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Renault-Nissan Alliance

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by

Nakia Hawkins

on 6 August 2014

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Transcript of Renault-Nissan Alliance

Renault-Nissan Alliance
Team Milo
PEST Analysis (1999-2004)
Political:
Nissan has strong bureaucratic relations in Japan
Recommendations
Continued collaboration
Establish additional cross-company teams
Increased corporate transparency between employees and management
Retain corporate identity
Nissan Motors
Losing Japanese market share for 27 years
Profitable once between 1992-1999.
$20 Billion debt
Strong manufacturing practices
International presence

Renault SA
Small French car company
Only produced small-medium sized cars
No luxury or utility vehicles
Slim margins, but profitable
85% of sales in Western Europe
Looking to expand global market share

SWOT Analysis
Situation: RNBV Alliance
Background

Porter's Five Forces Analysis of Automotive Industry
Final Quote
"Why is the alliance so successful?" asked Schweitzer. "Because both sides wanted it. Both needed it. This need must be continually felt so that they stay together. People must feel every day that they are better off together."-Louis Schweitzer, Chairman and CEO of Renault
Renault alleviated Nissan's debt, giving $5 million
Sold 5 million cars (Nissan 2.6 mil/Renault 2.4 mil)
9.2% of world market (Renault 4.4% & Nissan 4.8%)
Alliance became one of the World's Top 5 Automakers
$3.3 billions cost savings and synergies
Problem: What happens when the honeymoon phase ends?
Both CEO's are concerned about the looming challenges the alliance will face.
Have the two companies peaked as far as cost savings in manufacturing and additional sales?
Can employees unify across cultures, functions, and geographies?
Can the alliance deepen while still respecting cultural differences?
AGIL Analysis
Strengths:
Benchmarking
Research & Respect during merger
RNPO
Goal-Oriented
Consolidated Platforms


SWOT Analysis (External)
Weaknesses:
Not Nissan’s first partnership choice
Nissan’s Debt
Increased Workload
Distance of companies

Opportunities:
Mexico & Brazil
Joint-Purchasing Ventures
Continued synergy
Vastly improved management for Nissan and engineering for Renault
Threats:
Language Barriers
Cultural Differences
Two weak companies
Big stakes- failure could cripple companies
Supplier Power (Low):
Low switching costs
Many firms in the industry
Threats of Substitution( High/Medium):
Public Transportation
Biking
Car Share
Walking Segways
Threats of New Entrants: (Medium)
High labor and material costs
High initial investment
Industry Rivalry (High):
Renault-Nissan
Toyota
Honda
General Motors
Chrysler
Buyer Power (Low):
Little bargaining power
Consumers are price sensitive
Adaptation:
Developed CCTs
Renault: screwdriver and clothes.
Nissan: attractive designs to the consumer eye, and improved management.
Goal-Attainment:
Nissan profitability
“We arrived at an analysis where we felt that this was a good company with management problems”
Increase market share
Improve overall product quality
Integration:
Complete collaboration.
Went as far as alternating meetings in Paris and Tokyo.

Latent Values:
Renault: innovative design and management
Nissan: quality of its engineering.
Renault had a good reputation in Europe of providing economical vehicles for many years.
Nissan demonstrated a stricter culture.

Economic:
Certain vehicle requirements / preferences in different locations
Social:
Language barriers
Measurement differences
Strong Japanese Nationalism
Technological:
Number of platforms
Compact vs Utility
Video
Full transcript