Downloaded 48 times
More Related Content
Renault nissan new
- 1. Renault-Nissan The Challenge ofSustaining Strategic Change Presented By: Abhishek Rajvanshi Chitranshu Shukla 14.12.2017 Strategy Implementation & Control
- 2. s Introduction to NissanRenault 14.12.2017 Strategy Implementation & Control
- 3. Introduction to RenaultNissan 1999 Strategic alliance with Renault Nissan Timeline Renault Timeline 1933 Nissan was founded 1950s to 1970s Rapid growth 1980s Operating loss & severe competition 1992 Started restructur -ing plan 2001 Successful turnaround 1898 Renault was founded 1999 Obtained 44% shares of Nissan Carlos Ghosn 1983-1988 Suffered from loss 1990-1993 Attempt to merger and acquire 14.12.2017 Strategy Implementation & Control
- 4. Renault Nissan Respective objectives Improvingquality Internationalize its business (Asian & North-American) Technological know-how Reduce cost Reduce debt Expand market in Europe & Latin America Design & Marketing Common objectives Leader for the quality and attractiveness of products and services Objectives of the Alliance 14.12.2017 Strategy Implementation & Control
- 5. Japanese Culture 14.12.2017 StrategyImplementation & Control
- 6. Japanese Culture Collectivism High power distance MasculinityHigh context 14.12.2017 Strategy Implementation & Control
- 7. Collectivism culture: valueharmony, fitting in and politeness, “saving face” Decision were made by people having similar thoughts • The “Kereitsu” – affect purchasing in terms of cost and quality • Debates and conflicts are not valued or are seen as offense • Decisions were made by people with similar thoughts • Stress on consensus and compromise prolonged decision making process • Spent too much time apologizing for service failures Collectivism 14.12.2017 Strategy Implementation & Control
- 8. Subordinates expect tobe consulted in small power distance societies, versus being told what to do in large power distance societies. Unthinkable for a small group of middle managers to come up with a plan for the company’s future organization Feedbacks are channeled through a peer Respect seniority: life-time employment and senior-based reward Young employee could not take up senior positions High Power Distance 14.12.2017 Strategy Implementation & Control
- 9. Masculinity: a societyin which social gender roles are clearly distinct, i.e. men are supposed to be assertive, tough, and focused on material success; women are supposed to be more modest, tender, and concerned with the quality of life Males occupied important positions Not used to collaborate and communicate with females Male employees not appreciate to be supervised and managed by female Masculinity 14.12.2017 Strategy Implementation & Control
- 10. High-context communication tendsto be more indirect and more formal. Flowery language, humility, and elaborate apologies are typical. Functional requirements and specifications were not clear. ‘If people don’t act, it doesn’t mean that they don’t agree with you, it means that they don’t understand’ The “Blaming culture” High Context 14.12.2017 Strategy Implementation & Control
- 11. Turnaround by CarlosGhosn 14.12.2017 Strategy Implementation & Control
- 12. • Born inBrazil • Lebanese parents • Studied in Engineering in France • Spent 18 years in Michelin in Brazil and North America • Joined Renault in 1996 as EVP of Advanced R&D, Manufacturing and Purchasing • Appointed as COO of Renault in 1998 • Appointed as COO of Nissan in June 1999 and as CEO in June 2001 Who is Carlos Ghosn?! 14.12.2017 Strategy Implementation & Control
- 13. • On October18, 1999, Nissan introduced a three-year plan to revive the company. • The Nissan Revival Plan (NRP) is a bold, sweeping program with a goal of nothing less than recreating the organization. • NRP sets the stage for the creation of lasting, profitable growth. Nissan Revival Plan (NRP) 14.12.2017 Strategy Implementation & Control
- 14. 1. Nissan willreturn to net profitability in fiscal year 2000 2. Nissan will achieve a minimum operating income to sales margin of 4.5 percent by fiscal year 2002 3. Nissan will reduce consolidated net automotive debt to less than $6.3 billion by fiscal year 2002 4. If any of these are not met, the executive committee has promised to resign. Nissan Revival Plan (NRP) 14.12.2017 Strategy Implementation & Control
