Nissan Renault Case Study

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(Sources: www.media.renault.com) Global Strategy of the Renault-Nissan alliance Subject: Joint analysis on the Renault-Nissan alliance addressed to the CEO of Mitsubishi (group project) From: Group 22 Michael Sutherland Nicolas Murcia Saebong Cheon Yu Ri Na Jeong To: Professor Jan Jörgensen Due date: November 22, 2006 To M. Takashi Nishioka, Chairman of the Board of Mitsubishi Motors, Nowadays, Renault-Nissan is the fourth worldwide automaker with sales of 6,129,254 units in 2005, up 5.9% over 2004 (http://www.nissan-global.com/). Considering the traditional position of Mitsubishi in the actual market, the analysis of the Renault-Nissan alliance case would provide you with valuable elements on how to approach the growing and…show more content…
Nissan and Renault are collaborating on building universal platforms, with shared components and where companies lead engine design in their area of expertise. For example, Renault specializes in diesel as well as in innovation and Nissan focuses on gasoline and the manufacturing process. They’ve increased their purchasing power because they buy supplies for twice as much cars (6 millions). Consequently, the alliance has boosted profitability, market capitalization and sales in 192 for both partners (Nancy DuVergne Smith, 2004). Reasons for an alliance instead of merger and the benefit from synergies The making of the alliance was motivated by the enthusiasm of Ghosn to develop potential synergies, where both firms maintain their operational freedom. The foundation of the alliance focuses on the need for the negotiation of a formal equity joint venture because Renault and Nissan must evaluate their partners’ equities, capabilities and willingness to cooperate before selecting the right hierarchy (Segrestin, 2003). Indeed, Carlos Ghosn, former Renault CEO before the alliance, has always been focused in preserving the identity of the two companies as he strongly formulated: “If you don’t respect people’s identity, they will not get motivated and you will not get a strong corporate performance”(web.mit.edu). Renault was willing to implement a common platform, which would generate
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