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Renault- Nissan Strategic Alliance
 

Renault- Nissan Strategic Alliance

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    Renault- Nissan Strategic Alliance Renault- Nissan Strategic Alliance Presentation Transcript

    • Renault – Nissan’s Strategic Alliance model
      Leading to High Performance
      19 May 2010
      1
      Renault-Nissan
    • Agenda
      Introduction of the company
      Industry dynamics
      The Alliance of Nissan and Renault – Objectives and Goals
      Current business model
      Turnaround strategy
      Leadership of Carlos Ghosn
      Current Performance of the company
      Renault-Nissan
      2
      3 June 2010
      19 May 2010
      2
      Renault-Nissan
    • Introduction of the companies
      Renault
      Nissan
      By 1999, the environment of car manufacturers has become super competitive:
      globalization driven by market internationalization
      need for Renault and Nissan to reach critical size
      saturation of certain geographic areas for production anddistribution.
      Opportunities for survival - 4 million vehicles; new areas (Asia, Latin America)
      Address market saturation in Europe
      Cope with Asian leader Toyota
      19 May 2010
      3
      Renault-Nissan
    • Industry dynamics
      • HHI - competitiveness in an industry - Automotive Vehicles 2754.0
      • Porter’s five forces
      • Industry life cycle – Mature
      Renault-Nissan
      4
      3 June 2010
      19 May 2010
      4
      Renault-Nissan
    • Strategic Alliance
      Definition
      Agreement for cooperation among two or more independen firms to work together towards common objectives
      Companies in a strategic alliance do not form a new identity to reach their aims but cooperate while remaining apart and distinct
      The alliance between Renault and Nissan was signed on 27th of March, 1999
      19 May 2010
      5
      Renault-Nissan
    • Nissan’s problems before the alliance
      Nissans problems before the alliance
      company was falling apart
      $ 20 billion in debt
      The reasons of the problems
      Recession in early 90’s in Japan
      There was complacency and a lack of urgency in the culture
      There was no cross-functional and cross-regional communication
      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
      Sticking in the Keiretsu model
      Renault-Nissan
      6
      3 June 2010
      19 May 2010
      6
      Renault-Nissan
    • Main source of revenue - small to medium size cars in Europe
      85 % of sales in Western Europe
      -> go international
      Renault’s problems before the alliance
      19 May 2010
      7
      Renault-Nissan
    • Aim of the alliance
      Two principles
      Developing all potential synergies by combining the strengths of both companies through a constructive approach to deliver Win-Win results
      Preserving each company’s autonomy and respecting their own corporate and brand identities
      Three objectives
      Quality and value of products and services in each region and market segment
      Key technologies in engines, electronics and the environment
      Operating profit
      19 May 2010
      8
      Renault-Nissan
    • The objectives of the alliance
      19 May 2010
      9
      Renault-Nissan
    • Key success factors of the alliance
      Quality between the relationships among the managers and engineers of Renault and Nissan
      Business experience
      Technical skills
      Core values:
      Balanced relations between the two companies and the development of strong identities for each of the brands
      Other factors:
      Alliance charter
      Capital contributions and equity participations
      Management structure and exchange of personnel
      19 May 2010
      10
      Renault-Nissan
    • Goals Achieved by the Alliance
      Third largest global automaker (based on sales for the year 2008)
      Global market share of 9% (by volume)
      Significant presence in major world markets (United States, Europe, Japan, China, India, Russia)
      19 May 2010
      11
      Renault-Nissan
    • Corporate Structure of the Alliance
      19 May 2010
      12
      Renault-Nissan
    • Management Structure of the Alliance
      19 May 2010
      13
      Renault-Nissan
    • Levels of Corporate Culture
      Observable Symbols
      Ceremonies, Stories, Slogans,
      Behaviors, Dress,
      Physical Settings
      Underlying
      Values,
      Assumptions,
      Beliefs, Attitudes,
      Feelings
      19 May 2010
      14
      Renault-Nissan
    • New Strategies
      • Profitable growthworldwide
      19 May 2010
      15
      Renault-Nissan
    • An Open System
      19 May 2010
      16
      Renault-Nissan
    • Renault Nissan Group – a Global Player
      01/07/02
      31/12/95
      Renault
      44,4%
      Renault
      20%
      Nissan
      AB Volvo
      100%
      92,7%
      Renault VI / Mack
      Dacia
      Renault VI / Mack VI
      70%
      Samsung
      19 May 2010
      17
      Renault-Nissan
    • Common platform with Nissan for small cars
      Joint research projects and exchange of components (leading to standardization of these products)
