The Main Reason Of The Renault - Nissan Alliance

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I- The reasons behind the merger were sound for both parties II- Building on strengths III- Resolving weaknesses: they successfully bridged their cultural differences Signed on March 27, 1999, the Renault-Nissan Alliance has built a unique business model that has created significant value for both companies. For 10 years, employees at Renault and Nissan have worked as partners with attitudes of mutual respect and company pride while keeping separate brands and corporate identities. The main reasons behind the success of the merger: 1- A crucial need for Nissan to get funding 2- A crucial need for Renault to become a worldwide player 3- Very strong synergies: a) Nissan competences: engineering, quality control, … b) Renault competences: cost control, they had successfully turned around a similar financial situation 10 years ago, and they had also learned from a failed merger with Volvo. 4- Perfect complimentarily of product range: a) Nissan: medium & large cars + 4 wheels drive b) Renault: Small cars (compacts & subcompacts) and utilitarian cars 5- Perfect geographic complementarity: a) Nissan: Asia, USA b) Renault: Europe, Latin America 6- They successfully raised the challenge of cultural differences: When announced, many industry observers seemed to consider the alliance between Renault and Nissan an international failure waiting to happen. Conventional wisdom believed cultural differences between the French (Renault) and the Japanese (Nissan) would bring this merger to an ugly end. But the crash never occurred and today, the Renault-Nissan alliance is thriving. The importance of Corporate Culture has been an important issue in the Nissan-Renault alliance. In order for the combined share of ideas and strategic management to be effective, the employees of both companies must respect the identities of their colleagues as well as

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