can i have answer for this 3 qustion into the case below about the renault-nissa

Question

can i have answer for this 3 qustion into the case below about the renault-nissan alliance collaborating to succeed

if the photo not clear just open this link paje for case 261

https://books.google.iq/books?id=TO5LIILHmcYC&pg=PA261&lpg=PA261&dq=the+renault-nissan+alliance+collaborating+to+succeed+case&source=bl&ots=W8_O-KKi7H&sig=KNuOpz0GgKg7gCVfGiHE6nJRLEM&hl=ar&sa=X&ved=0ahUKEwiLnpSjqZDNAhUGX5QKHV-CCL8Q6AEIPDAE#v=onepage&q=the%20renault-nissan%20alliance%20collaborating%20to%20succeed%20case&f=false

the qustion

1-In your opinion, how could cooperative strategy help firms like Nissan and Renaults create competitive advantage? And how to sustain the “integrated competitive advantage”?

2-Why horizontal complementary strategic alliance at business level is important to firms like Nissan and Renault?

3-From your experience, what are the cultural challenges that will impede the cooperative strategy success?

THE RENAULT Marcnz is the day the almance between French-based Renault and Japan based Nissan was formally launched. At the NISSAN ALLIANCE: COLLABORATING TO SUCCEED time the alliance was formed, each of these firms lacked the size necessary to develop economies of scale and economies of scope that were critical to offorts to succood in the 1990s and beyond in the global automobile market. The alliance the two compa nies formed finds them holding ownership stakes in each other; the larger of the two companies, Renault has a 44.3 percent stake in Nissan while Nissan has a 15 percent stake in Renault. Brazilian-born Carlos Ghosn serves as CEO for both companies. Three values guide this corporate-level synergistic alliance (we discuss this type of alliance later in the chapter): (1) Trust (work fairly, impartially and professiona lly), (2) Respect (honor commitments, liabilities, and responsibilities), and (3) Transparency (be open frank, and clear The Renault-Nissan alliance is recognized for its success. The firms' decision to estab- lish Renault-Nissan B.V., which is a strategic management company that is responsible for creating common strategies for the companies and for facilitating and managing synergies resulting from combining some of the firms' respective reso urces, capa ties, and core competencies, is a key reason for the alliance's success. Also supporting the management of this alliance is a number of committees with mem bers from each company. These individuals are expectod to do every thing possible to integrate the firms resource portfolios for the purpose of creating products customers wil value and that will contribute to the firms' profitability bili- Cooperative strategies such as the one formed at the corporat ULT NISSAN l between Renault and Nissan ara increasingly important to firms; but firms form many types of cooperative relationships in addition to corporate- level ones. Moreover, an indlividual firm's set of cooperative relationships can be complicated, as the Nissan and Renault alliance demonstrates. In addition to their corporate-level all ance, Renault and Nissan have each formed horizontal complementary strategic alliances at the business unit level with other companies. (We discuss several types of business- unit level alliances in the chapter) For example, Nissan and Mitsubishi Motors Corporation formed a joint venture (called NMKV Co, Ltd.) to produce minicars for the Japanese market. The cars are to be introduced in 2012 and are being manufactured in a facility the venture built in Thailand. This venture was formed for the purpose of uniting the strengths of Nissan and Mitsubishi in the areas of vahicle engineering, development and parts sourcing, as part of an overall strategy to bring now minicar products to market. Additionally, the firms are discussing the possibility of using this rolationship for the purpos ing of collaborating to develop electric vehicles as well. Ghosn sees electric vehickes as a pillar to future strategies for both companies. RENAULT NISSA The successful Renault-Nissan alliance is built upon three standards-trust, nespect, and transparency

Explanation / Answer

Competitive advantages give a company an edge over its rivals and an ability to generate greater value for the firm and its shareholders. The more sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage.

There are two main types of competitive advantages:

A ‘strategic alliance’ is a cooperative strategy in which firms combine some of their resources and capabilities to create competitive advantage.

Firms achieve strategic competitiveness and earn above-average returns when their unique core competencies are effectively acquired, bundled and leveraged to take advantage of opportunities in the external environment in ways that create value for customers.

Over-reliance on internal resources, which change more slowly than the external environment, can indicate a core rigidity preventing the firm from integrating internal and external resources to gain competitive advantage. Understanding how to leverage unique bundles of resources and capabilities available in the internal and external environment is the key to competitive advantage.

‘Cooperative strategy’ is a strategy in which firms work together to achieve a shared objective. Among other benefits, strategic alliances allow partners to create value that they couldn’t develop by acting independently and to enter markets more quickly and with greater market penetration possibilities.

Strategic alliance: cooperative strategy in which firms combine resources and capabilities to create a competitive advantage

Three types of strategic alliances

Joint venture

Equity strategic alliance

Nonequity strategic alliances, which include:

Joint venture: two or more firms create a legally independent company to share resources and capabilities to develop a competitive advantage

Optimal when firms need to combine their resources and capabilities to create a competitive advantage that is substantially different from individual advantages, and when highly uncertain, hypercompetitive markets are targeted.

Equity strategic alliance: Two or more firms own different percentages of the company they have          formed by combining some of their resources and capabilities for the purpose of creating a               competitive advantage

Many foreign direct investments, such as those companies from multiple countries are making in China, are completed through an equity strategic alliance

Nonequity strategic alliance: two or more firms develop a contractual relationship to share some            of their unique resources and capabilities to create a competitive advantage

Separate independent company NOT established, thus no equity positions: less formal, fewer partner commitments, and intimate relationship among partners is not fostered

With Renaults strategy for competitive strategy:

The two basic approaches to managing cooperative strategies are:

In the cost-minimization approach, the firm develops formal contracts with its partners. These contracts specify how the cooperative strategy is to be monitored and how partner behavior is controlled. The goal of this approach is to minimize the cooperative strategy’s cost and to prevent opportunistic behavior by partners.

The opportunity-maximization approach focuses on a partnership’s value-creation opportunities. In this case, partners are prepared to take advantage of unexpected opportunities to learn from each other and to explore additional marketplace possibilities. Less formal contracts, with fewer constraints on partners’ behaviors, make it possible for partners to explore how their resources and capabilities can be shared in multiple value-creating ways.

Firms can successfully use both approaches to manage cooperative strategies. However, the costs to monitor the cooperative strategy are greater with cost minimization, in that writing detailed contracts and using extensive monitoring mechanisms is expensive, even though the approach is intended to reduce alliance costs.

REASONS FIRMS DEVELOP STRATEGIC ALLIANCES

Explicit collusion: Direct negotiation among firms to establish output levels and pricing agreements that reduce industry competition. (Illegal)

Tacit collusion: Indirect coordination of production and pricing decisions by several firms, which impacts the degree of competition faced in the industry.

Mutual forbearance: (tacit collusion) Firms do not take competitive actions against rivals they meet in multiple markets.

Cultural challenges that will impede the cooperative strategy success

Partners may choose to act opportunistically

Partner competencies may be misrepresented

Partner may fail to make available the complementary resources and capabilities that were committed

One partner may make investments specific to the alliance while the other partner may not

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