Strategic Management in Multinational Corporations

Introduction

Business strategic management is the practice of setting objectives, analysing the competitive environment and evaluating the internal organisational activities for developing effective strategies so that the multinational corporations can run their business internationally. It is necessary for the business firms to create innovative strategic planning in order to expand their operations and secure future sustainable development and for creating the appropriate strategy, it is necessary for the organisations to analyse the external and internal business environment for evaluating the opportunities of the companies in the market (Rothaermel, 2016). As well as it is also essential for the companies to conduct in depth analysis for identifying the competitive structure of the market as well as the firm’s capabilities and skill set through which it is possible for the firms to set clear objectives and develop effective tactics to achieve the organisational vision. The study provides a scope to evaluate the external and internal business environment for the organisation Nissan as well as analyse the brand capabilities of restructure their strategies for ensuring future growth. The organisation Nissan is a famous automotive manufacturing organisation operating with diverse products and the analysis in this paper is fruitful to understand the brand capabilities and skill set to develop proper strategic planning for future. Hence, the study aims at analysing the business environmental, competitive market condition and organisational capabilities through applying the theoretical framework and models related to strategic management.

Organisational background

The organisation Nissan is an auto merchant of Japanese automobile company and it has been established in the year of 1993. The auto dealer and manufacturer are efficient to develop quality products under the following brand names Nissan, Datsun and Infiniti. It has 6 billion common shares in the market and the company is successful to serve the customers worldwide. The production output in the provirus year was more than 556245 as well as Nissan is also efficient to generate revenue approximately ¥11.95 trillion in the year of 2017. Total numbers of employees of the organisation are more than 140900, where the employees have suitable skill set to serve the customers innovatively and create values for them. The organisational values are such as customer’s satisfaction, respect and integrity, transparency and accountability management and creating stakeholder’s values in long run as well as the organisation is also efficient to create values for the social communities as a whole by acting responsibly in protecting the environment. The government policies and cooperation are fruitful for the organisation where Nissan follows the rules to run their business ethically and the strategies such as powerful built-in battery, sleek aerodynamics with innovative technology are effective for the organisation to improve their competitive advantage and create values for the customers (Nissan, 2020a).

LO 1: Macro environmental analysis

PESTLE analysis is effective for analysing the macroeconomic condition where the organisation runs their operations in the market under proper business framework (Hill, 2017). The PESTLE analysis of Nissan will be evaluated further which helps to evaluate the impacts on the external organisation on the business strategic planning.

Political:

Political environment is playing a crucial role on the business profitability and the political support in the automobile manufacturing industry has strong effects on the companies under the automobile industry worldwide, the international trade agreements and the subsidy of the government on the low carbon cars are playing an important role to influence the organisations in this industry to switch their product portfolio towards low carbon battery and this further creates values for the customers. The inter country relationship and stable political environment are also influencing the companies like Nissan to restructure their strategic planning and run their operations efficiently.

Economic:

The developed market is associated with high national income and appropriate GDP growth which further enhances the performance o the automobile industry. The countries such as UK and USA and other developing nations are also successful to manage the inflation rate for avoiding unnecessary inflationary economic growth. This further stableises the external environment and provides the chance to the auto manufacturing companies to run their business efficiently. The purchasing power parity of the customers is also increasing over the period of time due to high employment and skill set and this further raise the demand for the automobile products and thus it also has positive impact on the auto industry (Schilling and Shankar, 2019).

Social:

There is sustainable social development with high literacy rate and there is environmental awareness among the people across the globe. The people are also educated enough to choose the products in the market after analysing the product portfolio of the companies and the people are also trying to be updated with latest news and information through social media and online activities. Thus, there is social growth and it further influence the companies in automobile industry to strategies their products to serve the customers innovatively. There is changing trend of the customers demand for the products and the company like Nissan in this regard must acknowledge the actual customer’s choices and market trend to design their products and services.

