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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
Founded 1911
Opportunities for survival - 4 million vehicles; new areas (Asia, Latin America) Address market saturation in Europe Cope with Asian leader Toyota
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Industry dynamics
HHI - competitiveness in an industry - Automotive Vehicles 2754.0
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
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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
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Economy of scale Technological Know-How Leader for the quality and attractiveness of products & services
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Other factors:
Alliance charter Capital contributions and equity participations Management structure and exchange of personnel
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New Strategies
Profitable growth worldwide
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An Open System
Input
Output
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Renault
20%
Nissan
92,7% Dacia Renault VI / Mack VI
100%
AB Volvo
Renault VI / Mack
70%
Samsung
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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 Nissans powerful industrial and commercial presence
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Current Business Model Post Merger Strategy 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.
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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.
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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
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Turnaround strategy
Lewins model
Unfreeze
Admit change was needed Establishing new company teams Closing plants Cutting jobs Reducing purchasing costs
Change
Introducing new models Establish common pool for resources Inter-cultural and management trainings Common marketing and sales approach New HR policy
Refreeze
Ensure acceptance Promote freedom of operations Establish close reporting system Common value creation Involvement in design and production
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China
Malaysia
Singapore
Hong Kong
Japan
Qualification of workplace
Cost of labor PIB per person Politic Stability Taxes Unemployment
Very Favorable
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Favorable
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unfavorable
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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.
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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
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