Nissan automobile industry in the uk
Nissan Motor Manufacturing UK Limited (NMUK) being the most productive firm in Europe involves planning and designing done form the begging which allows it to handle all aspects of manufacturing and assembly. It, therefore, produces vehicles used in the UK with over 70% of the output being exported to more than 55 markets around the world (Smith, et, al. , 2017 p. However, NMUK is affected by various trends in the environment which affects its profitability and production. Through a strategic analysis of the company this essay evaluates the general business environment and competitiveness. , 2017 p. The Nissan manufacturing company is also subject to free trade agreement signed recently by the EU which the UK will only be able to enjoy as a member of the European Union.
The Brexit issue has also led to the shift in the manufacturing of X-Trail, something that was confirmed in a statement by Nissan Europe, which was termed as preparation for Brexit (Hodge, 2017 p. The production of X-Trail has been paused and is currently made only in Japan. However, the signing of the recent FTA, allows the cars to be imported into the E. This explanation is based on the macro-economic effect of Brexit on the entire automobile industry. Environment trends The company has experienced a decrease in sales as a result of uncertainty on the future use of diesel. The recent inauguration of emissions testing’s on Volkswagen. Another environmental effect contributed by the automobile industry has placed NMUK Company at high risk with a drop in sales of 7% on diesel fuel which represent a third of the market (Smith189).
As a result, the company has experienced a fall in consumer demand for diesel vehicles with reports showing a weak sales performance in Europe which has further declined the company profits. The anticipated results of Brexit departure will negatively influence profitability. The exit will have a direct impact on employment as to will trigger leaving many treaties and business operation agreements all at once leading to mass unemployment (Bailey, 2017 p. The harsh economic environment will also dictate operations giving room for the importation of cheap cars to the UK market destroying the vehicle manufacturing industry. This is based on the economic framework that surrounds the Brexit issue, which by all means does not fail to affect the economy. Information sources Sources of information to monitor trends in the environment the identification of the patterns in the environment is essential to determine factors affecting productivity and profitability of the organization.
Using market intelligence the company will be able to implement total quality management. The provision of information on customers and their requirements setting organizational objectives and information on the root causes of the problem will help the company address the issues through employee training and education. TQM is a continuous process which addresses the ways of thinking improvement of organizational culture (Hamilton, 36). For example, the NMUK has access to information through government publication on the political trends and the likely effects on Brexit on the company. Such information is critical to management and will help in countering and minimizing the impact of such occurrences on the company. As a result, the management has decided to reduce the number of workers at the plant and transfer the manufacturer of specific models to other plants not affected by the European Union such as the movement of X trail to Japan.
The company withdrawals of its production at the plant and the shift to Japan based on economic predictions and information has facilitated changes in the Sunderland plant affecting the employment and expansion plans of Britain’s biggest auto plant. The company is also reliant on publications and reports by motor industry experts and consultants on the trends and social changes impacting the industry. For example, PWC automotive industry experts consistently provide publications and reports on the future trends expected in the automobile industry which not only informs the management but also gives insights on the forces driving transformation in the automotive industry. The expectation on social changes outlined in their reports which suggest autonomy, connectivity, and electrification of future car is beneficial to management in planning and management enabling them to plan and formulate their goals and ideas in line with automation.
Thus the NMUK has engaged in price and products differentiation as well as advertising to market their products in the local and international market. The threat of new entrants The barriers of entry and exit regulate the British car industry. The main industrial players have in their interests created barriers with the aim of preventing competitors from entering the market. Thus the emergence of new companies and the diversification of the existing companies. NMUK has a low threat of new entrants into the market due to high entry barriers (Porter, 2018 p. They often discount their products to increase sales and gain competitive advantages over the competition. The strategy has been successful in increasing Nissan market share in the UK. Bargaining power of suppliers The Nissan manufacturing company in the Sunderland plant has the low bargaining power of supplier.
Like other companies in the industry, Nissan position in supply and price control is limited due to the small numbers of the specific supplier of Nissan parts around the world (Kim, 2018 p. Nissan operates the bargaining power of the supplier through switching of costs and transactional costs leaving suppliers with the ability to negotiate. For example, Nissan production of better cars with the ability to run purely on electricity and with gasoline assist and are leading the electric car market with the Leaf hatchback EV. Conclusion NMUK faces various challenges arising from modern trends in the automobile industry. The management plans to address the problems affecting sales and profit. The company will diversify its operations to facilitate prevention of losses arising from the political, economic, and social crisis and disasters.
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