The globalization strategy of renault


For Renault, the first half of the 1980s were "the crossing of the desert" when the French automaker come to the edges of personal bankruptcy, while Volkswagen continued to extend in terms of production and market reach. Volkswagen developed its international base through the acquisitions in 1991 of Skoda, the automobile producer in the Czech Republic and Seating, the Sociedad Española de Automóviles de Turismo. After the withdrawal of Fiat in 1981, the Volkswagen Group subsidiary Audi AG agreed upon a cooperation agreement with Seats, becoming the major shareholder in 1986, and 100% owner of the company. In1990, SEAT widened its businesses in China and Latin America.

In comparison, Renault place the brakes on its international drive and concentrated its efforts on solving inside dissensions in the aftermath of the terrorist slaying of its CEO. Renault also centered on renewing its romance with the new French Federal government, smoothing the resistance of left-wing Unions, finding acceptable answers to its large and aging North-African immigrant personnel in France, developing creative models, and increasing quality. While seeking these goals, Renault also searched for to increase its market show in the North Europe where it confronted hard competition and noticed only low income. Renault had to improve route and in 1998, Renault obtained the seed of Curitiba in Brazil and the next calendar year, it became the major shareholder in Nissan of Japan, Dacia of Romania and Samsung of Korea.

The Logan Global Phenomena

Renault received the Romanian manufacturer Dacia with desire to to become customized in the production of the excellent budget Renault / Dacia Logan Car to be sold for 5000 Euro (USD 6105), which competed with the best of the world's cheapest automobiles. Goals for the Renault Logan car included Rover's CityRover, Kia Picanto, Seating Arosa, Daihatsu Cuore, Daewoo Matiz and the Volkswagen Fox. In June 2005, Renault made the Logan available in France, Germany, and Spain at a bottom price of $9300, 1 / 2 of the average price of competitive offerings. Renault's first target marketplaces were countries like Romania, Poland and Russia, where most people cannot afford an automobile with Western European pricing. This is actually the first step in a worldwide rollout of the Logan. In mid-July 2005, Renault released that it acquired produced 100, 000 Logan vehicles at its Romanian stock, exceeding its own most optimistic estimates. Shortly after the kick off in Eastern Europe, Renault was shocked to learn that Western Europeans liked the Logan as well. Over another several years, Renault factories in Russia, Morocco, and Colombia will get started producing the Logan. The Logan offers for about $6000 in these countries, while cars like the Ford Concentration or the Volkswagen Golfing cost around $18, 000. Deutsche Bank approximated that Renault can produce the Logan for $1089 per car; similar autos stated in Western Europe run about $2500. Actually, this fast produced car is not acknowledged limited to its low cost of operation but also development and consumption.

"The Logan is the McDonald's of cars â The idea was simple: Reliable executive without a great deal of electronics, cheap to build and easy to maintain and repair, " said Kenneth Melville, the Scot who headed the Logan design team (Edmondson, 2008).

In Feb 2008, Renault celebrated 80 years in Morocco. Renault has already established a long enduring, unbroken romance and active occurrence in Morocco. Nonetheless it has only been since 1966 that Renault has been assembling vehicles at SOMACA (Moroccan Modern culture of Automobile Construction), located in Casablanca, and had 80% by the Renault Group and 20% by the PSA Group. SOMACA started out the assembly of Dacia Logan in 2005. In total, Renault currently utilizes 1, 800 people in Morocco, and presents 1. 4 percent of the Group total and the creation in 2007: 28, 764 vehicles, or 1 percent of the Group total. In this way, Renault strengthened its presence in a substantial market, where it was a sales head at the end of August 2000. Before 2000, Nissan was a brand unheard of in Morocco. Then Renault required many stake in the carmaker. The next phase was created by Renault Morocco in taking over SIAB, the Nissan's exclusive importer in Morocco, which was until then wholly-owned by the ONA Group. Renault Morocco stepped up circulation of Nissan automobiles through the same Group, and in 2006 1, 100 Nissans were sold.

