Innovation Audit on Renault Clio

This report focuses on the innovation audit strategy of Renault and its invention, the Renault Clio. It analyzes the impact of PESTEL and Porter's five forces theory on the organization and examines its current innovation performance and capabilities.

Running head: INNOVATION AUDIT ON RENAULT CLIO
Innovation Audit on Renault Clio
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1INNOVATION AUDIT ON RENAULT CLIO
Executive Summary
The primary aim of the report is to focus on the innovation audit strategy of the large
automotive company – The Renault and its invention the Renault Clio. Moreover, it focuses
on studying the theories related to these factors which are implemented by the company in
their day-to-day business process. Further, the study analyses the innovation space theory of
4P's the organisation uses and also studies the impact of the assumptions of PESTEL and
Porter's five forces theory on the same. Furthermore, the study analyses the Strengths,
Weakness, Opportunity and Threats for the company and to investigate the performance
capabilities of the company; it focuses on examining the Value Chain Analysis of the
organisation. Finally, the paper concludes with the analysis of the future vision of the
organisation and briefs the 28 years of success of the same.

2INNOVATION AUDIT ON RENAULT CLIO
Table of Contents
Introduction................................................................................................................................4
Overview of the Industry and Organization...............................................................................4
Innovation history of Clio..........................................................................................................5
Impact of PESTEL factors on Renault Clio:..............................................................................9
PORTER’s Five Forces Model:...............................................................................................10
Existing Innovation Performance and Capability of Renault Clio...........................................10
The SWOT analysis of Renault Clio....................................................................................11
Value Chain Analysis...........................................................................................................13
Renault in 2019 and beyond.....................................................................................................14
Conclusion................................................................................................................................17
References................................................................................................................................19
Appendices...............................................................................................................................22

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Introduction
The particular paper chosen is about the industry Renault and its innovative product
Renault Clio (Jullien, Lung and Midler 2013). The primary purpose of this report is to study
the innovation audit strategies of the given organisation. The report focuses on analysing the
innovation history of the given organisation with the help of 4P's of the innovation space
strategy. Further, it investigates the paradigm of the organisation’s innovation strategies and
is followed by determining the possible outcomes of innovation that can be applied in the
firm. Furthermore, the report is focused on analysing the impact of PESTEL and PORTER’s
five forces theory on the organisation. Finally, the report concludes with the examination of
its current innovation performance and capabilities and the prospects of the organisation in
2019 and beyond.
Overview of the Industry and Organization
The automobile industry is the ninth largest industry of the world and contributes a
significant amount of revenue towards the economy of the different nation. For example, the
net income generated by the concerned industry at the end of every annual year is estimated
to be around 50,000 million, while it offered employment to more than 180,000 people (Mi
and Masrur 2017). The company Renault is a vital automobile industry which was established
in 1899 by Louis Renault, is a French Multi-national automobile manufacturer industry
(Millward 2016). The company has been producing wide ranges of trucks, tanks, buses,
tractors and auto rail vehicles in the past. At present, the company has shifted to the
production of cars and vans. One of the most innovative cars produced by the industry is its
Renault Clio (Schamp 2014). The Renault Clio was launched in 1990, and its fourth
generation was launched in 2012. The latest of its model is the fifth generation all-new Clio,
which inherits the most influential designs, inspired by all it's previous four generations.

