Strategic Management and Business Policy

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Strategic Management and Business Policy
July 21, 2007

Brief History of Nissan/Renault:
In 1990 the consolidation auto industry was increasing cost of developing more sophisticated vehicles and worldwide production overcapacity. Both Nissan and Renault were eagerly looking for a partner to compete in the 21st century. Nissan was rebuffed by both Chrysler and Ford. Renault was turned away by other Japanese automakers that made both companies reach an agreement on a global alliance in 1999.

The combination made sense that both companies main sales territories and production were corresponding. Renault needed Nissan and Nissan needed Renault due to the production side of the pattern and on a global basis that held more then nine percent market share that would position the combination number four worldwide in the auto industry. (Spiritus, 2005)

Main Problem:
The main problem that Renault and Nissan are facing is their financial problems, that is one reason why the Ford Motor company will not merge partnership or any other alliance to solve these problems. If Ford does merge it would be to make a relationship not a problem solver. The second problem Renault and Nissan are facing is their plants. They have more plants then what they can afford as a result in this the companies would have to shut down at least 5 plants to help productivity. (Car Connection, 2007)

Third issue that Nissan/Renault is having is their electrical problems in their vehicles. If they would build a better car they wouldn't have so electrical problems which these leads to many complaints and issues in the community. (Green Car, 2006)

Recommendations:
I would recommend Nissan/Renault have a three way alliance to help provide and increase their productivities. Try to get an alliance with GM. Produce better investments so that they don't fail like they did the first time. Look over the financial difficulties and see what, where and how it went wrong. Then fix those financial...
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