Essay: Effects Of External Environment On Nissan.

1. Give a brief overview of the primary external influences to which the organization is subject and briefly explain the particular importance of each to the organization.
This first task should contribute no more than one third of your overall report.

2. Choose one of the following themes:
1. International Technology Transfer
2. Incremental and Radical Innovation
3. Marketing Communications Mix
4. Corporate Social Responsibility and Sustainability

In relation to your chosen theme:

i. analyse its relevance to your chosen organization and how it influences policies and decision-making within your chosen organization or industry-sector.
ii. critically evaluate the effectiveness of the organization’s response.

iii. (if possible and appropriate) demonstrate some areas for improvement in the response of the organization
 

The report is based on the analysis of the effects that the external environment of an organization has on its operations and the profitability as well. The external factors related to the organization are analysed based on the different factors including political environment, economic factors, social factors, technological factors, legal factors and the environmental factors. The organization that is taken into consideration for this analysis is Nissan Motor Company Ltd. The company is commonly known as Nissan and it has its origins in Japan, with it has headquartered in Nishi-Ku Yokohama (Nissan-global 2018). Nissan mainly operates in the automobile industry and sells the cars under brand names like Nissan, Datsun and Infiniti. Nissan Motor Company Ltd. had made a partnership with Mitsubishi Motors and Renault in the year 1999 (Birnleitner2014).

Nissan had earned the position of the sixth highest automaker organization of the world in the year 2013. The organization has been holding this position after other large automobile organizations like, Toyota, General Motors, Volkswagen Group, Hyundai Motor Group and Ford. The alliance of Nissan and Renault has also held the fourth position in the automobile industry of the world. Nissan is also considered to be the highest manufacturer of electric vehicles in the whole world and they had global sales of around 275,000 electric vehicles within the year 2016. The organization was named Nissan Motors in the year 1934. The plant of Nissan in Yokohama was established ultimately in the year 1935 (Dubey and Gunasekaran2015).

The first car was manufactured by Nissan in the same year and they had started manufacturing airplanes, trucks and engines for the Japanese Army. In the year 1966 Nissan Motors merged its operations with Prince Motor Company and they had launched many upmarket cars which included models like Gloria and the Skyline. Nissan aimed for expanding their operations in the foreign market in the 1950s. The small cars range of Nissan was aimed towards Australia which was considered to be the largest market of cars in the year 1950. The organization also expanded its operations in the other parts of the world including the United States of America. Nissan was able to capture the US market successfully in the year 1973 when the oil crisis occurred and the demand for small cars increased (Eva et al. 2014).

Nissan launched its new brand which was named as Nissan Sunny so that they can meet the demands of the American consumers. Nissan then planned the expansion of its operations in Europe so that the delivery costs and the tariffs related to exports can be decreased. In the year 2001, a manufacturing plant of Nissan was established in Brazil and following this, the organization further opened its operations in India with the name Nissan Motor India Pvt Ltd. The global alliance partner of Nissan was Renault which invested more than 990 million dollars so that the organization can establish its plant in Chennai, India. Nissan penetrated into the market of the Middle East in the year 1957 and its first car was sold in Saudi Arabia in the same year. The external environment of Nissan Motors will be further analysed with the help of PESTLE framework (Frynas and Mellahi2015).

Political Factors

Nissan has been outsourcing the processes related to the production of its cars from many countries other than Japan which are mainly, located in South America and Asia. The government of the different countries where Nissan has set up its operations during the last few years has been setting many rules which are related to benefit of the economy and thereby produce the highest GDP. The political factors of the area where the organization is located can influence the rules and regulations of that country and the measures related to security which can impact the strategic decisions that are taken by Nissan (Grünigand Kühn2015). The change that can occur in the political scenario of the country and the trends in politics can affect the strategic decisions that are taken by Nissan. The political situation of the developed and the developing are different from each other and Nissan has its operations in both these types of countries. The strategy of Nissan in the developed countries is different from the strategy that is formulated by the organization in the developing countries. The local rules and regulations of the countries where Nissan operates affect the local production of the organization and the plants as well. Nissan needs to design its products and plants in the different areas in such a way so that the requirements of the consumers can be satisfied (Ho2014).

The economic factors of the countries that can affect the operations and profitability of Nissan are related to the attributes like, exchange rates, population growth, interest rates, segment size and demand of the products offered by the organization. The buying power and behaviour of the consumers towards Nissan are affected by the economic conditions of the country. The power of purchasing the products of the organization that are offered by Nissan are considered by Nissan so that they can gain sustainable profits in the market. The GDP of the country depends on the sales and profitability of the organizations which operate in the market. The balance margin of the investments that are made in the country is a major factor that needs to be considered while Nissan operates in that area (Hosseinzadeh et al. 2016). The auditing process of Nissan needs to be considered so that the latest laws related to taxation in the country can adapted within the systems of the organization. The economic position of the country where Nissan has its operations affects the profitability. The taxes that are levied on the different products that are offered by Nissan in the country affect the prices of the cars. The economic position can also define the products of the organization that can be offered to the consumers. The economy of the country also decides the buying behaviour of the consumers of that country and the buying capacities as well (Izogo and Ogba2015).

Economic Factors

The social factors that are a major part of the PESTLE framework can affect the product offering and the profitability of the organizations. The point of view and the opinion of the people about the products that are offered by the organization is important. The approach of the consumers towards the cars that are produced by Nissan is a major impact of the social factors on the organization. The rate of urbanization is quite high in Japan as compared to the Asian countries where Nissan has its operations. This provides huge benefits to the organization in the operations that they have in Japan. The social factors can further help the organization in increasing their profits and improve their operations as well (Izogo2015). However, the social factors of the developed and the under developed countries are different from each other. Nissan needs to consider the social factors and position of the people in the under developed countries and design their products and offerings accordingly. The developed countries have a vast market for the organizations like Nissan, however, it can be quite difficult for the organizations to fascinate the consumers of those countries. On the other hand, the social situations of the under-developed countries are much more welcoming towards new and fascinating products and offerings. The social environment of the countries can therefore affect the products and the prices of the organizations (Kew and Stredwick2017).

The changes in technologies related to the manufacture of the different vehicles affect the sales and profitability of the organization. The improving technologies help in increasing the production of the organization and this will in turn increase the profitability. The changing technologies also affect the pricing policies of the organizations. The technological factors of the developed and the developing countries affect Nissan in different ways. The developed countries are able to provide the latest technologies much faster than the developing countries. Nissan can ensure the smooth operations in the different plants of the organizations and the ways by which the vehicles of the organization can be promoted properly to the right people are also ensured with the help of new technologies (Micieta, Binasova and Haluska2015). The competition in the automobile industry is growing with each passing year and technology can impact the ways by which the organizations can create competitive advantage in the market. Nissan needs to focus on the usage of state of the art technology and latest equipments so that they can compete with the other automobile organizations in the market. Nissan also needs to incorporate the latest technologies in the products and offerings so that they can create a huge base of customers in the developed as well as the developing countries of the world. The usage and incorporation of latest technologies in the products of the organization can therefore help Nissan in increasing the profitability (Rakesh 2014).   

Social Factors

The legal factors related to the different countries of the world where the organization operates, affects the policies that are related to the production and sales. The strict laws of the different countries related to the environment and the safety issues of the customers affects the design of the products that are manufactured by Nissan. The designs that are formulated by Nissan need to have copyrights so that they can gain competitive advantage in the market. The automobile market is highly competitive in nature and every organizations needs improvement in the products that they offer so that they face the competition and increase their customer base. Laws and regulations related to the business organizations in the country need to be followed by Nissan (Rothaermel2016). This can further bring changes in the policies of Nissan itself and can affect the profits as well. The local customary laws need to be followed by Nissan Motors so that they can maintain a longer term in the country. The laws and regulations of the relevant country affect the operations of the organization in many ways including the change of policies. The legal aspects of the country where Nissan operates affect the operations of the organization and the profitability as well. The laws of the different countries are the major driving force for the organizations. Therefore, it can be said that, the legal situation and strict laws of any country can affect the profitability of the organization (Rushton, Croucher and Baker 2014).

The rules related to the environment are required to focus on the various policies that are required for automobile manufacturing. The major focus of Nissan Motors will be related to the zero emission or energy efficient vehicles. The environmental issues have become important for any type of organization in the present situation. This is the major reason why the organizations need to make their operations sustainable in nature so that it does not have any adverse effect on the environment (Simon, Fischbach and Schoder20140. The environmental factors now play an important role in the operations of the organizations, especially of the automobile industry. The climatic changes have brought major focus on the environmental issues and therefor Nissan must put major focus on the rules related to the safety of the environment and the relevant regulations as well.

