Case ID 14-1055
Published 2014
Industry Code 311
Subject Operations management

Abstract Created in 1999, the Renault-Nissan alliance put another step ahead in the integration of Renault and Nissan with the creation of 4 common Convergence Projects. This decision is directly linked with the need of the two car manufacturers to create synergies by increased collaboration, and thus to reduce their cost structure so as to better compete on the global market, on both developed and emerging markets. The integration is particularly high in the purchasing area, with today 100% of joint purchasing between Renault and Nissan through the Renault Nissan Purchasing Organization, a novelty in the automotive industry. As Renault-Nissan is choosing the way of strategic partnerships to expand technologically and geographically, the alliance is an interesting example of how investing in the relationships with suppliers can be a source of a competitive advantage in the automotive industry. On the other hand, strategic partnerships and alliances are time and assets-consuming. This case thus studies the dilemma between cost and quality, innovation and differentiation that car automakers are facing in global and highly competitive market. The case also raises the questions of trade-offs to accept when building alliances and strategic partnerships in terms of flexibility, corporate identity and sustainability of a common strategy.
Pages 23
Teaching Note Yes