Strategic Analysis Report: Nissan's UK Market Position and Strategy

This report provides a comprehensive strategic analysis of Nissan's operations in the UK. It begins with an introduction to strategic management and its importance for business success, particularly for a major automotive manufacturer like Nissan. The report then delves into an examination of the company's qualitative resources and how they contribute to its competitive advantage. The core of the analysis utilizes Porter's Five Forces model to assess the external factors impacting Nissan, including supplier power, buyer power, competitive rivalry, threat of substitution, and threat of new entry, with specific consideration given to the impact of Brexit. Furthermore, a PESTEL analysis is conducted to evaluate the political, economic, social, technological, environmental, and legal factors influencing Nissan's performance. The report also explores the various strategic decisions made by Nissan, including cost leadership, differentiation, and resource-based view approaches, to gain and maintain a competitive edge in the market. The report concludes by summarizing key findings and implications for Nissan's future strategies and growth in the UK market.

Strategic Management prevent the formulation of
monopolies and curb unfair practices

Table of Contents
Introduction......................................................................................................................................3
Assignment......................................................................................................................................3
Conclusion.....................................................................................................................................11
References........................................................................................................................................1

Introduction
Strategic management played a significant role in the success of each and every business
organisation. So that companies can use their resources to attain there organisational goals and
objective in an effective way. It helps to the management to identify and analyses the internal
and external resources of the company. It also helps to make and implementing strategies to
compete their competitors. Nissan is one of the valuable and well known brand in UK
(Ambrosini, and Bowman, 2009). They have there manufacturing plant which produced 50000
vehicles in a year. Company provide highest quality products to their customers which gives
competitive advantage to them.
The purpose of this report is to identify and analyses there qualitative resources. And
using these resources in a way where the company can get competitive superiority. This report
also explain the how the internal and external factors affects the company performance and
productivity.
Assignment
Strategic decision of an organization played a prominent role in the success of any
business entity around the world. Because these strategic decisions are use by the companies in
the long run. It is significant for Nissan which is one of the leading car manufacturing company
in UK. The manufacturing plan of Nissan is located at Sunderland (Audebrand, 2010). This plant
is operated by Japan car manufacturer Nissan motors. It has been operational from 1986. At
Sunderland plant company have various functions including body assembly, paint and final
assembly. There are various other facilities at Sunderland production facility of Nissan. It
includes press shop, body shop, body paint shop, plastic shop, and other facilities. There are
various factors which affects the current business operations of Nissan in UK. These factors can
be analysed by porter five force model. This approach can be used by the company to make their
strategic decision effectively. This approach also helpful for the organization after BREXIT
affects (Bottani, and Rizzi, 2006).
These factors which affects the current and future operations of the business are as
follows:

Supplier power: The bargaining power of suppliers played a prominent role for a business entity.
This is depends on the number of suppliers available in the market. If there are limited number of
suppliers in the market than it is difficult for the company to make their products cheaper.
Because the have more bargaining power and they can increase the price of raw materials
accordingly. But if there is larger numbers are available in the market than it is good for the
company. Because they have more scope to switch from one suppliers to another. Nissan
operating there business in UK. And UK is part of EU, therefore they have large number of
suppliers. There is limited bargaining power which is good for the company. Now UK separate
from EU as result there is limited suppliers. It can increase the bargaining power of the company
which can leads to increase the cost of the products (Cheng, and Grimm, 2006).
Buyer power: In this force the bargaining power of the customer affects the price and quality of
the products. Because in the market specially in car manufacturing industry. There are cut-throat
competition in the UK. Therefore the bargaining power of customer is increased. But here Nissan
provide high quality products to their customers so that I can not affects on a large scale.
Competitive rivalry: This force is one of the significant factors for the company. Because there
strategies are make according to the competitive rivalry. As we know that UK is a part of EU.
Illustration 1: Porter Five Force
[Source-Porter Five Force, 2016]