Technological:

In the recent era of digitalisation, there is strong impact on the technological up-gradation, where the companies try to be innovative and design their products efficiently through incorporating latest technique and facilities in the automobile products. The industry is growing towards low emission and high mileage facilities and thus the technical advancement further influence the organisations to strategise their business and produce high quality products as per the market trend. For example, Toyota, Hyundai and Ford focus on low emission cars to satisfy the buyers and act responsibly in the environment. Hence, the organisation Nissan tries to invest a huge amount for research and development activities so that they are able to design their products by incorporating latest technology (Schilling and Shankar, 2019).

Legal:

The legal structure also provides a scope to the automobile companies to restructure their organisational tactic and improve their product category in long run. There are laws on carbon emission and the government reshapes the industry with strong rule and regulations about carbon emission and other safety measures. There is safety measures for the passenger as well as the road accidents are also decreasing under the effective legal structure (Ansoff et al., 2018).

Environmental:

There is environment friendliness and carbon emissions rules and legislations which are growing stiffer around the world and the government in the 21st century focuses on pollution control mechanism which also reshapes the organisational activities under the automobile industry across the globe. Here is strong law and pollution test which further help the organisation Nissan to reshape their strategy to act responsibly and create values or the social communities as a whole.

Thus, as per the PESTLE analysis, the automobile industry is growing rapidly with economic growth and social development, where the political stability and legal structure reshapes the firms and Nissan needs to run their operations efficiently by cooperating with government and implementing the legal business practice. The environmental sustainability and technological advancement also provides a scope to the automobile manufacturing companies and thus Nissan must develop creative tactics for expanding their business sustainably in future through reducing greenhouse gas emission. In addition to this, the stakeholder’s analysis is also effective for understanding the external macros environment for the automobile industry (Lasserre, 2017). As per the stakeholder’s analysis, the major stakeholders of Nissan are the customer’s worldwide, employees and technician’s team at the workplace of Nissan, suppliers and car dealers across the globe, government and social communities as a whole. The organisation also have strong shareholders base to support the operations and research and developmental activities through which the company can expand their business sustainably with proper capital investment. As per the stakeholder’s analysis, influencing the power of the stakeholders is possible through meeting their needs and preferences and engaging them in the organisational operational activities. The organisation Nissan is efficient to manage their stakeholders and create values for them by providing high return on investment. The leader at Nissan and management team are also trying to empower the stakeholder and influence their power on the organisation so that they can provide their opinion and getting empowered well for developing effective organisational decision.

In order to maximise the interest of the stakeholders, the organisation Nissan aims to engage with all the stakeholders of the business and enhance communication with them as it further helps to maximise collaboration with each of the stakeholders of the organisation and increase their interest to make effective contribution on the business activities. In addition to this, the organisation aims at provide strong support and empower the stakeholders for getting their idea and innovative perception to develop successful organisational tactics for achieving future objectives, in addition to this, the organisations Nissan tries to create values of the employees, who are the major stakeholders of the business and in this regard Nissan provides high structured salary, performance related pay and manage health and safety of the staff at the workplace and these are major strategies to maximise employee’s values in the company. On the other hand, the organisation is also focusing on creating values for the customers and inspiring them to make effective purchase decision for their products (Lasserre, 2017). Nissan provide high quality products at effective price where products quality, latest technological innovation, creative design and other faculties are helpful to maximise the vales for the customers and satisfy them in long run. Moreover, the shareholders are also encouraged at the organisation of investing more to expand the business and conduct more research and development for creativity and innovation in designing their products (Nissan, 2020c). Nissan is hereby efficient to manage their stakeholders and empower them in the organisational decision making behaviour, which further helps the firm to run their operations in the market and acknowledge the market trend and customers preferences to meet their requirements and secure the future sustainable development (Nissan, 2020c).

