Market Entry of LCGC Nissan Cars to the Indonesian Market - Assignment Example

Market Entry of LCGC Nissan Cars to the Indonesian Market A) Suitability 1. Does the strategy exploit the company strengths? The strategy will take advantage of the fact that Nissan has a large market share in Asia, which is the strength in itself. In an effort to boost sales, Nissan’s adoption of green technology will help reduce reliance on costly cars that have high fuel consumption with less efficient cars that have better fuel economy (Nissan unveils low-cost car for Indonesia, 2013).  2. How far does the strategy overcome the difficulties identified in the strategic analysis (resource weaknesses and environmental threats)? Nissan’s Low Cost Green Car (LCGC) is taunted as one of the recent advancements that are expected to capture a big market in Indonesia. Nissan Motor Co. Ltd is one of the largest automobile manufacturers in the world. Among the Asian countries, Nissan is the largest Japanese automaker in China. The company has applied innovativeness in the development of its products, thereby emerging the sixth largest automaker in the world (Nissan Motor Corporation, 2014). 3. Does it fit in with the organisation’s purposes? This is because sales are expected to rise especially upon the realization by the customers about the efficiency and the low cost of the car. According to the Asian Pulse News (2011), Nissan intended to expand its Asian market by investing US$312 million. B) Feasibility 1. Can the strategy be funded? Funding the introduction of the LCGC cars can effectively be done since the company has been on a profit making record. This can be taunted as a market expansion strategy while at the same time diversifying to more technologically advanced products (Just –Auto Global News, 2014). 2. Is the organisation capable of performing to the required level (e.g., quality level, service level)? Nissan is a multinational company that has engaged in business venture in different parts of the world Indonesia being one of them. Their understanding of the Indonesian market is a very significant aspect that makes the company command some authority. The company has an existing clientele (Nissan unveils low-cost car for Indonesia, 2013).  3. Can the necessary market position be achieved, and will the necessary marketing skills be available? Based on the prevailing needs across the world, especially on environmental conservation and inflation, the marketing of the product will be a walk in the park. People will only require to be convinced that the cars are as efficient as the rest. It is, no doubt that the competitiveness of the LCGC cars will be unmatched. The proximity of Indonesia to major countries with raw materials such as China is a major advantage for the development of the entry of Nissan’s LCGC (Bank of Indonesia, 2014). 4. Can competitive reactions be coped with? This will create a high level of competitiveness especially with the established automakers. This strategy will definitely enhance the profitability of the company (Indonesia Autos report, 2013). 5. How will Nissan ensure that the required skills at both managerial and operative level are available? Nissan will continue to train its employees in order to ensure that the required skills are available. In addition, the company will outsource for specialized skills in order to have the operations transit smoothly. 6. Will the technology (both product and process) be available to compete effectively? Nissan has enhanced their competitive advantage in order to increase sales, the automobile industry has continued to embrace new technologies. Green technologies have been encouraged with many countries across the world committing to embracing green technologies in the just concluded Climate Change Summit (International Monetary Fund, 2014). 7. Can the necessary materials and services be obtained? Since the Low Cost Green Car (LCGC) will make use of technology and locally available materials, it is important to note that Nissan will save much more manufacturing such products. Besides, credible research reveals that the materials that the LCGC will use will primarily come from natural resources . The manufacturing process and servicing of the vehicles will utilize modern technology that is efficient and inexpensive as compared to the conventional cars (Nissan Motor Corporation, 2014). C) Acceptability 1. What will be the financial performance of Nissan in profitability terms? An analysis of the return on investment indicates that the company is likely to reap greatly because the technology is going to be embraced. The Indonesian population has a high number of the middle class who will embrace such a technology because of its economy (Bank of Indonesia, 2014). 2. How will the financial risk (e.g., liquidity) change? The financial risk will change from manufacturing less of the conventional cars and more of the LCGCs for the Indonesian market. The demand for a cheap and environmentally-friendly brand of car in Indonesia is a breakthrough for the diverse citizenry. It is because of the high population in the country estimated at 252.1 million in 2014 having grown from 237.4 million from the 2011 census. In terms of labor, Indonesia is endowed with skilled labor hence capable of meeting the labor demands for the production of LCGC cars (Bank of Indonesia, 2014). 3. What will be the effect on capital structure ? The capital investment is expected to rise, but it will have to go together with the sales. The increase in capital is likely to attract higher sales. With such a development, it would be important for a company to take a big risk in order to reap better profits (Nissan Motor Corporation, 2014). 4. Will any proposed changes be appropriate to the general expectations within the organization (e.g., attitudes to greater levels of risks)? Certainly, the proposed changes will be appropriate to the general expectations within the organization in the sense that more people will want to embrace green technology and take risks that come with it. 5. Will the function of any department, group or individual change significantly? The introduction of the LCGC will affect some of the tasks by individual departments. It will be paramount that the mechanical and the sales departments realign appropriately for the new development (Nissan Motor Corporation, 2014). 6. Will Nissan’s relationship with outside stakeholders (e.g., suppliers, government, unions, and customers) need to change? Nissan has managed to develop cordial relationship with all its stakeholders ranging from the suppliers to the customers. The relationship will change slightly due to the introduction of new technology, but the basics of the relationship will remain the same. 7. Will the strategy be acceptable in Nissan’s environment? The approach will be acceptable in Nissan’s environment because Nissan has always embraced innovation as an essential component of its culture. Continued growth and use of technology will have positive effects on Nissan’s internal and external environments. Subsequently, the strategy will be acceptable (Nissan Motor Corporation, 2014). References Bank of Indonesia (2014). Population. Retrieved from http://www.bi.go.id/sdds/series/pop/index_pop.asp Indonesia autos report - Q4 2013. (2013). (). London: Business Monitor International. Retrieved from http://search.proquest.com/docview/1430335766?accountid=45049 INDONESIA: Nissan showcases new product line-up at IIMS 2014. (2014, Sep 20). Just - Auto Global News Retrieved from http://search.proquest.com/docview/1563678799?accountid=45049 International Monetary Fund (2014). Indonesia. Retrieved from http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/weorept.aspx?pr.x=70&pr.y=2&sy=2013&ey=2013&scsm=1&ssd=1&sort=country&ds=.&br=1&c=536&s=NGDPD%2CNGDPDPC%2CPPPGDP%2CPPPPC&grp=0&a= Nissan Indonesia to invest US$312 million to raise production. (2011, Jul 26). Asia Pulse Retrieved from http://search.proquest.com/docview/879111266?accountid=45049 Nissan Motor Corporation. (2014). Our company. Retrieved from http://www.nissan-global.com/EN/COMPANY/PROFILE/ Nissan unveils low-cost car for Indonesia. (2013, Sep 18). Jiji Press English News Service Retrieved from http://search.proquest.com/docview/1433393376?accountid=45049 Read More