- 15. NRP: Meeting theRevival Commitments Main goals Results , 1998 Planned results, 2002 (according to NRP) 1 Minimum operating income to sales margin 1.7 % 4.5% 2 Suppliers and purchasing costs Too many suppliers- 3000 and very high purchasing cost Cut the purchasing costs by 20%, reduce the number of its suppliers 3 Platforms and assembly plants 24 platforms spread between 7 plants 15 platforms spread between 4 plants 14.12.2017 Strategy Implementation & Control
- 16. Main goals Results, 1998 Planned results, 2002 (according to NRP) 4 New products 4 out 43 models are profitable Introduce 22 new vehicles with high potential demand 5 New technologies Some of models have not attractive design and are more than 5 years in the market Vehicles are more enjoyable, safer and ecologically friendly 6 Investments in R&D 3,7 % of sales 5% of sales 7 Number of employees 131 000 Reduce to 127 000 NRP: Meeting the Revival Commitments 14.12.2017 Strategy Implementation & Control
- 17. Measures taken byCarlos Ghosn • Business Process • Corporate culture 14.12.2017 Strategy Implementation & Control
- 18. 1. Language policy:All top-level meetings were held in English, intensive language courses for all Nissan employees 2. Dictionary of essential terms which includes clear definitions 3. Thoughts, words and action are the same 4. Demanded the best quality of the job, strong control of every numbers 5. Cross-cultural training – having over 1500 employees from Renault learn about the Japanese business culture and 400 Nissan employees study the French culture Corporate Culture Measures 14.12.2017 Strategy Implementation & Control
- 19. 1. 5% oftime to establish a plan, 95% to execute 2. Encouraged open debate and open disagreement 3. A performance-oriented compensation, 35% of salary is performance-related 4. Promotions are based on performance, not on seniority 5. The use of e-mail is encouraged 6. Cross functional teams (CFT) creation 7. Cut jobs through early retirement, job transfer 8. Terminate the relationships with most Keiretsu suppliers Business Process Measures 14.12.2017 Strategy Implementation & Control
- 20. Purpose of CFT:to generate ideas and recommendations for change Critical areas: purchasing, engineering and R&D Every CFT consists of 10 people: 1 leader (middle manager), 1 former Renault manager 2 sponsors (senior executives),and other employees Sub-teams of 10 people to investigate particular issues. Total number is 500 people Business Process Measures and CFT 14.12.2017 Strategy Implementation & Control
- 21. The Role ofLeadership in Successful International Merger & Acquisitions 14.12.2017STRATEGY IMPLEMENTATION & CONTROL
- 22. Leadership in Mergers& Acquisitions • Successful post-M&A integration depends on a sound leadership style that enables organizational and cultural adaptation. • During the period M&A integration, if employees believe that their leaders care about them, they develop a positive attitude toward the change and commit to greater involvement in the integration. •Transformational and Transactional leadership styles can improve employee engagement.
- 23. Types of LeadershipsStyles Transactional Leadership Transformational Leadership There are two types of Leaderships styles
- 24. Transactional Leadership • Itis a style of leadership in which the leader promotes compliance of his followers through both rewards and punishments. • Also known as managerial leadership, focuses on the role of supervision, organization, and group performance. • Leaders using the transactional approach are not looking to change the future, they are looking to merely keep things the same
- 25. Transformational Style •A transformationalleader is a person who inspires (transform) followers to achieve extraordinary outcomes. • Able to arouse, excite and inspire followers to put out extra effort to achieve group goals. •Pay attention to the concern and developmental needs of individual followers •Change followers’ awareness of issues by helping them to look at old problems in a new way.
- 26. Factors of Successin M&A Main factors that should be implemented by leaders & affects the success or failure the M&A of Companies: 4. Aligning Culture 3. Talent Management 2. Strategic drivers & planning 1.Due Diligence 5. Evaluation Process
- 27. Due Diligence • Duediligence is the series of exploratory activities used in evaluating a company prior to finalization of the M&A. • The traditional approach to due diligence focuses on several key areas: financial, legal and regulatory, and accounting and tax. • When everything in the examination process checks out from a financial, legal, and regulatory standpoint, the merger partners typically move forward.
