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Renault nissan case study

Sep 11, 2014

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[Product Name] Marketing Plan

Renault Nissans External Audit Group Members Ulusyar Tareen Shehreyar Khan Yuze Yao Hua Meng Li Li

Renault-Nissan1Leading to High Performance

AgendaIntroduction of the company { Yao}Leadership of Carlos Ghosn Industry dynamics {Claire}The Alliance of Nissan and Renault Objectives and Goals with SWOT and PESTEL Analysis by { Shehreyar Khan}Current business model and previous ModelsValue Chain Model and Porters 5 Forces Analysis by { Ulusyar Tareen}Current Performance of the companyRenault-Nissan22Renault-NissanWho is Carlos Ghosn?Born on 9th March, 1954, in Porto Bello, Brazil Throughout his life he lived and worked all over the world and gained wide cultural awarenessSpent 18 years with Michelin in Brazil and North America Joined Renault in 1996 as Executive Vice President of Advanced R&D, Manufacturing and PurchasingAppointed as COO of Renault in 1998. Joined Nissan Motor as Chief Operating Officer in June 1999 and was named Chief Executive Officer in June 2001.President of Renault since May 2005Remains President and CEO of NissanCarlos Ghosn is also a director of Alcoa and AvtoVAZ.He is appointed President and CEO of Renault on May 6,2009.3Renault-NissanIntroduction of the companiesBy 1999, the environment of car manufacturers has become super competitive:globalization driven by market internationalizationneed for Renault and Nissan to reach critical sizesaturation of certain geographic areas for production anddistribution.Opportunities for survival - 4 million vehicles; new areas (Asia, Latin America) Address market saturation in Europe Cope with Asian leader Toyota RenaultNissan4Renault-NissanStrategic Alliance Definition Agreement for cooperation among two or more independen firms to work together towards common objectivesCompanies 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, 19995Renault-NissanNissans problems before the alliance Nissans problems before the alliance$ 20 billion in debt The reasons of the problemsRecession in early 90s in JapanThere was complacency and a lack of urgency in the cultureThere was no cross-functional and cross-regional communicationThe design of the cars was out of touch with the marketA high degree of bureaucracyThere was an emphasis on engineering culture rather than managerial culture and promotions. Renault-Nissan66Renault-NissanThe objectives of the allianceRenaultNissanRespective objectivesImproving qualityInternationalizeReduce CostsReduce DebtCommon objectivesEconomy of scaleTechnological Know-HowLeader for the quality and attractiveness of products & services7Renault-Nissan7Aim of the alliance Two principlesDeveloping all potential synergies by combining the strengths of both companies through a constructive approach to deliver Win-Win resultsPreserving each companys autonomy and respecting their own corporate and brand identitiesThree objectivesQuality and value of products and services in each region and market segment Key technologies in engines, electronics and the environmentOperating profit.8Renault-NissanCorporate Structure of the Alliance9Renault-NissanObservable SymbolsCeremonies, Stories, Slogans,Behaviors, Dress, Physical SettingsUnderlying Values,Assumptions,Beliefs, Attitudes, FeelingsLevels of Corporate Culture10Renault-NissanIndustry dynamicsRenault-Nissan1111Renault-Nissan HHI - competitiveness in an industry - Automotive Vehicles 2754.0 Porters five forcesIndustry life cycle Mature 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

12Current Business Model Post Merger StrategyRenault-NissanFurther 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.

13Current Business Model Post Merger StrategyRenault-NissanRestructuringThe 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.

14Renault-NissanTrust, addition of value to both sides, high commitment

Equity, fair dealing, both profit

Electronic linkages to share key information, problem feedback and discussion

Mechanisms for close coordination, people on-site Involvement in partners product design and production, shared resources

Long-term contracts

Business assistance beyond the contract15Renault-NissanNew Orientation PartnershipTransnational Model of RENAULT-NISSANAssets and resources are dispersed worldwide into highly specialized operations that are linked together through interdependent relationships.

Structures are flexible and ever-changing.

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 systems16Renault-NissanContingency FactorsAffecting Organization DesignStrategyEnvironmentSize/Life CycleCultureTechnologyRENAULT-NISSANOrganizational Structure and Design

17Renault-NissanPestel for renault357 million market sizeUK france germany italy spain ireland swededn Austria, Denmark, Finland 12 countries Competitors Volvo(niche) Psa wagon BMW Mercedes(German) fiat fordPsa Reno fiat high volume European cars and market is Europe only & try to keep Japanese out of marketPressure to elt Japanese companies get inCompanies asked for VRA (voluntary restraint agreement) Renault-Nissan18VRA = limit the no Japanese cars that are sold in the European market for a limited periodThey did this to make them self super competitive so they can fight the Japanese cars or leave their market and start globalizationVRA lasted 7 years and Japanese cars were limited to 16%Japanese agreed cause they had a low political influence so that Europeans will be more supportive Renault-Nissan19Real drivers were political and legal change with economical and environmental changeRenault used this to become tougher and restricted company and acquired Nissan during that timeRenault-Nissan20Value Chain Analysis Nissan-RenaultRenault-Nissan21INFRASTRUCTURE: Main Head office Backup & Administration offices Internationally HRM: Mainly Nissan, Executive Exchanges Across the BoardTechnology: Faster Product Development, Joint product development & Economies Of Scale Procurement: Coordinated Procurement & Improvement in Nissans Supply chain DistributionUse of common Distribution channelProductionDecrease Number of Plants to save Extra OverheadsMarketingSeparate Brand NamesMARGINValue Chain Analysis Nissan & RenaultRenaultNissanHuman Resource ManagementHuman Resource ManagementIndividualityGroupTechnologyTechnologyGood Sleek DesignsReliable, Lacked DesignProcurement Procurement Suitable Supply chain resulting reduced costsNeeds Good Strategies to cut costsProductionProductionMass Production (Economies of Scale)Mass Production (Economies of scale)DistributionDistributionGood Channel in Europe only.Good System In Asia & U.S.MarketingMarketingPerformance, Value for MoneyQuality, Value for MoneyRenault-Nissan22SWOT External AnalysisHyper-competitive MarketHeavy investment in R&DStrategy of cost becomes the major issue

Renault-Nissan23CountryChinaMalaysiaSingaporeHong KongJapanQualification of workplaceCost of laborPolitic StabilityTaxesUnemploymentHighly FavorableModerateUnfavorable Opportunities in Asia :SWOT Internal AnalysisRenault-Nissan24Strengths RenaultWeakness NissanGood cost control's for its debtsRecurring LossesInnovative & CreativeLack of Creativity Product Renewal NeededPrivileged relationship with suppliersMismatch between suppliers and its globalization strategyStrong ManagementWeak ManagementStrengths NissanWeakness RenaultQuality ProductsLack of Technology37% of the total in U.S. & 28% JapanNo Recognition in U.S. & JapanHuge Production SetupSmall production SetupSWOT Analysis ContdStrengths for Nissan are weaknesses for Renault & vice versaComplementary in many respectsNissan weaknesses are mainly due to mismanagement of their resourcesTo stay competitive Renault needed to diversify geographically in Asia & U.S. Nissan meets this criteriaTechnological & Design exchange between Nissan & Renault gave Renault & Nissan strength RespectivelyRenault-Nissan25Renault-Nissan26Thank you for your attention!26Renault-Nissan

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