A strategic alliance is an official commercial collaboration, adopted by mutual agreement between companies. The partners of the alliance share, exchange or integrate some their resources for their mutual benefit, while remaining distinct and completely independent entities. For an alliance to be strategic, it must be of determining importance to the companies which form it, or at least to one of them. If not, it is a simple agreement. One of the typical characteristics of a strategic alliance, it is that it often allows companies to do together what they could not have done alone, like launching new products, finding new markets for already existing products or reducing the production or operating costs of partners by increasing efficiency. Strategic alliances take very diverse forms. They have evolved considerably and have become more flexible these past few years. Companies can choose an alliance which only relates to simple commercial exchanges or an agreement of reciprocal concessions of licenses. They can also establish a more complex partnership starting with agreements, industrial co-operatives or joint ventures with share capital.
[...] Renault - Nissan Purchasing Organization (RNPO) now realizes 70% of its purchases from the alliance. Industrial and commercial co-operation: The two companies use common assembly sites. Certain factories are equipped to produce both Renault and Nissan vehicles. Regional commercial co-operation is based on the principle according to which the most important partner promotes the development of its counterpart by ensuring an active support in sales and marketing and/or production. Common distribution in Europe: The objective in 2006 was to support the growth of Nissan in Europe and to reduce the costs of distribution. [...]
[...] The objectives of Renault are not based solely on size, but rather on the effect of training, competencies, and innovation. However the complexity and the uncertainty of the effects of a merger-acquisition make these objectives much more difficult to reach. Thus, the strategy of Renault would become vague and lose its relevance Size of operations. A high price of acquisition weighs down the debt of the purchaser and limits his capacities of development. If Renault takes a primary risk of investing in a company (such as shares in Nissan), the purchase (its total acquisition) is a much more important risk which could really put the company in peril. [...]
[...] External growth Mergers - Acquisitions: Rather than opting for an alliance, Renault could have taken over Nissan (or another company) through the merger-acquisition method. This strategic mode of internationalization has certain advantages. However, taking into account the needs for Renault, this method also has some limits. External growth consists in developing by acquisition of companies. This strategy makes it possible for the firm to reinforce its competitive position by increasing its size and market share, by acquiring new brands. It also gives it the opportunity to access new markets and to internationalize itself quickly. [...]
[...] The following results are most significant: - Renault relies on Nissan to accelerate its international deployment: the two most notable examples are Mexico, and the development of Renault Samsung Motors in Korea. Without the dynamics and the opportunities of the alliance, Renault could not have succeeded so quickly in rapidly establishing itself in the market under good conditions. Thus Renault could use the production capacity of Nissan in Mexico to launch the Clio and Scenic there. In Korea, Renault Samsung Motors uses Nissan platforms. [...]
[...] Renault is the principal shareholder of Nissan and not the reverse. The absence of a symmetrical participation between Nissan and Renault prevents an alliance (it is unlikely, at least in the short run, considering the financial position of Nissan). The management perspective: There is also an imbalance in the agreement from the management perspective. Three director's positions were granted to Renault. Carlos Ghosn, former executive vice president of Renault initially became Chief operating officer, i.e. number two after Yoshikazu Hanawa, the president of Nissan. [...]
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