...Case Study 2.2: The Failed Merger between Renault and Volvo In 1993, merger talks finally broke down between Renault and Volvo. A merger between the two companies had seemed the inevitable consequence of a number of years of collaboration and the plans seemed well set. Cooperation between the two firms had begun in 1990 when Renault took a 25 per cent share in Volvo cars and a 45 per cent share in their truck division. Volvo, for its part, took a 20 per cent share in Renault. The early collaboration took the form of an exchange of engines, the joint purchasing of components and joint developments in quality control. The cooperative arrangements between the two companies were a constant source of internal criticism, which focused on the highly bureaucratic procedures that had been established. In this sense, a full merger was seen by both parties as the more favourable option. The strategic fit between Renault and Volvo seemed ripe for merger. Volvo had strengths in the large car market, where Renault had consistently failed to make an impact. Renault’s strengths lay in the manufacture of small cars and in diesel technology. In terms of market, Volvo was stronger in Northern Europe and especially North America and Renault had a larger market share in Southern Europe and South America. Both companies were probably too small to survive in a globally competitive volume car market. In Europe and the USA, merger was a route for survival, particularly in the face of increasing...
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...Case Study 2.2: The Failed Merger between Renault and Volvo In 1993, merger talks finally broke down between Renault and Volvo. A merger between the two companies had seemed the inevitable consequence of a number of years of collaboration and the plans seemed well set. Cooperation between the two firms had begun in 1990 when Renault took a 25 per cent share in Volvo cars and a 45 per cent share in their truck division. Volvo, for its part, took a 20 per cent share in Renault. The early collaboration took the form of an exchange of engines, the joint purchasing of components and joint developments in quality control. The cooperative arrangements between the two companies were a constant source of internal criticism, which focused on the highly bureaucratic procedures that had been established. In this sense, a full merger was seen by both parties as the more favourable option. The strategic fit between Renault and Volvo seemed ripe for merger. Volvo had strengths in the large car market, where Renault had consistently failed to make an impact. Renault’s strengths lay in the manufacture of small cars and in diesel technology. In terms of market, Volvo was stronger in Northern Europe and especially North America and Renault had a larger market share in Southern Europe and South America. Both companies were probably too small to survive in a globally competitive volume car market. In Europe and the USA, merger was a route for survival, particularly in the face of increasing...
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...THE VOLVO/SCANIA MERGER CASE |Maastricht University | | | | |School of Business & Economics | | | | |Place & date: |Maastricht 10. Dec. 2013 | | | | |Name, initials: |Michael Göpper, MG | |For assessor only | | |ID number: |I6069490 | |1. Content | | |Study: |Economics & Business Economics | |2. Language structure | | |Course code: |EBC1010 | |3. Language accuracy | | |Group number: |20 | |4. Language: Format & | | | | | |citing/referencing | | |Writing tutor name: |Heidi van Rooijen | |Overall: | | |Writing assignment: |Main Paper (Task 10) | |Advisory grade ...
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...Case Study of the Acquisition of Swedish Volvo by Chinese Geely Author: Lieke Wang Supervisor: Thomas Danborg Master's Thesis in Business Administration, MBA programme February 2011 Abstract The acquisition of the famous Swedish Volvo by the unknown Chinese Geely has attracted a lot of attention in the world-wide medias, particularly in Sweden and China. It is the largest overseas acquisition ever by a Chinese company, which marks a beginning of a new era that the fastest growing China has become a superpower in the world economy. Because this acquisition is such a complex business where two involved companies are so much different, it is of high interest to make a case study of this in the business research area. The thesis begins the study by looking at the basic facts of these two companies: the products, market, finance situation, brand and technology, etc. It was found that these two companies have very little in similarity, but a huge difference in product segment, technology and brand, inter-culture, language, etc. Therefore, there is no immediate cost saving through the integration of two companies and the sharing of the common components, which indicates that the risk of failure of this acquisition is relatively big. However, there do exist some opportunities lying ahead. The most obvious opportunity is the possible rapid expansion in the growing Chinese market as Volvo’s second home market. To be successful in China, Volvo must address several issues: quickly establish...
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... and where relevant ethical concerns. Submitted on December 10, 2010 The internationalization of Renault : a strategy of development in emerging countries Nowadays, Renault is the car manufacturer of reference in France, ahead of Peugeot and Citroën of the PSA group. The Renault-Nissan alliance, established in 1999 and based on two independent companies with their own culture and their own brand identity, is the fourth largest automotive group in the world. After experiencing some difficulties in the 80's, Renault has developed an aggressive strategy of international development that makes it today one of the key players in the global automotive market. By focusing on cultural, political, legal and ethical issues, we will first explain the different stages and difficulties in the internationalization of the group. Then, we will study its different implementation strategies in the several new markets and finally, we will discuss the consequences of the internationalization of Renault. The story of Renault started on the 24th of December in 1898. The society Renault Frères grew rapidly and in 1903, Fernand Renault started to develop the commercial network of the company and created the first subsidiaries abroad – England, Belgium, Italy, Germany, Spain and the United States. However, because of collaboration during the 2 nd world war, the state became owner of Renault Frères in 1945. During this period, the internationalization was started but limited : only some european...
