Nissan Survival Story
Transcript of 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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Why counldnt Nissan change before Ghosn arrived?
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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Why counldnt Nissan change before Ghosn arrived?
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 $mono-cultural%
9gai&inin a society that suspects foreigners
O++ORTUNITY
Nissans position as an international company
Nissans employees
THR%AT
'eiretsu
+essimistic of Nissan 5mployees
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Ghosns SWOT
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What did Carlos Ghosn do?
Established NRP (Nissan Revival Plan)
as a Vission
&
Established C! (Cross"unctional !ea#s)as a Mission
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What did Carlos Ghosn do?
Defined Nissans t!en"ths & #ea$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
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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
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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