Nissan 5 Forces Presentation

7/31/2019 Nissan 5 Forces Presentation

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Nissan Porters 5Nissan Porters 5

ForcesForces


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Threat ofNew

Entrants

Bargaining Power

of Buyer /Customer

s

Threat of

Substitutes

Products

Bargaining Power

of

Suppliers

Rivalryamong

theExistingCompetito

rs


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Threat of Substitutes

1. Purchase brand new car

High switching cost.

Cannot sell a new purchased car for the same price you

paid for it.

2. Before purchase a car

- Factors to be considered:Many good alternatives to new cars/ used cars.

Availability of public transportation (subway, buses, train, etc).

Urban area with well-established transportation system savetime, convenience, save fuel cost, parking cost, etc.

Recent rising in fuel prices.


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Threat of Substitutes

3. Product differentiation Similar capacity with similar price can

easily be found, eg. Toyota, Honda, etc.

Price-performance trade off of substitutes High threat of substitutes.

4. Social & cultural attitudes

Constraint by geography, race or religion. Necessary infrastructure (eg. roads & petrol

station)


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Conclusion:

Source: Market Watch, The Wall Street Journal, Jan 25, 2012

Medium level threat of substitute recognition brand in many regionswith satisfactory market shares.

Nissans strategy of continual improvement and well-equipped tohandle the challenge.

Technological innovation is the most important driver to gain and

sustain competitive advantage.


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Bargaining power of buyers

The power that the customers have thefact that gives Nissan the influence it hason the market. Buyers are most powerfulwhen :

Switch easily between the offerings of

different automobile industry

- Advertisements show up on the television daily asthere are so many choices and products available.

- If they cannot keep their buyers happy then they

risk losing them to their competitors.


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Different brand of cars fromautomobile industry

- Low switching costs associated with selecting

from among competing brands.

- constantly evolving technologically and increasing

quality can be factors that will draw customers to

them instead of leading them to other companies.


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The products that the buyerspurchase are standard or

undifferentiated

- Products is not unique and can be purchased

from other suppliers.

- Sellers are practically the same like GM, Ford,

Chrysler, Nissan, Honda, Toyota, etc all offerBASICALLY the same products. For examples,

automobile parts (eg. Oil filters, mufflers, belts,

etc) are standardized commodities.


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Bargaining power of supplies

Currently, Nissan source componentsfrom around five thousand suppliers.

Existing suppliers

- For those existing suppliers, they already havegood relationship with Nissan, they also know that

some suppliers are small firms who rely on the

carmakers, and may only have one carmaker as a

client, so bargaining power of suppliers are low.


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Bargaining power of supplies

New entrances suppliers

- Since Nissan has been committed to set aglobal standard for the quality of the

components from its suppliers base, sowith the new product quality of components

offered by new suppliers, they will be given

better offer in order to venture into market.

Force - Low


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Rivalry among the Existing Competitors

High competitive

- Main rivals:

Toyota Motor, Honda Motor (Japan-based competitors)

General Motor, Ford Motor and Chrysler LLC (U. S. market)

- Portion of market share in US:Toyota (13.1%), Honda (9.6%), Nissan (8.1%)

- Car Model :

Most-shopped new car

1st - Toyota Camry2sd - Toyota Prius

3rd - Nissan Altima

(Sourse: Automotive News -- March 26, 2012 - 12:01 am ET)


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Rivalry among the Existing Competitors

Diversity of rivals in terms of cultures

- Slow market growth U.S. and Western Europe market

- Growth rapidly booming market - China and India

Industry growth

- Strategies change after Renault-Nissan alliance

- expanded luxury line-up is essential to sustain fleetsales to corporate customers


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Conclusion:

Degree of rivalry : Moderate force

- Experience CEO Leadership to build multi cultural

management regions cross-cultural- Revival plan continuous improvement which

provided career development for individual

employee

Nissan 5 Forces Presentation

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