Renault- Nissan Strategic Alliance


Published on

Published in: Business, Technology
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Renault- Nissan Strategic Alliance

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