Changing Car Industry- Strategic Alliance

In marketing practice, one of the key srategic decisions revolves around building relationships. Today Daimler, Renault and Nissan have announced a very interesting alliance. They aim to share production but also to keep exisiting relationships with Volkswagen. This means that costs of development and generating common parts and technology given the green agenda.

The challenge for all car companies is to meet the challenge of the environmental pressures. This is costly and incurs a high level of risk. Good marketing practice suggests that reduction of risk is key. Therefore this alliance has a number of really positive potential benefits.

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This will build scale and offer huge opportunities for the future. Marketing practice suggests that this in difficult to implement in terms of brand. It will help the partners to increase competitiveness given the costs of innovation. This will push volume and generate lower costs.

“If you have scale but you don’t make scale work for you through sharing platforms and sharing engines and making smart decisions locally, geographically, scale is just complexity and confusion,” Ghosn the CEO of Nissan told a news conference in Brussels.

The brand of Mercedes needs to maintain quality and the use of Renault engines could confuse the market. So the alliance will need careful managment to avoid the problems Daimler encountered when it merged with Chrysler, which ended in 2007

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