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...Nissan case notes Taking on the challenge - Renaults cash injection 5.4 billion us - Renault would get access to North America and Asia - Nissan would get access to Europe and Latin America - Renault would get access to Nissans’ Engineering and Manufacturing expertise - Nissan would get access to Renaults’ Marketing and Design flair - Nissan had posted global losses in six of the previous seven years. - Nissans 4 out of 43 models were profitable - Daimler insiders afraid of Japanese resistance to change - Renaults credibility - referring to the Volvo merger, fueled by cultural problems. - Renault 44% state owned. - An analyst thought that the DaimlerChrysler cultural problems were nothing compared to if RenaultNissan. - Both Renault and Nissan: Nationalistic and Patriotic - News of Renault-Nissan negotiations resulted in a drop in Renault shares. - Nissans’ problems were evident: • Too many plants (some running at 50% capacity) • 25 expensive chassis (compared to volkswagens 4) • Too many suppliers (3000, compared to 300 at ford) • Too many dealers in Japan. • Japanese Culture: - Lifetime employment - Close ties with suppliers - Renaults STAKE: • The power of VETO, meaning that people were afraid of making changes due to the stakes. Building the team - Cross-cultural challenge (mainly French and Japanese) 1 - Ghosn had one condition: He would have full control, and he did not have to seek approval from France. - And he got to handpick 20 or so executives who would accompany...
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...- Lessons in Post-Merger Integration - Jan Daniel Laufhütte 2304958 Individual Written Case Study Report in Strategic Management IHS-3-422 London South Bank University 17/12/2003 Table of Contents List of Figures................................................................................. i Introduction ................................................................................... 1 1. The changing world automobile industry .............................. 1 2. Reasons for mergers and acquisitions .................................. 3 2.1. 2.2. Daimler-Benzs’ motives..................................................................... 3 Chryslers’ motives ............................................................................. 5 3. The Post-Merger Integration Structure................................... 7 3.1. 3.2. 3.3. Preparations for the merger .............................................................. 7 Integration Structure of DaimlerChrysler......................................... 7 Expected Synergies ........................................................................... 8 4. Cultural Issues ......................................................................... 9 4.1. 4.2. 4.3. Daimler-Benz’s Culture...................................................................... 9 Chrysler’s Culture ............................................................................ 10 Key Integration Problems and Post-Merger Business Culture ....
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...ECON254 THEORY OF THE FIRM. TUTORIAL 5. GROWTH, MANAGERIAL THEORIES OF THE FIRM AND THE ECONOMICS OF MULTINATIONAL ENTERPRISE. 1. Dunning’s Eclectic Theory. Read the following short case study and use Dunning’s eclectic paradigm to explain why IBM has decided to pull out of production of PCs at Zelenograd and revert to exporting. Hint: Dunning’s paradigm argues that firms will set up overseas operations where three conditions hold: • The firm has Ownership advantages – things the firm is able to do particularly well relative to its rivals • There are Locational advantages – there are good reasons why the overseas location is more favourable than supplying from the home country • There are Internalisation advantages – good reasons why the firm will run it’s own overseas operation rather than contracting a third party to produce the good under licence IBM Pulls out of Zelenograd. IBM is considering bending its production of personal computers at Zelenograd, near Moscow, blaming changes in the Russian tax regime for undermining the economic rationale for manufacturing computers locally compared to importing them. Other Western computer manufacturers are also complaining that tax breaks granted to Russian trading groups with connections in the Kremlin have undermined the local market’s price structure. The decision is a serious setback to Russia’s attempts to attract foreign direct investment and reflects the unpredictable business...
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...[pic] Blekinge Institute of Technology Ronneby-Sweden School of Management June 2005 Do organizations have IT Strategies? A Study on how organizations describe their IT Strategies. Masters Thesis in Business Administration (FED 006) Author Stephen Rupia Lyabandi Executive Summary Title: Do organizations have IT Strategies? A Study on how organizations describe their IT Strategies. Author: Stephen Rupia Lyabandi Tutor: Anders Hederstierna Problem: The research problem of this study is lack of insight on how organizations describe their IT strategies in relation to other strategies. IT strategy continues to be a major challenge for Information Technology intensive organizations and managers. Over the last two decades, the way researchers on information systems have viewed and analyzed IT strategy in organizational systems has not significantly been modified. Recent studies show that one of the main problems is that the concept of IT strategy has been around for nearly two decades and although many organizations have been using it, the meaning and reference of the idea remains elusive. Those who have attempted to define it have not reached an agreement. Purpose: The purpose of this study is to define the problem and explore whether organizations...
