Renault-Nissan: Presentation and Analysis of a Strategic Alliance

Résumé du document

Doubts and rumors were rife when Renault and Nissan announced the formation of the Renault-Nissan alliance in the late 90s. However, today, the Renault-Nissan alliance has proven to be successful because of their unity in terms of performance. This has been possible because ever since day one of the alliance, they have been working together through a coherent strategy, common goals and principles, results-driven synergies and shared best practices.

The alliance currently holds 9% of the global market share, making it the fourth largest global automaker in terms of unit sales and ranked No. 2 in both market capitalization and profitability with a combined 5,911,171 vehicles sold in 2006. The major areas for the alliance include Russia, Colombia, China, Middle East and Africa. Individually, Renault saw growth outside Europe where sales increased by 8.8% whereas Nissan saw new growth market in Russia; their fastest growing market is China. At the moment, the alliance is planning to be the market leader in North America, Europe and Asia.

Extraits

[...] Worst of all, PSA and Toyota have teamed up in a joint venture and began producing three huggable new mini cars in 2005. This is not only a threat of entering the US market but it also caused the drop in sale of the Renault in the European market. [...]

[...] However, the two companies believe that what makes them a successful Alliance today is the respect and reinforcement in their identities and brands. The CEO, Carlos Ghosn, places high value on the companies' most important asset, people. He believes that employees would lose their motivation to work or not put in their best efforts if they feel that their company and identity is being taken over by another company. In fact, it might be more interesting to consider adding a third partner to the Alliance in order to reap the benefits that they have found in their current partner but at a greater international scope. [...]

[...] This is very obvious that Renault and Nissan want the third Alliance to be American company because not only they can achieve geographical complementarities but they also can expand their market opportunities into the largest car market in the US. Even though Nissan already did well in the term of sale in the US car market, the Alliance still wants to gain more shares in that particular area. To be more precise, we can use the SWOT analysis to show why the US car market is so attractive to Renault and Nissan Alliance. [...]

[...] Nissan's reputation of efficiency and reliability, together with its experience in the US market, can help Renault to easier penetrate the US market. At the same time, Renault's strength lies in its car models that were certified to be the safest car in the market by Euro NCAP stars. The fact that Renault- Nissan is the producer of high quality yet low-costs cars makes their car models more attractive in terms of pricing as compared to those in the US market. Weaknesses The style and design of Renault-Nissan cars can be viewed as the weakness of the Alliance. [...]

[...] The fact that most Asian and European cars are usually small and light contradicts the Americans' tastes for big and strong car likes SUVs or Minivans. Moreover, the Alliance still lacks distinctive models that would make it stand out in the crowded US car market. The Alliance also has very few major product launches and narrow product ranges. Furthermore, the Alliance does not have a well-established distribution channel in the United State, making it more difficult to compete in the intense market competition. [...]