Launched in July 2005, the Logan became the best selling vehicle in Morocco within its first six-months. In 2006, 12, 700 Logans were sold in Morocco, which makes it the success of the entire year there. The real point in time of the explosion in sales was the release of the 1. 5 diesel engine motor. Around 75% of the autos bought from Morocco by Dacia Logan were diesel versions. Early in 2008, the Renault-Nissan Alliance started focus on the "Renault Tanger Méditerranée" commercial complex. It'll comprise an assemblage place for low-cost vehicles based on the Logan program. The Moroccan Hub is one website link in the string of local and global integrative cost-efficient manufacturing units carried out in other emerging marketplaces to create low priced vehicles. This global integrative reliable creation while facilitating access to labor, knowledge and skills at the cheapest rates. This sort of system is the prelude to the creation of new electric vehicles; a $3, 000 car for the Indian market and a jv with Russian carmaker Avtovaz to build a car for the Russian market. Actually, the Logan stated in Morocco is already exported to European countries.


Renault is now ready to execute more global centric regionalized business units that are linked by synergistic end result and productivity shows with terms of quality, technology and success that equivalent if not surpass the major global car manufacturers. Renault applied a built-in productive strategy predicated on the Just-in-Time way that imposed the implementation of total quality management and the enhancement of competitiveness to the amount of international standards, specifically in the conditions of Samsung and Dacia. With Nissan, Renault considered its relationship a synergistic one in the longer term, despite the problems faced in the first stage of their alliances and the recent challenging times that resulted in Carlos Ghosn stepping down in favor of a experienced deputy, Patrick Pélata.

With this move, Renault escaped from its Western european Fortress and established itself as the fifth major car manufacture on the planet. This world ranking enabled Renault's impressive and creative departments to develop, in collaboration with Nissan cutting-edge technologists, technical engineers and designers, better and alternative energy powered vehicles that will differentiate and localize productions and models relating to local requirements and regional market needs.

Copyright 2010.


Gail Edmondson in Pitesti, Romania, with Constance Faivre d'Arcier in Paris, "Got 5, 000 Euros? Need A New Car? Individuals across Europe are clamoring for Renault's ultracheap, no-frills Logan" July 4, 2008, Business Week, Western european Edition.


YOKOHAMA, Japan | Fri Feb 25, 2011 9:15am EST

YOKOHAMA, Japan (Reuters) - Carlos Ghosn, chief executive officer at Nissan Electric motor Co (7201. T) and Renault SA (RENA. PA), spoke to Reuters in his office at Nissan's global head office on Fri.

Below are Ghosn's comments from the interview on key issues for both companies.


"This composition has been very stable to help us concrete the alliance, create a solid sense of owned by the alliance, even though people remain fiercely Renault or fiercely Nissan, mounted on the culture.

"(But) we could challenged (by financial market segments) over how much capital we've imprisoned in to the structure of the alliance. It's a fair challenge.

"We will be studying and inspecting this with outsiders also, what are the ways to respond to these anticipations from the financial markets without challenging the functioning model which contains keeping both companies vibrant, enthusiastic, employed and keeping their identities.

"You have to study all the consequences. This is a very delicate balance between the two companies. You will need something which makes all the shareholders happy, both at Renault and Nissan.

"As the CEO, I must take care of the short-term, middle term and the long term. "

Asked if the change in the capital structure would come by the halfway point of Renault's business plan to 2016, he said: "Hopefully it'll come even before. "


"The largest problem is modernizing and adapting the alliance and, at the same time, keeping the strength of the alliance.

"What I want to do is to modify the alliance to the new realities of the markets, make the changes that are necessary but at exactly the same time keep what made the alliance resourceful therefore strong in front of adversity. "


"Each and every time you make a merger, somebody is getting rid of his personality. And saying different things is merely rubbish.

"It isn't validated by any example in the automobile industry that works. Not one example.