4INNOVATION AUDIT ON RENAULT CLIO
Innovation history of Clio
Launched long back in 1990, the Renault Clio of the industry Renault is claimed to be
one of the highest selling automobile products worldwide. Clio is represented as the favourite
car amongst the French population and ranks amongst the top of the B segment in Europe
since 2013 (Jullien 2015). Since the launch of Clio's first generation in 1990, it has been
chronically innovated and modified by its industry. The innovation range of Renault Clio can
be specified with the help of the following diagram (Refer Appendix 1):
Figure 1: Showing Chronicle Innovation History of Renault Clio.
Source: (Based on Von Pechmann et al. 2015)
The key features in the Renault Clio are that it comes up with an attractive flex wheel
and alloy wheel in its different models. It has touchscreen facilities and cameras attached to
Clio I
Launched in 1990. Includes All the features a large vehicle should be
inclusive of.
Features technology with end vehicles such as Espace and Megane.
Clio II
Launched in 1998.
Innovated to high standards of comfort and spaciousness to the driver.
Clio III
Launched in 2005.
Innovated in the terms of new era of perceived quality.
Clio IV
Launched in 2012.
Innovated with a strong design, inspired by all the range of Renault industry.
Clio V
Launched in 2017.
Designed according to the "Evolution and Revolution principle"that
emphasizes in - Drive the Future(2017-2022) technology.

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its parking sensors. It also comes up with an automatic light sensor. Not only this, the Clio
has standard driving safety features included in it (Refer Appendix 2).
Figure 2: Showing Safety Features of Renault Clio
Source: (Based on Orfila, Saint Pierre and Messias 2015)
The standard and essential features offered by Clio segregates it from other cars.
These features make it innovative in its rank to date. The unique safety features provided by
this modern car is claimed to be missing or less standard than that of what Clio offers. In this
connection, it was contended that since the introduction of Clio it is heading towards its
success and innovation. The innovation analysis of Clio can be determined with the help of
its innovative model of 4P's (Rawlinson and Wells 2016).
The 4P’s of Renault Clio can be specified as Product, Place, Process and Paradigm
(Refer Appendix 3 and 4).
Emergency Brake
Assist (EBA)
Speed Limitor-Cruise
Control Hill Start Assist (ASA)
Electronic Stability
Control (ESC)
Anti-Slip Regulation
(ASR)
Seat Belt Reminder
(SBR)
Standard Airbags
(Driver,
passenger,front and
side)

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Product
 Clio is claimed to be a star
performer across Europe.
 Clio has a total of five generations
since its introduction in 1990.
 The fifth generation is designed with
the latest features and is considered
as the best-seller.
Place
 Sold all over the globe.
 Europe alone consists of 75% of the
manufacturing units of Renault.
 Other than Europe, the
manufacturing units are set up in
Asia, South America and Africa.
Process
 Electric mobility.
 Connected mobility.
 Autonomous mobility.
 Introducing and innovating new
mobility.
Paradigm
 Ranks first as a brand in the French
Market with an overall sale of
39,746 in number.
 Launched in 1990 has reported a sale
of over 11.5 million units around
115 countries.
Figure 3: 4P’s Innovation Space of Renault Clio
Source: (Based on Orfila et al. 2017)

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Figure 4: 4P of Creativity-Renault Clio
Source: (Based on Jullien, Lung and Midler 2013)
As examined by the above illustrations, it was analysed that the innovation of Renault
Clio is highly dependent on its product innovation strategy. The procedures and the
modifications made in the product by each of its passing generation launches has made it
famous in the eyes of its potential customers and market. The given evidence also that
Renault Clio followed both the radical and incremental strategy of innovation, for
innovating and modifying its generation of cars (Nairn, Partner and Generals 2016). This is
because the launch of new generations followed both the strategy of advancing with new
technologies and features keeping in mind in improving the existing systems and getting
inspired by the same.

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Impact of PESTEL factors on Renault Clio:
The analysis of PESTEL tool is done by Renault to make better decisions for its
strategic management of products (Donada 2013). PESTEL is an abbreviation of -Political,
Social, Economic, Technological, Environmental and Legal factors that impact the working
process of the organisation. Since Renault works in a dynamic environment, all these factors
influence the working procedure of the same. The PESTEL tool for Renault can be examined
as below (Refer Appendix 5):
Figure 5: PESTEL factors impacting Renault Clio
Political
Political stability and taxation policies.
Regulatory Factors and Governance system.
Economic
Exchange rate policies of countries.
Downward pressure on consumer spending.
Social
Society norms and demogrphics.
Leisure interest and educational level of consumers and market.
Technological
Technology innovation and cost of production.
Potential and innovational strategies implemented by competitors.
Environmental
Weather condition and regular scrutiny by environmental agencies.
Recycling and Customer activism.
Legal
Legal protection and employment laws.
Business laws including data protection of customers and health and safety of
the same.

