Business Strategy: Analysis of Nissan's Macro and Internal Environment

This report analyzes the impact of macro environment on Nissan and evaluates its internal environment and capabilities using McKinsey's 7S model. It also applies Porter's five forces model to assess the competitive landscape. Suitable for business strategy and management courses.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION.......................................................................................................................................3
LO1.............................................................................................................................................................3
P1 Analyse the impact and influence of macro environment...................................................................3
M1 critically analyse macro environment to determine and inform strategic management decisions......5
LO2.............................................................................................................................................................5
P2 Analyse internal environment and capabilities of given organisation using appropriate framework. .5
M2 Critically evaluate internal environment to assess strength and weaknesses of an organisation
internal capabilities, structure and skill set..............................................................................................7
LO3.............................................................................................................................................................7
P3 Applying porter’s five forces model...................................................................................................7
M3 Devise appropriate strategies to improve competitive edge and market based on outcomes.............8
LO4.............................................................................................................................................................8
P4 applying range of theories concepts and models interpret and devise strategic planning for given
organisation.............................................................................................................................................8
M4 Produce a strategic management plan that is tactical and tangible strategies priorities and objectives
...............................................................................................................................................................10
D1 Critique and interpret information and data apply environmental competitive analysis to produce a
set of valid strategic directions, objectives and tactical actions.............................................................12
CONCLUSION.........................................................................................................................................12
REFERENCES..........................................................................................................................................13

INTRODUCTION
Business strategy refers to a framework that is used to set the competitive edge and actions that
an organisation use to attract public, compete with competitors, strengthening performance that helps in
accomplishing and reaching the organisational goal. It helps in making the decisions that assists the
business owner to achieve the strategic objectives. These reports taken the Nissan Motor Company that is
one of the famous Japanese multinational automobile manufacturing company. It includes the analysis of
macro and micro environment by using PESTLE, Stakeholders matrix or McKinsey model that helps in
identifying the ability and capability of gaining the competitive advantage and earning more profits.
Further it includes the porters five forces model that helps in gaining the competitive edge in the
competitive market within the same industry. At last apply a strategic model and concepts that is helpful
in building a strategic plan so that company will earn high amount of profits and enjoys longer
sustainability (Akter and et. al., 2016).
LO1
P1 Analyse the impact and influence of macro environment
Organisation overview
Nissan is one of the largest Japanese automobile manufacturing company that was founded in 28
December 1993.The company sells their products with a name of Nissan, infinity and Datsun. there are
number of employees are working in Nissan with in a two category i.e. consolidated employees and non-
consolidates employees(Peng, 2017).
Vision
The Vision of the Nissan in which they work is enriching the people’s lives and stay in the
market with longer term.
Mission
The main mission of Nissan is to provide the unique and creative automotive goods and services
that delivers to the customers in a superior quality which contains valued to all the stakeholders in the
alliance of the Renault(Martinez-Simarro, Devece and Llopis-Albert, 2015).
Stakeholder analysis

It refers to that procedure which is helpful for the manager to identify the impact on the
performance of an organisation before starring of any project. It can benefit the Nissan to know the
impact of the stakeholders by using three steps that can be shown below(Amran and et. al., 2016).
Step-1 – In this step manager can determine the individual stakeholders by making an appropriate
list. In case of Nissan major stakeholders are sales department, customer’s employees, public, government
and their shareholders.
Step-2 – After identifying the stakeholders and make a proper list manager of Nissan can
prioritize the different categories as per their interest level, participations and low interest level.
 High power, high interest- This type of stakeholders will be more important for Nissan that will
helps the company in performing the functions in an appropriate manner.
 High power, low interest- Theses type of stakeholders is working in the company but they have
low interest in projects of Nissan(Yuliansyah, Gurd and Mohamed, 2017).
 Low power, low interest – In this aspect stakeholders are informed about the projects and
products of an organisation so that it will create no problem for Nissan.
 low power, high interest – This type of stakeholders does not involves in any activities of Nissan
but have a high interest and power that will impact their working.
Step-3 – It is the last step where manager of Nissan can communicate with the stakeholders as
per their holding interest and power so that work can be done without facing any hurdles.
Pestle analysis
It defines to an effective external tool that is very effective for Nissan to analyse the external
business environment that may affect the operations of the company. It includes six aspects that can be
mentioned below(Yuliansyah, Rammal and Rose, 2016).
 Political – This factor influenced by the tariff rates, tax rate and the stability of an condition of
government. The political condition of UK is stable and the related rate of tax is also less that
helps the Nissan to operating the business in a beneficial and effective way.
 Economical- It considers the inflation rate, interest rate and the GDP of the country, spending
power of public. In this due to high growth rate in UK purchasing power of people are also high
due to this it will benefit the Nissan sales in a positive manner but high inflation rate due to
recession period Nissan sales may be impacted in a drastic way.
 Social- It involves the values and attitudes of a person in the society of UK. As UK people are
modern and excited to use advanced technology products due to which sales of Nissan may be

