Business turnaround – Renault and Nissan company Coursework

Exclusively available on Available only on IvyPanda® Made by Human No AI

The Renault company best known for its innovative and design was to undergo a turnaround with the Japanese motor giant, Nissan. The Nissan has a prolonged fame of producing quality engine systems. The two companies agreed to form a major strategic alliance. This alliance would be the fourth largest car making company across the globe. The Renault was to assume $ 5.4 billion of Nissan’s debt.

This alliance made sense for both sides since the Nissan Company’s strengths would cover the gaps of the Renault company and vice versa. The Renault was to reduce the much debt owed to the Nissan industry. The success of the alliance would purely depend on the conversion of the Nissan of the Nissan industry into a profitable and rising business as proposed by Schweitzer. An earlier attempt by the Renault Company to merge with Volvo was not successful due to the traditional state control of the player countries.

Before the idea of turnaround had emerged, Nissan Company was really struggling to earn the estimated profits. The cost of making a Nissan vehicle was extremely high hence; its market price for its products were high compared to other firms in the industry. The company stock had to accumulate since it would pile more than million more cars each single year. This made the company accumulate more and more debts.

In order for the company to protect its identity and maintain self-esteem for its people merger was the most appropriate option as at that time. Currently, the turnaround has achieved more success beyond its imagination. Nissan is very profitable, and its identity has been on the upward growth.

The successful turnaround of the two companies is due to the mobilization of the Nissan managers through cross-functional teams meant to spearhead radical changes and maintenance corporate culture by the Renault Company. The Nissan Company made new culture by dramatically breaking its past traditional culture. This enabled it to save money and alienate form the persistent loss making habit associated with the former method.

The company had to dismantle the Keiretsu investments to realize its capital locked up in these in this real-estate investment. In a close analysis, the major problem of the Nissan Company was not only financial constraint but also cultural difficulties. Its older employees stuck down more money and power than they did actually perform breeding complacency to the company hence undermining its competitiveness.

This culture made the company realize more loses, as its customers did not consider how the company undertook the process. However, what the customer required was well-designed and quality products at affordable prices. The company had no choice but to drop this culture and ditch the seniority rule. The company also revamped its compensation system and focused on performance. The company also had another culture of blame where in the case of failure it was due to another persons fault.

The success of such turnaround is ensured by building a trust through transparency within the operations of the two parties. In this alliance, building transparency was through keeping promises and providing totally clear and verified reports. The transparency was through ensuring each party knew what the other was doing and had a record the expected outcome. The alliance has moved form cross-function to cross company.

The two companies had to set up series of joint ventures and formed legal structures that effected the cross-company plan. The companies set respect as the motivating factor for their combined dealings. Since the Renault was not the Nissan’s preferred partner bestowing respect was an important aspect for long-term friendship.

Generally, Nissan’s identity and culture have been the main cause of its success. The relationship between the two companies has grown greatly despite the fact that at the inception Nissan was more of a leaner than the Renault.

More related papers Related Essay Examples
Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2019, May 8). Business turnaround - Renault and Nissan company. https://ivypanda.com/essays/business-turnaround-renault-and-nissan-company-coursework/

Work Cited

"Business turnaround - Renault and Nissan company." IvyPanda, 8 May 2019, ivypanda.com/essays/business-turnaround-renault-and-nissan-company-coursework/.

References

IvyPanda. (2019) 'Business turnaround - Renault and Nissan company'. 8 May.

References

IvyPanda. 2019. "Business turnaround - Renault and Nissan company." May 8, 2019. https://ivypanda.com/essays/business-turnaround-renault-and-nissan-company-coursework/.

1. IvyPanda. "Business turnaround - Renault and Nissan company." May 8, 2019. https://ivypanda.com/essays/business-turnaround-renault-and-nissan-company-coursework/.


Bibliography


IvyPanda. "Business turnaround - Renault and Nissan company." May 8, 2019. https://ivypanda.com/essays/business-turnaround-renault-and-nissan-company-coursework/.

If, for any reason, you believe that this content should not be published on our website, please request its removal.
Updated:
This academic paper example has been carefully picked, checked and refined by our editorial team.
No AI was involved: only quilified experts contributed.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for you assignment
Privacy Settings

IvyPanda uses cookies and similar technologies to enhance your experience, enabling functionalities such as:

  • Basic site functions
  • Ensuring secure, safe transactions
  • Secure account login
  • Remembering account, browser, and regional preferences
  • Remembering privacy and security settings
  • Analyzing site traffic and usage
  • Personalized search, content, and recommendations
  • Displaying relevant, targeted ads on and off IvyPanda

Please refer to IvyPanda's Cookies Policy and Privacy Policy for detailed information.

Required Cookies & Technologies
Always active

Certain technologies we use are essential for critical functions such as security and site integrity, account authentication, security and privacy preferences, internal site usage and maintenance data, and ensuring the site operates correctly for browsing and transactions.

Site Customization

Cookies and similar technologies are used to enhance your experience by:

  • Remembering general and regional preferences
  • Personalizing content, search, recommendations, and offers

Some functions, such as personalized recommendations, account preferences, or localization, may not work correctly without these technologies. For more details, please refer to IvyPanda's Cookies Policy.

Personalized Advertising

To enable personalized advertising (such as interest-based ads), we may share your data with our marketing and advertising partners using cookies and other technologies. These partners may have their own information collected about you. Turning off the personalized advertising setting won't stop you from seeing IvyPanda ads, but it may make the ads you see less relevant or more repetitive.

Personalized advertising may be considered a "sale" or "sharing" of the information under California and other state privacy laws, and you may have the right to opt out. Turning off personalized advertising allows you to exercise your right to opt out. Learn more in IvyPanda's Cookies Policy and Privacy Policy.

1 / 1