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Strategic Analysis of a Company: Renault


The report has analysed different factors associated with the strategic management of the company and the development of the different  factors in the company. With the help of  PESTLE analysis the macroenvironment of the company has been analysed . Porters’ five forces would help to improve the  effects of  different factors  in the external environment. Renault’s actions  and initiatives to the stakeholders and customers have been recognised in the report. On the contrary, Ansoff and BCG matrices have been used for the development of better understanding about the company’s management and effectiveness of decisions. VRIO has improved the ideas related to the financial resources, distribution, patents and cost structure of the company. After that, the SAF framework was used for the development of  better recommendations and decisions in the market. At the end of the report, different recommendations have been suggested for the development of the company .

Table of Contents


Abstract 2

Introduction. 5

Macro environment 5

Micro environment 7

Evaluation of the organisation’s strategic position. 9

Analysis of the organization’s internal business environment 10

Analysis of the organization’s strategic direction. 14

Ansoff matrix. 14

BCG.. 16

Formulation and critical evaluation of strategic measures SWOT. 17

Critical evaluation of the strategic measures SAF. 19

Conclusions. 20

Recommendations. 20



Table 1: PESTEL analysis. 7

Table 2: Porter’s Five forces of Renaults. 9

Table 3: KPI analysis. 10

Table 5: Ansoff ‘s  Matrix. 14

Table 6: BCG  Matrix. 16

Table 7: SWOT  analysis. 18


Renault  is one of the  renowned automobile companies in the world. The French company has set a benchmark in terms of performance in the market of  internal automobile business. While  the company’s strategic analysis is analysed “RENAULUTION” -the new strategy has been observed. Three phased strategic plan has steps like “Resurrection” , “Renovation” and “Revolution”. The company has created its new strategy to  improve  its revenues and  profits in this competition. Growings Mobility, Oldsmobile , Citroen  international and Mercedes Benz and  Volvo are the eminent competitors for Renaults. With effective  management and developmental strategies, the company   has  created  its popularity among the automobile market . During the  Covid 19 situation, the automobile industry was affected for  some time. However, the company has not faced an impressive performance in the UK. Moreover, the company has decided to improve its  products and services in different types of innovative initiatives. The company  has sold 2.95 ,millions  of  units and the revenue margin of the company would improve by 26624.8% (Renault, 2021).  On the  other hand, the UK automobile  industry was not developed during the pandemic.  The operating income of the company has improved after the withdrawal of  lockdown.   Moreover, this report has analysed the factors in the macro and micro environment factors have been analysed with critical factors. Organisation’s strategic direction and strategic formulation are the factors that would be analysed in this report.

Macro environment

Factors in PESTEL Analysis
Political The UK has modern parliamentary democracy and has importance for the constitutions. Therefore, business expansion and development are not  critical  factors. Political instability due to Brexit would affect the situation for expansion of  business in the country.  The administrative systems are very critical after the implementation of Brexit. Associates and allies in the political association would also improve the factors for business development .
Economic The country has a developed economic condition with a better level of GDP. The country is expected to achieve 6.76% GDP  by the end of 2021.The UK has a diverse  economy so that it can give every country equal opportunities to  grow its  business. FDI of the country is  also better as it has attracted different foreign investment. However, the inflation rate of the country is  also affected  during the current financial year.
Social The country has  a  higher education rate therefore  the company  would get skilled and trained employees. After Brexit the unemployment rate and the need for jobs  have increased therefore the company would get a huge amount of  workforce. Fall of income level might be an issue in terms of selling different products in the   company. The company might not get the proper amount of customers as the number of  new car registrations has decreased in recent years. After lockdown and COVID effects, the income and the intention of the car buying have been affected which would affect the sales of the company.
Technology Appreciation of technology and acceptance of innovation are prevalent among the UK customers. Therefore, the  opportunities for the consumers are high. The country has made  progress in technological aspects. Increased level of education and needs of sustainability practices have improved the options  for the company to extend in this country. Advanced  technological infrastructure would help to improve the company  in gaining better revenue.
Environmental The UK has improved its environmental laws therefore  the company might face some issues in maintaining sustainability for nature. Local and national authorities have taken different eco-friendly initiatives which might not be a good sign for the automobile company. Due to the COVID  pandemic, tourism across the world has been affected and the use of cars has been changed for  improvement of sustainability and this might be a threat for the company.
Legal Different laws and regulations are present in the business environment of the UK. So that the employment acts and policies would be developed with the support of administration. Equality act and tax policies should be considered by the company to avoid critical legal situations.

