RENAULT - NISSAN: THE PARADOXICAL ALLIANCE

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 Product development Brand image vis-a-vis customers Free capital resources from non-

strategic, no-core assets Increased investments

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

Unanimous pessimism

Weak industry players

Daimler-Chrysler’s failure

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

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

Challenges to successful implementing of the alliance

Cultural and corporate differences

Functional boundaries

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

Results of Renault-Nissan alliance and their current

market position

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

Nissan

Global brand image Focuses on China and Russia, 5% market

share New markets in India and Brazil Aggressive planning strategy

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

Thanks for your attention!!!