Reinventing Nissan Essay

1128 Words Apr 26th, 2013 5 Pages
Acar Niar April 15, 2000
Case: Nissan

Reinventing Nissan
1) What benefits will Nissan gain if its procurement of parts is combined with Renault’s parts procurement on a global basis? Are there any costs to this change? What problems does Nissan create if it abandons the keiretsu system for purchasing parts? In what ways might the Internet facilitate this change? Ghosn’s plan to combine, centralize, and globalize Nissan and Renault’s parts procurement would cut costs by 20 percent! Before this change, Ghosn estimated Nissan’s parts procurement costs were around 10 percent higher than Renault’s. To accomplish his goal, Ghosn had to prove that the precious keiretsu system of Japan was promoting
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One suggestion to help ease this change would be to prove to the employees that performance-based pay can be better than the pay scheme they were using before! If they perform better, they can make more money, and if they do not perform well, they will be cut. This will altogether improve Nissan’s performance as a whole.
4) Prime Minister Obuchi’s comments send a clear signal that Japanese politicians will resist any restructuring of Nissan’s operations that lead to significant losses of domestic jobs. How important is this political threat to Ghosn’s plans? What advice would you give to Ghosn to overcome or address Obuchi’s concerns? Ghosn should definitely take this threat into consideration but at the same time, he needs to stick closely to his plan to revive Nissan. He does not wish to provide tons of domestic job losses, but he needs to ensure the quality and low costs from suppliers to improve Nissan’s overall profitability! Although he will receive bad press and no support from politicians on this move, he needs to stand firm in his decision and follow it through and I believe that down the road, after seeing Nissan’s success, the politicians will understand why Ghosn made that decision and how it made Nissan successful again. Ghosn could also to try explain more clearly to the politicians what his plan is and how it will be improving Nissan which

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