"So that is why we're endeavoring to avoid this by saying we wish two companies which are vibrant, proud, eager for their own performance but at the same time, which want synergies

"This is the beauty of the alliance. It is a synergy with a new id, while a merger is synergy with one individuality. But the situation of the one identity is always perceived that somebody loses and an individual wins. "


"So long as I'm proceeding Renault, I'd like to suggest that I continue to mind Nissan because I believe it's best for Nissan to really have the same CEO. It guarantees partnership, the same level of decision. "

Ghosn's mandate as CEO of Renault would go to 2014, while his two-year term at Nissan is up for renewal this year.

Asked if Nissan's next CEO should be a Japanese nationwide, he said: "Definitely it should be somebody who is recognized at Nissan. That's number 1. Personally I've a desire for a Japanese. (But) this won't rely upon me because the shareholders have their own say. "


"My main resources, my main talents, my main abilities and know-how are in Japan. On the other hand, we will have to deal with unfavorable exchange rates for a while.

"So in function of these two elements, and our sales forecast -- luckily for us, we are in a strong growth -- we are envisioning that people will be producing more than 1 million cars in Japan (a year) for the foreseeable future, even as of this exchange rate level.

"While using strong growth, I want capacity. Because were growing, because of the emerging markets and because of our purchases in China, Russia, etc, and in the Middle East, we are in need of this capacity in Japan.

"When the yen would go to 90, 95, 100 yen (to the money), then the 1 million is likely to be a piece of cake. If it's stuck at 80 or 85, it's going to be tough. "


"We're not happy it's going up, but in a certain way, we were ready because now we have alternate technology allowing us to be competitive as of this level.

"(But higher oil prices) suggest the growth potential clients of many marketplaces are going to be downgraded, some kind of uneasiness for individuals to be buying another car or third car.

"It's not always only bad news. What is important for us is to have a strategy that is well balanced. "


"Whenever a company is facing a problem, it always takes a stance and requires a decision, but at exactly the same time it wants to be sure of what it can study from it, what enhancements it can make

"Obviously I cannot tell you more because we have been waiting for French justice to have a position. Until they take a position, nobody is going to move.

"When justice comes out with a final realization, we will communicate. " (Reporting by Chang-Ran Kim; Editing by Edmund Klamann)

(a)The necessity for success after having been on the ends of personal bankruptcy was a major drive behind Renault's drive to globalise. Identify and discuss pushes internal and external to a global company that, as in the case of Renault, lead businesses to globalise.

By Globalization we indicate to combine or interaction between distinctive and distinct markets of different countries in to one gigantic global market. The firms are now sourcing different goods and services from different locations around the globe to take good thing about national distinctions in the price and quality factors of creation like labor, land, capital and energy. Due to the decline in barriers of free move of goods, services and capital Globalization has prospered. Now due to the current business environment, it is very important for the organizations to globalize. There are many factors, internal or external, which power the organizations to globalize. External factors are out of control of the business but inner factors are controllable and that create a good environment for the business to globalize. They include boosting financial worth, severe industry competition, poor company performance, uncontrollable costs, operational inefficiency, expansive or incompetent workforce etc. The main element internal and external forces and only globalization are

Regain Profitability

The main interior factor that makes an organization to globalize is to boost its financial deficits. Same was the purpose behind the globalization of Renault the French automaker. Industry experts were predicting the Renault's takeover. Likewise India initiated the globalized financial reforms in 1991 to be able to recover from an unfavorable Balance-Of-Payment (BOP) situation by getting foreign exchange via an increased access to the world markets in substitution for beginning to the foreigners the Indian marketplaces.

Technological developments

Nowadays technology serves as a nucleus for organizations strategic moves. The fast technological innovations have required the organizations to globalization. Organizations try to improve production and market competitiveness by updating themselves based on the technological advancements, that are taking place at very fast rate. The introduction of superior vehicles and gadgets has made the delivery and activity of goods super easy. Globalization offers them a convenient and affordable way to attain their objectives. Most advanced technology has allowed easy and rapid information sharing, better capital freedom with very low costs.

