Business Strategy Report: PESTEL, VRIO, and 7S Analysis of Nissan

This report provides a comprehensive analysis of Nissan's business strategy, examining its operations within the context of a rapidly changing competitive landscape. The introduction highlights the importance of strategic planning for gaining a competitive advantage in the automotive industry, wit...Read More

Business
Strategy

INTRODUCTION.....................................................................................................................................3
TASK 1....................................................................................................................................................3
TASK 2....................................................................................................................................................5
TASK 3....................................................................................................................................................9
TASK 4..................................................................................................................................................10
CONCLUSION.......................................................................................................................................13
REFERENCES.........................................................................................................................................14

INTRODUCTION
In business sector, comeptiton isn rising at rapid scale. With this threat of competiton
it has become eessential to adopt strategy. So, business strategy refers to process of using set
of actions to gain copmetitive advantage in market. Nissan, a multinational automobile
corporation hedquartred in Japan. Eneteprise deals in varities of produsts such as cars,
equipment, and many different models of cars. Moroever, it has increased its global presence
at larger scale. This report comprises of macro environmental factors on working of Nissan
through PESTEL and Four corner analysis. Then, it analyse internal capabilities of respective
business firm by implementing VRIO and 7s McKinsey. Moreover, for analysing competitive
forces Nissan implement Porter’s five force model. In addition to this, respective report will
implement Ansoff matrix and Porter’s generic model for interpret strategic planning of
Nissan.
TASK 1
Macro environmental factor is related with the economic condition or of specific
region as well as sector. In addition to this, it includes tendencies in inflation, gross domestic
products, fiscal policies, spending and several other. Moreover, for Nissan it is crucial to
analyse macro factors within better manner because elements included within this have
optimistics & negative both have effect on operations (Mussolino and et. al., 2019).
Explanation of these are discussed below-
PESTEL analysis – It is framework which is used by enttiesd to examine the external
factors affecting business operation. It is further elaborated as Political, Economic, Social,
Technological, Environmental and Legal. Explanation of respective analysios in relation of
PESTEL analysis are mention below :-
 Political – This involves several elements such as rules, regulation, policies, political
instability of nation and several other. For example, Brexit is political factor as it
result in adjusting within respective Company because Britain comes in favour for
moving out EU within historic referendum in 2016. There are several terms linked to
the economic as well as trade post Britain’s exit which are not certain and result in
wide effect on Nissan (Rivera and Clement, 2019). The factors which are include in
poliitical component are affect the business structure of entity at depth.

 Economic – This elements comprises of variaous varibales like inflation & deflation
rates, tariff, non-tariff rates etc. These types of variables are non controllable by
companies. In reference with chosen firm, Brexit have affect a organisational
structure at depth & has also slows down their growth. It duty of manager to make
assure that thse factos do not affect functions of business.
 Social – People are getting more aware about environment which means that
customers are preferring environmental friendly transportation through that respective
sector go with wide transformation (Lüdeke‐Freund, 2020). With rise of social
awareness, indviduals are becoming more concerned about their level of income and
health. In relevance enteprise, they deliver low price products to high end cars
targetting every income of indvidual.
of hybrid/ electric vehicle adoption.
 Technological – In every country digital advancement is taking places which help
Nissan in bringing something innovative as well as attractive for customers in proper
way. As customer of selected entity, selected entity is getting aware on daily basis
which require respective company to come with something eco-friendly. Thus,
strategy of respective business is affected through legal policies which is related to
clear air as well as problem of climatic changes. Moreover, it encourages respective
company to built-in powerful battery, sleek aerodynamic along with latest
technologies that provide assistance to Nissan in making customer satisfy. This
strategy will result in reducing carbon emission.
 Environmental – This element includes climate change, pollution, green agenda etc.
Now a days, it has become necessary to focus on environment factors so that problem
do not occur in near future. In reference with selected firm, they follow proper
guidline accoridngly thery haver produced hybrid cars to protect environment from
getting polluted.
 Legal – For Nissan Company it is essential to implement strict norms within their
working in relation of emission regulation and passenger safety (Nason and et. al.,
2019). In addition to this, with customers Nissan have to focus on their staff as well as
also conduct their operations within legal consideration.