Therefore there are various competitors are in the market specially German can manufacturer. So
that the competition level in UK are huge in the basis of pricing, quality, and range of their
products.
Threat of substitution: It is another factor which affects the price and quality of the products.
This factors is same as competitive rivalry. For example if Nissan make a product for niche
segment. At the same time their rivalry companies make the same category products for this
particular segment (Furrer, Thomas, and Goussevskaia, 2008). Buyer of car will prefer a car that
used water, solar or electric auto as fuel because a project Green Mobile has launched, and this
project involves Eco-friendly vehicles and had attractive many buyer of car that support eco-
friendly.
Threat of new entry: Today there is fast industry growth in the market of EU. And also the
increasing the spending power of consumers, So that there are threat from new entry in the
industry. If Nissan wants to compete them they requires a large investment in research and
development. So that they make unique product and provide best services to their customers.
There are lot of entry barriers in this industry. Because it requires large amount of capital, so that
there are limited threat of new entry. Anther reason is that Nissan is an expertise in the car
manufacturing so that it is difficult for a new firms to compete with them (Grunig, 2006).
It is significant for Nissan, UK that they have more competition when they are part of
EU. But after Brexit there competition in the market reduced but at the same time they loss there
market share due to losing one of the large market. Brexit affects adverse to the company,
because it also increase trade barriers for the company for operating in EU. Business
environment played a significant role in the growth of the company. For that a company requires
to scanning their internal and external environment. It helps to the company to identify their
required resources and capabilities to operating this environment effectively. There are various
factors which affects the performance and productivity of a company. Nissan requires to make
their strategic decisions according to these factors so that they can attain their goals and
objectives easily (Hill, Jones, and Schilling, 2014). PESTEL analyses helps to the company to
know their internal and external environment and also know their available resources and
capabilities to achieve their targets. There are following factors involved in PESTEL analyses:
Political factors: These are the external factors which involved the government decision on the
industry or an economy. These factors affects the business operations of the company. It includes

tax policies, fiscal and monitory policies, trade policies etc. In the political factor the political
stability also affects the operations. As we know that UK is part of EU. Therefore all policies are
make by the higher authority of EU (Hitt, 2011.).
These factors impact the profitability and production of Nissan. For example EU make
decision on they provide social benefits of under developing part of UK. So that as a part of EU,
UK must contribute to them. This money comes from the various industries and UK government
can increase the tax rate. Which is not good for the company.
Economic factors: It involves the economic condition of the country. There are various economic
factors which affects the operations of the company. Growth rate of the economy, income level
of consumers, unemployment rate, inflation rate, exchange rate and other factors. Now the UK
decide to leave EU, its economic impact on UK and also car market in UK. It is not good for
Nissan because it affects the long term strategies for the company (Hitt, Ireland, and Hoskisson,
2012). There is another reason is that the economic slow down in the UK which can decreased
the production of the company.
Social factors: Social factors are great impact on the any business entity in the world. It involves
the new trends and preferences of the customers, change in the culture and taste of the customers.
These factors are also affects the product characteristics of the company.
Technological factors: Technological factors involved automation in the manufacturing process,
research and development and technological advancement also affects the operations of the
company. Because it will help to reduces the cost of manufacturing and increase the profitability
of the company which is the core objective of the business. Today companies are more focused
on the innovations of their brand in front of their customers. Customers are more aware towards
the new innovations. Therefore company can invest their money in to research and development
(Wheelen, and Hunger, 2011).
Environmental factors: Environmental factors are also affects the business operations of the
company. There are various rules and regulation regarding to protecting the environment.
Therefore each and every company requires to make their product with a sustainable process. So
that it will less affects the environment. Today environment are close the customer. So that they
are more aware about environment. They wants environment friendly products. It can leads to
the more investment on environment friendly technology which is on less harm to the
environment (Hodgkinson, and Healey, 2011). Now Nissan can focused on battery cars,

electronic cars, and less diesel and petrol consuming products. It is good for both company as
well as society.
Legal factors: Law and regulation regarding a business activity also affects the business
operations. Legislative and law regarding the business or an industry changes occur from time to
time.
There are various strategies used by Nissan to compete in the market. The automotive
strategy follows hot on the heels of the recently launched Aerospace Industrial Strategy. Both are
unique within Europe and both are a great example of industry and government working together
to address common issues and foster growth (Hult, Ketchen, and Arrfelt, 2007). In the next two
years company are willing tom invest more money to support their innovations and improve
there existing product quality. They are also focused on electric version car to meet the future
needs of the customers. They are also planning to produced more cars as compare to their current
production capacity.
Therefore, Nissan requires that to analyse all factors effectively and make their strategies
accordingly so that they can attain their organizational goals and objectives effectively.
Nissan's strong manufacturing footprint in UK and other continues to increase the company's
growth, enabling Nissan to gain market share in more than previous of the UK and European
markets in which it operates. Nissan continues to shape the future of mobility, investing
significantly in Research and Development to bring pioneering technologies to as many
customers as possible (Johanson, and Vahlne, 2009). The company is committed to bringing
autonomous cars to market in the near future, with a differentiated offering built on simplicity,
safety and accessibility. Nissan invests significantly in R&D and has a proven track record of
delivering bold design, great quality, and accessible technology to everyone, reinforcing Nissan's
values of innovation and excitement.
Competitive advantage is a superiority advantage as compare to their competitors in
terms of price, quality, brand for their products and services. So that Nissan requires that to make
their products which gives competitive advantage to them. For comparative advantage company
can use Michael porter strategies for gaining competitive superiority (Kraus, and Kauranen,
2009). These strategies are as follows:

Cost leadership: With the help of this approach a company can provide law price products to
their customers. For implementing this strategy effectively organization requires to increase
productivity and efficiency in their operations process. And also use their resources effectively.
Differentiation: In this strategy Nissan provide higher quality products to their customers. These
products are different from their competitors products. And gives brand value to their customers.
So that company can gain competitive advantage over their competitors.
Resource based view: In this approach the company is gain competitive advantage through using
there available resources effectively and exploit the market opportunities (Swayne, Duncan, and
Ginter, 2012.). In this new approach organization focus on using their existing resources
effectively and to attain higher organization performance and productivity. To achieve these
performance a company are use following resources:
Tangible assets: These assets involved land, building, equipment, machinery, and capital. These
physical resources are give long term advantage to the company. If the company have more
tangible assets as compare to their competitors it gives a competitive advantage to them.
Intangible assets: Intangible assets are called there is no physical presence. It involves brand
value, trademark, copyrights, intellectual property rights etc. Nissan have a good brand value in
across UK. So they competitive superiority over their rivalry firms.
[Source-Strategic Management, 2016]
Illustration 2: Strategic Management

https://www.strategicmanagementinsight.com/topics/resource-based-view.html
In the resource based approach there are two assumptions that all resources of the company must
be heterogeneous and immobile. These assumptions are as follows:
Heterogeneous: In this assumption the resources, skills and capabilities that organization own
different from other company. In this concept no competitive superiority could be attain because
organizations have same amount of resources, skills and capabilities. And organization also
follow same strategies to compete each other ((Nerur, Rasheed, and Natarajan, 2008)).
Immobile: This is the second assumption of RBV where resources are not move from one
company to another. Due to this immobility, companies cannot replicate rivals’ resources and
implement the same strategies. Intangible resources, such as brand equity, processes, knowledge
or intellectual property are usually immobile.
VIRO framework: VRIO framework is used to identify and analyses the internal skills,
capabilities and resources that can be used as a source of competitive superiority. Nissan
requires to identify these internal resources through PESTEL analyses (Parnell, 2008). By using
VRIO tool company can get competitive advantage. Because these resources must be valuable,
rare, imitable and non substitutable.
Valuable: In the VRIO approach, the resources belongs to the company are valuable or
not. If these resources are valuable than it can exploit the external opportunities and also defend
himself against new threats. These valuable resources help to the organization to increase the
customer loyalty on their brands. Therefore Nissan requires to make their product unique in
terms of quality or can reduced the price of the product. If these resources are not valuable to
them than, it can lead to competitive disadvantage (Schot, and Geels, 2008). To maintain the
competitive advantage it is essential for the company to review the value of their resources in the
regular basis. Because business environment is continuous changing.
Rare: These are resources which are owned by few companies are called rare. Rare
resources in the company also provide competitive advantage for short time. If Nissan have both
resources Valuable and rare than it is good for the company. If organizations have same
capabilities, this situation called competitive parity. This is not a favourable situation for the
company.
Costly to imitate: To attain a sustainable competitive advantage, company requires to
make their resources valuable, rare and costly to imitate.

Organization: A company itself provide a competitive superiority against their
competitors. It involves the organization system, their process, organizational culture, and
policies can be rare, valuable and costly to imitate.
[Source-Strategic management, 2016]
Illustration 3: Strategic management

Conclusion
In the above mention report, it has been described that how strategic decision of the
company are significant to them. This report focused on how internal and external environment
can affects the business operations of the company. It also tells how a company can get
competitive superiority against their competitors. These resources valuable to the company and
with the use of these resources effectively a company can attain there organisational goals and
objectives.

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