Globalization of Competitors

Globalization of rivals is also one of the key known reasons for globalization. A business has to monitor the activities of its competitors to efficiently flourish. Whenever the direct competition globalize by adopting a way of expansion abroad, the firms quickly have to behave as they do not want to take threat of letting the competitors to stabilize in new promising venture. This could impact their future opportunities and various overseas operations in the pipeline.

Similarly different companies from other areas of the world can more easily introduce their products across edges. Now the market competitors aren't only the neighborhood ones but from across the world. This coerces every firm to improve quality, offer innovative products and services, and cut down the costs through globalization.

Social and politics Factors

The country specific external factors also contribute for the phenomena of globalization. For instance in developing countries the indegent economy, individual bankruptcy, World Bank, World Trade Corporation, IMF (International Monetary Account), local body and other financial institutes suggest globalization in an effort to boost current economic climate. The needs and priorities of customers are unpredictable. They are also influenced by various varieties of interpersonal and political stresses. So business organizations need to be flexible and knowledge to address these issues.

Trade Regulations

Often there are different types of trade barriers, tariff, fiscal plans, and export quotas. This reduces the organization's gains, increase costs, and lowers its tendency to determine itself in the foreign market. Also some countries with tremendous growth opportunities resist overseas products and impose inconvenient and expensive limitations. The government authorities support local manufactures by preferring company made products. For example Indian authorities has customarily been supportive of buy local insurance policy. To avoid this, the organizations have a tendency to shift their making procedures across different suitable countries instead of exporting their goods to the people countries and facing confrontation.

Globalization Friendly Environment

With the duration of time there's been an increased recognition about the positive benefits of globalization among different industries and countries. This has lowered the traditional hindrance and doubt against the phenomena of globalization. Now the government authorities' stereotypical hold of local makers and consumers is declining and they tend to support market liberalization and privatization. Growth of varied global networks has made countries interdependent specifically market sectors. Most companies have become internationally oriented rather than traditional methodology to be nationally centered.

Also Reduction of tariff and non-tariff obstacles has fostered companies to globalize their businesses. The organizations look forward to market conditions with few international restrictive functions. These there's a concept of wide open markets and adoption of common requirements e. g. European union, NAFTA. Each day proper coalitions, new global alliances and new trading items are emerging to survive in constantly changing and highly competitive business environment.

Growth Opportunities

Sometimes the market segments in the neighborhood country can mature and there exist rare chances of further extension. Globalization offers encouraging new endeavors for such companies who want to expand and spend money on new ventures to gain profitability. In the same way Renault chosen globalization as it wanted to expand apart from the European market segments and solidify its market position. The brand awareness of Renault in Japan was suprisingly low. The alliance between Nissan and Renault established a trust worthwhile earth for Renault in Japan.

Another approach behind globalization is the introduction of similar needs and products worldwide. It has emerged because of considering the whole world as one global industry with common consumers. The firms are uncovering similar consumer organizations worldwide. For example the teenagers almost have the same concerns and dreams all around the globe. So there can be an increased likelihood that consumer products in a single area of the world have a tendency to also be desired in others. Renault performed the same using its Logan cars by checking out that worldwide consumers want cheap and easily controllable cars.

Increased Operational Efficiency

Globalization allows the organizations to increase their efficiency in different ways. That is achieved by fully using the available organizational resources and capability to have them at the cheapest possible costs. So, these businesses, in addition to investing their excess profits, also make an effort to maximize efficiency by using their underutilized resources in human and capital resources such as management, equipment, and technology.

Research and Development

The research and development costs are increasing daily. Organizations have to leverage their financial resources in mission of coming up with new ground breaking quality products. Global over-capacity and rising costs has managed to get increasingly very important to firms to get size through proper partnerships or mergers to attain profitable expansion. Globalization decreases the expenditures of research and development by growing joint groups and centers.