9INNOVATION AUDIT ON RENAULT CLIO
Source: (Based on Doufene, Dauron and Krob 2014)
PORTER’s Five Forces Model:
The model is known after Michael E Porter (David 2013). It is a strategical analysing
tool which helps to understand the critical factors affecting the market conditions and the
level of competition. Hence, in this paper this Five Forces research is on the giant automobile
industry – Renault. The rigorous application of five forces that can help the management of
Renault can be examined as per the given diagram (Refer appendix 6).
Figure 6: Application of Porter’s Five Forces Model in Renault Clio
Source: (Based on Economy and Business Models)
Existing Innovation Performance and Capability of Renault Clio
As opined by Cole (2017), depending on the experience of Renault Clio, be it
emotional, functional or professional, Renault Clio beholds the embodiment of the vision of
shared, electric and autonomous mobility. Renault Clio being the production of Renault is a
great dive into the future of high production automobile sector. Benefited from the synergy of
Rivalry among
existing
players in the
Automobile
Industry
Bargaining
power of
buyers of
Renault
Bargaining
power of
suppliers of
Renault
Danger of new
entrants in
automobile
industry
Subsitute
Danger

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crucial features, Renault Clio is a blend of innovative technologies. In this connection, to
examine the existing strategic management of Renault Clio, the theory of SWOT analysis
will help in the determination of the capabilities and opportunities the organisation has.
The SWOT analysis of Renault Clio
The SWOT analysis helps in the determination of the strategic capabilities of the
organisation that prominently affects its performance and strategic development. SWOT
stands for Strength, Weakness, Opportunity and Threat (Salar and Salar, 2014). The SWOT
analysis of Renault Clio can be specified as below (Refer Appendix 7).
Strength
 The wide range of generations with
different features and technologies.
 Global presence.
 Actively involved in the worldwide
championship of World's Best Car.
Weakness
 The cases of recall of the cars
industry have slightly affected its
brand image.
Opportunity
 The cars can be more hybrid.
 Demand from the countries where
the automotive industry is
continuing to grow at a steady pace.
Threats
 Fierce competition in the local and
international market.
 The emergence of new technologies
and innovations requires frequent
changes in the existing ones. This
leads to an increase in investment
and the cost of production.
Figure 7: SWOT Analysis of Renault Clio

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Source: (Based on Zwitter 2016)
The illustrated pieces of evidence and the analysis of the Strength, Weakness,
Opportunity and Threat, clearly demonstrates the current innovation performance and
capability of Renault Clio and the possible upcoming that can impact the strategies for the
future beholding of the organisation.
The Renault Clio since its origin in 1990, has critically aimed to offer more comfort
and enjoyment in everyday driving to its owners with a realistic approach for improving
energy efficiency. Since then there are now five generations of Clio introduced in the market.
The most recent fifth-generation Clio is approached to be in the technology of “Drive the
Future” ideology (Mock et al. 2013). The realistic proposal, driven by the automotive
industry and prominently by racing Formula One, the Renault industry of sport enjoys
identified expertise and has also brought advantage to the new version of All-New Clio at
present. The new generated 16-valve four-cylinder in the vehicles helps in developing 200
horsepower at the rate of 6,000 rpm. A high torque of 240 Nm (up innovation of 25 Nm of
engine compared to that of Clio third generation R.S.) is generated from 1,750 rpm for
immediate driving comfort. The highest level of torque is frequently occupied at higher revs
ranging to 5,600 rpm. This evidence clearly shows the innovation the industry has brought up
in the engine stability of Renault Clio. Renault Clio is boosting the most consistent flow of
innovation in the market of any auto manufacturer in the automotive industry with its
standard key features of modernisation and safety (Refer appendix 1 and 2).
The innovation of Renault Clio starts with its design amendments and modernisation
to culminating in service that makes life easier for its potential customers and shaping the
future of the Renault industry. The innovations made in Renault Clio not only promises
greater comfort and freedom benefits to the human connection but also a cleaner and better

