Managing Finance Resources: Market and Cost Analysis Report

This report delves into the intricacies of managing financial resources, utilizing a case study approach centered on Nissan's performance in the electric car market. The analysis encompasses various critical areas, including market structure, supply and demand dynamics, and cost analysis. The report examines the challenges Nissan faces, particularly competition from industry giants like Tesla, and evaluates the company's strategic responses, such as pricing adjustments and market positioning. It also explores the application of economic concepts like elasticity and inelasticity in the context of Nissan's pricing strategies. Furthermore, the report investigates the short-run and long-run cost structures, competitive pricing strategies, and the role of branding in enhancing market competitiveness. The report provides a comprehensive overview of Nissan's financial health and provides actionable recommendations for enhancing its profitability and market share in the competitive electric vehicle industry.

Running head: MANAGING FINANCE RESOURCES
MANAGING FINANCE RESOURCE
Name of Student
Name of University
Author’s Note

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Table of Contents
CASE STUDIES ISSUES:..................................................................................................2
Case Study 1:...................................................................................................................2
Case Study 2:...................................................................................................................3
Case Study 3:...................................................................................................................3
MARKET ANALYSIS:.......................................................................................................4
SUPPLY AND DEMAND:.................................................................................................6
COST ANALYSIS:.............................................................................................................7
PRICING STRATEGIES:...................................................................................................8
LEADERSHIP BEHAVIOUR:...........................................................................................8
ECONOMIC REGULATIONS:..........................................................................................9
FINANCIAL ANALYSIS:..................................................................................................9
DECISION MAKING:......................................................................................................10
BUDGETING:...................................................................................................................10
CONCLUSIONS:..............................................................................................................10
ADDITIONAL FINANCIAL INFORMATION:..............................................................10
REFERENCES:.................................................................................................................11

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CASE STUDIES ISSUES:
Case Study 1:
Hair maintenance is one of the most profitable businesses in the United States of America
and United Kingdom. As per the case study the hair maintenance fetches around $US 85 billion
in a year. As per the analysis provided in the case study, the men’s grooming industry estimated
to reach $US 26 billion. The same goes for United Kingdom.
 As per the case study the salons in United States of America and United Kingdom
receives numerous customers especially in weekdays.
 It is also evident that these salons have to offer many types of haircuts like Crew
cut, Undercut and many more. In spite of having such resurgence in the hair
salons in United States of America, the industry still faces some serious problems.
 The main problem that can be highlighted from the case study is the absence of
proper management.
 Due to the bad sales of these salons hit pretty hard because of the bad
management. These salons loose potential customers due to the bad management.
As per the author the salons faces less workforce due to which the salon cannot
accommodate or entertain every customers at a time.
 The loosing of customers heavily affects the financial performance of the salon.
Thus, to mitigate such problems the salon not only needs to increase the working
space, but they should also increase the workforce.

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Case Study 2:
 The main problem that can be identified with the management of the company is the
employee turnover of the company is pretty low.
 The poor performance from the human resource department led to the decrease in the
young talent in the workforce thus, resulting in getting high amount of ageing workforce.
The sudden change in the management will lead to a total chaos in future.
 The sudden change in responsibility may rise in the dissatisfaction among the employees.
The implementation of new system by the new CEO led to the rise in the profit margin of
the company and thus, the company is expected to increase its financial performance.
 The management of the company and the new CEO uses the experiences of the ageing
employees wisely and hence the company will reach to the helm in next few years.
 The implementation of productivity bonus, value driven culture programmer and
accepting the performance of the company led to the rise in the financial health of the
company.
Case Study 3:
As per the analysis of the case study it can be determined that Nissan faces considerable
amount of challenges in the electric market.
 Nissan failed to compete with the competitor like Tesla, Mitsubishi and other car
companies after the exit of their ex-chairman Mr Ghosn.
 Nissan’s electric car faced considerable amount of challenges from the Tesla cars, as
they acquire maximum percentage of market share from the market.
 To attract customers, Nissan reduce their electric car price by 435. The company also
started offering leases as low as $199 per month.

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 The exit of Mr Ghosn, the ex-chairman, from the company hit hard in the United States
of American market where Nissan faces very high percentage of competition.
 The drop in the percentage of the sales hit the financial health of the company.
 The battery market of the company also decreased by considerable means.
 Leaf, which was one of the best electric car for Nissan, saw a steep drop in sales from
2013. During the end of 2018 and 2019 the company saw a little bit rises in the sales,
but still it pretty low in comparison to the total industry sales.
MARKET ANALYSIS:
Nissan in recent five years have performed well. The market performance and financial
performance of the company started to reduce in last five years. The main reason behind the
below average performance was due to the sales structure. The company’s main product, Nissan
Leaf, which is an electric car was the fans favorite back in 2012 and 2013, but the level of
favoritism decreases in later stage. During 2014 the sales of Nissan Leaf EV decreased by
considerable means, which marked the starting of the downfall of the company.
On the other hand the electric car industry performed very well in these five years. The
main reason behind the decrease of the sales revenue of Nissan is the involvement of too much
competitor in the electric car market. The rise of Tesla is also one of the major factors that
affected Nissan’s financial performance. Another major reason that can be determined behind the
fall in the sales performance of Nissan in last five years is the implementation of new technology
in the industry.
Nissan mainly operate in Oligopoly market structure. The company in its native land
mainly operates in oligopoly market structure, but this is not the same in case of United States of

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American market. In United States of American electric car market the company has to faces
with considerable amount of competition coming from the giants like Tesla, BMW, Mercedes
and many more.
In oligopoly market the companies enjoys high profitability, as the company has very few
competitor and high demand. The demand of the products in this type of market is high in
comparison to the supply. The supply price in the oligopoly market will remain in moderate
range due to the presence of the competitor in the market. This is not the case fir Nissan in
United States of America. Nissan faces considerable amount of competition in United States of
America because of the presence of big electric car companies. In United States the demand for
the car is high and the profitability of the company is high but the supply price is pretty high in
comparison to Japan.
As per the present market situation Nissan needs to take some of the bold decisions, so
that they can come back into glory. Nissan needs to develop their manufacturing process. The
introduction of the artificial intelligence and robotics in the manufacturing industry led to the rise
in the cost cutting technology. To mitigate the present financial problem the company needs to
acquire new technology in the manufacturing firm, so that they can meet the present demand of
the electric car. The electric car industry is expected to rise by big margin in near future. To grab
this opportunity the company needs to speed up their manufacturing process as well, so that the
company can meet the demand. In this way the company can improve their performance.
The car industry of United States of America especially electric car industry has high rate
of competition. The demand for the electric cars is also very high in comparison to the other
markets in the world. Nissan stands at third position in the United States of America electric car

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market. If Nissan wants to grab the opportunity they need to compete with other big electric car
companies (Suzuki Nissan Motor Co Ltd 2014). To outperform the competitor the Japanese car
giant need to consider the costs and quality of the product. This will eventually reduce the price
of the product by certain extent. Thus, in this way Nissan can get back its profit margin in the
industry.
SUPPLY AND DEMAND:
The concept of supply and demand can be explained by determining the relationship
between the quantity of the commodity that the manufacturer wishes to sell at various prices and
the quantity that the consumers want to buy. The price is one of the major factor that depends on
the demand and supply of the commodity in the market. The demand of the commodity also
depends on incomes and preferences of the consumers, and pother seasonal effects. Supply oif
the commodity also depends on the prices of the substitute goods, the technology that is used for
production and even the availability of cost.
In case of Nissan the demand and supply drivers for the company are the innovation,
diversification of the business in terms of geographical areas and also the well-established brand
name. The prices of the substitute goods for electric cars are not efficiency in comparison to its
counterparts.
The company must consider reducing the cost of the product by implementing the
artificial intelligence or robotics in the manufacturing process. The introduction of the new
technology will reduce the cost of the product, which ultimately will reduce the price of the
product. The reduction in the price of the product will increase the demand of the product.

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The introduction of new technology and the high competition in the electric car industry
reduces the demand for Nissan manufactured electric car. To mitigate such problem Nissan must
use price cutting strategy. The priced cutting strategy will assist Nissan tro attract new customers
towards their new electric car.
Elasticity of demand can be referred to as the slight change in the price will lead to
change in the demand of the product. The same can happen when Nissan jwill reduce the price of
the upcoming electric car with modern technology. The inelastic demand can be stated as the
demand where change in the price of the product does not affect the demand of the product. This
is a hypothetical situation where the consumers often ignores the fall price of the product and
may shift to another product.
COST ANALYSIS:
Long run costs can be termed as the accumulated costs where the change in production
levels of the company over time expects profits or losses. The same can be observed in case of
Nissan if they implement the cost reduction strategies (Kremheller 2014). The company is
destined to release the new version of electric car by 2022. Thus, the company uses the long-run
costs to increase the revenue of the company.
Short run costs, on the other hand is the accumulated costs that are mainly being collected
in real time. This mainly happens in during the production process. Only the variable costs affect
the production cost of the company. Thus, the company needs to check the production costs, so
that the sales revenue can be increased by considerable means. Nissan can check their variable
costs, so that the company can see a considerable rise in the sales revenue after the launch of new
electric car by 2022.

