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T.Y.BBIGROUP NO.7
PRESENTS
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PRATHAMESH JADHAV 910314SANKET JADHAV 910315PRATHAMESH MESTRY 910326VIDDHESH SALVI 910333SANKET SAWANT 910337ROHIT SHINDE 910342RAJ KHATRI 89349
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DEFINITION
Implementation of rescue measures for failingorganization
MEANING
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MEANING FOR INDUSTRIALLY SICK COMPANIES
CLAUSES
EXCEPTION
EXAMPLE
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Motivation by Former Renault CEO Mr. Carlos Ghosn.
Focuses on the need for the negotiation of formal equity joint- venture.
Renault implement a common platform which would
generate significant economies in development costs.
The Strategy was to bring together engineering teams
to share knowledge.
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Renault & Nissan Alliance Resulted in improved Co-ordination and Cost Reduction.
Their Alliance Resulted in good teamwork and equal
contribution from both the end.
Renault owns 44% of Nissan Motors, Nissan owns 15%
non-voting shares of Renault. This Strategy secures
operational independence to both the firm.
Carlos Ghosn Quoted in an interview, We will never
merge the two companies. Why? Because my job is to
create value and a merger would destroy valueNissan-Renault
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Important issue in the Nissan-Renault alliance relies inthe management of two different cultures.
Mutual understanding between two different workculture.
Application of Hofstedescultural theories in thealliance.
Restructuring the Nissan management process byarrival of Mr. Carlos Ghosn.
Ghosn was indirectly forced to implement a newA system of double hierarchy
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Parent company Renault wanted to learn from Nissansuccess in North America which is essential for expand in
its market.
Before Alliance Nissan had Debt problem during 90s.
Its Debt amounted to 11.2 Billion which prevented Nissan
from making Investment in Product Line.
Products were too old to compete in Global Market.
E.g. March
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Nissan invested in many companies, Their large amountof money was locked up and could not utilized for
Nissans own good.
Renault Paid off Huge Debt in return of 36.6% Equity
stake.
Nissan had a clear distinction between customer andshareholder.
Following the alliance, nearly 14,000 employees were
unemployed. This change contributed to maximizing theutilization of personnel.
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The alliance between Nissan-Renault
Figures
Perception of Mr. Carlos Ghosn
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Strategies prepared as per host countrys
conditions.
Threatens by Japanese low price high quality car.
Building plants on Global soils.
The European Commissions new rule.
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Common platform with Nissan for small cars
Joint research projects and exchange ofcomponents (leading to standardization of theseproducts)
The decision to return to the Mexican market,using Nissans powerful industrial and
commercial presence
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Further expansion in
Europe and growth in Asia
To draw on the strengths
of complementary
expertise in sales and
technology, and to reduce
costs and enhance
performance.
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Renault CEO Louis Schweitzer and Nissan
CEO Yoshikazu Hanawa signed the
Alliance agreement in March 1999.
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PROMISED
Positive annual net income afterTax by 2000-2001
Annual operating margin of 4.5Percentage of sales by 2002-2003
50% reduction in net debt to $6.3
Billion by March 2003
Eliminate 21,000 jobs by March2003
DELIVERED
$6.5 billion 1999-2000
$2.7 billion 2000-2001
$2.7 billion 2001-2002
$4.1 billion in Mar. 2002-2003
18.8 percent by March 2002 to
March 2003
Net debt of $6.6 billion in
September 2001
19900 job cuts by September
2001
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