Customer Demands

Today customers have grown to be more aware because of increasing variety of world brands and global advertising. Customers favor global companies scheduled to increased travel and dependability. Also overseas customers want local equipment to reduce logistical problems and improve the flow of production.

Economies of Scale

Globalization facilitates economies of range for organizations. The costs of product development have increased as compared to expected earnings and market life. Globalization allows them to lower these costs by achieving a higher level of output multiply over large resolved costs and maximizing the use with their manufacturing facilities.

Developing countries are appearing as recently industrialized countries with beneficial functionality and low labor costs. These countries offer certain benefits e. g. as infrastructure, subsidies, low tariffs, and cheap qualified manpower to encourage international direct investment.

(B)Appraise the huge benefits and difficulties of the globalisation strategy of Renault with focus on its sourcing, production and marketing functions.

Renault has liked the benefits associated with globalization over quite a while. They have evidently helped it to boost its sourcing, creation and marketing functions. Everything good has some threats or difficulties enclosed with it. Same is true for globalization. The huge benefits and obstacles of globalization strategy for Renault are talked about below

Globalization and Sourcing

Sourcing describes the full fledge treatment of spotting those sources that are required for product development. They range between infrastructure, raw materials to the staff management. Initially Renault and other auto manufacturers resisted globalization thinking that getting the resources from the countries like China and India might undermine their quality and efficiency, but this altered after a few years.

Benefits of Globalization

Competent Employees Availability

Globalization has permit Renault to find the best prospects from a pool of very skilled and skilled global workforce. This is also affordable for Renault. The income scales in producing countries are significantly less than in France, North America and Western Europe, so it can easily hire well-trained experts.

(www. clarity-consulting. com)

Advances in telecommunications

Globalization has led to tremendous improvements in international telecommunications capacities, stability and quality of marketing communications. This has fostered easier sourcing as now Renault has many cost-effective options are available from wired, landline communication services to cellular, satellite services. The criteria introduced by the Internet also have fostered quick deployment and inter-operability of sites and marketing communications of Renault in almost every country and company around the globe.

Outcomes of Mutual Interaction

Globalization allows people of different calibers and backgrounds to brainstorm collectively. In case of Renault it has led to the emergence of strong and high quality collaborative tools. Work items are easily designated and synchronized between associates, and work products are manipulated and distributed in a central manner. Globalization has enabled Renault to get personnel sourcing from various areas of the world. This has helped to reduce the mishandling of communication, including time zone differences, protocols and various ethnical nuances.

Troubles of Globalization

Safety and Level of privacy of Key Issues

Sourcing from various areas of the entire world has raised the issue of security of corporate and business secrets. Different countries have different setup and legal constraints so physical security and security of intellectual property and trade secrets has become rough for Renault. Renault has responded by firing the professionals who were involved in leaking secrets about the future electrical vehicles and by restricting it's sourcing to locations that can promise perfect security.

Business Interference

Because of globalization Renault facilities face the chance of business disruption anticipated to politics unrest, terrorist activities, natural disasters or miscellaneous factors in producing countries. Renault is handling it by ensuring that work and resources can be quickly shifted between locations to minimize the impact of disruptions. Also the just offshore project clubs are trained to transfer to a new locality in a short notice to revive full businesses.

Globalization and PRODUCTION

Availability of Cheap Labor

Globalization has significantly reduced the production charges for Renault by permitting it to develop its operations globally in countries offering cheap labor and resources. There are lots of advantages that your companies can avail by production of its products globally.

Economical Raw material and Supplies

Another fruit of globalization for Renault is the availability of low cost quality recycleables. Renault has cut down its development and product development costs by shifting its operations in countries abundant with natural resources of and thus reducing vehicles and delivery costs. It has also been able to get highly skilled and production processes trained workers in producing countries of the world. That is helping it to produce competitive and effective product because of its customers. Renault is obtaining economies of level in development and syndication.

