Renault nissan


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Renault nissan

  1. 1. The Challenge of Sustaining Strategic Change
  2. 2. Criticism All Around“….marriage of desperation for both parties…” -Business Week“….two mules don’t make a race horse…” -CEO , Chrysler
  3. 3. History Alliance with Nissan Founded 1898 1999Renault Cooperation with Volvo 1990 Alliance with Founded 1911 Renault 1999Nissan Financial distress 1990•Increasing competition in the automobile Industry by the year 1999•Saturated Markets•Globalization
  4. 4. Nissan Before Alliance $ 20 billion in debt Recession in early 90’s in Japan There was complacency and a lack of urgency in the culture The design of the cars was out of touch with the market A high degree of bureaucracy There was an emphasis on engineering culture rather than managerial culture and promotions
  5. 5. Renault Before alliance Main source of revenue - small to medium size cars in Europe Lack of presence in the international market 85 % of sales in Western Europe Limited Product line Bland styling and poor product quality
  6. 6. Internal Analysis Strengths Renault Weakness Nissan Less debt burden Recurring Losses Lack of creativity and renewal of its Highly innovative products Products Overall management practices Poor management capacity Supplier relationships inPrivileged relationship with suppliers mismatch with a globalization strategy Capacity Management Slow to adapt change Strengths Nissan Weakness Renault Quality Products Too small to compete at world stage High technological acumen Presence only in European market
  7. 7. OpportunitiesCountry China Malaysia Singapore Hong Kong JapanWorkplaceCost of laborPolitic alStabilityTaxesUnemployment Very Favorable Favorable unfavorable
  8. 8. Industry Dynamics Buyer power HighThreat of Rivalry Suppliersubstitut among power es competitors MediumMedium High Threat of new entrants Low
  9. 9. Strategic Alliance Agreement for cooperation among two or more firms Companies do not form a new identity Co-operate while remaining apart and distinctThe alliance between Renault and Nissan was signed on 27thof March, 1999
  10. 10. Objectives of the Alliance Developing all potential synergies by combining the strengths Providing global reach Preserving each company’s autonomy and respecting their own corporate and brand identities Improving quality and value of products Benefit from each others key technologies
  11. 11. Individual Interests Renault Nissan
  12. 12. Current Business Model Common platform sharing Joint research projects and exchange of components Further expansion in Europe and growth in Asia To draw on the strengths of complementary expertise  in sales and technology  in order to reduce costs  In order to enhance performance
  13. 13. Goals Achieved by the Alliance Third largest global automaker Global market share of 9% (by volume) Significant presence in major world markets (United States, Europe, Japan, China, India, Russia)