Four Corner analysis – It is an concept which designed by Michael Porter and behind
introducing this model motive is to aids strategy of business firm through assessing
competitor intent, strength and objective which are important. This four corner model
involves current strategy, motivation, capabilities as well as management assumptions.
Respective model is respective model in context with chosen firm is explained under-
Motivation Present strategy capabilities Management
assumptions
Motivation of
given enteprise is
that they want to
deliver eco-
friendly product
that will not have
negative effect on
environment. In
addition to this,
respective
organisation is also
focusing on cost
effective tactics
also through
buying raw
material in
wholesale from
vendors.
Strategy of company is
affected through
government regulation as
well as policies which are
in relation of clear air &
issues of climate
modification. Thus,
respective company
powerful battery, sleek
aerodynamic with latest
technology that help in
gaining satisfaction of
customers (Parnell, Parnell
and Jones-Sepulveda,
2019). In addition to this,
such strategy will result in
reducing carbon emission.
Along with this, Nissan
will by raw material in
wholesale from suppliers
that will result in cost
effective product.
For Nissan there
strength of
Nissan is most
important
capabilities that
provide them
assistance in
gaining
innovative
strategy within
marketplace in
proper manner.
Along with this,
values of
business form
provide
assistance at
large level in
serving
customers
effectively.
In an organisation
it is responsibility
of administrative
department to
make sure that they
are providing
training as well as
development
session to their
staff. As it will
assist Nissan in
carrying out their
work in proper
way, & assist in
accessing
competitive
advantages.

TASK 2
In this competitve era, it is essential to be aware about firm internal emnvoronment
so that decision making is carried out in correct way this is because it is helpful in examining
of internal capabiliie of entity (Hahn and et. al., 2020).Furthermore, it help in
implem,entation of effectuve strategies for busuiness which is bieng used to deal with
competitors. Therefore, there are several types of models which are being adopteed like
VRIO Model. So, chosen firm has used VRIO for analysing intertnal capabilities & is further
discussed as under
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 – Itn this component, main focuses is on most crucial rassets of corporation which
provide better ROI. So, in context with undertaken firm they have vauable assets which have
been expalined- Products design and feature- This assets is essential because of their unique of
apporoaching to customers. Other than this, deisgn of cars are used accoridng to the
demand of end users which leads to increase of CRM value. Supply chain – They have a long supply chain structure which across the globe. They
have complex structure of supply chain because of existence iof many people but it is
their advantage.
 Employees – Firm also have highly skilled staff, technical experts, marketing & sales
team who help in increasing propdcutivity iof business.
 Financial capabilities – In market, corporation have a good brand name which
reflects their financial capabiklities too. By accesing these capabilities, they are able
to atttract investors to their business.
Rare – It is defined as those assets which is unique and different from others in terms of
scarcity. This rare elements is focused to increase the sustainablity period of business.

(Sanders and Wood, 2019). There are several resources which are rare in nature like
employees, supply chain structure. Supply chain – It is rare for the respective company because they develop or design
supply chain accoridng to the needs or conditions of shareholders.
 Employees – Staffs of Nissan are highly skilled, experienced, hardworking and loyal
which make them at the marketplace.
Inimitable – In this element, it sepcifies those resources which cannot be intimitated by third
party. In reference with given corporation, they aldo do have non-imitable products like d
products idea, design which is unique from others. D Personnel – Staffs of company are highly skilled, experienced, hardworking and loyal
to their workplace which cannot be imitable by other. Further, entity also provides
training to them to make them more effective.
 Financial position – The financial position 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 (Child and et. al., 2019). 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
This is a model which states the inner capabilities of enteprise in which iot specifies
that iin business sector there are basically seven elemenst which are needed to be adpted or to
analyse effectiveness & achieve goals. It is crucial for enterpsie to use this m,odel so that
they are aware about their effectivenees in most efficient way. Thus, there are various
elemenst in this tool which are given below-

