first US auto plant. Two years later, in 1984, Toyota entered into a “joint venture with General Motors called the New United Motor Manufacturing Inc., (NUMMI). Later, in 1989, the company launched its luxury division, LEXUS, creating a multinational approach to automobile manufacturing, with an increase in product sales soaring in the USA (Toyota Company History, (n.d.).

Ranked sixth out of the entire world, the United States is one of the leading car manufacturers (Cars). With today's assembly and productions lines, manufacturing of products and its availability to us has never been easier. Automotive production lines revolutionized the automotive industry, as well as American life. They made building cars more efficient. Because of the increase in efficiency, the cost to produce a car went down and when production costs were lowered, so was the retail price of the cars. “This price reduction meant more people could afford to buy a vehicle of their own” (How). As a matter of fact, automobiles are one of the prime examples of mass production within assembly and production lines. Automobiles are everywhere. In the year 2011 alone, 59,929,016 cars were produced around the world (Cars), and those numbers and continually rising. In 2012, for the first time in history, over 60 million cars passenger cars

These pressures require auto companies to make changes, this creates additional operational costs, costs to consumers as base costs rise and profitability levels need to be made to keep companies at profitable levels. Some customer segments, prefer styles of vehicles that have machine specifications not matching new models to meet emission standards, big engine muscle cares are an example of this, to big capacity personal trucks. These models may be available from overseas competitors resulting in loss of income and profitability as these customers switch to other imported brands. Producing a new model car is an expensive exercise with many resources required over a timer period to produce a prototype. Pressure from external sources to make unplanned changes introduce new costs that were previously unscheduled to meet lower producing emissions. Despite the high costs involved there is no guarantee the final product produced will be a success, as it still relies on customer acceptance and demand as well as competition from local and international competitors.

The new car product is the core of Autobytel’s automotive business. In a nutshell, Autobytel helps customers with making choices about the type of car they want to buy without the pressure of a sales force. Once a customer has determined the exact type of car they want to buy, the service then directs these motivated buyers to participating retailers. In essence, Autobytel has two customers, car buyers and car sellers and needs to work at pleasing both. In order to continue to attract more car buyers, Autobytel needs to focus its marketing and understand the marketing plan’s effect. Not only will this bring more interested

The auto industry has faced many challenges in the past years. The competition is now stronger than ever, all car manufacturers have been competing to be the number 1 in the market. At the same time, the growing concern of Global Warming has force the industry to reinvent itself and find ways to be more sustainable. Equally important, is the yearly advances in innovation that had made it harder to keep new vehicles up-to-date on the latest technology. For all this reasons, the car industry struggles to maintain customer satisfaction. In this essay, I will touch each one of the points on the challenges facing the American auto industry.

Updated technology is a mainstay in the automotive industry and the different players have come up with varying innovative ideas. According to a study conducted by J.D. Power and Associates in 2002 based on over 27,000 new vehicle buyers. The study showed that 60% of the buyers referred to the internet before making purchases. An additional 88% visited the auto websites before for a test drive. Technology has given rise to innovation that has set the companies apart

In early January 2012, Joseph Wierda, BMW’s X3 Product Manager, reviewed the latest sales numbers of the popular X3 Series compact SUV. He was, in particular, interested in the effects of BMW’s customization program called “Dream It. Build It. Drive It.” on both unit sales and overall profitability. This new integrated sales and marketing program allowed customers to create a fully customized BMW X3 SUV and have it delivered to their driveway in only a few weeks. The program scored some important points with the media. For example,

Nissan focuses on maximizing its auto manufacturing operations through flexibility and efficiencies by maintaining a

Along with other Japanese manufacturers, Nissan was successfully competing on quality, reliability and fuel efficiency. By 1991, Nissan was operating very profitably, producing four of the top ten cars in the world.Nissan management throughout the 1990s, however, had displayed a tendency to emphasize short term market share growth, rather than profitability or long-term strategic success. Nissan was very well known for its advanced engineering and technology, plant productivity, and quality management. During the previous decade, Nissan’s designs had not reflected customer opinion because they assumed that most customers preferred to buy good quality cars rather than stylish, innovative cars. Instead of reinvesting in new product designs as other competitors did, Nissan managers seemed content to continue to harvest the success of proven designs. They tended to put retained earnings into equity of other companies, often suppliers, and into real-estate investments, as part of the Japanese business custom of keiretsu investing. Through these equity stakes in other companies, Ghosn’s predecessors (and Japanese business leaders in general) believed that loyalty and cooperation were fostered between members of the value chain within their keiretsu.

process BMW had to launch a reengineering task force who was responsible for meet a bold target of for slashing product

The market introduction project of a new product is as important as its design project. When a company is budgeting for a new product project, it is fundamental to include the marketing expenses in the initial budget, thus, the company will not have future surprises. Dr. Levoy, in his article, The difference between efficiency and effectiveness, he explains that it may be a waste of time if a company has an entirely efficient manufacturing process, however, at the end is not effective, or does not achieve its objective, such as bringing more clients or selling a new product, (Levoy, B., 2011). This is the importance of a marketing project, the marketing professionals can sell ideas, products, services, anything that is marketable, and if a company is launching a product I believe that the goal is to reach the customers. Therefore, to understand well our plan for Fiat Chrysler and the launching of the new Jeep Wrangler Pickup Truck, we design the following schema to explain the plan details: 1. A fast explanation of the actual market and some challenges; 2. Explanation of the nature of the new product to be launched and its industry; 3. The marketing project to introduce the new product to the customers; 4. Explanation of how we will use the Total Quality Management - TQM tools to measure and control the marketing plan execution; 5. How FCA already applies TQM philosophy to achieve client satisfaction and how we can expand the use of TQM