Strategic Management: Macro Environment, Internal Environment, Porter’s Five Forces Model

This report discusses the macro environment and its impact on Nissan Company, internal analysis of the organization, and the application of Porter’s Five Forces model and strategic planning concepts.

Business Strategy

Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................3
Macro Environment.....................................................................................................................3
TASK 2............................................................................................................................................5
Internal environment....................................................................................................................5
TASK 3............................................................................................................................................7
Porter’s Five Forces model..........................................................................................................7
TASK 4............................................................................................................................................8
Strategic planning........................................................................................................................8
CONCLUSION................................................................................................................................9
REFERNCES...................................................................................................................................9

INTRODUCTION
Strategic Management refers to forming the strategies which helps the business in the
attainment of its mission and visions. Ever business or organization prepares the tactics in which
it prepares all the required strategies and the steps it will go to take for the achievement of their
objective. Strategic management is the management of strategies which organization uses. It is
also a framework in which the organization the activities of business conducts. For reference
purpose this report has taken an example of a company, Nissan. Nissan is a Japanese company
which deals in automobile industry. The company was founded in the year 1993 on 23
December. It has its headquarters in Nishiku city, Yokohama. The company sells its products
under the following name: Nissan, Datsun and Infiniti. In the year 2013, the company was a 6th
largest company for automobile manufactures. And in the year 2014, it was the highest selling
cars in North America.
This report discuss about the macro environment and its impact upon the Nissan Company. The
internal analyses are also performed of the organization to know about the internal strengths and
weaknesses about the same. This report also has applied the porter’s five force models and
concept related to strategic planning’s.
TASK 1
Macro Environment
Macro Environment is the factors which affects the operations and the activity of an
organization. Macro environment includes those factors which can affect the decision of any
business. All those factors which are included in macro environment are out of control of any
organization. These factors work independently and cannot get into the control in any
organization. Considering the macro environmental factors in decision making process is very
much vital. They form the base for decision. Any organization that has to enter into any new
market performs an evaluation of external or macro environment because it knows that they can
affect the business operations in a huge way.
Through the micro environment the organization can know most of the things like the taste and
preferences of the people living into the targeted market. Through this factor the organization
can provide those goods and services into the market which are according to the needs to people.
As the company Nissan is a multinational company and they have the operations centers at
various part of the world, the company has taken a good care for the legal rules and regulation all
these countries or the regions has and the Nissan follows all that very strictly. The macro
environment of any country or region can be analyzed through PESTEL analyses (Bharadwaj
and et. al., 2013). Pestel analyses is a framework in which the organization can evaluate the
external factors of the country. Pestel stands for political, economical, social, technological,
environmental and legal. All these factors helps the organization in reducing or eliminating the
risks which Nissan can face through them. The pestel analyses of Nissan company is as follows:

Political: Political factor are the factors which determines the degree of control of government
upon the companies. This factor includes the rules and regulation which is formed by the
government, some of them includes trade policies, corruptions, tax policies and the like. As in
the case with company, Nissan, it has to follow or obey the rules and regulation which are stated
by the government so that it can enter into that market. To enter and to sell the products of the
company the organization has to fulfill certain guidance that are considered as a mandatory thing
for any company to follow. There are some products which are not allowed by the government to
be sold into their market, for example the Nissan Company has a vehicle called Nissan Skyline
which is not permit by some countries as it may cause the road blockage or accidents. Apart from
this the company also has to fulfill the obligations which are stated by the states regarding the
pollution emissions from the vehicles produced by Nissan. The Nissan Company has to
manufactures the products in such a way that the pollution which is emitted by this vehicle is as
per the government guidance.
Apart from this the company Nissan tries its best to get enters into the market where the
government of that company is stable. The country where the government is unstable, the rules
and regulation forms by the government keeps on changing with the time that does cause some
problems to the people (Blackburn, Hart and Wainwrigh, 2013). But the state or the region where
the government is very much stable, there the rules and regulations also get stable which is
beneficial for the company. The company can focus upon other department or topic rather than
changing the policies and operations according to the new change regulations.
Economic factor: Economic factor tells about the economic situation and condition of the
country or the states. It includes employment rates, disposable income, GDP of country, fiscal
policy and the like. The Nissan Company analyzes the countries on the basis of the economic
situation and condition. The company enters into the market which comes under developing and
developed category. All the countries in which the organization has put their feet come under the
both category. Either they are developed economy or they are developing economy. The
company also set the prices of their products according to the disposable income of the country
people. If the country has the high disposable income the company would provide the products
of higher or elite prices also. Because they know that these prices can be afford by the country
where the people has the high disposable income.
Social factor: The social factor includes the taste, preferences, behavior, attitudes, lifestyles, and
the like. Through this factor the organization gets to know about the kind of products the
customers wants. The company Nissan has produced the products which are in too demand into
the market. Apart from this the company Nissan has also tries its best in which they have
produced the products for the every class group of the people and also the products for every
need has been covered up by the company (Buckley and Ghauri, 2015). The Nissan has the car
ranges for middle class person to high or elite class people. It also produces the car like SUV’s,
normal diesel and patrol cars and the etc. This has enable the company in gaining the market
share and growth.