- 28. Strategic Drivers • Itmeans defining strategic drivers or reasons why a company wants to go through M&A process. • Most of the companies can go through M&A for either: - Organizational growth - Increasing market share - Gaining entrée into new markets - Obtaining products - Keeping pace with change • Successful M&As should focus on post the M&A on rationale and objectives and then managing the tactical and functional activities to achieve those.
- 29. Aligning Culture Defining corporateculture is based on viewing it on three levels: • Culture is an Iceberg, the visible part, such as how the office is structured, formal or informal, what lies beneath the surface such as the nature of people, time, economics, business success. • The real task for leaders to align culture of two companies is based on a thoughtful and thorough analysis of the people If leaders want them to change the people, they should make sure they are malleable. • Leaders also should make the people part of their vision based on the people's culture Political Culture: As the distribution of power throughout the organization. Emotional Culture: As influenced by the personal feelings that employees hold toward the company, its policies. Structural Culture: Such as company size, industry, and other readily identifiable characteristics
- 30. Talent Management • Whenorganizations go through M&A, they need to determine whether or not there is a need for a retention incentive plan. • If so, they have to decide who should participate, how people will awarded, the timing and structure of the plan and finally how much the overall plan cost
- 31. •Team of Renaultengineer & production employee visited Nisaan and vice versa to share their expertise. •Nissan design team was relocated from engineering group to marketing group. •Top executives were stationed in major markets. •A global marketing team was created to coordinate Nissan’s activities across globe. •By 2002,30% of all purchasing was jointly done. Global structure were establish, along with GSAM. Initiative taken by Mr. Carlos Ghosn.
- 32. To select thealternatives and then evaluate the best one as the company have limited choices and constraints. •Improve profitability •Increase sales, market share, return on investment •Customer satisfaction •Brand image •Corporate mission, vision and strategy •Resources and capabilities Selection Of Alternatives For Renault Nissan
- 33. Strength & WeaknessAnalysis- Internal Strength Renault Weakness Nissan Good cost control for its debts Recurring losses Innovative & creative Lack of Creativity Privileged relationship with suppliers Mismatch between suppliers and its strategy Strong Management Weak Management Strength Nissan Weakness Renault Quality products Lack of technology 37% of the total in US & 28% in Japan No recognition in US & Japan Huge production setup Small production setup
- 34. Porter Five Forces SupplierPower Medium Threat of New Entrants Low Buyer Power High Threat of Substitutes Medium Rivalry among competitors High
- 35. VRIO ANALYSIS VALUABLE •Cross companyteams (CCTs) •Cross Functional Teams (CFTs) •Feedback from workers on the shop floor •Global Marketing Team. RARE •Global Supplier account Managers( GSAMs) •Nomination Advisory Committee •Joint Distribution Platform
- 36. VRIO ANALYSIS COSTLY TOIMITATE Global Engineering team. Global Supplier Global structure were established for managing finance, manufacturing, IT and R&D functions. ORGANIZED TO CAPTURE VALUE Resources, itself, cannot provide advantages to organization until it is organized and exploit to do so. Renault Nissan organize its management systems, processes, policies and strategies to fully utilize the resource’s potential to be valuable, rare and costly to imitate.
- 37. • Leadership playsa vital role in the success of M&A • Understanding the multicultural aspects help to integrate both two cultures and companies smoothly in order to achieve the business success • No “right” or “wrong” culture • The success of the M&A depends on the deep analysis of the market and company, followed by a concrete implementation plan for business processes. Insights & Conclusion Carlos Ghosn: “If you have to work and do something significant in a country it is much easier if you connected with the country and the culture. 14.12.2017 Strategy Implementation & Control
- 38. Thank You ForPatience 14.12.2017 Strategy Implementation & Control