Table 1: PESTEL analysis

Source: (Inspired by Song, Sun, & Jin, 2017)

Micro environment

Five forces  
Competitive rivalry ·         Renault faces huge competition in the automobile industry with automotive manufacturers like Nissan, Honda, Ford and Chrysler. ·         In this industry, the competitive actions amongst Renault and other companies are less. This is because no company needs to capture market share from each other. Companies with higher positions become market leaders. This nature of the automobile industry brings in a stronger force of rivalry within the firms. ·         Renault operates in an industry where the fixed costs are high naturally. This nature forces the firms to reach their full capacity and lessen the price of products when the demand slackens.   
Bargaining power of suppliers ·         Renault dwells in an industry where the bargaining power of suppliers is weaker compared to the buyers’. The suppliers of this industry have failed or have less control over the prices. ·         The raw materials used in the automobile industry, including paint, glass, plastic – are standardized products. As the input materials are not differentiated the switching costs are also low. This lessens the bargaining power of suppliers. ·         The industry itself is the customer for the suppliers which lead them to imply reasonable pricing over the products. This dependency on the market makes the bargaining power of suppliers weaker.  
Threat of new entrants ·         The products in the industry are differentiated within the firms because customers also look for differentiated products. This nature prioritizes customer services and advertising. These factors weaken the threat of new entrants in the industry. ·         As Renault has a strong distribution network, it is easier to launch new entrants by setting up new distribution channels. The product types are rare in the other firms that help the new entrants to get popularized and desirable amongst customers. This makes the threat of new entrants a stronger force. ·         The economies of scale play a vital role in the industry where Renaults dwell, as the price of production might be higher for the new entrants. But with its advantageous economies of scale Renaults can fight with new entrants of other firms using its cost advantage.  
Bargaining power of customers ·         The number of suppliers is less in the automobile industry that forcing the customers to rely upon a few existing firms for a better quality product. The customers do not have control over prices. With a huge customer base, Renault can lift the burgeoning power of customers. Renault can make the weak force a stronger one through the marketing strategies to create brand loyalty. ·         In this industry, buyers focus on the quality of the product more than the cost of that product. This proves that customers are less price sensitive. This makes the bargaining power of customers a weaker one.  
Threat of substitutes ·         As the market does not have many options for substitute products, Renault can differentiate its products compared to the other firms. This will help them to make a better customer base. Through market research, they can reach the desires of the customers regarding the products and can make unique ones with no substitute available in the market. ·         The cost-effectiveness will also help Renault to beat the threat of substitutes in the industry. Making better quality products at a reasonable price, less than the other firms dwelling in the market will help Renault to reach buyers and increase its customer base.  

Table 2: Porter’s Five forces of Renaults

Source: (Inspired by Khurram, Hassan, & Khurram, 2020).

Evaluation of the organisation’s strategic position

KPIs Analysis
EBITD / share Reuter’s EBITD  is 23.29 which is less than Mazda’s value for the EBITD is 55.28 (Editorial, R. (2021) . Therefore, the  company has  to  improve the  operating profit with the sales and revenues (, 2021). Therefore, the factors in the operating  ratio should be  improved properly.
P/B ratio The company has 0.34 as  P/B ratio but Mazda’s P/B is 1.73 (Editorial, R. (2021)  therefore, it can be said that the company might improve its price  to book ratio as per the industry requirement. 
Net liquidity (current ratio) Mazda’a current ratio (3.41) is better than the Renault’s (1.07) therefore  this company should improve the  share pricing and the sales in a proper way to improve its performances (Editorial, R. (2021).
Management’s efficiency (Price/ sales) Mazda has the ratio of price to ratio is 1.63 and 0.18 is the price to sales of Mazda. Therefore, the price to sales ratio would be  improved in Reuters. On the other hand, the factors would analyse that the company has better results in the management efficiency.
Debt to equity Annual debt to equity of the company is 259.75 whereas the KPI in the Mazda is  0.88 (Editorial, R. (2021). Therefore, the chance of  solvency in Reuters is high in compared to Mazda. 