impacted in an positive way because they always works for enriching people’s lives (Mellat-
Parast and et. al., 2015).
 Technological- Technological advanced in UK is very effective and there people are indulge and
used to the use of internet and digital platform on their daily basis. In case of Nissan they use
advanced technology in their products and also regularly update their technologies and machines
as per the market requirements so that they can enjoy high amount of profits.
 Legal- This factor includes the laws and regulations that were created by government to secure
the rights of employees and customers. In this manager of Nissan can follow all the legal laws
that can benefitted the employees so that they work with motivation and sustain in the company
for a long time.
 Environmental – It is related to protecting the environment for the harmful activities that was
arising in the company. In case of Nissan they were focused on manufacturing cars with built-in
batteries to satisfy the customers and cut down the carbon emission. that will destroy the
nature(Kossyva, Sarri and Georgolpoulos, 2015).
M1 critically analyse macro environment to determine and inform strategic management decisions
By using the above PESTLE and stakeholder analysis it is to be critically analyzed that business
environment plays an important role in taking the strategic decisions because it shows the various aspects
in which company has to focus and examine on a regular basis. In this manager of Nissan can constantly
focus on technological and environment and governmental policies so that they can manufacture the
products according to that. In these employees, customers shareholders, government play a major role as
per their interest and power them hold within the company so that manager can inform the activities as
per their involvement and make appropriate decisions to earn a high profit(Evans and et. al., 2017).
LO2
P2 Analyse internal environment and capabilities of given organisation using appropriate framework
McKinsey’s 7S model
It is an effective application that is helpful to design the company by using seven internal
frameworks. It is very essential to Nissan to align these entire frameworks in an effective and appropriate
manner so that they can achieve the overall targets. This framework of Nissan can be shown
below(Hamilton, Cruz and Jack, 2017).

 Strategy – It refers to a plan that is implemented by the organisation to gain the competitive
advantage. In this if Nissan manager cannot make robust and effective strategies than the business
firm faces many problems such as decrease in sales, reduction in customers.
 Structure – It refers to that structure in which Nissan can organized and transfer the information
within the firm related to business entity and their divisions. In this if Nissan cannot make an
effective structure then it will face the inefficiency in gaining the competitive advantage and rival
firms can enjoys all the benefits.
 System- This framework shows the regular activities that were perform within the company to
achieve the objectives. In this Nissan can focus on managing and maintaining the effective
systems that helps in adopting the change as per the requirement of the environment that benefits
the company (Lai, Melloni and Stacchezzini, 2016).
 Skills – It shows the skills and knowledge of the employees who are working within the Nissan.
if they are highly skilled than they hires for solving the complex problems so that company
cannot face major issues for a long time.
 Style – This component suggest the style that was followed within the Nissan to manage and
maintain the decorum in working environment. in this manager can use the participative style
where they can give right to employees in sharing their ideas and suggestions so that they will
retain within the firm.
 Staff – It denotes the number of working employees within the company for earning higher
profits. it involves the employment hiring, training, selection, reward stem and the
encouragement level of manager towards the employees so that they can achieves the targets and
enjoys longer benefits.
 Shared value- It is an essential tool in this model that shows the rules and guidelines that Nissan
follows to manage the behavior of an employees in an effective way(López-Cabarcos, Göttling-
Oliveira-Monteiro and Vázquez-Rodríguez, 2015).
VRIO Analysis
It is an effective tool that is used by the company to analyse the capabilities of the internal
resources that helps in gaining the competitive advantage in the marketplace. It includes four factors in
context of Nissan that can be shown below.
 Valuable – In this manager of a Nissan can mainly focus on the valuable resources that include
Employees, supply and logistics management in an proper way so that it can helps in gaining the

