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Assessment Brand Management

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STRATEGIC MANAGEMENT ASSIGNMENT II INDIVIDUAL WRITTEN REPORT ANALYSIS BY 200911488 CONTENTS PAGE: Introduction 3 Summary 4 I - Renault Plan 2009 5 II - Renault Findings 6 A) Profession 6 B) Strategic Business Unit 6 C) Renault's Models 7 D) World Market 8 III - Industry Environmental Analysis 9 A) External 9 ? PESTLE Analysis 9 ? Future Scenarios 10 B) Internal 11 ? Porter's Five Forces 11 ? Future Scenarios 12 C) SWOT Analysis 13 IV - Renault Plan 2009 Strategies 15 A) Innovation Strategy 15 B) Alliances & Acquisitions Strategy 15 C) Profitability Strategy 16 V - Resources and Capabilities 17 Discussion 19 Recommendations 20 Conclusion 21 Bibliography 22 Introduction In order to manage its growth and resist well to the crisis, Carlos Ghosn, Renault CEO, established the "Renault Plan 2009" in 2005, namely an offensive strategy of international development which aims to become one of the first three world brands. Indeed, having known some difficulty in the 80s, Renault today is one of the key actors of the world automobile market. Present in 118 countries, the company Renault is the first car manufacturer in France in front of the brands Peugeot and Citro´┐Żn. In the same time, Renault is one of the first passenger & commercial car manufacturers in Europe and leader in Romania and in Morocco, thanks to its Low-Cost car, Logan. Since its alliance with Nissan organized in 1999, with total respect for the identity of each brand, the group is the fourth in the world rank of the biggest automobile groups today. (Appendix 1) This fast progress was made on one hand, by the development of the international sales, and on the other hand, by the increasing internationalization of the productive device of the group. Indeed, the acquisition of the Romanian manufacturer Dacia in 1999 allows Renault to have a present new brand on the markets of the Eastern European countries, facilitating the international development of the group on emerging markets. ...read more.


Thus, the partnership system obliges the suppliers to satisfy in the best way their customers if they don't want to be substituted. From a buyer power point of view, diversified choices which is offered on the market puts the customers in a strong position. Indeed, the buyer can choose his car according to the dimensions, the manufacturing country, the price, the style of body... However, it is the manufacturers who created this situation by their desire to present competitive advantages. Furthermore, the current economic circumstance doesn't encourage the customers to buy a car thus negotiation power of companies become weak. At last, industry rivalry represents the last factor. Number one in the world, General Motors regroup seven brands (Appendix 4) in order to assure its presents on all markets. For example, In Europe, GM exists with two brands, Opel and Vauxhall, but doesn't represent a huge threat for Renault in this continent. Ford Company, its main American competitor and fourth in the world rank, has know a 20% decrease of its turnover en 2008 against 7% fall for Renault. Concerning Volkswagen, first European group and third in a global market, the company differentiates itself by its excellent technical, its redefining of the brands and its rise rang in particular with its specialist brand Audi. Besides, with the Skoda, Volkswagen is the principal rival to Renault's Logan in Romania. Regarding the main Renault French competitor, Peugeot Citroen develops a strategy based on three axes: growth, innovation and profitability. This last one, strongly look like to Renault Plan 2009 Strategy. At last, Toyota proposes reliability cars and possesses leading industrial infrastructures. The company is very successful in term of technical innovation and has good reputation in term of environmental with the first hybrid car, Prius. Japanese's company appears as being the main competitor of Renault in ecology. * Future Scenarios These next ten years will see probably the important development of the Asian car industry. ...read more.


Hence, Renault partnership with Cherry maybe envisaged especially since Cherry has particular knowledge on Chinese market and Logan will be appropriate to its segmentation and the emerging market. Otherwise, Renault can adopt the same marketing strategy than in Mexico namely the Logan's sale via its partner Nissan. Concerning the others emerging market specifically Brazil, Russia and India, Renault should strengthen its position on these markets because they represent "the future". Renault has a competitive advantage with Logan and has to continue to conquer new countries because this differentiation's strategy allows gaining market shares. However, Renault also must continue to innovate around Logan because of new competitors such as Volkswagen or Toyota gradually arrives on this segment with similar projects. On the other hand, the company should pay attention to not damage its current image with the low-cost segment. For that purpose, it has to invest in news technology in order to keep a position on the up-market mainly for its development in Europe especially in France. At last, the Renault Plan 2009 having been falsified by the crisis, it would be smart to set up a new plan, based on the same features and applicable as soon as the economy will be better. Indeed, this kind of objectives, even if they are ambitious, gives a strategy's direction to the company and allows it to be better in the worldwide. Conclusion To conclude, automobile industry is the first victim of the current crisis due to the rise of raw materials and fuels' prices and to the decline of the households' purchasing power. With these factors, it was difficult for Renault to achieve correctly its Plan. However, Renault managed its international expansion thanks to its strategy of alliance and acquisition. In fact, the repurchase of Dacia allowed the Logan which knows a huge success and represents a growth model for the company in particular in emerging countries. Regrettably, this car is not still present in China although this country has a strong potential of growth. Thus, the strategy elaborated by C. Ghosn drive gradually Renault towards the way of success. ...read more.

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