Table 3: KPI analysis

Source: Self-created

Analysis of the organization’s internal business environment

  V R I O Analysis
Financial performance Yes Yes Yes Yes Financial performances and resources are related to better external  investment opportunities in the market. The company has strong financial resources that could be observed in very few companies. Prolonged profits and popularity of the company would improve the financial resources.Captured value of the company has been identified as the financial resources in the company.   
Distribution Yes Yes No Yes The company has a worldwide distribution market, therefore, it is  critical to imitate the distribution. Prolonged performances in the market would be valuable for the company to  expand in a global approach. Use of  networks to reach out to different global customers. 
Patents Yes Yes No No Patents are valuable for the development of exclusivity in brand. Therefore, designs and models of the company can be secured. Patents of Renaults might be considered as an intangible resource. The intellectual property of the company is related to patents.These are not easily available in the market so that the company should be careful to the patents.   
Employees Yes Yes No Yes Employees are one of the most important factors in a company’s  perspective.Trained employees can improve the factors associated  with the performance of the company.  Employees should be retained with a proper salary package and compensation.
Cost structure No No Yes No Cost structuring in the company  is weak as compared to the competition. Production and development of the company would help to  improve the performances of the company. The cost management of the company would be affected with different issues in strategic planning and management.

Table 4: VRIO analysis

Source : (Inspired by Elias & Farah, 2020)

Renaults has focused on  the development of a circular economy, therefore, the company might have  improved its financial resources. Moreover, the stock price of the company is 28.93 in 2021 ( 2021). Therefore, Renault has to improve its performance in the share market as its price is dropping. Poor condition of the European car market affected the factors associated with the financial resources. Therefore, the company should improve its strategic management. On the other hand, employees in the company are valuable. 179,565 employees are associated with the company (Renault, 2021). The huge workforce would help to improve the factors in the development of better profitability. However, the company has cut down 15000 jobs while restructuring (BBC, 2021). As an initiative of cost cutting management, the company took this decision. Alliance with Nissan affected the unity among employees. HRM management of the company  has  been affected  due to the effects  of the external environment of the market.

Patents for the hybrid car models in Renaults are emphasized with greater quality management  and  customers needs (Čirjevskis, 2021). Therefore, to compete with the  other companies like  Mercedes and Toyota , the company has created its  own mark on the design and modeling. The easy to park system is  one of the most creative designs in automobiles. Renault has focused on the  cost-structuring with the help of  different factors like  line-up optimization, parts diversity and commonalization. The organizational costs have been rationalized with the subcontractors base, RTX utilization and digitalization of different processes. The improvement of the cost structuring has a different impact on employment, manufacturing   and technological implementation.  Therefore, it can be said that the company has to  manage the above mentioned factors in the development of better cost structure and  optimization of the company  design.

Analysis of the organization’s strategic direction

Ansoff matrix

Market penetration Product development
Strong market investment Engaging communication with stakeholders (Renault, 2021)Amplified distribution network Better competitive pricing Operational cost  cutting for high affordabilityJoint ventures and alliance with renowned companies like Nissan   Launching new products Strengthening presences of 5 brands such as Renaults, dacia, Alpine, RSM and LADA (Renault, 2021)Betterment of existing products New product launching Better research and development Strategic partnership  for new products  
Market development Diversification
Strong brand awareness New customer segmentsRegional expansion  International  market strengthening    Hybrid and electricity regulated models Future relevant model line up Diversified  marketing and pricing policies Merger and acquisition (M&A) in the different regions      

Table 5: Ansoff ‘s  Matrix

Source : ( inspired by Dawes, 2018)

The company has improved different types of strategies to  maintain the financial status and  development of  different  products  for  betterment of the company.  In recent  years, the  automobile market  of the UK has declined because of the effects of  COVID. Moreover, Renault is trying to establish it as the  greenest automobile company  in the UK market. However, the alliance with Nissan was ruled out due to some organizational  differences (CNBC, 2021). As a result, market acquisition was affected  by the company.