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environment for everyone by innovating its eco-friendly features. The All-New Clio offers its
customers an improved suite of effective and efficient components to help them decrease
their consumption of fuel and harmful emissions of CO2 gases (Brown and Wang 2015). In
this connection, the features served by Renault Clio are specified as below:
 An ECO mode feature in the car allows its driver to minimize the consumption of fuel
by around 10% and more at just the push of a button.
 A Gear Shift Indicator (GSI) and a monitor to the style of driving (yellow, green and
orange) on the dashboard of the car helps the driver improve the driving style to
reduce the consumption of fuel.
 An innovated Eco² driving app obtained through the R-Link helps the owner with
updated technology of information, which enables the owners to examine their style
of driving and implement corrective measures in the connection to decrease the
consumption of fuel and emissions of CO2 gas.
Clio is claimed to be the only car that have been awarded with the Title of Car of the
Year twice (Mock and Yang 2014). This strategic capability is significantly in the hands of
the people who create and manage these products and services. The same can be analysed
with the determination of the value chain analysis of the organisation.
Value Chain Analysis
The value chain analysis is claimed to be a strategic tool that analyses the role and
activities of the private firm (Zott and Amit 2013). Its goals are to determine the source of
valuable actions that lead to the success of the business firm. In this connection, the value
chain analysis of Renault Clio managed by its department which lead to the revolutionary
success of Renault in the automotive industry can be determined with the help of the given
diagram (Refer Appendix 8).

13INNOVATION AUDIT ON RENAULT CLIO
Figure 8: Value Chain Analysis of Renault Clio
Source: (Based on Sulaiman and UNRUH 2015)
Every illustrated data shows the innovation that emerged in the Renault Clio and
helped serving its customers since 1990-2019 and counting. In this connection, the prospects
of Renault Clio in 2019 and beyond can be analysed as below.
Renault in 2019 and beyond
As opined by Seiberth and Gründinger (2018), Renault believes in vehicle- service
integration combined with the connection to data analytics, multimodal systems, connected
technological services and standard critical characteristics of successful solutions of mobility
and smart manufacturing in the future. Based on the conceptual facts mentioned in the report
it was determined that the Renault industry is working across the public sector to understand,
analyse and engage with their potential market structure about their future vision and to
maintain its leadership position. Renault since its existence is a promising sector in the
innovation of new technologies and is committed to continuing with the same investment in

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new technologies and services that would foster into the introduction of smart cities. Renault
unveiled robot-vehicle concepts in 2018 that encourages into illustrating its vision of shared
mobility of the future.
Renault is focused on generating highly customised platform cars that would accommodate
the highest range of uses and formats. Renault is also idealised into expanding with premium
offerings of vehicles through which the owner can enjoy and enhance a private trip in a city
or even premium tour experience (Hill et al. 2014). Renault with the help of their innovating
strategies claims that the mobility of the future is already into motion. Renault claims to
break the record of profit and sustainable growth with the help of their invented fifth
generation Drive the future Clio. As opined by (), the sale range of Clio’s previous generation
car has increased from 2012 through 2018 (Refer Appendix 9).

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Sales Year Sales rate of Renault Clio
2018 328.860
2017 321.472
2016 310.944
2015 303.240
2014 299.623
2013 283.749
2012 246.672
Figure 9: Showing sales rate of Clio (2012-2018)
Source: (Based on Mock and Yang 2014)
The given table clearly states that the generations of Clio has an increased selling rate
and the debut of the fifth generation of all new Clio is holding the market strongly at present
and will continue the same in future as this fifth generation of Clio is claimed to be the best
and inspired by all other production of Renault (Refer Appendix 10).

