Bus 499 - External and Internal Environments

Assignment 2: External and Internal Environments

Ralph L. Stout

BUS 499

May 4, 2016

Professor Mark Cobia

Assignment 2: External and Internal Environments

Nissan Motor Company Ltd, frequently shortened to Nissan, is a Japanese multinational automobile manufacturer headquartered in Nishi-Ku, Yokohama, Japan (Dongfeng Motor Co., LTD, 2013). Nissan a publicly traded corporation that is the sixth largest automaker in the world behind Toyota, General Motors, Volkswagen Group, Hyundai Motor Group, and Ford in 2013 (Dongfeng Motor Co., LTD, 2013). Taken together, the Renault–Nissan Alliance would be the world’s fourth largest automaker. Nissan is the leading Japanese brand in China, Russia, and Mexico.

The general environment refers to elements of society that affect sectors and the companies that operate within those industries. The Nissan Company cannot control these aspects of society but can work in or with them. The general environment is made up of these segments: demographic, sociocultural, political/ legal, technological, economic and global segments (Hitt, 2013).

The demographic segment is the characteristic of the population of a given area in the world. It includes the following factors such as age, income, and education. The data from these elements are used to track the trends and pattern of client behavior (Hitt, 2013).

The sociocultural segment is the social attitudes and cultural values of different societies in a given part of the world (Hitt, 2013).

The political/ legal segment attempts to understand how firms and other organizations try to influence government agencies and how governmental entities, in turn, influence their strategic actions (Hitt, 2013).

The technological segment refers to institutions and activities involved in the creation of new knowledge and how it uses that knowledge to develop outputs, products, processes, or materials (Hitt, 2013).

According to Hitt (2013), the economic segment refers to the environment and trends of the economy the company competes. Characteristics are inflation, gross domestic product, interest rates, budget deficits/surpluses, investment rates, individual and business savings, and trade deficits/surpluses.

The global segment is made up of existing markets, world markets, and significant international political events. Due to the rapid advance of communications and technology firms are now competing in the global market.

For Nissan the economic and demographic Environment are high-risk segments:

Economic Environment:

 The human factor: Regarding employee advancement, the workers are discouraged because they are not advancing in the company due to the company’s slow growth. The idea that they are not guaranteed promotions has given rise to less work effort and workers leaving for better jobs (Andreosso-O'Callaghan, Pascal-Bassino, & Jaussaud, 2001).

Demographic Environment:

        The age factor: Japans workforce populations are aging and are retiring at higher rates every year. In 1992, 1 out of 7.7 Japanese was 65 years old or older. In 2000, that ratio moved to 1 out of 5.9 with a projection of 1 out of 3.9 in 2025. As the employees retire at a faster rate every year, Nissan and other company’s must face the swelling of social payments to fund retirement and health care accounts (Andreosso-O'Callaghan, Pascal-Bassino, & Jaussaud, 2001).