Fig : Sales in different regions by Renaults

Fig : Sales in different regions by Renaults

Source : (, 2021)

 In the modern world, the company has focused on sustainability  performances in the market. With the changing approach for M&A or market trend, the company has shifted its focus in the market segments (Sukma, Lubis & Utami, 2019). With the diversification of  products, the company  has improved its manufacturing units  for the development  of sports cars in the market.  In poor market performance of the company, Group Renault’s models in EV segments were renovated to achieve the EU’s CO2 fleet with the average target of  2020. The company has expected  different v renovation and  innovation  in the market development. Electrification and lifetime value are provided by the company in the market. Best segmentation in reconquering for  C-segment and  defending B-segments would  be  provided  by the company by 2025. As an example of product diversification , Dacia has launched the  most cost effective model called  “Logan”. On the other hand, 1.8 million and 2.2 million models  of Duster and Sandero were sold in 2019. Moreover, there are different types of models are included in the management


Stars Question mark
Renualt PC+LCVLada Mobilize Alpine DACIA
Cash cow Dog
RENAULT SAMSUNG MOTORSAutovazZoe JinBei  & huasong Group renault

Table 6: BCG  Matrix

Source : (Inspired by Chiu, & Lin, 2019)

During 2020, the passenger cars and light commercial vehicles have performed in terms of sales. However, the Grope Renault brand was severely impacted in the business. The electrical vehicles like Mobilize and Autovaz  performed well in the market with an increase of 14% sales. Among Renault brands, Clio was the best selling vehicle category in Europe. On the other hand, Dacia fell by 31%  worldwide in terms of sales (Torquati, 2018). LADA has  improved its market  with better performance and high growth in the market. Electric vehicle brands are promoted by the company with higher intensity so that a fast-track development would be observed (Čirjevskis, 2021). Alpine was  relaunched in the  presence of Nissan by the company . According to a report of (2021), sales of cars of groupe Renault fell by 21% but the range of sales was developed in the Electric Vehicle market.

Figure : Market declination of combustion engine

Figure : Market declination of  combustion engine

Source : (, 2021)

The company focused on the sales development of the market of the new brands in the market. Moreover, the image of the business  will be  developed with the  new hybrid and with the  electric regulated vehicles. On the other hand, development of new models are emphasized in the automobile market.  Renault Dacia was launched in the UK to  imp[rove the company’s performance in better market  management. The company has faced losses in the section of JinBei  & huasong brands. Therefore, different strategic development in the company for maintaining the sales and marketing in the country. In the UK, Renault also expanded its products like Clio, Megane and Captur in the Group  Renault section but the products were not successful in the market . As the company sold  more than  30000 hybrid models , 25%  fall could be observed in the  models of  Group Renaults.

Formulation and critical evaluation of strategic measures SWOT

Strength Weakness
Strong presence in the European market Strategic alliance with  Nissan Offers different types of products  Present in more than 100 countries Higher technological integration in the stems and  operations   Inappropriate cost structures Withdrawal  of models affecting popularity Brand image is weakening  Poor market presence in Northern America  
Opportunities Threats
Investment in the hybrid modelsSustainable development with the electric  vehicles  Extensive distribution network in the market Political instability in the UK Inability to maintain the balance in economyLower range  of business for different models Natural phenomenon  like  COVID waves  

Table 7: SWOT  analysis

Source  : (inspired by Vlados, 2019)

From the report of  Renault (2020), it was observed the company has a strong presence in the European continents and in other continents also. Moreover,  technology, productivity and generation of new ideas  would be associated with the development of better quality production and manufacturing. The  company  has developed  its  production in different locations for better production. Moreover, investment in hybrid and electric  vehicles would help to improve  the profitability in the company (GURL, 2017). In addition to  that, Ranualation  or better strategic development would help to  improve better production in the market.  Systems and softwares are developed in the company for better sustainability in the company with high quality sales mix in hybrid cars and EVs. With the help of data and AI, ASAS or AD softwares, alliance cloud networks and cyber securities would be  related to the betterment of the services.

Strategic Analysis of a Company

On the other hand, the company has faced different issues in the  external environment  which  can be  used  as threats. For example, during the covid pandemic the company  has  faced a huge  amount of  loss  as  the  automobile  industry of the entire UK declined  that  time. Due to the financial crisis , the company might be affected by different factors like poor performance of different models in the market, inability to maintain the  balance  in the circular economy and weakened brand image due to high competition. Most importantly , the company is unable to impact the USA market and different American countries as well.  On the other hand, withdrawal of different models would affect the brand image  of the company.  Moreover, cost structure would  be affected with  poor planning and designing in the company.  Moreover, there are different factors like pricing and shutting down of the factorsines  might affect  improvement of the company.

