Nissan Porters 5 Forces

Threat of New Entrants Threat of Substitut es Products Rivalry among the Existing Competito rs Bargainin g Power of Suppliers Bargainin g Power of Buyer / Customer s

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 save time, convenience, save fuel cost, parking cost, etc. Recent rising in fuel prices.

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)

Conclusion:

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

Medium level threat of substitute recognition brand in many regions with satisfactory market shares. Nissans strategy of continual improvement and well-equipped to handle the challenge. Technological innovation is the most important driver to gain and sustain competitive advantage.

Bargaining power of buyers

The power that the customers have the fact that gives Nissan the influence it has on the market. Buyers are most powerful when :
Switch

easily between the offerings of different automobile industry

- Advertisements show up on the television daily as there are so many choices and products available. - If they cannot keep their buyers happy then they risk losing them to their competitors.

Bargaining power of buyers

Different

brand of cars from automobile 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.

Bargaining power of buyers

The

products that the buyers purchase 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 offer BASICALLY the same products. For examples, automobile parts (eg. Oil filters, mufflers, belts, etc) are standardized commodities.

Bargaining power of supplies

Currently, Nissan source components from around five thousand suppliers.
Existing

suppliers

For those existing suppliers, they already have good 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.

Bargaining power of supplies

New

entrances suppliers

- Since Nissan has been committed to set a global standard for the quality of the components from its suppliers base, so with the new product quality of components offered by new suppliers, they will be given better offer in order to venture into market.
Force

- Low

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 Camry 2sd - Toyota Prius 3rd - Nissan Altima

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

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 fleet sales to corporate customers

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