DEFINITION Implementation of rescue measures for failing organization
MEANING
Nissan-Renault
MEANING FOR INDUSTRIALLY SICK COMPANIES
CLAUSES
EXCEPTION EXAMPLE
Nissan-Renault
Nissan-Renault
Motivation by Former Renault CEO Mr. Carlos Ghosn. Focuses on the need for the negotiation of formal equity joint- venture.
Renault implement a common platform which would generate significant economies in development costs. The Strategy was to bring together engineering teams
to share knowledge. Nissan-Renault
Renault & Nissan Alliance Resulted in improved Coordination and Cost Reduction.
Their Alliance Resulted in good teamwork and equal contribution from both the end.
Renault owns 44% of Nissan Motors, Nissan owns 15% non-voting shares of Renault. This Strategy secures operational independence to both the firm.
Carlos Ghosn Quoted in an interview, We will never merge the two companies. Why? Because my job is to create value and a merger would destroy value
Nissan-Renault
Important issue in the Nissan-Renault alliance relies in the management of two different cultures.
Mutual understanding between two different work culture.
Application of Hofstedes cultural theories in the alliance.
Restructuring the Nissan management process by arrival of Mr. Carlos Ghosn.
Ghosn was indirectly forced to implement a new A system of double hierarchy
Nissan-Renault
Parent company Renault wanted to learn from Nissan
success in North America which is essential for expand in its market.
Before Alliance Nissan had Debt problem during 90s. Its Debt amounted to 11.2 Billion which prevented Nissan from making Investment in Product Line.
Products were too old to compete in Global Market. E.g. March
Nissan-Renault
Nissan invested in many companies, Their large amount
of money was locked up and could not utilized for Nissans own good.
Renault Paid off Huge Debt in return of 36.6% Equity stake.
Nissan had a clear distinction between customer and shareholder.
Following the alliance, nearly 14,000 employees were unemployed. This change contributed to maximizing the utilization of personnel.
Nissan-Renault
The alliance between Nissan-Renault
Figures
Perception of Mr. Carlos Ghosn
Nissan-Renault
Strategies prepared as per host countrys conditions.
Threatens by Japanese low price high quality car. Building plants on Global soils. The European Commissions new rule.
Nissan-Renault
Nissan-Renault
Nissan-Renault
Nissan-Renault
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 Nissans powerful industrial and commercial presence
Nissan-Renault
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.
Renault CEO Louis Schweitzer and Nissan CEO Yoshikazu Hanawa signed the Alliance agreement in March 1999.
Nissan-Renault
PROMISED Positive annual net income after Tax by 2000-2001
DELIVERED $6.5 billion 1999-2000 $2.7 billion 2000-2001 $2.7 billion 2001-2002 $4.1 billion in Mar. 2002-2003
18.8 percent by March 2002 to Annual operating margin of 4.5 Percentage of sales by 2002-2003 March 2003 50% reduction in net debt to $6.3 Billion by March 2003 Eliminate 21,000 jobs by March 2003 Net debt of $6.6 billion in September 2001 19900 job cuts by September 2001