Critical evaluation of the strategic measures SAF

Sustainability : The company has focused on different factors like eco-friendly models in the market. Evolution of  different models for Renaults would be  better for  higher sustainability and mobility. Moreover, it has been  observed that the company  would  help to  improve the hybrid and automated car models in betterment of the company. There were  differ t issues such as  pricing  and  sales  drop  in the  market . Therefore the company has improved the manufacturing of different cost-effective EVs for the European regions. Moreover, the company has revised different models for the betterment of the profitability and sales volumes in the developed market. Moreover, factors in the company like affected brand image and poor brand positioning could be observed in post-COVID scenario of the  company.  As a solution to different issues in the company, factors like poor cost-structures and pricing would be affected in the  company. To get better sustainability,  proper presence in the USA would improve the profitability of the company (McAlpine et al. 2019).  Different federal laws and regulations are not followed by the products of  the company. Therefore,Renault is losing different opportunities to grow in the market.

Acceptability :  Moreover, there were different types of initiatives like hydrogen fueled commercial vehicles in the UK market. Deploying all sustainable models in different brands  would improve the value of the brand. On the other hand, Economic sustainability would help to  improve the supply chain and relations between customers  and the company. With the financial  management  the company is  trying  to  sustain the relationships with the stakeholders. Cost-structure can be developed  by the company. To optimise the condition of the market, the company should  improve different factors like circular economy leaderships and emission control. Upcoming models of the  company are  intended to improve emission rate by  30% within 2030 ( Retrieved 4 December 2021).  Digital supply chain in the company would help to improve the management with a more sustainable model development in the UK market. With the help of  CAFE standards, different sustainable development would help to  improve the  emission control factors and this  would improve the brand image of the company.

Feasibility: The company has a huge  workforce in and outside of Europe. Moreover, Renault is trying to penetrate the market  in Asia. Therefore, the company  would get better options  for a high quality labour force with cheap  pricing. The company has focused on cost-effective strategic management so that they could provide better options at lower prices.with a strong strategic positioning and alliances, supply chain  and labour issues can be resolved. Moreover, the factors in the development of sustainability would be improved with better strategic alliances and partnerships. To improve the  cost effective marketing and product development in European markets. With the help of proper resources and development of scopes, Renault can penetrate and improve the performance in the USA market.


The report has analysed different factors associated with Renaults with the help of applying SWOT, PESTLE, VRIO , Ansoff and BCG matrix. The report has analysed different factors in the product development and  diversification. Market penetration issues and  drawbacks in the current markets have been identified in the report for the development of better strategies and management. With better strategic management and development in the company, Renault  would help to  improve the market positioning in the UK market. The  company’s performance and future goals have been analysed in this report with specifications and detailing. Moreover, factors related to demand and growth of the company have been analysed  in this report. On the other hand, the SAF framework has found out the issues in  the company and whether the company has the potential to overcome it.


The company can improve its development or manufacturing section  so that it  would  help to  provide the products like sustainable Two-wheelers and trucks in the existing  market as well as the medium of  market penetration.  Both sustainable  two-wheelers and trucks  are very popular for the development of better marketing strategies in the UK market.  It would be beneficial to enter into the market of  Northern america also. In the UK market, Cost-effectiveness and brand image can help to gain a better level of profitability in the market.

Analysis On External Judicial Practice And Internal Governance Mechanism

Shareholders for the strategic management are manufacturers, designers, R&D team, employees , factory workers, supply chain managers, company authority, transporters and government.  With the help of a strong R&D team, the manufacturing and designing of the models would be able to make sustainable  two wheelers. The company authority might hesitate about the innovation. The suppliers and transporters would be in a  profitable position. If the policies and regulations of the government are met with the launch of new models, the government would be interested in allowing the company’s innovation. Political tension and issues might affect expansion of the business. On the other hand, the company would get a better chance of expanding its market in the land of America.  In  post-covid era,  issues related to sustainability have been  emphasized by the business leaders and administration also. Therefore, this innovation would definitely improve the factors of expansion.

Therefore, in a board meeting,  these recommendations might be suggested as these are not only impactful on the development of the market in the USA. Electronic two-wheelers would improve the acceptance of the brand in wider customer range irrespective of  country if  the cost-structure is effective.



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