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QUESTION
Week 3 Discussion
This is a discussion question that I need answered. I need each bullet point answered thoroughly. I need this order returned to me completed without any grammatical or punctual errors. The company that I want this question written about is Nissan Motor Corporation.
Using the company you have selected for your Strategy Development Project, describe one way the company could generate substantial topline sales revenue growth.
- Is your suggestion an incremental/tactical action which might generate short-term growth but could be easily copied by competitors, or will it generate a sustainable competitive advantage?
- What costs, systems, or capabilities would be necessary for this growth to occur, and would you expect it to result in attractive bottom-line profit growth?
- As you describe and assess these potential moves, refer specifically to the Dogfight textbook, and your other weekly readings to support your response.
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| Subject | Business | Pages | 3 | Style | APA |
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Answer
How Nissan Motors can Generate Substantial Topline Sales Revenue Growth in the EVs Market
Survival and success of any company, regardless of its industry of operation demands consistent growth in sales revenue. A company’s bottom-line growth (profitability) relies heavily on revenue generation, meaning that bottom-line is destined to fall apart if the company is not adequately prepared to boost and maintain its revenue growth. Being in the manufacturing industry, Nissan Motors can find it especially challenging to boost its sales revenue growth. One way the company can circumvent competition in the electric vehicle (EV) market and build the infrastructure need to boost the sales of its EV models is by creating referrals.
As a business level strategy, referrals are a type of marketing strategy or approach where a company asks resellers, dealers, existing customers and other people in their networks to recommend its products or services to new customers, and pays them an incentive for every successful customer conversion (Hart, 2020). This leads to a snowball effect where new customers and resellers recommend the company’s products to additional customers, thereby generating more sales. For Nissan, the strategy will involve offering an incentive to automobile dealers, mechanics, motor insurance companies, existing car owners, and other connections who recommend its EV models to a new customer, and the customer makes a purchase. The referrals will work to increase Nissan’s brand awareness, which will ultimately drive top line growth by increasing sales revenue (Biyalogorsky, Gerstner & Libai, 2001).
The fact that the referral program/strategy will increase awareness of Nissan’s EVs among potential car owners as well as those who would like to upgrade to energy-efficient car models means that the strategy will increase the company’s top line growth (Dose, Walsh, Beatty & Elsner, 2019). However, the resulting revenue growth may be short-term as the strategy is imitable. Notably, close competitors, such as Tesla and General Motors, may respond by offering auto dealers and resellers higher incentives when they recommend their models to new customers, and the customers make a purchase. Nonetheless, Nissan can remain competitive by using the referral strategy in combination with other business-level strategies, particularly those aimed at increasing brand awareness.
Deriving topline growth from a referral strategy will require Nissan to incur some costs. For every referred customer, for instance, the company will have to pay a certain percentage of sales in the form of an incentive, as agreed by the referrer. This will potentially eat into the company’s profit, especially if majority of customers come in through the referral program. The strategy will also increase the company’s sales and marketing expenses, which will affect its net profit. However, since incentives offered on customer referrals are often a very small fraction of sales revenue, the strategy will result in attractive growth of bottom-line profit.
References
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Biyalogorsky, E., Gerstner, E., & Libai, B. (2001). Customer referral management: Optimal reward programs. Marketing Science, 20(1), 82-95.
Dose, D. B., Walsh, G., Beatty, S. E., & Elsner, R. (2019). Unintended reward costs: The effectiveness of customer referral reward programs for innovative products and services. Journal of the Academy of Marketing Science, 47(3), 438-459.
Hart, M. (2020). 16 ways to grow your top line and bottom-line revenue. Retrieved October 21, 2020, from https://learn.g2.com/top-line-vs-bottom-line