Research Paper on Nissan's Global Challenges: Revenue and Beyond

Paper Type:  Research paper
Pages:  7
Wordcount:  1873 Words
Date:  2023-05-22


Nissan is a moto dealer business that operates in a global setting with four-set countries as the major points of the manufacturing and centers of distribution. Nissan reaches a market of 170 countries (NISSAN, 2014). However, the big business faces several challenges, which are the aim of discussion in this paper and the provision of proposed solutions to these problems.

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Challenges Related to Revenue

Nissan experiences various challenges in regards to its incomes, which is as a result of poor sales and woes. Low earning by the company comes along with incompetent management as revealed by several battles between the company and its management- for instance, with its former chairman Ghosn Carlos. The company reports a low income due to the loss of averagely more than $180 million between October and December in 2019. The damage resulting from low income has led to a delay in paying dividends to shareholders in the company. Low turnout is from sleepy operating profits at sometimes (Cooper & Slagmulder, 2017). The executive management experiences pressure from the weak performance and little industry volume due to the slump brought about by poor company operational structures.

Low revenue makes the company increase its discount to attract more clients, thereby lowering the average income by contributing to the low demand for aging products that require innovation. Halting of production in some areas such as Kyushu sometimes is among contributors to moderate-income (Teasley, 2016). The resigning of crucial staff behind the driving force of the company, such as Ghosn, contributes to the failure of Nissan Company. The company operates at a small profit margin of about 2.8 percent, which is low as compared to previous years before Ghosn's resignation, which was averagely above eight percent.

Nissan Company has a low market share in some of the developed countries such as the United States of America. The company spends a significant amount of its profit on securing a high level of market in developed countries, coming from stiff competition from other companies such as Toyota, which are already established. The need to increase the revenue of the company makes the value of the products to reduce. For instance, anyone seeing rental Nissan vehicles lining up at places such as the airport can consider it very cheap. Pursuing volume over quality for high earnings in developed countries such as the United States of America and other parts of the world to increase income makes the image of the company fade away.

The low revenue earning leads to job slash since the company targets improving quality over quantity by cutting down some of its excessive production capabilities by approximately 10 percent in all production firms worldwide (Cooper & Slagmulder, 2017). There is a rise in the need to push down the break-even point of the company to produce all necessary cash and maintain a good investment and return cycle. Enhancing cost-cutting efforts in the company contributes to a low rate of investment, which lowers the amount of operating profit. Nissan's continuous low return makes some shareholders; for example, Renault looks for a way out of the company despite the efforts of the company for a turnaround as soon as possible.

Challenges Related to Sales

Nissan has destroyed its proper relationship with its alliance partners, Renault South Africa, due to low-profit slide, contributing to less compensation of the shareholders, which is pushing them to be independent. There is a high chance of Nissan losing independence to their partners over constant pressure to reduce the costs, though they are reluctant to understand that it will lose their powers. To increase the company's average income, it needs to create vehicles that are on-demand rather than concentrating on cost-cutting measures, which require substantial investment in the engineering departments. There is Low growth potential for Nissan Company due to other popular and potential automakers in Germany. The stiff competition necessitates Nissan Company to increase income to cater for all expenses. To streamline its operation, Nissan might need withdrawal of Renault, which has higher shares than Nissan in the European global automakers market (Kastrop, 2018). Weak presence in the emerging market in countries such as India and Southern Asia.

The slowdown of sales in Nissan puts thousands of jobs at risk. Countries, for example, China is the most affected over the past several years, with the company having fewer models to offer and having very few or no customers at all. Salespersons are having difficulties in making ends meet and are weighing their options and chances of being in the company. Some wealthy countries, such as China, prefer quality life; whereby, they tend to prefer quality over volume, reducing the demand for Nissan's products in their market (Craddy, Hewitt, Bailey, & Foxon, 2019). Car industry activities are recording low progress due to the declining economic output of the world. Trade disputes among the countries that provide a large market for Nissan products such as the United States and its partner Europe hurt both demands and exports of the company.

Low earnings of the company from its sales contribute to conflict in the management, which comes as a result of blaming stakeholders in charges such as sales management and marketing department. Some staff has been forced to resign or step aside to examine the operations of the company. Low revenues have force Nissan Company to invest heavily in autonomous and electric vehicles to catch up with the needs of the customers they share with their competitors, thereby disrupting their financial status.

Nissan has seen a series of damaging events one year ago due to the financial mishandling of some staff, such as Carlos Ghosn, from poor sales management. The outcomes of these events show a long way for Nissan as it navigates a vast industry decline in global sales and also emerges from the damages that began a year ago, for instance, the detention of its leaders. Low sales and demands have lowered the company's reputation to some extent in areas with the potential market.

