Question

Use Nissan-Renault strategic alliance as an example to discuss the pros and cons of developing a strategic alliance.

Answer 1

A Thumbs Up! Would be really helpful for me. If you have any questions, please leave a comment and I will get back to you as soon as possible.

A strategic alliance is an agreement between two parties or two company's working together to complete their mutual objectives. It is a mutual combination of working together but it does not count as a legal partnership or legal entity. The motive of strategic alliances to increase the sale of the companies and try to achieve positive growth for their respective companies. If we talk about Renault and Nissan then these both companies are car manufacturing companies that are having a great share in the market and doing really well in the current scenario. Nissan is having a great market share in the United States and in Asia and if we talk about Renault then it is having a great share in Europe and the benefit they will get after getting merged is that they can have a big market share in different countries around the world which will help them to increase their share and their profit as well. Moreover, merging of these companies will make these companies more strong with more technological power with them and it will have a great impact on their customers they will get to see something really new and creative from these companies together. Merging together can increase the cost of the product they are about to launch because they also have an agreement and various new technological products have been added so it will increase the cost of the product which will be quite expensive to afford for there customers. Nissan company can have more power than another company which can result in failure of merging together and this can fail an idea of getting together for an agreement to do something good for society.