7’s Factors of McKinsey’s model
Hard S Soft S
Strategy Style
Structure Staffs
System Skills
Shares values
 Strategy – It refers to different set of action which is being used to accomplish both
long and shoprt terma goals. It depends pon entity to select most appropriate strategy
for business. (Akhmedova and et. al., 2019). In perspective of given corporation, they
are planning to launch vehicles which produce low emission that affect environment
as well as they also planning to unpin economy.
 Structure – It refers to how business units are dividied & who will report to whom in
management. It is necessary to focus oin structure of organisation because it help in
analysing of indvidual role. Therefore, undertaken corporaton have divisonal
structuyre in management.
 System – It refers to procedurs of a company which depicts activitties which are
performed on daily basis & also they reflects how organisatiopnal strategies are
neeeded nto be carried out. In viewpoint of company, they developed proper strategies
and system related to introducing vehicle which is eco friendly as well as that
generate how carbon emission.
 Style – In this, it states how activities, fucntions are carried out by top authorties, way
of interearction with employees, set of actions taken by them to solve disputes. It
directly reflects managers or leadership style of leader. (Gallego‐Álvarez and
Pucheta‐Martínez, 2020). In terms of given corporation, their manager involves
employees in decision making process so that they can attain their desire goal
successfully.
 Staff – These are one who are responsbile for getting the work done of management
on given deadline. Staff comprises of many poeple like,subordinates, salesman etc. In
relvance with undertaken enterprise, their staffs are trained, motivated and encouraged
so that they accomplish their task properly and attain desire goal of company
successfully.
 Skills – It refers to inner or external capabilities of a person which is used by them in
work elated comtext area. Each & every person have different skill set according to

their knowlede. In reference with enteprise, 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 – These are defined as practices, beleifs, which are adopted by
community, corporate world to surviuve in environment. They also depicts the
guidlines of principles which assist in way to behave, talk, etc. In view point of
selected corporation they follow proper guidelines so that they can be successful in
launching vehicle which not harm to environment.
All these 7 elements work together for Nisan which provide them assistance in
conducting their work within more effective manner as well as also result in accomplishing
goals and objectives. With the assistance of these staff also feel motivated and do work in
better manner which result in enhancing productivity of company.
TASK 3
Porter’s five force model is strategy that an business firm use for analysing
competitive forces which are available within market area. With the assistance of this
approach manager & leader of firm will able to structure and select process, approaches and
plans within legitimate manner (Wielsma and Brunninge, 2019). In relation of Nissan they
adopting respective model for evaluating competitive forces at marketplace, explanation of
porter’s five force model are mention below:-
 Threats of new entrants – It is circumstances in that new business enter within
specific market area without facing any difficulties. It is in like manner possible when
that specific market is significantly beneficial and there is incredibly less limits
similarly as establishments. In regard of taken entity, their danger of new section is
low on the grounds that particular organization embrace new innovation and have
high pieces of the pie which isn't simple for other companies to pick up in less time.
 Threats of substitutes – It is identified as situation in that market have higher
availability of substitute offerings. Thus, such practices will result in high switching
power of customers easily from one product to other for gaining high product on less
price. In relation of Nissan firm, threat of substitute product is high because there are
numerous companies within industry who are selling same products such as BMW,
Hyundai, Suzuki etc.

 Bargaining power of customers – It determine the control of customers in relation of
prices as customers of given enteprise have low buying power because of expensive
cost offerings. Apart from this, consumers are fragmented at global level as new cars
sold through dealers which result in low bargaining power of consumer with more
distinct products as well as Nissan in successful manner creating enough
differentiation within automobiles in relation of features as well as specifications.
This will provide assistance to respective company in maintaining profitability and
brand image.
 Bargaining power of suppliers – Offering of automobiles is complex with detailed
specific as well as require wide components as well as accessory. For quality control
purpose Nissan need qualitative components from trusted suppliers and this will result
in enhancing bargaining power of suppliers (Cao and et. al., 2019). Hence, it is
important for respective company to maintain good relation with vendors or search for
new suppliers for avoiding increment in cost and shortage of raw material.
 Competitive rivalry – Automobile manufacturers are facing high level of
competition and Nissan is also part of it. As they are facing rivalry from local as well
as international competitors such as General Motors, Daimler Chrysler, Toyota.
Honda and many more. Still at global level respective company is most profitable at
global level. Although, for reducing market competition Nissan is doing strategic
alliance that provide benefits for company as well as they are also trying hard for
enhancing market share through competing with Toyota. It is essential for Nissan to
manufacture alternative of Toyota offerings within less price in comparison of Toyota
for gaining market position.
These five forces have wide impact on working of Nissan as it is important for them to
analyse these factors in better manner and then conduct their operations so that better
outcomes will be gained. Along with this, negative impact gets minimise as well as
opportunities available in market will be gained in better way.
TASK 4
Porter’s generic as well as Ansoff matrix both model Use by Nissan Company by
which will be used to analyse and evaluate market within better manner for developing
strategies, plans and policies appropriately. Discussion of these model in relation of
respective firm are as follows-

