Recommendations of Renault-Volvo Strategic Alliance (A): March 1993 Case Help

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Recommendations of Renault-Volvo Strategic Alliance (A): March 1993 Case Study Solution

RecommendationsOn the basis of above internal and external analysis of the company together with the examination of numerous alternatives, the company is recommended to consider alternative 3. As alternative 3 would permit the company to expand in international markets with no decrease in its local profits and any degeneration of its market position. By thinking about Alternative 3, the company might keep its shop experience and brand name individuality. It might also think about alternative 2 that might permit the company to access the markets without any potential investment. The business might pursue alternative 1 which would enable the company to focus on potential international markets rather than the local markets but as the company is highly dependent on the regional markets with 90% of its stores in the US, there fore pursuing alternative 1 would result in the significant decline in business's income. The business is advised to consider alternative 3.

Aletrnative-1: Expanding International Brick and Recommendations of Renault-Volvo Strategic Alliance (A): March 1993 Case Solution Stores

International SegmentsGrowth towards worldwide markets through opening new shops in other Europe and Asian nations with closing domestic stores is although an excellent alternative for increasing the global presence of the business. However, the closing of domestic shops might highly affect the earnings of the firm as above 90% of its stores are located locally and closing those shops would ultimately lower the earnings of the company. Moreover, the company has a long term market position in US which can not be created soon in the new markets. The choice would help the business to expand in international markets along with the elimination of issues raised in its local markets connected to its diversity. The benefits and drawbacks for Alternative 1 are listed below;

Pros:

• Expedition of brand-new global markets.
• Boost in revenue from global markets.
• Removal of problems associated with diversity.
• Profits diversity.
• Step towards being a strong international brand.

Cons:

• Loss of comprehensive earnings from the local markets.
• Increase in competition.
• Distinctions in cultures could caused a failure of the brand especially in Asian countries.
• Low profits at initial levels.
• Increase in marketing expenses to acquire market share.

Alternative-2: Introduction of Click and Recommendations of Renault-Volvo Strategic Alliance (A): March 1993 Case Solution Stores

With the increased patterns towards online shopping, the online shops like Amazon, Alibaba and so on might posture a serious danger to the market share of company. In this scenario the company could think about presenting Click and Recommendations of Renault-Volvo Strategic Alliance (A): March 1993 Case Analysis shops. These stores with a low requirement of funds to settle would allow the business to reach international markets, without ending its domestic stores.

Pros:

• Low financial investment
• Reducing competition threat
• Access to the world markets
• Enlarging consumer base
• Easy to manage
• Big Incomes
• Low Operating Expense
• Easy new market entrance

Cons:

• Hazard to the marketplace position
• Removal of brand Individuality
• Removal of the fantastic shop experience.
• Danger of decrease in elite sales.

Alternative-3: Expansion towards International Markets Without closing Domestic Stores

Another option that the company might consider, is to broaden towards the global markets without closing its domestic shops that adds to the major part of revenues of the company. The advantages and disadvantages related to Alternative 3 are offered below;

Pros:

• Lowering competition threat
• Access to the world markets
• Enlarging consumer base
• Big Profits
• Expedition of new international markets.
• Increase in earnings from worldwide markets.
• Profits diversification.
• Action towards being a strong global brand.

Cons:

• Extension of concerns related to variety.
• Differences in cultures could led to a failure of the brand especially in Asian nations.
• Low earnings at preliminary levels.
• Boost in marketing expenses to get market share.



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