Dacia Renault: PESTLE Analysis, Strategies in Global Context

This report provides a comprehensive analysis of Dacia Renault's global business operations, with a specific focus on its potential expansion into Switzerland. The report begins with background information on Dacia Renault, its products, scope, and competitive landscape. It then delves into a detailed PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) analysis to assess the external factors influencing the company's operations. The report also explores the application of appropriate strategies for companies operating globally, with a focus on Dacia Renault's approach. The analysis includes Switzerland's business environment, highlighting its attractiveness to multinational organizations. The report also examines the legal and economic factors relevant to business operations in Switzerland. The report concludes with an overview of the challenges and opportunities Dacia Renault faces in expanding its business. The strategies include less margin in their products so that they can attracts the potential consumers at more lucrative manner and that is why it doesn't offer to its consumers a huge discounts. Company's policy is to provide a luxuries comfort to its consumers at a reasonable rate.

Business organisations and
environments in a global
context

Table of Contents
INTRODUCTION...........................................................................................................................3
Background information of Dacia Renault, its products, scope and competition:..........................3
Application of PESTLE analysis of Dacia Renault:........................................................................5
Application of appropriate strategies by companies operating globally:.........................................8
CONCLUSIONS..............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
After globalization, multinational companies are trying to expand their business in many
countries. Globalisation is a way by which big organisations interact various nations and trying
to develop global economy. It is the way of linking the world's markets with each other. Dacia
renault is an auto mobile company which operates in many of the country. Now, company wants
to expand their business in Switzerland and in an international stage company faces many of the
difficulties in operations(Nahavandi, 2016). But, the strategy they followed in the expansion of
their business in Switzerland is not quite easy,as it includes extensive industry research and clear
comprehension of their market, consumers, competitors, vision, mission, company's core
competencies, environment etc. AS, these are not normal questions to attempt and it also take too
much time to think about them and then respond. Optimum management in an organisation can
form well improved economic performance. There are so many terms which are used to
elaborate such management practices.
Background information of Dacia Renault, its products, scope and
competition:
Now, organisations operates in an international context as they do not operates directly
with other countries, they may get impressed by a domestic shortage of proficient labour or
might be subject to genesis on the international markets. As, most of the organisations are
looking to limit the cost of production and trying to improve organisation due to economic
pressure in the world economy. They are searching the concept by which they can take the
competitive advantage in the industry and make the unique product to get the core competence in
the marketplace. Most of the organisation have formed some aspect of shared services, and many
of the organisation grab the outsourcing service delivery plan. Although, there are so many
opportunities left with regards shared services in general along with some traffic opportunities
for an developing concepts to get major enhancement and handle all service delivery
options(Ebert and et. al., 2014).
It has operated its 1st plant in 1966 for the construction of Mioveni car. The plant started
production of Dacia 1100 in 1968, nuder the R8 licence. It later on upgraded to Dacia 1300,
under R12 licence. Dacia generate an entire product line-up, covering several kinds of personal

and commercial vehicle. In 1998, company attained the ISO 9001 quality management. In 2005,
company launch of diesel Logan and also got the ISO 14001 Environment Certification. It also
create a record of Production of 2500000th car inauguration of the CKD exports centre. In 2011,
company make a Production of 4000000 vehicles at Dacia plant since the starting of its
activity(Needle, 2010). In 2012, Dacia company expand their operations with the new launch of
Lodgy model. This year company's most famous brand Duster was sold to 300000 worldwide.
In an European market troubled by price war, Dacia applied a policy of less margin in
their products so that they can attracts the potential consumers at more lucrative manner and that
is why it doesn't offer to its consumers a huge discounts. Company's policy is to provide a
luxuries comfort to its consumers at a reasonable rate. The Dacia Renault is become one of the
lowest dealer margin brand in the entire European Union region. They hardly take 5% margin.
This is because its dealers do not need to create their own outlets but they share such outlets with
existing Renault dealerships. Dacia Renault has become a global production company. It has
successfully implemented its rock- bottom cost strategy to emerging markets all around the
globe. Competitors presumed that the Dacia theory works because its M0 platform exercises old
Renault technology that has been now completely changed. As, M0 based vehicles are produced
in a country with low labour costs(rompenaars and Hampden-Turner, 2011).
Allocated business environment in Switzerland:
Switzerland is a perfect business destination for multinational organisations. As, in this country,
there are many people living from diversified cultural society. Switzerland is strategically
situated in the heart of Europe and it share international borders with Germany, France, Italy,
Austria and Liechtenstein. The geography of Switzerland is huge and covers of four languages.
Like- German, French, Italian and English. English is most spoken by the professionals.
Switzerland is a constant, governance system structured to prepare direct democracy. The 26
cantons are the associate member states of the Federal State of Switzerland. As a extremely
decentralized real confederation of states, political and administrative obligation are separated
among the federal, cantonal and municipal stages of government. Switzerland is a clam, well
suited and modern market economy with a highest in the planet(Oliveira and Martins, 2011).
Lack of disequilibrium and debt burden is going to permit the Swiss economy to come down to
the pre-crisis stages of economic activity quicker than its west European peer. Switzerland is a

