1 ) Identify and discuss two factors that you think made this alliance successful?
Nissan Motors Company, an automobile manufacturer in japan had serious financial debt totaling up to $20 billion and it was losing substantial market share for over 8 years. Until French auto maker Renault entered with a proposed plan to partner both companies in what became known as the Renault-Nissan B.V. (Besloten Vennootschap) strategic alliance.
Much had been accomplished in the first three years of the alliance. Nissan and Renault had the opportunity to take advantage of each others core strengths and capabilities. Nissan had market reach in North America, while Renault was extremely successful in Europe. Nissan was known for their engineering, but was a company on the verge of collapse. Where one company lacked the other flourished and this proved to be beneficial to both.
Renault-Nissan had created several different functional teams within Nissan to maximize synergy. These teams covered different departments, management levels and regions for both companies and were meant to ensure that the alliance would be managed strategically.Once allied with Renault, Nissan’s once poor financial performance and debt dramatically decreased, and Nissan’s profits totaled 47% of Renault’s profit for 2001. World market share rocketed at more than 9.2%, placing Renault-Nissan in the top five automakers in the world.
2) Based on your study of this case, what would you say about the meaning of an alliance?
An alliance is like a marriage. It is not a one man show but a give and take kind of partnership. Two partners must make continuous efforts to keep a marriage productive and happy. The staff at both Renault and Nissan worked as equals with feelings of mutual respect and company pride while maintaining separate brand and corporate identities. “We were called the marriage of the poor” stated a Nissan executive, referring to Nissan’s financial state when entering the alliance. The contributions and benefits between the two were not balanced but were complimentary.
3) Discuss the role of Mr. Carlos Ghosn.
There were many contributions Carlos Ghosn, the president and CEO of Nissan, made in his role in the Nissan-Renault alliance. He paid particular attention to the day to day functioning of the alliance and made sure everything ran smoothly. He also set up yearly meetings to discuss the alliance’s progress as well as monitor the advancement of the CTTs. In these meetings the companies reviewed experiences and shared best practices for success.
On December 20, 2001, Scweitzer and Ghosn opened a new Renault light commercial vehicle assembly plant built at Renault’s industrial complex in Brazil. Ghosn protected Nissan’s executives from uninformed demands of Renault. He was particularly careful in placing focus on the activities that were of significant importance. He also encouraged the English language to be used for internal e-mail. He believed in the motivation of rank-and-file employees to be critical to the success of the alliance. Ghosn wanted to create eagerness in each company to boost their performance. Under Ghosn, Nissan had launched its next three year operating plan, the “Nissan180” plan. 