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... Roll no-40 PGDM(2007-09) [pic] New Delhi Institute of Management, New Delhi. ACKNOWLEDGEMENT The research on “Customer Satisfaction Survey of Maruti Udyog Ltd.” has been given to me as part of the curriculum in the completion of 2-Years Post Graduate Diploma in Management. I have tried my best to present this information as clearly as possible using basic terms that I hope will be comprehended by the widest spectrum of researchers, analysts and students for further studies. I have completed this study under the able guidance and supervision of Dr. Manab Adhikari and my project guide Prof. Anita Saxena; I will be failed in my duty if I do not acknowledge the esteemed scholarly guidance, assistance and knowledge I have received from them towards fruitful and timely completion of this work. Mere acknowledgement may not redeem the debt I owe to my parents for their direct/indirect support during the entire course of this project. I also thankful to my friend who helped me a lot in the completion of this project. RAVINDRA KUMAR PREFACE If we can compare marketing to a long train with a multiple compartment then every bogies represent different aspect of...
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...managed strategic alliances agreement, companies can gain in markets that would otherwise be uneconomical. Considerable time and energy must be put forth by all involved in order to create a successful alliance. It is essential that corporations enter into strategic alliances arrangements with a comprehensive plan outlining detailed expectations, requirements, and expected benefits. ``How can this be?'' you ask. These companies, like many other companies these days, have entered into strategic alliances with their suppliers to do much of their actual production and manufacturing for them. A strategic alliance is ``an agreement between firms to do business together in ways that go beyond normal company-tocompany dealings, but fall short of a merger or a full partnership'' (Wheelen and Hungar, 2000, p. 125). These alliances...
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...China’s Auto Sector Development and Policies: Issues and Implications Rachel Tang Analyst in Asian Affairs June 25, 2012 Congressional Research Service 7-5700 www.crs.gov R40924 CRS Report for Congress Prepared for Members and Committees of Congress China’s Auto Sector Development and Policies: Issues and Implications Summary The automobile industry, a key sector in China’s industrialization and modernization efforts, has been developing rapidly since the 1990s. In recent years, China has become the world’s largest automotive producer, with annual vehicle output of over 18 million units in 2011. China is now also the world’s biggest market for automobile sales. Meanwhile, China’s auto sector development and policies have caused concerns in the United States, from automotive trade, China’s failure to effectively enforce trade agreements and laws, to market barriers and government policies that increasingly favor Chinese manufacturers, which could affect business operations and prospects of international companies doing business in (or with) China. China’s auto industry has developed extensively through foreign direct investment, which has come in the form of alliances and joint ventures between international automobile manufacturers and Chinese partners. These international automobile manufacturers, who generally dominate the higher end of the Chinese market, have focused on making cars for China’s large and fastgrowing market. The domestic Chinese automakers, who...
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...managed strategic alliances agreement, companies can gain in markets that would otherwise be uneconomical. Considerable time and energy must be put forth by all involved in order to create a successful alliance. It is essential that corporations enter into strategic alliances arrangements with a comprehensive plan outlining detailed expectations, requirements, and expected benefits. ``How can this be?'' you ask. These companies, like many other companies these days, have entered into strategic alliances with their suppliers to do much of their actual production and manufacturing for them. A strategic alliance is ``an agreement between firms to do business together in ways that go beyond normal company-tocompany dealings, but fall short of a merger or a full partnership'' (Wheelen and Hungar, 2000, p. 125). These alliances...
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...www.businessmonitor.com Q2 2011 UNITeD KINGDOM AUTOS RepORT INCLUDES BMI'S FORECASTS ISSN 1749-0251 published by Business Monitor International Ltd. UNITED KINGDOM AUTOS REPORT Q2 2011 INCLUDING 5-YEAR INDUSTRY FORECASTS BY BMI Part of BMI’s Industry Report & Forecasts Series Published by: Business Monitor International Production Date: March 2011 Business Monitor International Mermaid House, 2 Puddle Dock, London, EC4V 3DS, UK Tel: +44 (0) 20 7248 0468 Fax: +44 (0) 20 7248 0467 Email: subs@businessmonitor.com Web: http://www.businessmonitor.com © 2010 Business Monitor International. All rights reserved. All information contained in this publication is copyrighted in the name of Business Monitor International, and as such no part of this publication may be reproduced, repackaged, redistributed, resold in whole or in any part, or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written consent of the publisher. DISCLAIMER All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor International accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or...
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...Chapter 1 expanding abroad: motivations, means, and mentalities Case 1-1 Cameron Auto Parts * Alex Cameron got the family biz when graduated in 2001, when the American economy fell into a recession * History * Auto Pact, big three ship car parts between Canada & US, with tariff free * Cameron focus on small engine parts and auto accessories * Car Sales dropped in 2000, because declining North America and entry of Japanese * High pressure for modernization and cost reduction * Operational survival: cut workforce, overtime, part-time, subcontracting * Recovery and diversification * The short-term future seemed positive, but the popularity of Japanese car forced it to diversify * Working as an OEM Cameron did little to be innovative * Alex brought in a team of designers, concentrating on developing products with a wider ‘non-automotive’ market appeal * The first year no progress, Alex lured away a key engineer from the Canadian firm, and mid-2003, developed its own line of flexible couplings * Marketing the new product * Hired eight field sales representatives, stress product quality, service and speed of delivery, but not price. * Financing plant capacity * Increasing sales of flexible couplings required a new separate plant, but the financial position is not strong enough to support it * Foreign markets * Took a European Patent * A licensing opportunity ...
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