nissan survival story

8/10/2019 Nissan Survival Story

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CARLOS GHOSN

&

NISSAN SURVIVAL STORY

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Nissan before Carlos Ghosn Joined

1.Net loss of 14 billion (1998)

2.Debt of US$ 17 billion (1999)

3.Hold only 19 % of J!n"s #et s&e ('&ile in t&e 1974 it &eld 34%)

4.nested US$ 4 billion in non*+to#otie b+sinesses

,.-#!loyees bon+s bsed on !od+tion leels t&e t&n o#!ny"s !ofit.

/.,000 +to!ts s+!!lie /00 dele

7.Nissn"s o+nts bein #intined by 200 bns oss t&e 'old

8.Nissn is !t of keiretsu system

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Keiretsu

1.It had made Nissan over-invested in many non-core automotive business.

1998. Nissn 's &oldin n o'nes&i! ste in 1394 diffeent o#!nies in J!n

2.It had made Nissans supply cost were at the level that the company could no longer operate

profitability.

ny senio #nes of s+!!lie 'ee fo#e Nissn e#loyees

2.It had made Nissan had to go for a loan to stay survive.

De 1998. Nissn 'ent fo lon of US$ 708 #illion fo# J!n Deelo!#ent n.

5 keiretsuis set of o#!nies 'it& inteloin b+siness eltions&i!s nd s&e&oldins. t is

ty!e of info#l b+siness o+!. 6&e eiets+#intined do#inne oe t&e J!nese eono#y fo

t&e lst &lf of t&e 20t& ent+y (Wikipedia).

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Why counldnt Nissan change before Ghosn arrived?

1.Conflict of Interest

The executives and managers were too concern about their

personal relationship with suppliers and dealers

2.Closed-Group anagement !ystem

Executives and managers were only concerned about their

respective department

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4 bd bsi ss+#!tion1.Okami-Ishiki

"elying too much on government or a higher-ran#ing priority $not company profit priority%

2.Shigarami

Concerning too much in self-reputation among other people&group

3.Oyata-Hi!mar"

Create the way of thin#ing 'too big to fail( and create the lac# of urgency

#.Oits"k$-Oik!s$

)sed when a company lags behind its competitors and tries to spur employees

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6oo i to il: way of thin#ing

Employees had no SENSE o !"#EN$% so that they elt that a

company as big as Nissan would not and could not go bankrupt.

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Who is Carlos Ghosn?

*orn in +orto ,elho *rail on arch / 1/0 $from

ebanese father and 3rench mother%

4ad his engineering degree from 5cole +olytechni6ue)niversity 3rench and had his master degree from

5cole 7es ines 3rench.

!pent 18 years with ichelin in *rail and North

9merica

:oined "enault 1//; as 5,+ of 9dvanced "


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STR%NGTH

9bility to maintain relationship with people by

r$s$'t

9bility to a(!tand a(atthe cultural practices

Good understanding of cross-cultural mi? in

organiation9bility to spea# in many laguages. 3rench

)%A*N%SS

4e is not a :apanese

4e spea#s non-:apanese anguage

Cultural barriers $mono-cultural%

9gai&inin a society that suspects foreigners

O++ORTUNITY

Nissans position as an international company

Nissans employees

THR%AT

'eiretsu

+essimistic of Nissan 5mployees

8

Ghosns SWOT


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What did Carlos Ghosn do?

Established NRP (Nissan Revival Plan)

as a Vission

&

Established C! (Cross"unctional !ea#s)as a Mission

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What did Carlos Ghosn do?

Defined Nissans t!en"ths & #ea$nesses

1%

STR%NGTH

!ignificant International presence and global reach.

9 world-leading manufacturing system.

9 leading edge in selective crucial technological

fields.

>he alliance with "enault.

>alented and dedicated employees.

)%A*N%SS

4e is not a :apanese

4e spea#s non-:apanese anguage

Cultural barriers $mono-cultural%

9gai&inin a society that suspects foreigners


11/20

N"+ was announced on

ctober *th+ ,,,

N"+ goal target

--

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NRP consist of:

1. "educe operating costs by @1 trillion.

2. Cut number of parts and materials suppliers by half (cut the 'eiretsu)

A. "educe net debt from @1. trillion to less than @B billions by fiscal year of 22 $more than

0D reducement%.

. Create new product investment and rollout.

0. ay-off 21 employees.

;. *oost-up by 20D of "


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CFT (Cross-Functional Teams)

1 'onsist of abo(t 1% )e)be!s *o)in" f!o) )iddle )ana"e)ent+

,ith diffe!ent ba*$"!o(nds and ,ith a -!o.en t!a*$ !e*o!d and

/hosn as 'han"e -onso!

2 0he )ain ob of the tea) is to *ont!ib(te to the !e"ene!ation of

the *o)-an

3 0he *on*e-t of '0 allo,ed a f!ee flo, of ideas and o(t of the bo

thin$in"

4 'a!los /hosn "a.e 9% das fo! '0 to "ene!ate ideas in the

-(!-ose of *o)-ans !e.i.al

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Gh!s,s T!!s t! R" CT/

1. 9dapt to the culture. f yo+ do not d!t; yo+ lose; if yo+ identity is o#!o#ised; yo+ lose:

2. otivation to the empoyees. it 's t&e etest tool t&t led to t&e Nissn t+no+nd:

A. Communication. 6&is is


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What key that CEs shoul!"shall ha#e$

1 e trans%arentand e-lain o(!self in *lea!+ l(*id te!)s

2 Do as you say you are !oin&

3 'isten first and then thin$

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hosns actions to safe Nissan *y cost sa#in&:

1 'han"in" !elationshi-s ,ith s(--lie!s none ,e!e offli)its

2 ed(*in" staff o.e!heads

3 'losin" non.iable -lants and eli)inatin" non-!ofitable -!od(*ts

4 Debt !ed(*tion

5 Establishin" *lea! -afo!-e!fo!)an*e "(idelines fo! all

e)-loees+ in*l(din" ee*(ti.es

6 Establishin" a *lea! leade!shi- s(**ession -lan fo! the lon" te!)

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!he result of NRP

1.=od+tiity ised by o+nd 20% (19 #ont&s fte N>= 's l+n&ed)

2.Sles e' by 4% (t t&e finnil ye*end 2000)

3.?+n&ed 22 ne' #odels (t t&e finnil ye*end 2000)

4.=+&sin ost 's ed+ed by 11%

,.n+ft+in +tili@tion 's i#!oed fo# ,1 to 74%

/.-#!loyees 1A12; (1999) 127/2, (2002)

7.Aentli@tion of t&e finnil #ne#ent; fo# 200 to 1, bns

8.innil

17

is'a Y$ar 23 is'a Y$ar 1000

Net ales 7+4292 billion en 5+9771 billion en

:-e!atin" ;n*o)e 8294 billion en 826 billion en

:-e!atin" Ma!"in 112< 14

nissan survival story

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