Nissan had adopted a simplified product line strategy in comparison for its rivals
Nissan had adopted a simplified product line strategy in comparison for its rivals. Given the capacity constraints after the disaster, the company went for a build-to-stock strategy for models with greater demand and build-to-order strategy for models with higher customization and lesser demand. As, the disaster had affected the production process of the company to a great extent; such strategy helped the company to produce to goods which assured of generating revenues instead of increasing its burden. The production of models with lower demand were confined to build-to-order strategy so as to avoid any wastage of materials, maintain efficiency of operations and also earn good revenues. Limited resources or affected supplies encouraged such strategies and proved beneficial in such crucial time for the company. Apart from the above mentioned benefits, these strategies further helped Nissan in simplifying its business operations and product offerings along with substantial increase in its sales. This was urgently required by the company to boosts its sales and earn sufficient amount of revenues to enable persistent business operations without any barriers. Flow of income also improved the financial strength of the company arising from such crisis which is a major concern. Several functions such as sales, marketing and supply chain management were integrated to decide upon allocation of supply globally so as to generate greater revenues.
As per the case, Nissan’s six production facilities had been damaged and about 50 of its critical suppliers were weakened. The strategies adopted definitely pulled the company from such draining scenarios as they addressed exactly the issue witness by Nissan. The various belifits of build-to-order strategy can be described as follow: