Strategic Management - Renault and Matra Case

Essay by SmokanabeachUniversity, Master's May 2005

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Table of contents

I. Background ................................................................... Page3 Ã 4

1) Issues ........................................................................ Page 4

2) Objectives ................................................................... Page 4

II. Matra Diagnostic ............................................................ Page 5 Ã 7

1) "Espace Project" ........................................................... Page 5

2) Matra- Renault Alliance .................................................. Page 5

3) Weaknesses of the company .......................................... Page 6

III. Recommendations of Renault-Matra alliance perspectives .... Page 7 Ã 8

1) Key success factors of future market .......................... Page 7

2) Illustration of Matra Perspectives ................................ Page 8

I. Background

Matra Automobile is owned by Hachette- Matra, a large diversified company with business in aerospace, defence, automation, telecom, publishing and automobile

Automobile is not the main activity of the company and so not the only concern. In parallels it is one of the most profitable activity of the firm since 1994

Moreover since mid 1995's, it is one of the most profitable automobile manufacturers with net profits amounting to approximately 10% of sales (Mainly Due to the success of the Espace, sold by Renault and manufactured by Matra)

Dependence of a portfolio compounded of one product for Matra Automobile

One inventor, P.

Guedon

Espace is a myth, a revolution in the car industry by its design and practical using

But,

Strong direct competitors are entering the market in 1995

Growing market period

Lead to saturation within the future

Jointly- produced model trend, sold under own brand with strong advertising campaign

Ford and Wolkswagen

Fiat and Peugeot- Citroen

Renault-Matra agreement until 2001

1) Issues

- Competition

- Market saturation

- Average development time and commercial life span of a new model is 4 to 5 years

- Environmental issues (Recycling, fuel consumption,...)

2) Objectives

- Define product policy for the years beyond 2000 and reconsider its strategy for the next decade

- Evolution of Matra's alliance...



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