LO 2: Internal environment and capabilities

The internal analysis can be done through applying the McKinsey’s 7 s model and Porter’s Value Chain analysis. The organisational capabilities and skill set at Nissan can also be evaluated through the internal environmental analysis. As per the McKinsey’s 7 s model, the factors are structure, system, style, staff, skills, strategy and shared values (Shao Taisch and Ortega-Mier, 2016). The organisational structure and system at Nissan are effective to guide the stakeholders engaged with the business. The staffs members are also expand who are playing crucial role to manufacture the quality products of Nissan. The strategy of the firm tries to diversify the products with producing different car models such as Nissan GT-R; Micra; Nissan –Trail; Nissan Leaf; Nissan Juke; Nissan QASHQAI and Nissan e-NV200. Additionally, the skill set is effective for Nissan to satisfy the customers in long run with high quality products and efficient services (Nissan, 2020d). The hierarchical structure, systematic approach at the workplace as well as staff development and skill enhancement activities through technical training and development program are effective to improve the internal organisational process of Nissan.

Additionally, porter’s value chain model is also effective to identify firm’s capabilities in running their operations in the market. The organisation Nissan focuses on improving primary activities such as inbound and outbound logistics, marketing and sales, services and operations (Carayannis, 2018). The staff members, about 140900, at Nissan are efficient to maintain stock of the products and improve their marketing tactics to expand their business sustainably across the international markets. Nissan is also efficient to manage their operations sustainably and the company focuses on utilising alternative resources or renewable resources as well as develop strong and environmentally sustainable battery and engine for the cars. The secondary activities are such as firm infrastructure, technological innovation, procurement and human resource development (Chandak, Chandak and Dalpati, 2019). Nissan is successful to manage their strong employee base that is efficient to design the products and improve the quality of the products through continuous research and technological advancement (Nissan, 2020d).

Through the internal analysis of Nissan, it can be stated that, the company is capable to developing further strategic planning to gain high competitive advantage by utilising their skill set and experience of the employees as well as improve firm infrastructure to develop latest cars for meeting the customer’s satisfaction in long run (Nissan, 2020d). Technical innovation and strong IT framework further boosts the performance of the firm in long run. Hence, the organisation Nissan is able to improve their strategic planning by utilising the organisational resources and capabilities for managing the manufacturing and distribution of the car products. Additionally, inbound and outbound logistics are maintained by the strong suppliers and efficient distributors for better management of the distribution of the cars. The digital media marketing and website development of Nissan are also fruitful to manage their operations and expand the business strategically.

LO3 Porter’s five forces analysis

The Porter’s five forces analysis is effective to identify the market structure and other competitive information of the market which are effective for the firm Nissan to develop appropriate strategic planning for achieving future success.

LO 4: Strategic management Plan

Background:

The major products of the organisation are such as Nissan GT-R; Micra; Nissan –Trail; Nissan Leaf; Nissan Juke; Nissan QASHQAI and Nissan e-NV200, which are in good quality and creative design which further attracts the customers worldwide. The vision of the company is “with our Alliance partner, Renault − we are working with passion to achieve it”. The mission of Nissan is “to enrich people's lives, building trust with our employees, customers, dealers, partners, shareholders and the world at large”. Hence, the organisation focuses on creating values for the stakeholders including the customers, employees, suppliers and car dealers, distributors, government and social communities as a whole (Nissan, 2020b).

Organisation structure:

The organisation follows hierarchical structure where the structures of the firm is developed on the basis of the business functions which are such as finance, sales and customers relationship, operations, production, human resource and research and development as well as technology. According to these functions, the organisational structure of Nissan has been developed.

Vision:

The vision of Nissan is “Enhancing people’s life”.

Mission:

The mission of Nissan is “As a company, worthy of trust, Nissan provides unique and innovative automobile products and services that deliver superior measurable values to all the stakeholders”.

Objectives:

The objectives is to create values which are customer’s satisfaction, respect and integrity, transparency and accountability management and creating stakeholder’s values in long run.