Ansoff matrix – It is framework which an business form adopt or implement for
creating plans, policies and strategies that will aids in business expansion in more effective
manner. Within an organisation, this is use by senior manager & marketers of company and
several other people who generally design strategy in company so that staff can carry out
their operations in correct way. In relation of Nissan, manager utilise Ansoff matrix within
their working for analysing strategy in better manner. Explanation of these are mention below
:-
 Diversification – According to this factor of Ansoff matrix company introduce wide
range of products and services in market area. Diversification will help company in
enhancing their customer base as well as profitability in better manner. In addition to
this, diversification strategy may be risky for company because every people have
there different taste and preferences which may result in not liked offering of business
firm.
 Market development – It is strategy in which business firm focuses on new market
through utilisation of existing offerings. Here, market development is simply
expanding business in customer segments, region, new geographies and several other.
In other words, it can be said that, market development tactics need conducting proper
research in relation of market so that customers will be analysed in better manner.
 Product development – It states that business come with innovative in market for
satisfying need & want of customers in better manner. While bringing new product it
is necessary for company to conduct research in better manner so that their sales and
profitability will get enhance. In reference with given enterprise, new product
development strategy is influenced through government which is related to clear air
and problem in term of changing climate. This will provide driven to respective
company in building powerful battery with innovative technology that help in making
end users satisfy. This product will provide assistance in reducing carbon emission in
better manner.
 Market penetration – According to this, business use their product and services within
their existing market. Behind this aim of cooperation is the increase their market share
through market penetration strategy. Moreover, an organisation can use market
penetration strategy within vaious manner such as decreasing price, acquiring
competitors, increasing promotion and several other ways also.

After evaluating all these growth factors of Ansoff matrix, Nissan Company analyse
the product development is effective for them. Because product development provide
assistance in gaining competitive advantages and also provide help in conducting operations
as per policies of government in better way.
Porter’s generic competitive strategy – By Porter’s four generic business strategies
has been introduced which provide assistance to company in gaining competitive advantages.
Other than this by utilisation of respective model an business firm will determine their
position which means there profitability is up to the mark or not industry average. Thus,
profitability above average which leads to long term sustainability of company & also assist
in gaining competitive advantages. There are mainly four factors within this model such as
cost leadership, differentiation, cost focus and differentiation focus (Porter’s generic
competitive strategy (Ways of competing), 2016). All these in relation of Nissan Company
are as discussed below :-
 Cost leadership – In this strategy company target broad market as well as offer low
possible price as there are mainly 2 options available in this course. Company have to
opt low cost as much as possible and they have to make sure that company have
larger marker share along with average prices. Within both situation, main point is to
keep price of company low as much possible. Moreover, organisation can apply this
strategy only in successful manner then they have substantial invested capital at
disposal, low costs as well as efficient logistics when it come to material and labour.
 Differentiation – Within differentiation strategy business firm always unique ways
with some ideas in innovative way in market area which help in attracting large
number of attention and also help in increasing sales. Differentiation is awarded for
their premium pricing as well as uniqueness.
 Cost and differentiation focus – In this, cost focus strategy keep attention in gaining
benefits in relation of target segment as well as differentiation focus on gaining
differentiation within target segments. So, in context of selected enterprise they are
influencing policies of government in term of clear air and issues related to
modification within climate. It motivate Nissan for building powerful battery,
advanced technology that help in making customers satisfaction. Although, it also
result in reducing carbon emission. In addition to this, respective company buy raw

material in bulk that result in low cost and also offering customers products which are
economic and can be affordable by everyone.
Nissan is focusing on cost and differentiation focus because they are coming with
different product at affordable price which help them in fulfilling government policies
and conduct operations of company in better manner.
CONCLUSION
This overall assignment result summarised that, for an organisation strategy is
important part as it provides help in achieveing of goals and objectives of organisation in
appropriate manner. Because it related with course of action which aids entrepreneur in
gaining competitive advantages within market sector. Thus, it is seen that business tactic is
simply but planning which an organisation can implement within their activity for long term
sustainability in market. For analysing analyse impact of macro environmental factors on

working company implement PESTEL and Four corner analysis. Further, it is also important
to analyse internal capabilities of company which is possible through applying VRIO and 7s
McKinsey. Every organisation want to gain competitive forces which only possible with the
assistance of applying Porter’s five force model. Apart from this, for implementation of
suitable strategy Ansoff matrix and Porter’s generic model is suitable.

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/>