Nissan Case Study: Nissan

looked for a good fit partner. In order to expand globally, there were two markets taken under consideration – North American, where the top 5 auto manufacturers resided and none of them would be keen on sharing their market or expanding to a new one. The second developing market covered Asia. Teaming up with Nissan who was in financial difficulties and had already established position in the market looked like a perfect fit for both sides. In revenge for teaming up with Renault, Nissan could obtain financial support as well as a market presence in a new market – Europe and South America (Donnelly et al., 2005) 4.3.1.1 Renault Renault, headquartered in Boulogne-Billancourt, back in the time of the merger was a relatively young company,
Shortly before the merger in 1999, Nissan was facing serious financial difficulties, and significant losses for nearly a decade. It was caused mostly by late 90s recession in Japan, high degree of bureaucracy as well as pursuing the Keiretsu model.
As a result of entering to alliance, it high amount of accumulated debt to pay off. Its profit margins were low in contract to high purchasing costs. According to data from 2009, company represented $ 11 bn debt, with a capacity production of $ 2.4 mln (Nissan, 2016). Company represented concentrated sales – 41% of total sales accumulated from Japan and 27 % from North America. Entering into alliance with a company with a stable financial position operating in a completely different geographic region was a perfect solution for the company. In theory it was slightly similar situation in which Chrysler was during the merger with
First element that could be a challenge was a langue, therefore English was chosen to be alliance’s official language - term glossary was created in order to avoid misunderstandings (Hughes et al., 2001 in Donnelly et al., 2005). Second milestone was eliminating existing in Nissan’s promotion by seniority schema, instead a promotion by merit system was implemented. On top of that a cross functional departments were created allowing career starters to work head to head with experienced managers and learn from them (Flament et al., 2001 in Donnellyet al., 2005). Mixing employees on different levels of hierarchy, influenced a decision making process – it was one of the biggest challenges to implement. French employees are characterized as fast decision makers, and individual’s initiatives were taken in a risky way. In contrast – Japanese culture characterizes a long decision process, shared at many different hierarchical levels before a decision making and an