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

This report analyzes the macro and internal environment of Nissan, a Japanese multinational automobile manufacturing company, using PESTEL, VRIO, and McKinsey's 7s model. It also discusses Porter's five forces model to evaluate the competitive forces in the market.

Business
Strategy

INTRODUCTION...............................................................................................................................3
TASK 1.................................................................................................................................................3
P1......................................................................................................................................................3
TASK 2.................................................................................................................................................6
P2......................................................................................................................................................6
TASK 3.................................................................................................................................................9
P3......................................................................................................................................................9
TASK 4...............................................................................................................................................10
P4....................................................................................................................................................10
CONCLUSION..................................................................................................................................12
REFERENCES..................................................................................................................................13

INTRODUCTION
Business strategy is defined as course of actions as well as judgement which assist an
industrialist in accomplishing their goals and objectives within effective manner (Alsudiri,
Al-Karaghouli and Eldabi, 2013). In other words, business strategy is nothing but a planning
that administration of company apply in their operations for gaining competitive advantages
within market area, attract customers to accomplish desired ends, carry on their operations
and many more. This report is based on Nissan which is Japanese multinational automobile
manufacturing company. It was founded in 1933 on 26th December ad products offering by
them at global level are automobile, luxury vehicles, commercial vehicles, outboard motors
and forklift trucks. Respective company is headquartered at Nishi-Ku, Yokohama, Japan.
Respective report will going to conduct macro environment analysis by using
PESTEL and some other frameworks. In addition to this, it will also highlight internal
capabilities of company through VRIO as well as 7s McKinsey model. Furthermore, for
analysing competitive environment Porter’s five force model will use by company as it will
help in analysing each and every factor within effective manner. As this report is related to
business strategy so in this strategic planning is important so for this purpose Ansoff matric
will be use by company.
TASK 1
P1
Macro environment is simply a condition which exist within economy as overall
instead a specific sector or region. Thus, it involves tendencies within gross domestic
product, employment, inflation, fiscal policy, spending as well as many more (Chang 2016).
It is essential for Nissan to conduct external analysis in effective manner because these
factors will result in positive and negative effect on operations of company. Explanation of
these are mention below :-
PESTEL analysis – Here, PESTEL stands for political. Economic, social.
Technological, environmental and legal. This framework help company in analysing macro
environmental factors in effective manner. Description of PESTEL for Nissan company are
as follows :-
 Political – It includes political instability of nation, new rules & regulation and many
more. For instance, Brexit result in adjustment within Nissan Business as Britain

voted for motiving out of EU in an historic referendum in 2016. Thus, terms related to
economic and trade post Britain’s exit are still uncertain as well as these have wide
impact on business of respective company. More than 7000 employees of Nissan are
it Sutherland plan and if company doesn’t enjoy similar trading condition after Brexit
then they will cut down their UK operations which result in job losses at wide level.
Although, it is important for Nissan to analyse political factors on timely basis which
have impact on working of company.
 Economic – In United states, automotive industry is major contributor but when
nation deal with recession sale of company get decrease automatically (Bharadwaj
and et. al., 2013). Apart from this, Brexit is best example because due to this there
was wide negative impact on working of company as their sales will also get reduce.
 Social – In relation of Nissan company preferences of customers is related to the
environmental friendly transportation by which automobile industry go through
transformation. As consumer awareness is increasing in relation of negative impact as
well as cost of fuel. Thus, within this situation for gaining competitive advantages
manufacturers are developing electronic as well as hybrid vehicles which are in
demand now days. As Nissan introduced Nissan Leaf in US and Japan as well as
stands for the benefits if growing electric vehicle adoption.
 Technological – As technology is getting update day by day which provide assistance
to Nissan in coming with something innovative in market area and attract large
number of customers in effective manner. As awareness related to environment is
increasing in customers which require Nissan to come with eco-friendly products so
strategy of Nissan is influenced by government policies related to clear air and issues
related to climate change. It driven Nissan to powerful built-in battery, sleek
aerodynamic with innovative technology which result in customer satisfaction. Along
with this, it also cut down on carbon emission.
 Environmental – Government has given several rules and regulation related to
environment which has to be followed by every company working within business
environment. Thus, Nissan to come with eco-friendly products so strategy of Nissan is
influenced by government policies related to clear air and issues related to climate
change. It driven Nissan to powerful built-in battery, sleek aerodynamic with
innovative technology which result in customer satisfaction. Along with this, it also
cut down on carbon emission.