Technological Factor: technological factor includes the factor like technology up gradation,
technology awareness and much more. In this fast changing technological world, it has become
very much essential for the Nissan to bring up the new and innovative products very often into
the market. As the company can bring the innovation and creation through its technology, it has
to invest much upon its R&D. the company has bring up the latest technology in which they have
manufactured the auto mobile which produces minimum pollution ot the emission of carbon into
the environment. This technology is very latest and much in demand among the customers.
Environmental factor: The Company Nissan from its advance and innovative technology has
try their best to bring out the vehicle that produces the least or minimum percentage of pollution
into the environment. Also their procedure for manufacturing of products is such way that it
creates least harm to the environment (Chen and Jermias, 2014). For example introduction of
battery vehicles.
Legal factor: The legal factors are the factor which is associated with the rules and regulation
made by the legislation. It is mandatory for the organization to follow these rules if they want to
perform business into the country. The Company Nissan follows all the rules which are
associated with the country. The company has adopted all the legal obligations into their system
which also has helped them in gaining the trust of the customers and government.
TASK 2
Internal environment
Internal environment is a framework in which the organization evaluates its internal
resources and knows about its strengths and weaknesses. The internal analyses can be performed
by the SWOT analyses. SWOT is an abbreviation of strengths, weakness, opportunities and
threat of the organization. It includes both the internal and external analyses. Strength and
weakness comes into internal analyses whereas opportunities and threats take the external areas
also. The SWOT examination expects to call attention to the most significant outer and inner
variables that are fundamental for the association to achieve their targets. Here,
Strengths are the qualities which make the organization unique from the other companies. This
also helps the organization in brining the competitive advantage which is very much beneficial
for the company (Iacob, Quartel and Jonkers, 2012).
Weaknesses are the weak points or the areas from which the organization lacks behind. The
organization can improve all their weaknesses for the better growth and survival.
Opportunities are the areas where the organization can explore more and can gain more growth
and profits. This can be done through expansion, mergers, partnership, diversification and the so
on.

Threats are the risks which the organization faces internally and externally. Organization
although tries their best to reduce the risk or to eliminate it but still there are some risks which
cannot get eliminated and they becomes threat from the organization.
The SWOT Analysis of Nissan Company is as follows:
Strengths: The strength for the company includes that the company has a very strong brand
image. As the company is has expanded its business at many parts of the world, the awareness
for the brand is also very much strong. The Nissan has a positive brand name is the products
which it delivers to the customers are of very good quality and they satisfies the needs and wants
of the customers. As stated above into the report, the company offers the products of all kind of
customers; it has the products ranging for middle class people and also has the products for elite
class people. This has enables the company to target all kinds of social group (Johnson and et.
al., 2017).
Nissan Company has also done a huge investment in their R&D department so that they can
bring new and innovative products into the market with time. The R&D department job is to
bring more up gradation into the technologies and products. For example recent innovation of the
Nissan vehicle which produces the lowest amount of carbon into the environment is one of the
work of R&D.
Weakness: The Company has the biggest weakness that it sets the goals or the objectives for the
company in an inadequate manner. The company faces various issues in ascertaining their goals
and many a times fail to achieve it. The company is also facing some backslash because of some
reviews. The company faces problems or the issue regarding the well being of the cars. A report
was made into the year 2010, where around 604500 cars of the company gets under complain
due to some battery problem. Apart from these thousands of units of units of around 9 models
gets under review due of the problem for motor switches.
Such reviews have very bad consequences upon the brand image of the company. The customer
base got reduced. Also the company technology is very much absent in the Diesel which also
works a drawback for them. The company also is very much late or delayed in bringing the
diesel based vehicle into their market.
Opportunities: There are various opportunities available with the company with regard to the
better performance and better benefits for themselves. The opportunities may include the
development of new vehicle into the region like Asia Pacific. The promotion of new vehicle
would prove to be a great growth for the company as the market is huge and the product vehicle
suits best according to the need for the customers (Leonidou,and et. al., 2015).
The company has notice a strong demand for their vehicle products into the India and china
region. This has helped the company in bringing an increase in strong customer base. The
company can also go for mergers for acquisitions with other big brand so that they can acquire

