1.1 Background of Renault and Nissan
French Renault is the ninth largest manufacturer with 4.3% of the market in the world. Bartlett, Ghoshal, and Beamish (2008, p. 587-588) found “In the spring of 1997, Georges Douin, Executive Vice President in charge of corporate strategy, had submitted an international development plan to Renault’s Management Committee, at the request of Louis Schweitzer.” Renault wants to entry in the Asian market. Especially, it researched Nissan which manufacturer in Japan. And Renault attempts merger with the Nissan. Nissan is the second biggest manufacturer in Japan. Bartlett, Ghoshal, and Beamish (2008, p. 587-588) found “In 1998 Nissan Motors was a company with major financial problems.” Another problem is internal management problems. By way of keep on operations, Nissan needs seeking a partnership.
1.2 Purpose of assignment
The purpose of this assignment is to gain analytical and research skills by examining a case study using International Business theory. Base on the research from the case study and other sources, prepare a report addressing the following issues: • Environment: external and internal factors
• Conflicting global demands
• Strategy implementation
• Global marketing and operations
• Identifying current challenges
• Suggestion and recommendations
2.0 Discussion and analysis
2.1 External environmental scanning
Hunger and Wheelen (2003, p.30) “Environmental scanning is the monitoring, evaluating, and disseminating of information from the external and internal environments to key people within the corporation.” Corporations use it to avoid strategic surprise and to ensure long-term health. This is a positive relationship between environmental scanning and profits. Analysis of the external business environment is a major factor in determining the strategy adopted by a business. For businesses that are international, this stage in strategic analysis is even more important. A firm’s external environment includes societal environment and task environment. “The societal environment includes general forces that do not directly touch on the short-run activities of the organization but that can, and often do, influence its long-run decisions.” (Hunger & Wheelen, 2003, p.30). These forces are: 1) Economic forces
“Economic forces regulate the exchange of materials, money, energy, and information.” (Hunger & Wheelen, 2003, p.30). Because nations are interconnected as a result of the global economy, firms must scan, monitor, forecast, and assess the health of economies outside their host nation. In this case, Bartlett et al. (2008, p.591) found “In terms of expertise, Renault had achieved excellent cost control, formalized a global strategy for platforms and purchasing, and was known for designing vehicles of innovative style and appearance. Nissan stood out more through its quality control, R&D programmes and technology.” With the relations of cooperation, Renault and Nissan will gain profit from each other. 2) Technological forces
Hitt, Ireland, and Hoskisson (2003, p.52) found “The technological segment includes the institutions and activities involved with creating new knowledge and translating that knowledge into new outputs, products, processes, and materials.” The importance of these efforts is suggested by the finding that early adopters of new technology often achieve higher market shares and earn higher returns. Thus, executives must verify that their firm is continuously scanning the external environment to identify potential substitutes for technologies that are in current use, as well as to spot newly emerging technologies from which their firm could derive competitive advantage. In case, the Renault and Nissan exchanged information about their know-how, expertise and project. Bartlett, Ghoshal, and Beamish (2008, p. 591) found “Their work showed that the potential synergies should yield, on paper, savings of...