 Legal – It is important for Nissan to impose strict norms in their working related to
passenger safety as well as emission regulation (Chang, 2016). Along with their
customers, company have to focus on their employees also and conduct work within
legal manner.
Four corner analysis – This model was developed by Michael Porter as motive
behind designing this is to help company strategy by assessing competitor intent, objectives
as well as strength which utilise for accomplishing all these. It include 4 major corners i.e.,
motivation, current strategy, capabilities and management assumptions. Explanation of these
in relation of Nissan Company are mention below :-
Motivation Current strategy capabilities Management
assumptions
Nissan want to offer
eco-friendly product
which will not harm
environment. Along
with this, they are
focusing on cost
effective strategy
also by purchasing
raw material in bulk
from suppliers.
Nissan Company there
strategy is influenced by
government policies
related to clear air and
issues related to climate
change. It driven Nissan to
powerful built-in battery,
sleek aerodynamic with
innovative technology
which result in customer
satisfaction. Along with
this, it also cut down on
carbon emission.
In addition to this, they
will purchase raw material
in bulk which result in cost
effective product.
Strength of
Nissan is one of
the major
capabilities
which help them
bringing their
innovative
strategy in
market area
within effective
manner. Along
with this,
organisational
values also help
at wide level in
serving their
customers
effectively.
It is responsibility
of management
division to ensyre
that theyvare
providing training
and development
session t the
employees. This
will help them in
conducting their
work within
effective manner
and also in gaining
competitive
advantages (Eaton
and Kilby, 2015).

TASK 2
P2
For each and every organisation it is important to analyse internal environment as
well as abilities analysis because through that they can understand market position as well as
competition in the effective manner. Moreover it also helps an organization in developing
proper strategies by which they will able to gain competitive advantages at the potential
marketplace (Agustia, Muhammad and Permatasari, 2020). In order to conduct internal
environment and capabilities analysis an organization may adopt several models and theories.
In respect of Nissan, in order to conduct internal environment as well as capabilities they also
adopt different models, from which main two are mentioned below:-
VRIO Analysis
Resources Valuable Rare Inimitable Organized
Products design
and features
Yes - - -
Supply chain Yes Yes - -
Employees Yes Yes Yes -
Financial
capabilities
Yes Yes Yes Yes
Valuable – It alludes to those assets which are significant for an organization as through that
they increase high upper hand at the commercial center. In regard of Nissan their important
assets are:
 Products design and feature – It is rare because respective company introduce
vehicles according to requirement of customers as well as they also take care of
surrounding and environment that provide assistance in grabbing benefits related to
competition (Burgelman, 2020).
 Supply chain – Nissan develop their supply chain according to the requirement as well
as location so that they can fulfill customers demand properly.
 Employees – Nissan employees are skilled, experienced and hardworking that provide
assistance in grabbing benefits related to competition.
 Financial capabilities – The financial status of respective company is good that
provide assistance in grabbing benefits related to competition at marketplace.

Rare – It is considered as those products which are rare for the company because through
that they sustain in market successfully (Cardoni, Kiseleva and Lombardi, 2020). Nissan few
resources are not rare i.e. products design and feature because competitor copies it but there
various resources are rare:
 Supply chain – It is rare for the respective company because they develop or design
supply chain according to location and requirement.
 Employees – Staffs of Nissan are highly skilled, experienced, hardworking and loyal
which make them at the marketplace.
 Financial capabilities – The financial status of Nissan is good and it is not adopted by
any other companies.
Inimitable – It is considered as those resources which cannot be copied by any competitor. In
respect of Nissan their some resources are imitable such as products feature and design as
well as supply chain because it can be copied by competitors in some time duration. On the
other hand their some resources are inimitable:
 Employees – Staffs of Nissan are highly skilled, experienced, hardworking and loyal
to their workplace which cannot be imitable by other. Moreover company also
provides training to them to make them more effective.
 Financial capabilities – The financial status of Nissan is strong which cannot be
copied by competitors companies.
Organized – It is determined as that factor which required very little organized. In respect of
Nissan there some resources need to be organized such as products design and feature, supply
chain and employees (Davis, 2020). But their few resources are didn’t need to organize such
as:
 Financial capabilities – The financial status of Nissan is strong which cannot need to
be organized in short duration of time.
McKinsey’s 7 s model
According to respective model there are seven areas of organization which are further
divided into soft as well as hard areas. It is essential for a company management to
understand these areas and develop strategies accordingly as through that they can create
sustainability at the marketplace as well as it will also help in gaining high competitive

