Did Nissan follow Napolo's (2005) 8 steps? Discuss which steps they did and those they did not follow.
Nowadays, Nissan Motor Company is one of the most popular Japanese automakers. It's turning out great cars and achieving the highest profit margins in the business -- even slightly ahead of Toyota Motor Corp (Book Review, 2005). Nevertheless, Nissan has not always been successful. In fact, many businesses face diverse foreign exchange risks, and Nissan was not an exception. Nevertheless, today managed by its general director Carlos Gosn, Nissan was able to revive its business and reach new levels.
First of all, it is necessary to stress that the company has experienced a period of severe loss. For example, back in 1999, Nissan was in a death spiral the company was carrying massive debts, heavy losses, and a badly damaged brand (Book Review, 2005). That is why it was important to find the way out from this financial stagnation. Carlos Gosh is currently a President of Nissan company. As cost savings and debt reduction freed up cash, Ghosn took daring steps to rejuvenate the Nissan brand (Book Review, 2005). He made a tremendous effort in order to revive the company and eliminate its financial risks.
It is also necessary to identify several important Napolo’s steps and analyze how they were implemented by Gosh in order to avoid foreign exchange risks of Nissan Motor Company. These steps will make it possible to analyze how did the Nissan Company managed to prosper and achieve success.
The first step is to establish a framework for the policy, which outlines the principal business lines and overall corporate objectives and stipulates those areas where the company is prepared to take risk (Napolo, 2005). As the matter of fact, Gosh was pretty strict in his new tactics of the company development. Ghosn made it clear he would tolerate no backsliding: "If you disagree with the plan," he writes, "you've got to leave the company." (Book Review,2005). Therefore Gosn was trying to overcome popular denial toward Nissan’s performance in the international automobile market.
Secondly, another criterion is to identify strategies to manage risks. According to Kim (2001), for Nissan purchased options and option-combining strategies were applicable as the competitive international environment necessitated an upside potential from currency movements (Kim, 2001). Therefore, Ghosn has developed effective strategies, which could eliminate different risks. In addition, Ghosn also counts himself lucky for arriving in a Japan so fed up with its post-bubble malaise that it was open to change, even from a gaijin (Book Review, 2005).
Lastly, it is also necessary to stress that Gosn did not follow any particular plan and his behavior was quite risky. For example, he used an interesting strategy in order to eliminate the company’s dept. Thus, Ghosn revived the Z-series sports-coupe line with the Nissan 350Z, a model discontinued in 1996 (Book Review, 2005). This behavior can also be compared to successful risk management strategy, also described in the eight of Napolo’s eight step strategy.
All in all, Nissan Motor Company was able …