Competencia

Scope of Renault ± Nissan alliance

Coventry university London campus
End of module assignment Submitted to: Adewale Adeyemi From: Umais Shafqat Student ID: 03467017 Subject: Strategy International Business

Course title: Global Business (top up)

Scope of Renault ± Nissan alliance

Scope of Renault- Nissan alliance
Table of contents: 1. Introduction 2. Summary of environmental audit3. Current state of industry 4. Evaluating current strategy 5. Conclusion 6. List of references 7. Appendices

Scope of Renault ± Nissan alliance

1. Introduction:

y Background: The debt level of Nissan was too high in 1999 and it faced bankruptcy. Nissan was looking for an automotive partner to overcome those crises; Nissan entered in alliance with Renault S.A. of France. The alliance wassigned on March 27, 1999, it was a unique partnership of two global companies and they linked by crossshareholding. Renault acquired 36.8 percent of stake in Nissan for $ 5.4 billion. The alliance was based on the principle that both the companies should retain their own identity but will share each other s resources and Nissan recovered quickly under Carlos Ghosn leadership.

y Detail of mywork: In this assignment I tried to visualize all those activities and strategies which Renault and Nissan being as Japanese and French are performing since after signing their alliance. I discussed the united agenda of both automotive companies and their criteria of formulating strategies to achieve profitable growth. However, my work also highlights the current state of automotive industry and alsoits impact on both industries. Lastly after discussing their

Scope of Renault ± Nissan alliance current strategy, I also recommended an alternate strategy and also discussed that how it can boost up Renault and Nissan business by utilizing the knowledge that I gained from studying at Coventry University.

2. Summary of Environmental Audit: y Internal environmental audit:  Swot analysis: Inthe first presentation we discussed key strengths and weaknesses of Nissan and Renault. The strength of Nissan is being as a global brand it enjoys a strong financial position and the international market value of its shares is which kept on increasing. Its management team consists up of experts, competent, experienced employees and environmental friendly technology. The weaknesses are slowdecision making procedure, lack of diesel technology and focus more on international market rather than on national market which is against any countries prosperity, government policies, financial transaction and operation. On the other hand the strengths of Renault are European market, strong R&D activities, strong growth prospective, proactive management, modern cars and capitalizing on competitiveweakness. The weaknesses are it s not entirely global, declining operating margin and decline market share in sector. The swot analysis is available in appendix 1.A

Scope of Renault ± Nissan alliance After alliance majority of the weakness of Renault are now Nissan s strengths and vice versa and they are complementary to each other in many respects.  Value chain: Value chain analysis ofRenault-Nissan is made in diagram that is available in appendix 1.C

y External environmental:  Pestel analysis: The PESTEL framework provides a comprehensive list of influences on the possible success or failure of particular strategies. PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal. (Johnson, Scholes and Whittington 2008:55) In terms of political and legalfactors Renault was prevented from competition with Japanese cars from 1992 to 1999. After that period it was the time for Renault to decide whether it will stay in Europe and compete with other automotive car companies or will enter in the global market. Renault made a clever decision and entered in to alliance with Nissan as it will get access to global market and can also prevent competition in...