Renault Nissan Merger Ppt

Published on March 2017 | Categories: Documents | Downloads: 403 | Comments: 0 | Views: 281
of 32
Download PDF   Embed   Report

Comments

Content

Renault – Nissan’s Strategic Alliance model
Leading to High Performance

19 May 2010

Renault-Nissan

1

Agenda
Introduction of the company Industry dynamics The Alliance of Nissan and Renault – Objectives and Goals Current business model Turnaround strategy Leadership of Carlos Ghosn Current Performance of the company

19 May 2010 3 May 2012

Renault-Nissan

2

Introduction of the companies
Renault Nissan
Founded 1898 Cooperation with Volvo 1990 Alliance with Nissan 1999 Alliance with Renault 1999

Founded 1911

Financial distress 1990

 By 1999, the environment of car manufacturers has become super competitive:
 globalization driven by market internationalization  need for Renault and Nissan to reach critical size  saturation of certain geographic areas for production and distribution.

 Opportunities for survival - 4 million vehicles; new areas (Asia, Latin America)  Address market saturation in Europe  Cope with Asian leader Toyota
19 May 2010 Renault-Nissan 3

Industry dynamics
 HHI - competitiveness in an industry - Automotive Vehicles 2754.0

 Porter’s five forces Industry life cycle – Mature

Supplier power Medium

Threat of new entrants Low

Buyer power - High

Rivalry among competitors - High
Renault-Nissan

Threat of substitutes Medium

19 May 2010 3 May 2012

4

Strategic Alliance
 Definition
Agreement for cooperation among two or more independen firms to work together towards common objectives Companies 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, 1999

19 May 2010

Renault-Nissan

5

Nissan’s problems before the alliance
 Nissans problems before the alliance  company was falling apart  $ 20 billion in debt
 The reasons of the problems Recession in early 90’s in Japan There was complacency and a lack of urgency in the culture There was no cross-functional and cross-regional communication The design of the cars was out of touch with the market A high degree of bureaucracy There was an emphasis on engineering culture rather than managerial culture and promotions  Sticking in the Keiretsu model
19 May 2010 3 May 2012 Renault-Nissan 6

Renault’s problems before the alliance
 Main source of revenue - small to medium size cars in Europe  85 % of sales in Western Europe
-> go international

19 May 2010

Renault-Nissan

7

Aim of the alliance
 Two principles
 Developing all potential synergies by combining the strengths of both companies through a constructive approach to deliver WinWin results  Preserving each company’s autonomy and respecting their own corporate and brand identities

 Three objectives
 Quality and value of products and services in each region and market segment  Key technologies in engines, electronics and the environment  Operating profit

19 May 2010

Renault-Nissan

8

The objectives of the alliance
Renault Respective objectives Improving quality Internationalize Common objectives Reduce Costs Reduce Debt Nissan

Economy of scale Technological Know-How Leader for the quality and attractiveness of products & services

19 May 2010

Renault-Nissan

9

Key success factors of the alliance
 Quality between the relationships among the managers and engineers of Renault and Nissan  Business experience  Technical skills  Core values:
 Balanced relations between the two companies and the development of strong identities for each of the brands

 Other factors:
 Alliance charter  Capital contributions and equity participations  Management structure and exchange of personnel

19 May 2010

Renault-Nissan

10

Goals Achieved by the Alliance
Third largest global automaker (based on sales for the year 2008)  Global market share of 9% (by volume)  Significant presence in major world markets (United States, Europe, Japan, China, India, Russia)

19 May 2010

Renault-Nissan

11

Corporate Structure of the Alliance
Renault-Nissan BV strategic management company

Alliance Board of Directors Carlos Ghosn

Renault-Nissan Purchasing Organization

Renault-Nissan Information Services

19 May 2010

Renault-Nissan

12

Management Structure of the Alliance

19 May 2010

Renault-Nissan

13

Levels of Corporate Culture
Observable Symbols Ceremonies, Stories, Slogans, Behaviors, Dress, Physical Settings

Underlying Values, Assumptions, Beliefs, Attitudes, Feelings

19 May 2010

Renault-Nissan

14

New Strategies
 Profitable growth worldwide

15

19 May 2010

Renault-Nissan

An Open System

Raw materials Information resources Financial resources

Input

Transfo rmation Process

Output

Products and Services

19 May 2010

Renault-Nissan

16

Renault Nissan Group – a Global Player
01/07/02 31/12/95 Renault
44,4%

Renault
20%

Nissan
92,7% Dacia Renault VI / Mack VI
100%

AB Volvo

Renault VI / Mack

70%
Samsung

19 May 2010

Renault-Nissan

17

Current Business Model Post Merger Strategy

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 Nissan’s powerful industrial and commercial presence

19 May 2010

Renault-Nissan

18

Current Business Model Post Merger Strategy  Further 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.