      The decision to return to the Mexican market, using Nissan’s powerful industrial and commercial presence
      19 May 2010
      18
      Current Business Model
      Post Merger Strategy
      Renault-Nissan
    • Further expansion in Europe and growth in Asia
      To draw on the strengths of complementary expertise in sales and technology, and to reduce costs and enhance performance.
      19 May 2010
      19
      Current Business Model
      Post Merger Strategy
      Renault-Nissan
    • Restructuring
      The aim of this restructuring was to be profitable and competitive
      Sales & Marketing, Distribution, Human Resource were the key areas where restructuring initiatives have taken place.
      The first important step taken by Renault was to broaden the notion of service to its customers. That led to the creation of two new entities: the Service department and the Distribution Project department.
      19 May 2010
      20
      Renault-Nissan
    • Trust, addition of value to both sides, high commitment
      Equity, fair dealing, both profit
      Electronic linkages to share key information, problem feedback and discussion
      Mechanisms for close coordination, people on-site
      Involvement in partner’s product design and production, shared resources
      Long-term contracts
      Business assistance beyond the contract
      19 May 2010
      21
      Renault-Nissan
      New Orientation Partnership
    • Transnational Model of RENAULT-NISSAN
      Assets and resources are dispersed worldwide into highly specialized operations that are linked together through interdependent relationships.
      Structures are flexible and ever-changing.
      Subsidiary managers initiate strategies and innovations that become strategy for the corporation as a whole.
      Unification and coordination are achieved primarily through corporate culture, shared visions and values, and management style rather than through formal structures and systems
      19 May 2010
      22
      Renault-Nissan
    • Strategy
      Culture
      Size/
      Life Cycle
      Environment
      Contingency FactorsAffecting Organization Design
      Technology
      RENAULT-NISSAN
      Organizational Structure and Design
      19 May 2010
      23
      Renault-Nissan
    • Who is Carlos Ghosn?
      Born on 9th March, 1954, in Porto Bello, Brazil
      Moved to Lebanon with his parents in 1960 for primary education in a Jesuit School
      Throughout his life he lived and worked all over the world and gained wide cultural awareness
      Spent 18 years with Michelin in Brazil and North America
      Joined Renault in 1996 as Executive Vice President of Advanced R&D, Manufacturing and Purchasing
      Appointed as COO of Renault in 1998.
      Joined Nissan Motor as Chief Operating Officer in June 1999 and was named Chief Executive Officer in June 2001.
      President of Renault since May 2005
      Remains President and CEO of Nissan
      Carlos Ghosn is also a director of Alcoa and AvtoVAZ.
      He is appointed President and CEO of Renault on May 6, 2009.
      19 May 2010
      24
      Renault-Nissan
    • Fiedler`s Contingency Theory
      19 May 2010
      25
      Renault-Nissan
    • Fiedler`s Contingency Theory
      19 May 2010
      26
      Renault-Nissan
    • Turnaround strategy
      Lewin’s model
      Renault-Nissan
      27
      3 June 2010
      19 May 2010
      27
      Renault-Nissan
    • SWOT – ExternalAnalysis
      Automakers face legislation increasingly restrictively on the fuel consumption
      Market has become hyper-competitive
      Heavy investment in R&D
      Strategy of cost becomes the major issue
      The opportunities in Asia :
      19 May 2010
      28
      Renault-Nissan
    • SWOT ExternalAnalysisCont’d
      To stay competitive Renault must diversify geographically by integrating a company that already has strong position in Asia, particularly in the regions identified - Nissan meets these criteria geography.
      However, the settlements are a necessary but not sufficient in the choice of partner
      19 May 2010
      29
      Renault-Nissan
    • SWOT - InternalAnalysis
      • The majority of the weaknesses are strength for Nissan Renault and vice versa: we can say that they are complementary in many respects. Moreover, we note that Nissan weaknesses are only due to a bad optimization from their resources and skills.
      19 May 2010
      30
      Renault-Nissan
    • The benefits of alliance with respect to other strategies
      In the market for car manufacturers, the only appropriate strategy is that allows the rapid acquisition of new skills.
      Strategy of horizontal diversification.
      Merger
      Acquisition
      Alliance
      Complementarities between the strengths and weaknesses of both companies
      Distinctive resources and competencies
      Learning: major challenge - little degree of synergy would cause a high cost of restructuring
      Advantages of the alliance before merger and acquisition
      economies of scale, geographically diversification, the reputation, the bargaining power
      19 May 2010
      31
      Renault-Nissan
    • Thank you for your attention!
      Renault-Nissan
      32
      3 June 2010
      19 May 2010
      32
      Renault-Nissan