Renault-Nissan Alliance: Success by Integration

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Case Details:

Case Code : BSTR422
Case Length : 14 Pages
Period : 2000-2012
Pub Date : 2013
Teaching Note :Not Available
Organization : Renault; Nissan
Industry : Automotive
Countries : Europe; Japan; Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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About Renault

Renault's origins can be traced to 1898, when Louis Renault started to build the "voiturette," a two-seater vehicle. Louis' factory increased its output from six vehicles in 1898 to 4,200 in 1913. The First World War had a negative impact on France's economy. However, after the War ended, Renault resumed automobile production. Renault diversified into other areas such as locomotives, tractors, and aircraft. In the 1930s, the company continued to manufacture affordable and appealing automobiles...

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The Renault-Nissan Alliance

In the mid- to late 1990s, several auto companies either acquired other auto companies or entered into joint ventures with them. This was done for several reasons such as to enter new markets, quicken the rate of expansion, reduce costs, or acquire technology. For instance, in 1998, Daimler Benz, a major German auto maker, acquired Chrysler, a US-based auto company. Similarly, PSA Peugeot Citroen, a French auto maker, entered into an alliance with Ford, the US-based auto company. The Renault-Nissan Alliance came about when Nissan was in a bad shape financially. In the mid-1990s, Nissan incurred huge losses and was in debt...

Nissan Revival Plan

In June 2000, Ghosn was made President of Nissan and later in June 2001, he was appointed CEO as well. Ghosn had launched the Nissan Revival Plan (NRP), a set of reforms that was expected to rescue the debt-ridden company and bring it back to profitability, in October 1999. The implementation of the NRP began in April, 2000. The plan involved slashing jobs, closing down factories, reducing the number of vehicle platforms, dismantling the Keiretsu network , investing in new technology, and setting up an efficient production system...

A Lesson in Integration

The Renault-Nissan Alliance was established with the aim of developing synergies while keeping the identities of the Nissan and Renault brands intact and preserving the corporate culture of the two entities.

The partnership was based on trust and mutual respect. "You can make companies work together even if they are on different continents. One company does not need to take over the other, nor is it crucial for both companies' cultures to meld into one. Preserving distinct styles helps each company's employees identify with their employer and stay motivated," said Ghosn...

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