the renault nissan alliance in 2008
DESCRIPTION
TRANSCRIPT
![Page 1: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/1.jpg)
The Renault-Nissan Alliance: A Novel Organizational Form
Group 4Yi-Ru Lai, Ian Rich, Clotilde Pinault, Xi Zhang
![Page 2: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/2.jpg)
OutlineContext & Background
Success Factors:- Strategic fit- Cultural fit- Organizational fit- Capabilities fit
Challenges and Recommendations
1
2
3
![Page 3: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/3.jpg)
Context • In 1999, state of the automotive industry: rising of the Asian markets, Daimler and Chrysler M&A in 1998
• Nissan: 9 years of losses
Aim for Nissan: avoid bankruptcy
Aim for Renault:
become a global
automotive player
Aim for the Alliance: become one of the
top three automotive
companies in terms of quality,
technology and profitability
![Page 4: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/4.jpg)
The 2 firms in 1999
• French multinational vehicle manufacturer established in 1899
• Market: Europe and south America
• Aims to expand globally
• Japanese multinational automotive manufacturer established in 1933
• Market: Japan and the US• 9 years of losses• No strategic objectives• No 3-year plan• No road map to the future
![Page 5: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/5.jpg)
The Alliance
![Page 6: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/6.jpg)
The Alliance
Results: • From 1999 to 2006, market cap of both companies tripled,
while total market cap of the global auto industry increased by 27 percent
Firm Infrastructure
Human Resources
Technology
Procurement
Operations
Marketing
![Page 7: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/7.jpg)
4 Phases: Turning “A Marriage of Desperation” into a Successful Alliance
Pursue opportunities for joint projects (electric cars)3
Expansion of the Alliance: adding a third major party4
Renault helps Nissan: management expertise and financial resources1
Identify and exploit synergies and economies of scale2
![Page 8: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/8.jpg)
Performance - Outcome
• Market Capitalisation: compared to the other automakers, Nissan was ranked 10th in 1999 and became 4th in 2006; Renault was ranked 11th in 1999 and became 7th in 2006.
• Sales (2000-2007). Between 2000 and 2007, sales increased by 23% (The Alliance)
• Nissan assets grow: cash and ST investment from $1.8b in 2004 to $4.1b in 2007 (USD)
![Page 9: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/9.jpg)
Partner Analysis
Strategic FitOrganisational
Fit
Cultural FitCapabilities Fit
![Page 10: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/10.jpg)
Success Factors: Strategic Fit
• Strategy for entering new markets: Divide and conquer approach. Renault focuses on Brazil, Russia and India while Nissan focuses on China
• When head-to-head competition is inevitable: Be smart competitors (e.g. collaborate with back office functions)
![Page 11: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/11.jpg)
Success Factors: Strategic Fit
Renault ContributesStyling and design
expertise Experience with manufacturing
platforms
Nissan Contributes
Expanded distributionEngineering technology
Sales experience in Asia & US
Win-win principle
Learn from each other’s mistakes and best practices
![Page 12: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/12.jpg)
Success Factors: Cultural Fit• Mutual respect and trust• Involve employees (foster a sense of personal responsibility)
and create and equal-footing relationship• Key employees loyal to the Alliance• Carlos Ghosn, CEO of Nissan and Renault: a very unique
position. Leads by example: very high involvement of Carlos Ghosn and his team. Split time 50%-50% between companies and spends most of his time outside France and Japan
![Page 13: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/13.jpg)
Ghosn’s Leadership Style
To some extent, Ghosn followsKotter’s 8 steps to lead change successfully
![Page 14: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/14.jpg)
Success Factors: Organisational Fit• An unique organisational form in the market. Two other
forms: industry giants (GM and Toyota) and the failed merger of Daimler-Chrysler.
• Ghosn at the head of Nissan reorganises Nissan from a silo based organisation to one that can operate cross-functionally.
• HR strategy: the appointment of Shiro Nakamura sends a message to employees that performance is the only key to success
• Appoint a new generation of leaders that have worked in both companies and that have loyalty to the Alliance
![Page 15: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/15.jpg)
Cross company teams
![Page 16: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/16.jpg)
Success Factors: Capabilities Fit
Technology
ProductionMarketing
![Page 17: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/17.jpg)
Challenges
How to sustain and
grow the alliance after
Ghosn?
1How to utilise partners fully
for the benefits of all
parties?
4
Finding another alliance partner.
2How to manage
future “eco system”?
3
![Page 18: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/18.jpg)
• Focus on long-term vision rather than short-term gains• Build the alliance mechanism• Continue the culture of mutual respect, trust and loyalty• Reaffirm the win-win principle• To achieve greater integration, the two firms could give ABM
more control
Recommendations
![Page 19: The renault nissan alliance in 2008](https://reader033.vdocuments.mx/reader033/viewer/2022061220/54bc48e04a7959a7338b45c9/html5/thumbnails/19.jpg)
Thank you!!