competitive advantage. it also helps in earning more revenues and market5 share so that Nissan
can enjoy longer sustainability in market.
 Rare – In this Nissan can mainly focus on their rare products i.e. its research team and the using
of advanced technology so that customers are valued to the products and this helps in increasing
the sales and profits of the company(Tsai and Liao, 2017).
 Imitable – In this Firm Nissan can focus on those resources that are not easily copied by the
other rival firms. If goods offering are to be copied by the competitors than it can decrease its
brand image and also customer base. In this their using advanced technology in manufacturing
the car is effective and imitable resource for the organisation so that they enjoy high earnings.
 Organisation – It is very essential for the Nissan to focus on their resources and managed and
organized those resources that help in achieving the targets. In these employers, supply chain,
customer’s technology, investors all are very essential part so that manager can manage and
organize them in an effective way.
M2 Critically evaluate internal environment to assess strength and weaknesses of an organisation internal
capabilities, structure and skill set
STRENGTH WEAKNESSES
The best strength of Nissan is an effective research
and development due to which they can enjoy the
largest electric vehicle selling in the world.
The major weakness of Nissan is the poor
advertising capability that will reduce the brand
image in the market.
OPPORTUNITIES THREATS
Core opportunity of Nissan is the timing and
frequency of releasing new model
The major threats is the increasing competition in
the market such as Tata motors, Ford motors etc.
LO3
P3 Applying porter’s five forces model
Porter’s five forces model – It is an framework that is very useful for the manager of Nissan to
analyzing the level of competition that was present in the industry. It includes the five components that
can be shown below in context of Nissan.
 Threat of new entrant – This factor is relatively not so high as Nissan includes high capital and
huge amount of investments that is very difficult for new entrant to sustain in the marketplace. In
this it is very complex for new entrant to invest large financial resources to perform their business

operations and because of this no new firm is capable to compete with Nissan and attracts the
large customer’s base(Motohashi, 2015).
 Bargaining power of suppliers- In the automobile industry it is very tricky to evaluate the
bargaining power of suppliers because there are two types of suppliers one is tremendously
powerful on Nissan because they sales all the parts that is helpful in manufacturing the cars and
set up their operations on a high scale on the other hand some suppliers are small ventures that
only relay on Nissan as a client from which manager can buy the products on their own price.
 Bargaining power of buyers- In this bargaining power of customers is not so high because in
case of Nissan a person can purchase a one car at a time at this time company can enjoys the low
bargaining power of customers.
 Threat of substitutes – The fear of substitute present in the automobile sector is large as if the
price of the products is high that a middle class people cannot afford they can move towards the
public transport or the other rival firms who can charge the low price. So that Nissan can make
more observe in their pricing strategy so that everyone can enjoy riding a technology advanced
car that satisfy the customers demands.
 Rivalry among existing competitors – In automobile sector there are many competitors are
present in the market like Toyota, Honda, Ford, Hyundai etc. in this threat of the competitors are
higher for Nissan. Due to this company can set their price on the competitive based that will
make the opportunity to earn a high profits and revenues and also attracts the large customers
base.
M3 Devise appropriate strategies to improve competitive edge and market based on outcomes
To maintain the competitive edge in the marketplace by Nissan it is very essential to make an
appropriate strategy according to the porter’s five forces model so that company will earn high amount of
profits in this they can make the strategies related to reduce the completion in the market by using
innovation in their products on the effective price so that they can attracts the large base of customers and
beat the competition in the market(Gumusluoglu and Acur, 2016).
LO4
P4 applying range of theories concepts and models interpret and devise strategic planning for given
organisation
Porter’s generic model

It refers to that framework which helps the manager of a Nissan to make strategic decisions that
helps in staying the market with a good image and earning more profits and re3venues with high market
share. It includes generally three kinds of strategies that can be shown underneath(Štefan and Branislav,
2016).
 Cost leadership – This strategy is related to the price sensitive customers that can be targeted by
the organisation to improve their sales and profit margin. In This strategy Nissan can offers their
goods in a low price by providing them discounts and other attractive offers so that customers
will enjoy the services and offers and also recommend to other people for buying it. Due to this
business firm may enjoy the large amount of sales and profits in a small period.
 Differentiation – It refers to that strategy in which Nissan mainly focus on making new
innovative and creative products that is distinct from the competitors so that large base of
customers gets attracted towards it. This will increased the sales and profits for a long and short
term basis.
 Focus – It includes two aspects i.e. cost focus where Nissan can provide the goods to their
customers on a low price so that they can attracts the large base of customers whereas
differentiation focus helps the company to provide modern products and services so that they can
sale their products without focus on pricing strategy.
Bowmen’s strategic clock
It refers to that strategy framework which is used to explore the positioning of the strategies such
as Nissan can position their products and earns major benefits as compare to their other competitors. It
includes various aspects that are explained below in context of Nissan(Leischnig and et. al., 2017).
 Low price and low value added- It is first aspect in Bowmen’s clock where Nissan cannot enjoy
high competitive advantage position because of homogeneous type of products that customers do
not perceive any value even when the price is low. They focus on other major brands.
 Low price- In this strategic position Nissan can position them as a low price taker in the market
due to which they can enjoy the large sales volume and large base of customers.
 Hybrid – It involves the strategic position that shows the low price with differentiation in
products it shows the effective planning for a Nissan because it helps in attracting large base and
due to these they can enjoy large sales and profits.
 Differentiation – It includes the differentiation in the products that is done by the Nissan to enjoy
the large market share and longer sustainability. In this they need to offers the innovative and
creative design product to the public.

