ORGANISATION'S STRATEGY

Evaluating The Organisation's Strategy: Renault-Nissan



Table of Contents

Introduction3

Environmental Audit3

External Analysis3

PESTEL Analysis3

Porter's Five Forces4

Internal Analysis4

Value Chain Analysis4

SWOT Analysis5

Analysis of Current Strategy5

Evaluation of Current Strategy7

Conclusion and Recommendations8

References10

Appendix11

Evaluating The Organisation's Strategy: Renault-Nissan

Introduction

The debt level of Nissan was too high in 1999 and it faced bankruptcy. Nissan was looking for an automotive partner to overcome those crises; Nissan entered in alliance with Renault S.A. of France. The alliance was signed on March 27, 1999, it was a unique partnership of two global companies and they linked by cross-shareholding. Renault acquired 36.8 percent of stake in Nissan for $ 5.4 billion (Renault, 2011). The alliance was based on the principle that both the companies should retain their own identity but will share each other's resources and Nissan recovered quickly under Carlos Ghosn leadership.

Environmental Audit

External Analysis

PESTEL Analysis

The PESTEL framework provides a comprehensive list of influences on the possible success or failure of particular strategies. PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal (Johnson et al, 2008, p. 55). In terms of political and legal factors Renault was prevented from competition with Japanese cars from 1992 to 1999. After that period it was the time for Renault to decide whether it will stay in Europe and compete with other automotive car companies or will enter in the global market. Renault made a clever decision and entered in to alliance with Nissan as it will get access to global market and can also prevent competition in Europe with Nissan being its partner.

In terms of social culture Japanese culture brings number of hurdles for women; however Carlos Ghosn increased number of female employees over the past decades to 8% from 2%. Nissan is now hiring, training, guiding and promoting women for sales and management jobs (Global Post, 2011). As far as technology is concerned Renault and Nissan are making huge investment in research and development. They are cooperating and exchanging their engineering and are working to increase manufacturing of electrical vehicles concerning zero-emission technology.

Porter's Five Forces

Porter's five forces is a framework that influences an industry to form effective business strategy and it helps in analyzing factors that are affecting a business and it is used by expert strategy makers with the other methodology e.g. SWOT, Pestel, and Value chain etc the result will be a competitive and sustainable business strategy.

Internal Analysis

Value Chain Analysis

Before alliance the firm infrastructure of Nissan was bureaucratic but after alliance its efficient and competitive because its being running by the combined administration and alliance has brought intensive changes in the human resource management of Nissan and these changes considered to be very beneficial for the success of Nissan and in terms of technology they are developing products together with and are achieving economies of scale by using common platforms. In terms of procurement the supplier of Nissan has been reduced from 15 to 2 and improved Nissans cost supply chain (Nissan, 2011). And there cost of production has been reduced as they didn't built separate manufacturing plants for example Renault ...