Strategy formulation:

Bowman’s strategy is effective for analysing the strategic management tactic of the business and in this regard the strategy of Nissan is focused differentiation and low price strategy, which is fruitful strategic planning of the firm in managing their business internationally. The organisation aims to creating new products with latest technology and added facilities and this is effective for focused differentiation strategy and retaining the long run customers. It is necessary for the organisation Nissan to develop effective strategic planning for successful expansion of the organisation and gaining high competitive advantage in long run. As per the above analysis, the macro environmental condition of the global automobile industry is suitable for Nissan to expand their business across the international nations as well as the brand has strong skill set and capabilities to strategise their business in a unique way for better performance in the market. The strategic model such as Porter’s generic and Ansoff’s matrix are effective to analyse the brand position and develop proper strategic planning for the company.

As per the Porter’s generic model, there are four tactics to establish the business successfully and the tactics are such as cost leadership, differentiation strategy, focus strategy with diversification and focus strategy with low cost (Iyengar and Bharathi, 2018). The organisation Nissan in this regard needs to incorporate the strategy of minimising the cost of operations and manufacturing the products in the market so that the organisation would be able to set affordable pre for the benefits of the customers. Nissan focuses on creating values for the customers and it should be beneficial for the organisation to focus on cost leadership strategy to provide high quality products at affordable price. It will also provide a scope to Nissan to gain competitive edge and secure future sustainable development (Nissan, 2020e).

The Ansoff’s matrix is also another appropriate tool to strategise the business for gaining better market share in the competitive automobile industry (Chandak, Chandak and Dalpati, 2019). There are the strategies such as market penetration, product development and market development and diversification. In this regard, the organisation should focus on market penetration for acquiring new customer base in across the international markets. The organisation musts penetrate the Asian markets as well as expand their business across the UK and USA for better establishment of the organisational business in the international industry. Apart from cost leadership strategy, the organisation Nissan must also focus on product diversification strategy so that it would be beneficial for the firm to establish the business with innovate product portfolio. Nissan must develop electric cars which has strong demand of the customers for the electric cars where the customers are concerned about environmental sustainability. The government rules and legislations related to environmental protection are also there where government support low carbon battery and development of electric cars. These strategic planning will be beneficial for Nissan to establish the brand uniquely in the market (Nissan, 2020e).

Implementation:

The organisation is financially stable and the operation management team and the leader focus on implementing the above mentioned strategy of product diversification and market penetration for expanding their business to Asian markets. Through developing IT infrastructure, Nissan focuses on improving IT innovation and creativity in designing their products for creating values for all the stakeholders.

Evaluation:

The above mentioned strategic planning of the brand and marketing mix tactics are beneficial for the organisation to expand their business and secure future sustainable development.

Conclusion

It can be concluded that, the organisation Nissan is capable of investing more in the research development for producing new and technically advanced cars which would be environmentally sustainable. The political stability, economic growth and legal structure reshape the automobile industry across the globe and Nissan has the opportunity to penetrate the market with product diversification and cost leadership strategy which in turn provides a scope to Nissan to gain high competitive advantage and secure sustainable development in near future.

Reference List

Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018. Implanting strategic management. Berlin: Springer.

Chandak, A., Chandak, S. and Dalpati, A., 2019. The Analysis of Impact of Critical Dimensions on Performance in Context of Supply Chain: Evidence from Indian Automobile Industry. Available at SSRN 3350929.

Iyengar, V. and Bharathi, S.V., 2018. Bibliometric Analysis of Lean, Agile, and Leagile Supply Chains in Automobile Industry (1990-2017). International Journal of Information Systems and Supply Chain Management (IJISSCM), 11(3), pp.22-45.

Schilling, M.A. and Shankar, R., 2019. Strategic management of technological innovation. London: McGraw-Hill Education.

Shao, J., Taisch, M. and Ortega-Mier, M., 2016. A grey-DEcision-MAking Trial and Evaluation Laboratory (DEMATEL) analysis on the barriers between environmentally friendly products and consumers: practitioners' viewpoints on the European automobile industry. Journal of Cleaner Production, 112, pp.3185-3194.