19 May 2010

Renault-Nissan

19

Restructuring
 The 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.

19 May 2010

Renault-Nissan

20

New Orientation Partnership
 Trust, 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 partner’s product design and production, shared resources  Long-term contracts  Business assistance beyond the contract
19 May 2010 Renault-Nissan 21

Transnational Model of RENAULT-NISSAN
 Assets 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 systems

19 May 2010

Renault-Nissan

22

Contingency Factors Affecting Organization Design

RENAULT-NISSAN Organizational Structure and Design

19 May 2010

Renault-Nissan

23

Who is Carlos Ghosn?
 Born on 9th March, 1954, in Porto Bello, Brazil  Moved to Lebanon with his parents in 1960 for primary education in a Jesuit School  Throughout his life he lived and worked all over the world and gained wide cultural awareness  Spent 18 years with Michelin in Brazil and North America  Joined Renault in 1996 as Executive Vice President of Advanced R&D, Manufacturing and Purchasing  Appointed 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 2005
 Remains President and CEO of Nissan  Carlos Ghosn is also a director of Alcoa and AvtoVAZ.  He is appointed President and CEO of Renault on May 6, 2009.
19 May 2010 Renault-Nissan 24

Fiedler`s Contingency Theory

19 May 2010

Renault-Nissan

25

Fiedler`s Contingency Theory

19 May 2010

Renault-Nissan

26

Turnaround strategy
 Lewin’s model

Unfreeze
• Admit change was needed • Establishing new company teams • Closing plants • Cutting jobs • Reducing purchasing costs

Change
• Introducing new models • Establish common pool for resources • Inter-cultural and management trainings • Common marketing and sales approach • New HR policy

Refreeze
• Ensure acceptance • Promote freedom of operations • Establish close reporting system • Common value creation • Involvement in design and production

19 May 2010 3 May 2012

Renault-Nissan

27

SWOT – External Analysis
 Automakers face legislation increasingly restrictively on the fuel consumption  Market has become hyper-competitive  Heavy investment in R&D  Strategy of cost becomes the major issue
The opportunities in Asia :
Country

China

Malaysia

Singapore

Hong Kong

Japan

Qualification of workplace
Cost of labor PIB per person Politic Stability Taxes Unemployment
Very Favorable
19 May 2010

Favorable
Renault-Nissan

unfavorable
28

SWOT External Analysis Cont’d
 To stay competitive Renault must diversify geographically by integrating a company that already has strong position in Asia, particularly in the regions identified - Nissan meets these criteria geography.  However, the settlements are a necessary but not sufficient in the choice of partner

19 May 2010

Renault-Nissan

29

SWOT - Internal Analysis
Strengths Renault Cost Control Debt Innovation, creativity, imagination Overall management and strategic platforms production and supply Privileged relationship with suppliers Capacity Management Strengths Nissan Quality Products of poor quality 37% of the total distribution in the U.S. and 28% Japan 18.5% of cars with engines up to range on all of their production Weakness Nissan Recurring Losses Lack of creativity and renewal of its Products Poor management capacity Supplier relationships (vertical Keiretsu) in mismatch with a globalization strategy Management & slow conformist Weakness Renault Timeliness of Filing Delay in production time Lack of notoriety in Japan & USA (0% of the distribution) Opportunities insufficient to justify the development and production of top-end engines (4.5%)

 The majority of the weaknesses are strength for Nissan Renault and vice versa: we can say that they are complementary in many respects. Moreover, we note that Nissan weaknesses are only due to a bad optimization from their resources and skills.
19 May 2010 Renault-Nissan 30

The benefits of alliance with respect to other strategies
 In the market for car manufacturers, the only appropriate strategy is that allows the rapid acquisition of new skills.  Strategy of horizontal diversification.
 Merger  Acquisition  Alliance economies of scale, geographically diversification, the reputation, the bargaining power

 Complementarities between the strengths and weaknesses of both companies  Distinctive resources and competencies  Learning: major challenge - little degree of synergy would cause a high cost of restructuring  Advantages of the alliance before merger and acquisition

19 May 2010

Renault-Nissan

31

Thank you for your attention!

19 May 2010 3 May 2012

Renault-Nissan

32

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close