advantage at potential market (Ghauri, Grønhaug and Strange, 2020). Below explanation of
all 7 areas are given in respect of Nissan:-
7’s Factors of McKinsey’s model
Hard S Soft S
Strategy Style
Structure Staffs
System Skills
Shares values
 Strategy – It is considered as plan which is developed by a company management for
the attainment of sustained competitive advantage as well as successfully competes in
the market. In respect of Nissan they are planning to launch vehicles which produce
low emission that affect environment as well as they also planning to support
economy.
 Structure – It is determine as way related to business division and units. A company
conducts its business operations as well as functions according to its structure as that
help in sustainability. In respect of Nissan they are operating their business in the
divisional structure which helps them in attaining their desire goal successfully.
 System – It is considered as process or procedure which is implemented by a
company for conducting their daily business activities so that they can attain their
desire goal as well as objective successfully (Lartey and et. al., 2020). In respect of
Nissan they developed proper strategies and system related to introducing vehicle
which is eco friendly as well as that generate how carbon emission.
 Style – It is considered as ways a company managed by the top level authorities
conduct interaction so that business operations conducted properly. In respect of
respective company their manager involves employees in decision making process so
that they can attain their desire goal successfully.
 Staff – It is determined as element which concerned with type of employees which is
required by a company as well as how they will be recruited, trained, rewarded and
motivated (Lyneis, 2020). In respect of Nissan their staffs are trained, motivated and
encouraged so that they accomplish their task properly and attain desire goal of
company successfully.
 Skills – It is determined as abilities of employees so that they can attain their goal by
accomplishing their allotted tasks in effective manner. In respect of Nissan they

provide proper training to their staffs so that their skills get enhanced which help them
in attaining desire goal of launching effective vehicle.
 Shares valued – It is considered as norms as well as standards which provide guidance
to the employee’s behaviour and company practices. It is essential for every company
to follow guidelines developed by government. In respect of respective company they
follow proper guidelines so that they can be successful in launching vehicle which not
harm to environment.
TASK 3
P3
Porter’s five forces model is a procedure or strategies which are received by
an organization for direct assessment and investigation of force of rivalry at a marketplace.
Through which leader and manager of an organization can structure and choose procedures,
plans and approaches in legitimate way. In respect of Nissan they adopt respective model so
that they can evaluate competitive forces at the marketplace, explanation of porter’s five
force model is given below:-
 Threat of new entry - It is considers as a circumstance in which any new
organization go into specific market without any problem. It is likewise conceivable
when that particular market is profoundly productive and there is extremely less
boundaries just as enactments (Ojiako, 2020). In respect of Nissan, their threat of new
entry is low because respective company adopt new technology and have high market
shares which is not easy for other firm to gain in less time.
 Threats of substitute – It is determined as situation in which there is high availability
of substitute’s products at the marketplace. So customers can easily switch from one
company to another for getting high quality products at low prices. In respect of
respective company, their threats of substitutes is high because there are various
companies who are operating at the similar industry such as BMW, Hyundai,
Volkswagens, Suzuki and many more.
 Bargaining Power of Customer – It is considered as circumstance which show
haggling intensity of client, in the event that the force is high, at that point clients may
interest for great items at the low costs (Park and Mithas, 2020). Then again in the
event that the force is low, at that point they need to pay more for low quality items.
In regard of individual organization, the bartering intensity of clients is low since

Nissan has quantities of faithful clients just as particular organization dispatch novel
and creative element and structure which draw in clients. Additionally it will likewise
urge them to pay the particular measure of specific vehicle since they feel it is an
incentive for cash.
 Bargaining power of supplier – It is considered power of supply at the specific
industry, if the power of suppliers is high then they will offer low quality products at
the high price. In addition to this, if the bargaining power of supply is low then they
will offer high quality products at the low price (Peng, 2020). In respect of respective
company, the bargaining power of supplier is moderate because management of
Nissan develop as well as maintain effective relationship with the suppliers which
help them in gaining products at the appropriate prices most of the time.
 Competitive Rivalry – In is considered as factor which show rivalry at the
commercial centre or explicit industry. It is fundamental for each organization to
break down this elements as that help in creating systems. In regard of Nissan the
serious contention is high in light of the fact that there are a few organizations who
are working in comparable industry and have solid altruism like BMW, Hyundai,
Volkswagens, etc.
TASK 4
P4
Nissan conduct Ansoff Matrix and porter’s generic model through which they will be
able to analyse as well as evaluate market for develop plans, strategies as well as policies
within effective manner. Explanation of these model are mention below :-
Ansoff Matrix – it is procedure which an organisation adopt for developing as well as
creating plans, strategies as well as policies which will provide assistance in expanding
business within effective and appropriate way (Iacob, Quartel and Jonkers, 2012). Ansoff
Matrix used by senior manager, markets and so on who basically design strategy so that staff
will be able to conduct their operations in effective manner. In relation of Nissan, there
manager is using respective framework for analysing strategies in effective manner.
Explanation of these are follows :-
 Diversification – As per this strategy an business firm introduce range of products as
well as services within market area. It will provide assistance in increasing their
customer base within effective manner. Diversification strategy will be risky for

