This paper presents a comprehensive five-year strategic plan for Renault, the French multinational automobile manufacturer. It outlines a decision-making structure, selection criteria, and a core strategy centered on developing low- and medium-priced vehicles in lower-cost countries, particularly in Central and Eastern Europe. The paper defines Renault's vision, mission, and measurable objectives — including relocating production plants, launching new models, increasing revenues by up to 15% annually, and cutting costs. It concludes with a detailed implementation plan covering site analysis, facility investment decisions, employee training, marketing entry, and a monitoring and feedback framework to track progress against stated goals.
Renault is a French automobile manufacturer and one of the largest and most well-known in the world. It has been developing both lower-priced models — often by acquiring existing producers in developing countries — and luxury vehicles. The central challenge for Renault is its capacity to adapt to changes in the external environment, including rising fuel prices, the continuous consumer demand for new vehicles featuring better technology and greater comfort, and competition from numerous other producers with comparable histories and market positions.
This report aims to provide a five-year strategy that Renault can use in its future development, taking several key elements into consideration.
There are two distinct parts to the decision-making structure. First, proposals for a new strategy will be received bottom-up — from the working levels of the organization toward a selection committee composed of decision-makers from different departments. This committee would include the Head of Human Resources, the Head of Finance, the Head of Production, and senior decision-makers such as the Senior Vice-President for Marketing and the Senior Vice-President for Budget and Finance. The aim is to streamline the selection process while also ensuring a sufficient volume of proposals from working-level employees — those most directly in contact with markets, consumers, and suppliers.
Once management has agreed on a set of strategies, these can be presented and discussed in a referendum-style process with the company's shareholders. The assumption is that strategy proposals will have already taken into account other relevant stakeholders — such as consumers, producers, and suppliers — and that by the time proposals reach the decision-making committee, these perspectives will have been factored into the evaluation criteria.
The company will need to consider several internal and external factors in order to build a proper framework grounded in relevant criteria. First, an obvious objective for Renault is to grow its profits and revenues, which means that projected revenues should be one of the criteria. Costs should also serve as a criterion — including the cost of implementing the strategy and any opportunity costs. Costs are particularly important because they affect both the company's ability to remain competitive and its overall financial health.
Human resources, and the impact of the strategy on the workforce — both current and future — should constitute another criterion. The long-term competitiveness of the company will depend heavily on the quality and capability of its human resources and how well they are trained and managed. This means the strategy will need to dedicate a substantive section to human resources, addressing how management plans to integrate the workforce into the new strategy and how roles and responsibilities will evolve during implementation.
Market impact is a fourth criterion. Relevant considerations include the projected number of new consumers, changes in market share, and the effect on competitors. A successful strategy must ultimately increase market share as the foundation for the company's future growth.
Finally, the environmental impact of the strategy should also be evaluated. Consumers are increasingly aware of concepts such as sustainable development and environmental responsibility. A strategy with a significantly negative environmental impact could damage Renault's relationships with key stakeholders and harm its public image.
Renault's strategy is based on concentrating the company's development efforts and resources on low- and medium-priced vehicles produced in developing countries at lower production costs. Ideally, these cars would be sold in the same markets where they are produced — reducing transportation, marketing, and sales costs — while also being exported to markets where consumers have a higher standard of living and greater purchasing power.
This strategy would focus Renault's resources on a particular market segment and area of development. The effect of this concentration — including investment in research and development — could generate economies of scale, enabling the company to produce vehicles at lower costs with better materials and technologies. The primary goal would be to generate higher profit margins while remaining mindful of all the criteria described above.
Implementing this strategy would require the company to phase out several models at the higher cost end of its range that are not generating adequate profit margins. It would also involve relocating some production facilities from high-cost developed countries to emerging economies, including countries in Central and Eastern Europe that have recently joined the European Union.
"Relocation costs and employee training needs"
"Measurable targets for revenue, cost, and new models"
"Analysis, action steps, training, and monitoring framework"
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