Strategy proposal for an MNC who wants to invest or expand in a specific country – New Group Renault strategic plan: "Drive the Future"

Matthieu L.

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Strategy proposal for an MNC who wants to invest or expand in a specific country – New Group Renault strategic plan: "Drive the Future"

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Renault, strategy, investment, competitive advantage

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Abstract

In this work, we analyze Renault's strategic plan for 2017-2022, called "Drive the Future" on three levels: the company's source of competitive advantage (section 1), the reasons for choosing the target of investment in emerging country, such as China (section 2) and finally the content of this new strategy (section 3).

Indeed, it is relevant to analyze the attractiveness of Chine towards multinational companies, such as Renault in the context of an increasing labor cost and the current trade war. Thus, the Chinese model inside the international labor division, present some advantages and weaknesses, and notably in the moment through the structural transformation of the Chinese economy, characterized notably by the loss of the advantage of low wages and by the recent trade tensions.

In the case of Renault, the focus is on the future for consolidate and make sustainable the group's position as world leader through the development of electric, autonomous, connected models, horizontal and vertical integration into the Alliance, internationalization, competitiveness, the launch of the mobility service or finally the respect of environmental legislation.

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[...] 190-207. Kojima, K. (2000), « the flying gees model of asian economic development: origin, theoretical extensions, and region policy implictations », Journal of Asian Economics pp. 375-401. Akamatsu, K. (1961), « A theory of unbalanced growth in the world economy », Weltwirtschafliches Archiv pp. 196-215. [...]

[...] Indeed, international trade is a factor of economic growth, so that export promotion is one of the pillars for China to achieve sustained growth, allowing it to accelerate its catching up and its economic development in developed countries. Among the theoretical arguments that we can mobilize to show the benefits of trade openness, we refer to traditional (liberal) theories of international trade: the absolute advantages of Adam Smith (1776), comparative advantages of David Ricardo (1814) or relative endowments in factors of production of Heckscher, Ohlin and Samuelson (HOS) in the 1930s. [...]

[...] Strategy proposal for an MNC who wants to invest or expand in a specific country – New Group Renault strategic plan: "Drive the Future" Executive summary In this work, we analyze Renault's strategic plan for 2017-2022, called “Drive the Future” on three levels: the company's source of competitive advantage (section the reasons for choosing the target of investment in emerging country, such as China (section and finally the content of this new strategy (section 3). Indeed, it is relevant to analyze the attractiveness of Chine towards multinational companies, such as Renault in the context of an increasing labor cost and the current trade war. [...]

[...] Finally, according to the O.L.I (Ownership, Location and Internationalization) paradigm, developed by John Dunning (1988), he identifies three modes of penetration of foreign markets: the license when the firm owns the property, export when it has the organization and internationalization and finally the FDI when the following three advantages are held (Organization, Localization and Internationalization). In other words, an MNC will decide to produce in China, instead of exporting if these three criteria are met. However, China is a very specific case compared to other nations. According to Chanteau (2008), the size effect indeed makes this country both a productive base and a promising end market. III. [...]

[...] The group is also taking the turn of digital transformation, autonomous and connected vehicles and mobility services. Finally, it contributes to the fight against climate change by launching zero-emission vehicles and benefiting from the carbon footprint. In other words, the Alliance will obtain a sustainable competitive advantage. Renault has two main goals in its new plan: - on the one hand, strong, robust, healthy, profitable growth at the global level, which is well distributed geographically and well balanced between the different segments of the market. [...]

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