the market with confidence. The company for its growth can go for expansion in which it expand
its business by stepping its feet into the market where it has never put the step before. This would
result into both an increase in market share and market growth.
Threats: The company, Nissan, has the potential threat from the competition which is available
into the market. The company faces the competition from various companies like Toyota, Tata,
Cheverlott and many more. To meet such competition the company has to rbing the new
technology or product very often so that they can gain the competitive advantage into the market.
The company also faces problem with the changing rules and regulations into the countries
where they are operating. The company has to change their polices ort operations when the
legislation changes their rules and regulations for the industries, this is a huge risk because there
can be some policies which goes not in favor for the company and can impact the operations of
it. Another threat which the company can face is in the increase in the price of raw materials. As
the increase into the prices of raw materials can result into the increase into the cost for
production which can high the price for the vehicle. This may not work into the favor of
company.
With this SWOT examination of Nissan Motor Company, it can possibly improve its
shortcomings and dispose of threats (Mithas, Tafti and Mitchell, 2013). Focal points on the
opportunities ought to be taken. These means will assist the purchasers with doing methodology
investigation about Nissan Motor Company and take great dynamic on picking an appropriate
vehicle.
TASK 3
Porter’s Five Forces model
Porter’s five force model is a framework which analyzes the whole industry of that
business and then evaluates what benefits the company can have through entering into this
particular field. The model has the 5 forces which it believes can affect the business in a major
way. To enter into any business or to make any business decision the organization has to analyze
these 5 forces so that they can reduce the risks and can make a fine performance into their
business. Every business considers this model as an important aspect to consider. The five force
model of the company Nissan is as follows:
Level of competition: This implies the level of competition which is available to the company.
It has been said that more the competition that would be present into the industry, more will be
the burden upon the company. In automobile industry, the competition in the market is very huge
as various companies are there which are running and ruling the market. Some of the major
competitors for the company Nissan are Toyoto, Honda, Renault, and so on. All these companies
tries to bring up many products and Nissan has to bring up new and innovative vehicle for their

customers to gain competitive advantage. In the world of competition it is very much necessary
and hard to retain a strong customer base.
Threat of new entry: It refers to the degree towards which businesses can entry into the
industry. As in the case with automobile industries the companies need to perform some legal
formalities to get into these industries. As this industry requires huge capital amount, only some
companies gets in. But every new entry creates a burden upon the company. As this industry
requires the high investment, only few companies have the potential to get into it which works
has a merit for the present or current establish company as the number of competitors are quite
less into the business (Peng, 2017). Also this industry is full of hindrances as the availability of
resources of quite low; it has the high risk and etc.
Threat of Substitute: Substitute products are the products which provide the same features and
value to the products which are provided by the other companies also. This work as a demerit for
the company as the customer can shift to other substitute product anytime. To eliminate this risk
or the factor the company has to bring competitive advantage on an often basis. They can
perform this through bringing innovative and creative products into the market; working in their
R&D department and bringing the new feature which can help the company in gaining the
competitive advantage. There are many companies which act as a threat for the Nissan some of
them are Toyoto, Honda, Hyundai and so on. All these companies provide same features or in
some cases advance features in which brings more opinions to the customers as they are getting
the same product with same or advance feature in less price.
Bargaining power of suppliers: It refers to the degree of terms and conditions which the
suppliers has with respect to the company. More number of suppliers refers to the less degree of
implementing terms and conditions. Whereas less number of suppliers refers to the more degree
of terms and conditions. As in the case for Nissan the company has the modest number of
suppliers which means that the company can easily be getting shift to other suppliers if they are
getting the resources at high price from one supplier. The bargaining powers of suppliers are
very much less and the control or the power majorly lies into the hands of Nissan Company.
Bargaining Power of Buyers: It refers to the bargaining power of the purchaser or the
customers. In this if the buyers have the more choices available with them, they can easily get
shift form one company to the other where they can see more benefit. So to maintain the
customer base the company has a burden to bring innovation and creation into their vehicle so
that they can provide more features to the customers. This helps the company in maintaining the
competitive advantage and the customer base (Scholes and et. al., 2014).

TASK 4
Strategic planning
For evaluating or attaining the strategic planning of the company, the porter’s generic
model is very apt. Through this we can evaluate the type of strategy used by the company in its
operations. The porter generic model has a total 4 strategies out of which the company chooses
to operate and succeed. The strategies which are included in porter’s generic model are cost
leadership, differentiation of product, cost or differentiation focus. All these strategies help the
business in its growth and expansion.
In cost leadership: In this strategy the company aims on reducing its cost of production as
much as possible. In this the company gains the competitive advantage by providing the products
to the customers at a less price compared to the competitors. From this their major aim would be
to gain the economies of scale, totally innovative product or technology which bring ease into the
lives of people, provides different features into the products and so on. The company tries to
reduce the cost of the production has much as possible. In this strategy the organization seeks
focus on reducing the cost rather than getting the product differentiation. Major focus is to
provide the products at the lower cost (Shavarini, and et. al.,2013). Nissan has produced the
vehicle of moderate and dependable nature to their customers in many parts of their market like
in Japan, US and North America.
Product differentiation: It is a strategy in which the company seeks focus on making its product
different and unique from others. In this strategy the company put efforts in innovation and
creation and discusses how they can bring new features into their products. The company tries to
bring new features or development new their product and gains the competitive advantage. The
company put investment in its R&D department so that they can develop the innovative product
to serve into the market. For example the company has an elite vehicle Nissan Skyline which has
the capability for high speed and unique features. The vehicle provided by the company comes
under elite class which can be brought by the elite class only. The company also differentiate
itself on the basis of unique feature into their products.
CONCLUSION
From the report presented above, the macro environment of the organization has been
analyzed through pestel analyses. The report also includes the SWOT analyses which show that
the company needs to work upon its weakness and focus upon in grabbing its opportunities. The
report also includes the Poter’s five force and generic model which helps the company Nissan in
framing its strategies.

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