company because sometimes their may be chances that customers will not like their
new product.
 Market development – In this firm enter within new market by using their existing
product. Here, expanding in new market simply means expanding within new
geographies, customer segments, regions and many more.
 Product development – It this strategy in which company design latest or innovative
goods to catering present market area. This move generally involve wide-ranging
research as well as development and extension related range of offerings. It is
important for an business firm to analyse market in actual way and then develop new
product (Jocovic and et. al., 2014). In relation of Nissan Company there strategy is
influenced by government policies related to fresh air as well as problem in relation
of changing climate. It driven Nissan to powerful built-in battery, sleek aerodynamic
along advanced technology which result in customer satisfaction. Along with this, it
also cut down on carbon emission.
 Market penetration – According to this strategy company use their goods in their
present market behind this motive of organisation is to enhancing market share with
market penetration strategy. This strategy can be done in several manner such as.
Decreasing price, increasing promotion, acquiring competitors and many more.
After evaluating as well as determining all these factors of Ansoff matrix manager of Nissan
determine that product development will be effective for them. Because it will help them in
gaining competitive advantages as well also help in fulfilling government policies in better
manner.
Porter’s generic competitive strategy – By using this framework an organisation
will be able to determine their relative position whether their profitability is above or below
within industry average. Because above average profitability result in long term
sustainability and competitive advantages. This model include four different factors which an
organisation can use for growth of business such as cost leadership, differentiation, cost
focus and differentiation focus (Porter’s generic competitive strategy (Ways of competing),
2016). Description of these in relation of Nissan Company are as follows :-
 Cost leadership – In cost Leadership, a firm chooses to transform into the
straightforwardness producer in its industry. The wellsprings of cost advantage are
changed and depend upon the structure of the business. They may join the mission for

economies of scale, selective development, specific access to rough materials and
various factors. An insignificant exertion creator must find all wellsprings of cost
advantage (Lawton, 2017). if a firm can achieve and bolster all things considered cost
authority, by then it will be a superior than anticipated performer in its industry, on
the off chance that it can arrange costs at or near the business typical.
 Differentiation – In differentiation strategy firm trey to come with something
innovative in market which provide assistance in grabbing attention of numerous
customers as well as enhancing sales. This strategy is awarded for their uniqueness
and premium pricing.
 Cost and differentiation focus – Within this strategy, cost focus on seeking
advantages in target segment and differentiation focus on seeking differentiation in
target segments. In relation of Nissan Company there strategy is influenced by
government policies related to fresh air as well as problem in relation of climate
modification. It driven Nissan to powerful built-in battery, sleek aerodynamic with
innovative technology which result in customer satisfaction. Along with this, it also
cut down on carbon emission. Moreover, Nissan purchasing raw material in bulk
which result in less cost and also offering customers products which are economic
and can be affordable by everyone.
CONCLUSION
From this entire discussion, it has been concluded that business strategy is essential
for an business firm as it assist in gaining competitive advantages. Because business strategy
is related to the course of actions or judgement which assist an business persons in
accomplishing their goals and objectives within effective manner. In other words, business
strategy is nothing but a planning that business management of business firm apply in their
activities for gaining competitive advantages in market place, attract customers to accomplish
desired ends, carry on their operations and many more. If an business firm wants to conduct
analysis their internal factors then they can use VRIO as well as 7s McKinsey model. Apart
from this, for analysing macro environmental factors PESTEL will be more suitable
framework. Furthermore, after finishing assessment of micro and macro environment factors
an association must lead assessment of rivalry in a market by conduction Porters five powers
model. Alongside this for creating fitting techniques, plans and approaches an organization
may direct doorman's nonexclusive model. Through all these, the board of an organization

ready to create just as make methodologies through which organization ready to lead activity
work in successful and productive way.

REFERENCES
Books and Journals
Online

Porter’s generic competitive strategy (Ways of competing), 2016.[Online].Available
through< https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-
strategies/>