New Production Ideas

Renault has got into into several acquisitions and coalitions in street to globalization. Every country and firm has their own critical success factors. By showing and utilizing this kind of information Renault is enhancing its production facilities. For example, the creation of Renault Tanger Mediterranee commercial complex has empowered it to find new global integrative cost-efficient development processes.

Nissan is a Japanese structured auto company. Japanese are really good in only in time creation, constant improvement programs and total quality management initiatives. By creating an alliance Renault is enhancing in these respects and enhancing the competitiveness to the level of international requirements.

Plant sharing

Globalization has allowed Renault to lower costs by showing creation facilities of local companies in several countries. It is enjoying mutual use of manufacturing plant life of Nissan, Dacia and Samsung in several locations.

(www. blurtit. com)


Marketing is the sign of every global business strategy. The high range competition in the car industry compels the organizations produce new ground breaking marketing ideas.

Benefits of Globalization

Access to vast customer base

The globalization has empowered Renault to outreach customers across the globe by wise marketing. Renault now offers an array of products in different ways while all together keeping the marketing costs low. Globalization has significantly increased the energy and range of advertising for Renault. It was only because of globalization relationship with Nissan that Renault succeeded in a normal country like Japan regardless of no acknowledgement.

Brand Image

Renault has had the opportunity to be named a recognised brand worldwide in the auto industry apart from French and Western european markets. Adopting two way communication programs Renault is creating its image as an innovative, dynamic and adaptive company. Due to globalization there exists a uniformity of marketing tactics. Renault has been able to build up a regular brand image.

New Technologies

Technologies are bettering daily because of growing pattern of globalization. Renault is intelligently utilizing these technologies to improve its customer bottom part. It was because of this Renault regarded that the demand for its Logan cars is available in Western European countries, Morocco and Spain other than France Romania, Poland and Russia. The Renault's savvy marketers are also successfully targeting the niche markets.

Challenges of Globalization

Threatening Individualities

Globalized marketing strategies usually consider the whole world as one place and often undermine the variations in consumer needs, perceptions, and usage patterns for products in different parts of the world. For example Nissan's autos were primarily not successful in the United States because these were designed matching to Japanese weather. The clients in many elements of the United States possessed severe problems in starting their automobiles during the cool winter season.

Marketing Combine Elements

Different consumers respond in a different way to various marketing blend elements. Globalization has made it difficult for marketers of Renault to choose among various elements of the marketing blend the main one to spotlight on.

Cultural Issues

Culture signifies the shared prices, norms, way of life and socially accepted actions in a particular place. Globalization has made fast amount of resources open to the masses that have made strengthening of new multicultural connections problematic for Renault. It has responded by implementing global marketing strategies with some local tailoring. Renault also prefers to recruit the skill from different cultural backgrounds in order to maintain adaptability and wealth. At the time of alliance between Renault and Nissan 300 employees were chosen from each company and were trained about French and Japanese cultures to defeat this intricate problem.

(www. wikipedia. org)

(C)How hold the changes in Technology added to the globalisation of markets and development?

Would the globalisation of markets and production have been possible without these technical changes?

Technology is the gift idea of modern time which has evolved the life of man from Rock Get older to space. There is no argument in declaring that the driving a car pressure behind globalization of development and marketing is the development of modern tools. Technology has served as an amplifier for globalization. The scientific improvements have made our life far more convenient and up at this point. The technological innovations will infact continue to provide as future individuals for globalization. The continuous changes in technology help as an enormous contributor to the globalization of marketplaces and production.

Hill, C. , (2001) referred to globalization as being comprised of two main components: the globalization of market segments and the globalization of product. Relating up to now of view, the changing in technology would lead to the effect on globalization of marketplaces and globalization of creation.

(Hill, H. C. 2001)

Advanced Information Technology

The advanced technology in microprocessors, Internet, wireless communications, and vehicles has actually accelerated the growing of globalization. Information technology has managed to get possible for organizations to easily take part in global financial activities. Internet has emerged as a worldwide collaboration tool for extensive information writing and trade conversations with out the traditional limitations of energy and space. The original restrictions of distance, time and location no longer are present because of technical advancements.

