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Renault - Nissan: The P aradoxical A lliance

Renault - Nissan: The P aradoxical A lliance. Prepared by: Valeria Kostyan Ekaterina Sopova Ekaterina Efimova. Agenda:. Executive summary Answers to case questions Conclusion and lessons . Reasons behind Nissan’s performance. “Freeze” agreement on March 16, 1999

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Renault - Nissan: The P aradoxical A lliance

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  1. Renault - Nissan: The Paradoxical Alliance Prepared by: Valeria Kostyan Ekaterina Sopova Ekaterina Efimova

  2. Agenda: • Executive summary • Answers to case questions • Conclusion and lessons

  3. Reasons behind Nissan’s performance • “Freeze” agreement on March 16, 1999 • Product development • Brand image vis-a-vis customers • Free capital resources from non-strategic, no-core assets • Increased investments

  4. Advantages of Renault - Nissan alliance • New production lines • Improvement of manufacturing position • Increase of capacity utilization • $109 billion in sales, $4 billion in net profit

  5. Unanimous pessimism • Weak industry players • Daimler-Chrysler’s failure

  6. Carlos Ghosn as a new COO o Nissan • Boundary-spanning leadership • Company-wide building blocks • The Nissan Revival Plan • Building glue between Nissan and Renault • Communication rituals • Cross-boundary rotations

  7. Nissan’s Revival Plan • Increase in operating margin • Restored allure to Nissan tarnished brand image vis-a vis the customers • Additional research and development investment • Conquered the U.S. market, 1/3 of Nissan sales

  8. Challenges to successful implementing of the alliance • Cultural and corporate differences • Functional boundaries

  9. Actions during the 1999-2006 period • 22 entirely new car models • Innovative car model produced in Brazil • Company-wide building blocks • Cross-functional teams • Nomination Advisory Committee • Producing Renault cars in Nissan plants

  10. Results of Renault-Nissan alliance and their current market position

  11. Renault • LCV leader in Western Europe, 14.4% share of market • New vehicles • International expansion, broader brand portfolio • Global Supply Chain Organization (GSCO) in 2008

  12. Nissan • Global brand image • Focuses on China and Russia, 5% market share • New markets in India and Brazil • Aggressive planning strategy

  13. The most important lessons • Importance of a strong ”common glue” • Don not try to be an alliance of equals • Create the environment of genuine trust, mutual loyalty, reciprocity, and low-risk

  14. Thanks for your attention!!!

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