Financial Constraints by Nissan

By the end of the 2019 financial year, the Nissan motors company reported slowing growth in terms of financial rates and returns. The net income had tumbled with a net fail of more than 54.8%, and the revenue interest falls with a rate of 6.6%. The profit decline was 35%, with the vehicle's profit trailing to poor performance by 5%. The financial year divided had to be revised (Nissanglobal, 2019). Nissan is exposed to various financial market risks that cause the constraints of capitalization. Foreign exchange, interest rates, and authoritative financial measures are a cause for extra expenditure that reduces the returns. By facing more than 170 foreign returns, the company has an excellent task of managing to merge the finance. The risk is Nissan's fortunes have darkened again in recent years as it tries to stretch more in the United States, neglecting its home markets, thereby eroding the profitability of the company.

The Nissan Company has also missed an opportunity in developed countries such as India due to the overconcentration of capital in specific regions (Djashan & Lawira, 2018). The operating margin's profits for Nissan are among the lowest car manufacturing industries. Poor finance management has seen the company lose its vital officers, such as Ghosn, who contributes significantly to the amount of income to the company. The financial crisis has influenced the fallout of Renault and Nissan, which is a terrible sign to all other potential investors (Birkmose, 2014). There is a lack of trust, as revealed by Renault questioning the handling of Mr. Ghost by Nissan. The disproportionate capital structure of the alliance has made most of the investors to shift their attention from possible opportunities to the tension created by mismanagement of funds. There are chances of unwinding the group, which is likely to cause a more difficult situation

Constrains Related to Consumers

Nissan's brands and services market depend on the client's response and attitude towards the products. There has been a trend of negative implications from the client's responses, and satisfaction buys the business of Nissan. Around the 170 countries of the world that Nissan biases their trade, they have been negative responses to the sales of Infiniti, which is one of the luxury cars produced by the company. The branding is the best by Nissan, but the effort has hit nullification as clients complain of the price Nissan has been forced to lower costs to meet aggressive customers' needs. As a result, Christopher, the current manager of sales of Nissan global, says it came as a surprise that local retailers complained about the reduced pricing that Nissan had made (Nissanglobal, 2019). Nissan was claimed to be overcharging for a product that I not worth the cost. Ideally, the brand was of high production cost, but the company had to move to the customer's direction. Perhaps a more crucial problem was left to the company for the withholding of the brand's products that they were forced to remove from the market and rebrand it- this is a double manufacturing cost. In another case is where customers lease old vehicles from the company's distributors or agents and but are disappointed by the performance, which scares them away from purchasing the product.

In 2017 before the CEO of Nissan was related to a crisis, the company faced a consumer-related severe effect. In the claim of poor in Nissan brands, the customer's referred their products of Nissan to high profile scandals (Nissanglobal, 2019). A, on the complaints, was that the vehicles had high fuel consumption through inadequate inspection through marketing. The business was ruined, and no new market gaps rose that year. In response, Mitsubishi acknowledged they were the ones who had interfered with the fuel efficiency during the production for Nissan. Following these claims and acknowledgment, the collaboration status between Mitsubishi and Nisan was shaken with a significant effect on Nissan as Mitsubishi could not engaging in the production of Nissan products anymore even though the treaty did not end. The realization of other brands by consumers costs the Nissan market efficiency. For example, in 2018, the US consumers realized passion in the products of General motor dealers and which made Nissan spend their profits and part of the capital in the subsidizing of consumer Nissan preferences.

The company spent 16% of its incentives compared to 10.6% of profits made that year. In America alone, the margins sagged with 1-2%. In contrast to customer satisfaction, the Nissan dealers were amused by the sales strategy as they were to have short sales due to the deep discounts and the cheapening of brands. There were dealers claim that they would be more successful were it not for the company's decision. Most dealers in this note changed their dealing priorities to other companies that were much competitive to the Nissan Company. The fight between consumers, the company, and the dealers continue to affect the business, and revenues got are used for the sustainability of the automotive sector.

Challenges Related to Technology

Nissan faces a significant issue in the failure and accomplishment of her technological development. In this token, the company lacks even a single roadmap to the technological advancements or corrections. From a technical perspective, Nissan announces that the end of the ICE was too quick before the full invention had to be made. The technology mix that was set to be attained was closed as designing a...

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Research Paper on Nissan's Global Challenges: Revenue and Beyond. (2023, May 22). Retrieved from

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