Case Study 3.2: The Failed Merger Between Renault And Volvo Bam Assignment

3279 words - 14 pages

ASSIGNMENT SUBMISSION COVER SHEET
SUBJECT NAME: CONTEXT & REGULATORY FRAMEWORK OF BUSINESS
SUBJECT CODE: BUSI 1332
TITLE: INDIVIDUAL COURSEWORK (CASE STUDY 3.2: THE FAILED MERGER BETWEEN RENAULT AND VOLVO)
PROGRAMME: BA (HONS) BUSINESS MANAGEMENT
UOG ID: 000916491
SEGI ID: SC-KL-00044771
LEARNING CENTRE: SEGI COLLEGE KUALA LUMPUR
LECTURER NAME: MR PRADEEP
a) Based on the study of the proposed merger between the automaker and carmaker, which is Renault and Volvo Company. We can know about a merger is a combination of two different companies that cooperate strategy into a single company and this is in order to expand the operational and financial strengths of these organizations. State about this, Renault is a largest automobile manufacturing in French and Volvo is the company with the largest manufacturers of heavy trucks and buses. Renault and Volvo will merge on 1 January 1994, were announced on 6 September 1993. Here is the SWOT analysis to compare about the strength and weaknesses between these two companies.
Strengths
I. Strong company background: In France, Renault is the largest business enterprise which is manufacturing of automobile and for Volvo was the largest industrial group in Sweden. Both companies are from strong background.
II. Effective production: Renault – Volvo will lead to a much effective of production. Renault produces the numerous numbers of productions of cars every day by their responsibility. Volvo would use the method and processes by transforming the raw material into product of Renault, for increasing the production. With the new techniques and skills, Renault- Volvo can state out the efficient and effectiveness of their production.
III. Job distribution and Allocation: Renault and Volvo will have the division of categories to allocate the technical person. Volvo technician can use their expertise on the shorter duration for help to solve the problems if Renault has facing the trouble. These are the efficient job distribution by the two firms will help to do their job well.
Weaknesses
I. The different of management structure: Renault is a company that which is a greatest control by their top management and it is centralized structure. For Volvo is the decentralized management structure which they are efficiently to make a quick responds for sharing their information. Base on the different structure of management it will cause the decision making will be delay with the reason that 2 companies cannot cooperate in a same decision.
II. The falls in term of the Research and Development (R&D): Renault has falling behind from the entire competitor because of the breakthrough in term of research and development although Renault was expert in the price containment. This will cause the delay of completing with others and reducing the power.
III. Barriers of communication: Renault – Volvo was having the agreement of to cooperate and communicate in English language but is a failure for Renault to do so. Renault is a French...

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