CASECH18 02/11/2014 11:45:28 Page 3
Short Cases • 3
others you have to go beyond that. You have to build a brand
because they don’t know anything about it.”
DISCUSSION QUESTIONS
1. Jollibee Foods is an example of a so-called emerging mar-
kets champion. What have been the key success factors
behind the Jollibee story?
Sources: http://www.jollibee.com.ph; http://www.jollibeeusa.com; and
“Tasting Success,” Forbes Asia (February 2013): 62–66.
r r r r r r r r r r r r r r r r r r r r r r r r r r r
C ASE 18-3
NISSAN’S REVIVED DATSUN—THE MODEL T FOR THE TWENTY-FIRST CENTURY?
In its heyday, Datsun was a much-beloved brand in the
United States and Europe. It had a reputation for being
an economical car that came with innovative touches and
classy designs. It was the second-biggest selling import brand
in the United States in 1981, with sales of 580,000 cars. The
Japanese carmaker phased out Datsun in1981 and replaced it
with Nissan to unify the corporate identity worldwide.3 Some
people considered the name change as one of the worst
marketing decisions in automotive history. Now, Nissan plans
to revive the Datsun marque for emerging markets. The new
Datsun would be distinct from existing Nissan models on at
least one attribute: its price tag.
The trigger for Datsun’s rebirth as an emerging market car
brand came after India’s carmaker Tata Motors revealed its
mission to build the world’s cheapest car for a price below
$3,000. Tata’s bold plan intrigued Carlos Ghosn, chairman and
CEO of Renault-Nissan: he had been told by Nissan executives
that a full-fledged car could not built for less than double that
amount. Ghosn was convinced that Nissan should have an
offering that could compete in the so-called ultra-low car
segment of emerging markets. By 2012, nearly half of all global
car sales were in those countries. He turned to the company’s
internal think-tank known as the Nissan Exploratory Team.
Their mission was to come up with a profitable way to design a
better cheap car. The team started a secret project codenamed
“The $3,000 car” in 2007. In the meantime, in 2009, Tata rolled
out its super-cheap Tata Nano in India. Sales of the Nano were
very disappointing; a badly conceived marketing campaign was
mainly blamed for the poor results.
Five years after the taskforce initiated the project Nissan
revealed its plans. The company intended to offer at least six
Datsun models in early 2014 with the cheapest one selling
within the $3,000 to $5,000 price range. This price would be
close to a third of its current most inexpensive offering, the
$8,000 Tsuru compact sold in Mexico.
In an interview with the Wall Street Journal, Ghosn prom-
ised that the new car will be “modern and fresh” because
3
Nissan also sells premium cars under the Infiniti brand name.
2. Tony Tan plans to raise the international share of the
company’s business to 50 percent by 2020. Is this goal
realistic? Over time, how has the company’s global expan-
sion evolved?
3. Assess the China strategy. How does it differ from the
strategy used in other regions? So far the China business has
been loss-making. Should Jollibee continue developing the
China market, or would it be better off focusing on other
areas such as Europe?
4. What strategic recommendations would you make for
Jollibee’s global expansion strategy?
buyers in emerging markets want a car “that makes them feel
good and is in their budget.” When Nissan first revealed the
relaunch of the Datsun in 2012, most details were still vague
and mostly based on rumor. One thing was clear though:
Nissan did not intend to sell Datsun cars in the United States
and other industrialized countries. In these markets, regulatory
and safety hurdles would undermine the company’s ultra-low
pricing strategy.
To make the new cars profitable and ultra-cheap at the same
time, Nissan planned to take a bare-bones approach to comfort
and safety. Features that were standard for cars sold in devel-
oped countries would be sacrificed: only manual transmission,
noisier exhaust systems, no full supply of airbags. Referring to
emerging-market drivers, a senior Datsun team advisor said in
an interview with the Wall Street Journal: “If an accelerator
pedal sticks, they tend to overlook it rather than obsess.”
The initial focus for the re-born Datsun would be India,
Indonesia, and Russia. India in particular looked like a prom-
ising market: one study found that only 38 Indians out of 1,000
owned a car in 2010, compared with over 600 per 1,000 in the
United States.
Still, Nissan’s latest plan was met with a great deal of
skepticism. Some Nissan executives worried that the Datsun
revival would divert scarce resources needed to boost sales of
existing products in developed markets. Nissan’s rivals
doubted that there would be enough demand for such cars
in emerging markets. One Toyota executive observed: “It’s a
big mistake to think you can introduce a cheap car in emerging
markets and be successful. People want a car they and their
family can be proud of.”
DISCUSSION QUESTIONS
1. The Tata Nano was hailed as the world’s cheapest car.
Despite its low price tag, its sales performance was miserable
in India. Does the re-born Datsun have a better chance to
succeed in profitably penetrating the lowest price segment in
CASECH18 02/11/2014 11:45:28 Page 4
4 • Chapter 18 • Short Cases
emerging markets? Should Nissan instead focus on more
developed markets or its existing core brands—Nissan and
Infiniti?
Sources: “For Datsun Revival, Nissan Gambles on $3,000 Model,”
http://www.wsj.com, accessed October 1, 2012; “After Three Decades,
Nissan to Revive the Datsun,” Wall Street Journal Asia, March 21,
2012, pp. 17, 18; and “Nissan Dusts Off Datsun Brand,” http://www
.branchannel.com, accessed March 5, 2012.
2. How would you position the Datsun? Whom would you
target?
3. What challenges do you foresee in launching the
Datsun?
4. Nissan decided to initially launch the reborn Datsun in
India, Indonesia, and Russia. What criteria should the car-
maker use in deciding what other markets to roll out
Datsun?