PESTLE analysis has been used to analyse the different factors related to Nissan Motors. The political situation of the country where Nissan is operating affects the policies, operations and the profitability of the organization. The economic situation of the developed or the developing countries where Nissan has its operations affects the profitability and the pricing of the organization as well. The social situation of the countries is also important for the products and offerings of Nissan and the mind-set of the people of that area. The technological factors related to the production of Nissan can also affect the pricing of the cars manufactured by the organization (Toma and Marinescu2015). The strict laws related to the countries where Nissan has its branches also affects the trade policies of the organizations. The environmental factors hold major importance in the present situation and this affects the ways by which Nissan operates in the countries as the automobile industry can affect the environment in many ways.

Technological Factors

Marketing can be described as a broad component that will be able to include product research and development, purchasing and distributing the good to the consumer. It also involves activities like pricing and event communication. Communication mix can be described as the particular processes, which are used in order to promote the product or the company to the given group of customers (Hollensen 2015). It can be stated as the sum total of the activities of a company in order to make sure that the target audience is aware of the product and promotes it in the market. Certain versions of the promotional mix of a company include all the five elements whereas certain elements include a sixth element, which refers to the event sponsorship.

The first element of the Communication Mix of a company comprises of:

This is the most popular and the most common element of the marketing communication mix. Ery often these two are taken to be the same thing. Advertising is a paid form of advertising in which a business pays the advertising agency to deliver the message through a paid medium. This is done to attract the larger audience (Webster and Lusch 2013). This is also an expensive method of reaching out to the consumers whereby, the whole target audience gets to see the advertisement at once.

Personal selling is very often combined with direct marketing techniques. Many companies tend to employ a large sales force in order to make sure that they are able to complete their targets and [promote the value of the goods to the consumers (Nissan-global. 2018). It is generally observed that the companies, which offer high products, tend to emphasize more on personal selling as a marketing mix.

To establish themselves in the market many companies tend to promote their products in the initial stage of the product life cycle through promotions and discounts (Armstrong et al. 2015). These also tend to be expensive from the companies point of view but this is an intelligent method if a company is trying to create demand for the product.

Public relations can be considered extremely similar to advertising as it involves communicating the message of the company through a mass media medium. However, unlike marketing one does not have to pay for public relations. Any article, which brings up the name of the business, tends to act as a source of advertisement for the company. The main disadvantage of any company is that the PR cannot be controlled (Gordon 2013). With good reviews, some articles also tend to promote bad aspects of the company, which affect its sales. 

Legal Factors

 Direct Marketing can be described as a combination of both sales promotions as well as personal selling. The message, which the company wishes to portray to the consumer, is conveyed to it through mediums like direct mail. These mails are sent in bulk, which is customized, to specific audience. Print surveys also serve as a source of appealing to the consumer.

Event sponsorship means advertising, which is generally paid. The company pays for the presence at an entertainment, non-profit or community event (Charter 2017). Through the sponsorship, the company receives various benefits like booths, gifts and literature and most importantly coming in front of the eye of the public.

Nissan makes use of all the elements of the marketing mix t promote its product. These are:

• Advertising- Nissan invests highly in advertising and advertises through all the mediums. The advertising campaigns that are generally used by the company include magazine, TV ads, billboards and mails. Refer to Appendix 2 for an example (Sinha and Mishra 2014). Nissan believes that its main target audience will usually view the product and car being the primary product, discuss with their family, before purchase. Hence, Nissan advertises in various lifestyle, business as well as luxury mediums like magazines and yearly books to grab the attention of the audience.  It utilizes different advertising techniques for different consumer segments. 

• Public Relations- Nissan wants to change the way it is perceived in the market and wants to alter its position all around the globe. It has a the line of electric cars, for which it wants to make sure that people do not just perceive it as a normal product but a car of the future. It applies real life situations to sell the products (Perreault Jr, Cannon and McCarthy 2013). Recently, to associate itself as a common car for common people, it introduced some of its cars as a part of the New York City taxi fleet.
• Sales promotion- As a part of its sales promotion and specially so in the lean season, Nissan comes up with a variety of special deals for the new customers with features that include:
  • extended warranty
  • free maintenance
  • Free servicing
• Personal selling- As stated earlier there are certain companies that tend to use its sales force as a medium to persuade the consumers to buy the given products (Sheth and Sisodia 2015). There is a sales team at every showroom of the car dealers, who are paid as per their performance and have certain set targets for every month. This increases the sales of the company tenfold.
• Social media- Nissan realizes the power of social media and considers social media marketing as a part of their communication mix. The products of Nissan are new and tend to attract discussions all around the globe. Due to the power of the social media, the medium is a great source of attention for the company. 

The marketing communication mix comprises of long-term marketing plans for the company, which are intended at increasing the performance and value of the brand over some time. Sale promotion can be described as short-term inducements to buy a particular product. However, communications strategy is a long-term plan for the organization.

The objective of the Marketing Mix of Nissan is as follow:

Nissan aims to increase the awareness of the brand amongst its consumers. When the company enters newer markets it becomes extremely important for the company to make sure that the consumers are aware of the product and its uses (Hult, Ferrell and Pride 2013). Once the company becomes established, they have a closely relayed goal or aim at maintaining the top of mind awareness, which just tends to remind the customers of its existence.

Very often, the consumers tend to be extremely judgemental and pick up pre-conceived notions about the company. Nissan aims to break these barriers and make sure that the company understands the aims and objectives of the company in general so that they are able to understand the effort the company puts behind every product and praise the company for their efforts.

Through its advertising, the company also aims to influence the customer and instigate them to purchase a product. They try to tune the advertising as a need, which then tends to have an impact on the mindset of the consumers (Boone and Kurtz 2013). This shall perk up the sales.

Very often, a company tries to attract a target audience by simply instigating the customers to take a drive. The company believes that once a company has taken a test drive, it improves the chances of the company to sell the product. In the next step, the product speaks for itself and a large crowd of customers is attracted to the given car.

Environmental Factors

Very often, the customers have been using a particular product for too long and this makes them feel like they need to change their product (Armstrong et al.2014). Hence, Nissan engages in a communication Mix Strategy that then attracts the customers and enable the company to increase their revenue.

The characteristic features of the product do not matter if the marketing mix of the organization is weak. Therefore, the marketing aspect of the company tends to have a huge influence n the polices of the company. Every aspect of the business functions is based on customer perception of the company. The decision making of the company is also largely affected by the medium of marketing it chooses (Burns and Bush 2013). As the social networking marketing has greatly involved and the actions if the company are always under speculation, Nissan makes sure that its activities do not contain any flaw and its decisions are greatly made after keeping in mind their components of the marketing mix.

As stated earlier, the company has realized the importance of the communication mix strategy of the organization and makes sure that its efforts are at par with the requirements of the industry. The competition in the industry is extremely fierce and this is not forgotten by Nissan (Peck et al. 2013). In order to combat with the markets, the company has a strong communication strategy, which comprises of Personal selling, Social media marketing, Public Relations and Advertising technique. Hence, Nissan has been quite successful in promoting its products it the consumers in the organization (Kato et al. 2013).

Although Nissan has been performing very well, in the given section certain recommendations have been provided which shall guide in the organization in performing better in its communication strategy:

• Using push strategies- If Nissan starts using Push strategies for its marketing Mix, the company will be able attract a larger crowd. It needs to make use of smart strategies, which makes the users realize the strength of the company as compared to its competitors. This will enable the customers to purchase their products.
• Giving discounts- The company also needs to give discounts to the customers during lean seasons. Many times when the price of fuel goes down then the company should take advantage and increase the price of the product (Schmidt and Simchi-Levi 2013). When the fuel price goes up, the company can use this strategy and decrease the price of the cars so that the sales increase.
• Explore emerging markets- There are various markets, which have not yet been explored by the company.  There is a large capability in these countries. If the brand is able to promote the products in those countries where the purchasing power of the customers is expected to grow, the company will be able to increase its revenue considerably.

Conclusion

Therefore, from the discussion it can be stated that Nissan has been putting consistent effort to become a leader in the market and to make sure that it is able to attract a larger crowd for its products. Through the PESTLE Analysis, it could be identified that the company tends to keep into consideration the various players that are present in the external environment of the firm and sees to it that the players in the external market influence its policies and decision-making. The first part of the essay concentrates on the external market itself.

The second task concentrates on the marketing communication mix of the Nissan automobile company.  The report discusses the various components of marketing communication mix and associates the concepts with the various factors of the company. The communication mix strategy of the company has been elaborated in detail along with the objectives of each strategy. The manner in which this mix tends to influence the decisions of the company had also been provided in the company. The recommendations as to what can be provided to the mix in order to attract the crowd have also been given. Nissan has been performing adequately and by following the recommendations, the company will be able to perform well in the dynamic environment. 

Conclusion

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