Renanlt Nissan the making of Global Alliance case Essay

Renanlt Nissan the making of Global Alliance case - Essay Example major changes were taking within the global automotive market characterized by large-scale mergers between some of the major automotive companies in the world. In addition, the economic slowdown being experienced in the Asian region was also affecting the industry, with many of the Asian automotive manufacturers experiencing financial problems. Conversely, the earlier attempted merger between the company and the Swedish carmaker Volvo in 1993 was unsuccessful and had left a negative effect on the company. This merger had been a well-planned initiative that was based on shared synergies between Renault and Volvo and comprised a significant part of the European industrial policy (Krcmar & Klein, 2006). The merger negotiations had lasted for three years and had involved various key authorities, including the French industrial minister, as the French government was a major stakeholder in the company. It was therefore important for the company to be able to undertake a successful merger undertaking in order to go past the effects of the previous failed merger. A major strength involved the company’s privatization 1996 due to the various changes in the country that resulted in the separation of economic and political factors and influences. This privatization process resulted in the French government owning only 46% of the company’s shareholding (Krcmar & Klein, 2006). As such, the management was quite sure that the company’s shareholders would approve the company’s need to expand as well as provide the management with a conducive environment to implement the company’s strategy. Another major strength of the company was its experience and market share, as the company was a major automotive producer within the western European and South America automotive markets and had a 5% of the total global automotive market. The company had excelled in the field of mid-range cars and light commercial vehicles. It was also ahead in cost reduction, efficient purchasing and