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Figure 10: Sale increase chart of Renault Clio across the globe
Source: (Based on Bouigeon 2015)
By the end of this plan of fifth generation, Renault aims to top the world with 70
billion in profit, increase their margin of operation to over 7%, 50% increment in the value
they had in 2016 and introduce 21 new vehicles which will also include 3 conceptual cars
which define the plans of Renault (Taglioni and Winkler 2016). Renault claims to grow both
profitably and sustainably all across the globe. They promise to strengthen their presence in
the emerging markets with both radiant and incremental new technologies of innovation.
Conclusion
Based on the study of the report and the given shreds of evidence that shows the
innovation strategy of Renault Clio the history of its success can be briefly examined with the
help of the given table (Refer Appendix 11).
Year of Existence The success of Renault Clio

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1990 Clio, I processed for sale and won car of the
year award in 1991.
1998 The introduction of Clio II, first car in its
component to gain a four-star rating at Euro
NCAP crash test.
2005-2006 The debut of Clio’s third generation, termed
as B-segment’s first model to score a five-
star in Euro NCAP crash test and named as
Car of the year in 2006.
2007-2008 The segment of the first 1.2 petrol turbo
engine introduced and was available in
Estate form since 2008.
2009-2010 Brought navigation the volume market by
adding the model Carminat TomTom of
Clio in 2009 and celebrating its 20th
anniversary in 2010 with a sale rate of more
than 11 million units.
2012 The debut of Clio IV, innovated with a
robust design inspired by all the other range
of Renault industry.
2017 The launch of Clio V, the "Drive in Future
(2017-2022)" technology.
Figure 11: Showing 28 years of success of Renault Clio
Source: (Based on the shreds of evidence explained in the given report)

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Nostalgia. Pen and Sword.
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Hill, L.A., Brandeau, G., Truelove, E. and Lineback, K., 2014. Collective genius: The art and
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Millward, R., 2016. Business institutions and the state. The Routledge Companion to
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Mock, P. and Yang, Z., 2014. Driving electrification. A global comparison of fiscal incentive
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Appendices
Appendix 1
Figure 1: Showing Chronicle Innovation History of Renault Clio.
Source: (Based on Von Pechmann et al. 2015)

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Appendix 2
Figure 2: Showing Safety Features of Renault Clio
Source: (Based on Orfila, Saint Pierre and Messias 2015)

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Appendix 3
Figure 3: 4P’s Innovation Space of Renault Clio
Source: (Based on Orfila et al. 2017)

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Appendix 4
Figure 4: 4P of Creativity-Renault Clio
Source: (Based on Jullien, Lung and Midler 2013)

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Appendix 5
Figure 5: PESTEL factors impacting Renault Clio
Source: (Based on Doufene, Dauron and Krob 2014)

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Appendix 6
Figure 6: Application of Porter’s Five Forces Model in Renault Clio
Source: (Based on Economy and Business Models)

27INNOVATION AUDIT ON RENAULT CLIO
Appendix 7
Figure 7: SWOT Analysis of Renault Clio
Source: (Based on Zwitter 2016)

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Appendix 8
Figure 8: Value Chain Analysis of Renault Clio
Source: (Based on Sulaiman and UNRUH 2015)

29INNOVATION AUDIT ON RENAULT CLIO
Appendix 9
Figure 9: Showing sales rate of Clio (2012-2018)
Source: (Based on Mock and Yang 2014)

30INNOVATION AUDIT ON RENAULT CLIO
Appendix 10
Figure 10: Sale increase chart of Renault Clio across the globe
Source: (Based on Bouigeon 2015)

31INNOVATION AUDIT ON RENAULT CLIO
Appendix 11
Figure 11: Showing 28 years of success of Renault Clio
Source: (Based on the shreds of evidence explained in the given report)