 Focused differentiation- This strategic positioning helps the Nissan to offers the innovative
products so that they can decide their own price without focusing on competitors because in this
customers values the products.
 High risk margin – In this manager of a Nissan can charge a high price for the regular products
in which there is no innovation. It will show the risk of the failure of the business enterprise.
 Monopoly pricing – It shows that pricing which is charges by the business for the products that
is very useful for the customers and customer can buy it at any cost.
 Loss of market share – It shows the drastic impact on the company in this concerned
organization can set the price according to the market share.
By focusing on above two models Nissan manger can adopts the Differentiation strategy where they
attracts the large base of customers by their innovation and creation in the design and features of the car.
This helps in retaining the old customers and attracting the new customers on a worldwide nature so that
company can enjoy large profits and longer sustainability in the market place. Here the customers also
values the products and it helps in enhancing the brand image of the business venture.
M4 Produce a strategic management plan that is tactical and tangible strategies priorities and objectives
Strategic planning – It refers to that planning that helps the manager of Nissan to identifying the various
set of activities, resources, operations, priorities, technologies and many more so that they make assure
that the employees working within the firm can effectively move towards the achieving the common
objectives and all it can be managed and organized as per the set strategic plan so that manager of Nissan
can implement it in an effective way that can be shown below(Akter and et. al., 2016).
Vision – The vision of the Nissan motors is enriching the lives of the people in an very attractive way so
that they can enjoy their memorable moments. This company also works for earning profits and revenues.
Mission – The major mission of the company is to offers the creative and unique products to their
customers that help in delivering the measurable value to the people and other stakeholders in alliance
with the Renault Company.
Strategies – The strategy that is followed by the Nissan is the product differentiation because it helps in
attracting the large customers in worldwide and also has a sufficient capability to optimize the
competition in the market. It is an effective strategy to target the customers towards the environment
friendly products i.e. car at the same time using advanced technology which is a trending fashion as per
today’s environment.

Objectives – The main objective of Nissan is to enhance their sales by 20% with the increment in the
customer’s base and this will ensures that the profits will be increased by 15% within a fifteen months.
Tactics – It refers to a short term strategies that is made by the manager of Nissan to earn stability and
profits in the market place by attracting the customers on a large basis. In this Nissan can make the
strategy related to sale their cars directly to their customers by reducing the mediators so that they can
sale it on the attractive price. In this they also focus on the promotional activities as they use the social
media to attract the large customers on a global nature within a small period of time. It helps in targeting
the all class of people majorly high and middle class people so that they can enjoy the services and
products to the Nissan.
Implementation – It is an important stage for a business firm to execute what they have planned by
allocating the resources according to the needs and preferences. In this Nissan can allocate and manage
the funds and financial resources by marketing budget. in this manager can focus on taking some
measureable actions that can helps in controlling the activities on every levels. in this they can audit on
internal basis that helps in analyzing the actual and estimated budget and their performance for this they
need to use the key performance indicators because it helps in improvising the performance and show the
effective results to the plan(Leischnig and et. al., 2017).
Evaluation – It is the last step that collecting the data and useful information about how the plan can be
action and what are the blockages they can face while performing and achieving the plan. In this Nisan
can focus on evaluating the differentiate product in the market by analyzing on the basis of actual
performance and taking follow up in the marketplace.

D1 Critique and interpret information and data apply environmental competitive analysis to produce a set
of valid strategic directions, objectives and tactical actions
By examine the whole information related to macro and micro environment, competitive
advantage and the strategic plan it is to be critically evaluated that the without properly analyzing the
internal and external environment company cannot focus on earning the competitive advantage because
they gives the knowledge related to the capabilities and abilities of the resources to perform a task for
gaining the profits in the market. In this porter’s five forces model give the relevant information regarding
the edge of competitiveness. After that porter generic and Bowmen’s strategy helps in making the
strategic plan so that it can be implemented successfully(Akter and et. al., 2016).
CONCLUSION
From the above analysis it is to be concluded that if an organisation cannot adopts the business
strategy in an effective way then they cannot achieves the targets in a specified way. In this analysis
includes PESTLE stakeholder’s analysis, McKinsey model helps in acknowledging the environment of
business in an appropriate manner. It also helps in finding the capabilities of business firm to earn higher
revenues. By using the porters five forces model company can enjoy the competitive edge in the market.
By using the Bowmen’s strategy and porter’s generic model it helps the enterprise to select the right
strategy and make a strategic plan according to that so that they can earn higher profits and longer
sustainability of the firm(Leischnig and et. al., 2017).

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