Renault-Nissan Alliance

Renault-Nissan Alliance - Renault-Nissan Alliance From A...

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Renault-Nissan Alliance From A Risky Trial to A Tremendous Triumph Feifei Qiu Huan Long Ming Gu Qi He 2011-6-10
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EXECUTIVE SUMMARY Nissan Motors Company is an automobile manufacture in Japan. Before its alliance with Renault, it had a serious financial problem: the debt of the company was up to $20 billion and it was losing market shares for 8 years. The Renault-Nissan alliance took place in 1999 as an alliance agreement allowing Renault to buy 36.8% of Nissan for $5.4billion. Nissan and Renault developed a Renault-Nissan B.V. (Besloten vennootschap) as the common strategic management structure of the Renault-Nissan Alliance. It is the sole shareholder of the two existing alliance joint-companies: Renault-Nissan Purchasing Organization (RNPO) and Renault-Nissan Information Services (RNIS).After the alliance, Nissan become a global brand and continue to have a growth in net income. This paper aims to analysis the Renault-Nissan Alliance and answers the following questions: Why Nissan chose alliance? What was Renault-Nissan Alliance facing at the beginning? What kinds of advantages did tow companies contribute to the alliance? What strategies did the alliance take? What challenges it was facing? What it can do to fix those issues and what can an alliance bring to a company? This paper will first introduce the reason forced two companies, especially for Nissan, to choose Alliance. Then, we will briefly introduce the structure of the Renault-Nissan Alliance, as well as the dramatic change after alliance. At the second part of this paper, we will analyze the external situation the alliance faced, as well as the internal competitive advantages of this alliance, contributed from its combined resources and capabilities. Then, the paper will demonstrate the functional-level strategies adopted by the
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alliance, which all contributed to the tremendous success of the alliance. Finally, we will define the challenges the alliance now faces and provide the proper recommendations. INTRODUCTION Nissan Motors Company is a multinational automaker headquartered in Japan. In 2011, it became the second largest car manufacturer in its home market in 2011. Back to 1999, Nissan entered a two way alliance with Renault S.A. of France, which has brought Nissan to a new development in its history. Why Nissan Chose Alliance? Before the alliance, Nissan had confronted serious financial problems, including losing global market share consistently; a total amount of $20 billion debt; facing the widespread economic stagnation in the country; and lack of working capitals owning to investing a lot of money in its Keiretsu partnership. On the other hand, Renault‟s product line had limited appeal outside the Western European market. In addition, its early foray into the U.S. marketplace was met with stiff customer resistance. In order to learn from Nissan‟s success in North American and expand its market, Renault decided to have the alliance strategy with Nissan. The Structure of the Renault-Nissan Alliance
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Renault-Nissan Alliance - Renault-Nissan Alliance From A...

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