Improved Communication

The key contributor of technology is the progression in the communication technologies that have improved upon globalization. Modern communication alternatives have improved the way many companies do business. Latest it tools e. g. internet, training video and web conferencing hasn't only lowered but almost removed physical barriers between countries. Thus latest technology has fostered more exact understanding of local attitudes in several countries.

The positive thing is that the speed, control capacity and quality of technology has improved and the price is becoming low with the passage of time. This has increased the response time for global organizations. If the low cost of communication does not exist, organizations around the world would not have so many chances to hook up with others and business would not be willing to put money to widen their market segments.

(www. writework. com)

Electronic Banking

Digital technology have opened just how towards global sites. Another driving contributor towards globalization is the system of electronic banking. Electronic banking is at the heart of the global systems system. Now financial funds and assets can simply be transferred across the globe. Also a worldwide system will there be to keep a check on the transfer. The Contemporary society for Worldwide Interbank Financial Telecommunication (SWIFT) displays the reliable global electronic financial system.

www. mediaif. emu. edu


E-Marketing is another gift of technological advancements which has positively added towards globalization of marketing and development. It includes information posting; growing pr, thus enhancing customer services and sales. It offers successfully positioned the global creation systems on the internet. Now customers can view and order the product with in a few moments with no location and time restrictions. It has reduced the lead time and creation and purchase cycles as customers' reactions can now be quickly sorted.

Customer Pressure

The customers actually power the organizations to globalize by demanding products that are technologically latest and audio. The technologies will infact continue to provide as future individuals for globalization. Same is true for auto industry where competition is usually extremely intense. The customers want new ground breaking products which could meet latest technical advancements.

For illustration in the car industry they need autos with digital sound broadcasting center, vehicle monitoring systems, safety receptors, toll collection options, Gps device locators, map system guiding about the traffic alerts, rough highways and swiftness breakers. It has forced organizations to work with globalization as an instrument to address this issue. Similarly consumer electronics Company Toshiba develops tactical alliances with different lovers for different systems because a one company cannot dominate any technology or business by itself.

ERP Contributions

Earlier a major problem for organizations to globalize was the difficulty to handle inventory ventures and complicated information dispersed in several international territories. Technology has fixed this issue by adding interactive ERP Electronic Learning resource Planning packages. Global organizations is now able to easily handle source chain management, payrolls, consolidate financial studies, inventory information and can also cope up with municipality reporting requirements, labor laws and regulations, and trade tariffs in various countries.

Improved Development Processes

Certain production technology have positively contributed in the creation of a global business create. This has increased the efficiency, creation capacity and manufacturing quality which can be must for globalization. Robotic solutions and manufacturing plant lines have improved the speed at which materials and products are created. Now, production and marketing processes are revolutionized by various varieties of technology. In this manner most advanced technology is significantly contributing in the acceleration of productivity growth.

(www. ehow. com/ technology-impacted-global-business-environment)

Improved Vehicles Facilities

The increasing pattern of globalization demand perfect transportation system that could efficiently ensure the delivery of recycleables and completed products. Latest transportation technologies again show up to rescue global organizations here by offering safe, effective and affordable options. The technology has resulted in creation of advanced transportation alternatives by means of cargo ships, railways and aircraft planes. As a result organizations are able to easily transfer raw materials and other resources to various areas of the globe.

Tracking Systems

Another blessing of technology in stimulating globalization is the creation of global setting systems and technology-based syndication channels. Employing this, the goods location can be exactly traced. This has increased the linkages with customers and suppliers of global organizations.

