1. Renault – Nissan’s External
Audit
Group Members
• Ulusyar Tareen
• Shehreyar Khan
• Yuze Yao
• Hua Meng
• Li Li Renault-Nissan 1
Leading to High Performance

2. Agenda
Introduction of the company { Yao}
Leadership of Carlos Ghosn
Industry dynamics {Claire}
The Alliance of Nissan and Renault – Objectives
and Goals with SWOT and PESTEL Analysis by
{ Shehreyar Khan}
Current business model and previous Models
Value Chain Model and Porters 5 Forces Analysis
by { Ulusyar Tareen}
Current Performance of the company
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3. Who is Carlos Ghosn?
 Born on 9th March, 1954, in Porto Bello, Brazil
 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.
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4. Introduction of the companies
 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
Founded 1898
Cooperation with
Volvo 1990
Alliance with Nissan
1999
Founded 1911
Financial distress
1990
Alliance with Renault
1999
Renault
Nissan
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5. 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
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6. Nissan’s problems before the alliance
 Nissans problems before the alliance
$ 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.
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7. The objectives of the alliance
Renault Nissan
Respective objectives
Improving quality
Internationalize
Reduce Costs
Reduce Debt
Common objectives
Economy of scale
Technological Know-How
Leader for the quality and attractiveness of products &
services
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8. Aim of the alliance
 Two principles
Developing all potential synergies by combining the strengths
of both companies through a constructive approach to deliver Win-
Win 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.
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9. Corporate Structure of the Alliance
Renault-Nissan BV
strategic management company
Alliance Board of Directors
Carlos Ghosn
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Purchasing Organization
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Information Services
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10. Observable Symbols
Ceremonies, Stories, Slogans,
Behaviors, Dress,
Physical Settings
Underlying
Values,
Assumptions,
Beliefs, Attitudes,
Feelings
Levels of Corporate Culture
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11. Industry dynamics
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Rivalry
among
competitors
- High
Buyer power
- High
Supplier
power -
Medium
Threat of
new entrants
Low
Threat of
substitutes -
Medium
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 HHI - competitiveness in an industry - Automotive Vehicles 2754.0
 Porter’s five forces
Industry life cycle – Mature

12. 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
12
Current Business Model
Post Merger Strategy
Renault-Nissan

13. 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.
13
Current Business Model
Post Merger Strategy
Renault-Nissan

14. 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.
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15.  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
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New Orientation Partnership

16. 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
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17. Contingency Factors
Affecting Organization Design
RENAULT-NISSAN
Organizational Structure and Design
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18. Pestel for renault
357 million market size
UK france germany italy spain ireland swededn
Austria, Denmark, Finland 12 countries
Competitors Volvo(niche) Psa wagon BMW
Mercedes(German) fiat ford
Psa Reno fiat high volume European cars and
market is Europe only & try to keep Japanese out
of market
Pressure to elt Japanese companies get in
Companies asked for VRA (voluntary restraint
agreement)
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19. VRA = limit the no Japanese cars that are sold in
the European market for a limited period
They did this to make them self super competitive
so they can fight the Japanese cars or leave their
market and start globalization
VRA lasted 7 years and Japanese cars were limited
to 16%
Japanese agreed cause they had a low political
influence so that Europeans will be more
supportive
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20. Real drivers were political and legal change with
economical and environmental change
Renault used this to become tougher and
restricted company and acquired Nissan during
that time
Renault-Nissan 20

21. Value Chain Analysis Nissan-
Renault
Renault-Nissan 21
INFRASTRUCTURE: Main Head office Backup & Administration offices Internationally
HRM: Mainly Nissan, Executive Exchanges Across the Board
Technology: Faster Product Development, Joint product development & Economies Of
Scale
Procurement: Coordinated Procurement & Improvement in Nissans Supply chain
Distribution
Use of
common
Distribution
channel
Production
Decrease Number of
Plants to save Extra
Overheads
Marketing
Separate
Brand Names
MARGIN

22. Value Chain Analysis Nissan &
Renault
Renault Nissan
Human Resource Management Human Resource Management
Individuality Group
Technology Technology
Good Sleek Designs Reliable, Lacked Design
Procurement Procurement
Suitable Supply chain resulting reduced
cost’s
Needs Good Strategies to cut cost’s
Production Production
Mass Production (Economies of Scale) Mass Production (Economies of scale)
Distribution Distribution
Good Channel in Europe only. Good System In Asia & U.S.
Marketing Marketing
Performance, Value for Money Quality, Value for Money
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23. SWOT – External Analysis
 Hyper-competitive Market
 Heavy investment in R&D
 Strategy of cost becomes the major issue
Renault-Nissan 23
Country China Malaysia Singapore Hong Kong Japan
Qualification of
workplace
Cost of labor
Politic Stability
Taxes
Unemployment
Highly Favorable Moderate Unfavorable
Opportunities in Asia :

24. SWOT – Internal Analysis
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Strengths Renault Weakness Nissan
Good cost control's for its
debts
Recurring Losses
Innovative & Creative Lack of Creativity Product
Renewal Needed
Privileged relationship with
suppliers
Mismatch between suppliers
and its globalization strategy
Strong Management Weak Management
Strengths Nissan Weakness Renault
Quality Products Lack of Technology
37% of the total in U.S. &
28% Japan
No Recognition in U.S. & Japan
Huge Production Setup Small production Setup

25. SWOT Analysis Cont’d
Strengths for Nissan are weaknesses for Renault &
vice versa
Complementary in many respects
Nissan weaknesses are mainly due to
mismanagement of their resources
To stay competitive Renault needed to diversify
geographically in Asia & U.S. – Nissan meets this
criteria
Technological & Design exchange between Nissan
& Renault gave Renault & Nissan strength
Respectively
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26. Renault-Nissan 26
Thank you for your attention!
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