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As the company works in oligopoly market the presence of high quality and low price of
the product will increase the demand of the product. The increase in demand will also increase
the chances of collecting high revenue, which ultimately increases the profit margin of the
company.
PRICING STRATEGIES:
Nissan should increase the extent of the additional benefits like warranties, delivery and
credit sales. The company should also increase the after self-service. The company should use
the competitive pricing strategy. The competitive pricing strategy will increase the profit margin
of the company. The competition in the market will decrease if the competitive pricing strategy
is adopted then the company will see a considerable rise in the profit margin. The introduction
of new technology in the electric car market will assists the company to gain instant success in
the market. Nissan also holds a good brand value and brand reputation in the market. These will
help the company to win back the trust of the customers that will ultimately assist the company
to gain big customer base. The packaging service of the company needs to improve, so that the
products can be visually appealing to the customers. Thus, competitive pricing strategy will not
only reduce the cost of the company, but it will also reduce the level of competition in the
market. In this way the profitability of the company will increase and hence the market share.
The increase in market share will lead to the increase in the profitability of the company.
LEADERSHIP BEHAVIOUR:
As per the case study it can be determined that Nissan use to have one of the most
successful chairman namely Mr. Ghosn. After the sudden termination of the chairman, Nissan
losses its governance over the stakeholders of the company and thus, the fall of the company

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started. Thus, the leadership behavior in the company can be stated as very lousy, as they are
following the footsteps of Mr. Ghosn instead of creating new strategy.
ECONOMIC REGULATIONS:
The market should not allow any company to directly increase or reduce the cost of the
products. There should be a cost allocation procedure. The company having numerous ranges of
product at different price range will increase their customer base. As Nissan is already have
numerous products at different price range, so the decisions if the car industry will benefit the
company, as they can get acquire all types of customers.
FINANCIAL ANALYSIS:
As per the analysis of the financial statement of Nissan it can be determined that the
liquidity concern of the company is quite high due to the presence of the considerable difference
between the current assets and current liabilities. The presence of the high current assets will
assist the company to pay-off the short-term obligations. It can also be observed that the total
assets of the company is much greater in comparison to the total liabilities. This indicates that
the company’s financial position will set to rise high in near future. The only concern that the
company needs to be cautious about is the long-term liabilities of the company in last two years.
Nissan must focus on reducing the debt of the company, so that the profit margin of the company
can increase by considerable means. The operating expense of the company is also being
reduced than previous year that assists the company to gain considerable amount of revenue from
the market.

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DECISION MAKING:
Nissan should increase the additional benefit. The decrease in cost can result in getting
more customers from the market. Innovation is also one of the major reason that will reduce the
company’s losses and increase the company’s profitability.
BUDGETING:
The forecasting of the cost and revenue will assist the company to gain considerable
amount of advantage over its competitor. The cost reduction will not only increase the sales
revenue for the company, but it will also increase the customer base of the company.
CONCLUSIONS:
After analyzing the above data set it can be observed that Nissan may faces a high
competition in the market due to which the sales of the company reduced, but in coming years if
they started to implement the new strategies. The main challenges that can also be observed is
that the company’s lazy behavior towards the development of the technology may cost the
company’s market share. To increase the market share Nissan must introduce several products at
different price range, so that the financial performance of the company can increase, which
ultimately increase the financial health of the company.
ADDITIONAL FINANCIAL INFORMATION:
To improve the financial analysis the availability of yet market share price needs to be
provided, so that the gearing ratio of the company can be calculated. The budget should also be
required fir providing proper analysis.

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REFERENCES:
Furusawa, M., 2014. Global talent management in Japanese multinational companies: the case of
Nissan Motor Company. In Global Talent Management (pp. 159-170). Springer, Cham.
Kondoh, T., Yamamura, T., Kuge, N., Takae, Y. and Komori, K., Nissan Motor Co Ltd,
2014. Driving assistance system for vehicle and vehicle equipped with driving assistance system
for vehicle. U.S. Patent 8,688,312.
Kremheller, A., 2014. The aerodynamics development of the new Nissan Qashqai (No. 2014-01-
0572). SAE Technical Paper.
Matsui, H., Tsuchikawa, H. and Shimoyama, H., Nissan Motor Co Ltd, 2016. Hybrid vehicle
rapid deceleration control device. U.S. Patent 9,283,956.
Suzuki, H., Nissan Motor Co Ltd, 2014. Thermostat diagnostic apparatus. U.S. Patent
8,770,834.