(www. ehow. com/ technology-impacted-global-business-environment)

While looking at the tremendous efforts of technology in improving boosting the globalization of development and marketing, it can easily be assumed that today's notion of world being a global village would have been a headache without technology progress. Surely, the world global economies could have had to badly suffer in absence of these latest technology. However some kind of outsourcing, and traditional import export can have existed; however the true globalization can you need to be a goal or magic without technology.

(D)From Ghoshn's interview, what do you observe as the primary organisational problems likely to be associated with the development of global and transnational strategies.

Carlos Ghoshn's interview unveils different aspects of Renault Nissan alliance. He has clearly covered the key areas and clarified the questions well. In my own opinion there are different organizational issues with the development of global and transnational strategies. They are simply discussed below

Cultural and linguistic differences

Renault might face the situation of differing perceptions and social and linguistic variances. Carlos Ghoshn has recommended that employed in multicultural setups results in organizational disruptions. Folks have a natural strong tendency to safeguard the interests with their initial employer as in case of Renault and Nissan alliance. Few employees are uncomfortable with the variations in the corporate cultures. Thus ethnical insensitivity can be considered a significant problem in pursuing global and transnational strategies.

Capital Structure

Another problem that Renault could face in the development of varied going after global and transnational strategies is the creation of the balanced capital framework and key investment decisions. Globalization escalates the quantity of stakeholders for the business. Eventually to gratify all stakeholders and take financial decisions with the discretion becomes a hard nut to crack. For example the shareholders of Renault who has 43 percent stake in Nissan are demonstrating their dissatisfaction. Combination ethnical disharmony in Renault Nissan alliance can lower the alliance performance and destabilize it.

Renault Nissan Alliance

In the introduction of global and transnational business strategies an integral problem will be modernizing and adapting the Renault Nissan alliance without compromising on the success factors of the alliance package. The true important things about the offer are yet to be achieved particularly for Renault. The accomplishing collaboration of both companies will have to be well balanced and well designed to strive in competitive conditions of car industry.

The true aligning of shared expectations, the opportunity of their partnership in creation of a joint platform will have to be carefully considered. Agreeing on a set of common organizational regimens and synchronization mechanisms for effective copy of knowledge may also be an effort for the business.

(www. nissan-global. com)

Unfavorable exchange rates

The money and exchange rate fluctuations are also a matter of concerns for organizations that develop a global or transnational or an assortment of both. It has been stated by Ghoshn that bringing down price of yen in comparison to us dollars can significantly impact their sales forecasts, business decisions and targets.

Capacity building

The occurrence of various uncontrollable and unpredictable events has created an uncertain condition for businesses. The adoption of global business strategy makes it difficult for Renault to meet its obligations in different parts of the entire world.

Industrial Espionage

With the increased emphasis on global and transnational business strategies the business faces the task of industrial espionage and trust issues. The strategic corporate and business secrets can be leaked at different levels. In vehicle industry t is really the unique proven fact that offers. So if opponents get only the hint about the prototype of upcoming car model etc, they can replicate the same with little disruptions.

Trade offs

Another problem could be the various tradeoff decisions. For instance the tradeoffs from the external flexibilities derived from countrywide responsiveness and the inner efficiencies derived from global integration.

Adoption of substitute technologies

The successful adoption of alternative technologies will also be an issue for the business. It is planning to come up with cars based on alternative gas consumptions, for example electronic cars, hybrid cars, solar autos etc. Almost all the cars consume oil. The olive oil prices are growing even beyond goals. So it will be a problem to rightly asses the most popular and potential technology while adopting a couple of global and transnational business strategies.

Business Plans Implementation

The development of global and transnational strategies might cause various communication problems at the implementation of business strategies because of intricate multiple functions, low empowerment, multiple locations, inflexibility and various ethnical issues. This can make cooperation even difficult.

Rising Material Prices

The prices of various raw material found in the auto industry are dramatically increasing daily. Eventually this cost needs to be transferred to the finish consumer. Consequently they want to invest only in a few highly innovative, theoretically sensible and customer friendly car models. This may boost the product development costs for Renault which is already on way to lessen its functional costs.

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