country where so many competitors and innovative business organisations exist. In Switzerland,
there is an economic freedom in the operation of business as anyone can operate the business
here. Although, foreign investors is essentially required to have both work and residence permits
so that they can convene business activities personally or on a permanent basis. Here, two kinds
of business entities which clearly elaborated by the Swiss law(Wang and et. al., 2010).
1). Capital-based organisations: In this structure, stock firm and limited liability
organisation are included.
2). Partnership-based organisations: Limited or other normal partnerships.
Dacia Renault introduced an advanced set of limited-edition versions. On exhibition in Geneva is
the Duster essential in the Swiss market. Company's online community is regularly increasing to
expand as the number of brands fan cross the threshold of three million. company make the
highest sales record in 2015, which is more than 550000 vehicle registered worldwide which is
almost 8% enhancement from the previous data. After getting record sales in 2015, the brand has
viewed on Facebook that members surpass the three-million mark of its repaid-growing society
keep to share their dedication for creating online and offline. Dacia’s positioned at the 2016
Geneva Motor Show characteristic the Duster Essential that pioneer an advance set of limited-
edition of the Duster, Sandero, Logan, Logan MCV, Dokker and Lodgy(Nadkarni and
Herrmann, 2010).
Application of PESTLE analysis of Dacia Renault:
Organisations in any country is affected by an external environment. International forces
influencing firm by legal, social, technological, end economic factors. Assessment of these
factors is significant at the time of creating a business strategy.
1).Social Environmental factors: these are the factors which are connected to alteration
in social structures. These factors need deep research on tastes and lifestyle patterns on the
general public of the country. Purchasing pattern are largely affected by the alteration in the
framework of the population, and in the potential customer lifestyles. Specific group like age,
gender, etc., identify the purchasing patterns and assessing such modification is critical for the
formation of the strategy of the Dacia Renault. In an international environment it is beneficial
that firm strategies are framed after giving proper attention on social and cultural differences

which differ from country to country. Customer religion, language, life style are the significant
information for the prosperous firm management.
Germany and Switzerland are powerfully cultural connected and they have similar
language. As, the German language is mostly used in Switzerland. For Germans people,
Switzerland has become the perfect emigration destination. That is why the German becomes the
largest foreign individuals who are living in.
2). Legal Factors: This is the factors which affects organisation strategy which are
link to the change in the government rules and regulations. For the prosperous
business operation it is beneficial that Dacia Renault need to consider the legal
issues of the Switzerland. As, laws, rules and regulations modify over a period of
time. According to the company, Dacia Renault is aware of these modification in
the areas of consumer protection laws, environmental laws, health and safety
laws,etc.(Bachmann and Inkpen, 2011).
3). Economic factors: This is the factor which carries modification in the global
economy. Improvement in the living standards would reflect an enhancement in
the demand for the products so that it can offer better opportunities for the
business community to earn more profits by selling more products. This would
affects the economy via inflation. As, increase in the demand of the products will
tend to enhance the price of the products. On the other hand, reduction in the
demand of the product will tend to price go down. Therefore, business strategy
should be created after keeping all such fluctuations issues in mind. Some other
economic alterations which influences Dacia Renault business. Such as alteration
in interest rate, inflation rate, and wage rates. If the country have low interest rate
and rise in demand. Then, the business would be appreciated for diversification
and ready to take risk. Switzerland is the global most competitive economy, with
a GDP of around $425.8 billion in 2012. This is because of its systematic
banking and capital market industry, some analysts have identify the country as
an essential investment region for the global financial industry. Switzerland's
GDP is anticipated to incline by 1.6% in 2013 and grow by 1.6% in 2014, and for

the period until 2022, the GDP is expected to develop at an average of 1.7% each
year(Bachmann and Inkpen, 2011).
4). Political Factors: This is the factor which reflects the alteration in government and
government policies. Company's operation is largely affected by the country's
political factors. Like- organisations operating their businesses in the European
Union have to implement directives and regulations formed by European Union.
The political factors has a great impact on the regulation of firms and
disbursement power of potential customers and other firms. For the development
of the businesses, there is a strong need of stability of the political environments.
Switzerland government Policy is anticipated to concentrated on enhancing the
business environment. As, the Swiss government make the Bilateral agreements
with the EU. Which are anticipated to stay in force, but introducing new
arrangement which will be very challenging until a new model for relations is
recovered. Because, the EU will promote an easier framework. Switzerland has
come through in keeping its rule of neutrality in the international domain. That is
why, country managed to neglect engagement in a number of issues(Kerlin, 2010)
5). Technological Factors: This is the factor which is highly affected enterprise
strategies as it offer opportunities for the enterprises to opt advanced innovations.
It assist the firm to limit costs and emerging new products. With the genesis of
advance communication techniques, technological factors have increased large
impetus in the business domain. Vast volumes of information can be firmly
shared by way of databases so that the Dacia renault enable immense cost
reductions, and better in service. Dacia Renault is required to understand the
current applicable technological advancements for their concern and to remain
competitive. Technology assist organization to get competitive advantage, and is a
leading operator of globalization. While structuring the business strategies
organisations must think if implements of technology will enable the business to
produce products and services at a reasonable cost. Organisation can choose new
way of distributions by taking help of technology. Now, this has become easier
for organisations to communicate to their consumer in any part of the plant.
Switzerland all over the world is recognised as one of the best nation with the

biggest innovation capability. Although, research and development is required for
the innovation in products and services. R&D is the required for the advancement
of products, services and technologies. Switzerland is the most advance telecom
market. The opportunities covers advance intensive industries and emergence of
Swiss watches(Pless and et. al., 2011).
Application of appropriate strategies by companies operating globally:
Benefits of ethics in the corporate world is superior and modern way and issues grow on a daily
basis which might form an essential load to companies and ultimate customers. Nowadays, there
is a requirement for appropriate ethical behaviour in a companies. Which has become critical to
avert manageable lawsuits. A company obligation are not fixed to stakeholders.
Companies which are looking for expanding their business to other countries. These
organisations have to face business diversity and cultural issues. But, once they adjust with the
other country's climate. Then, they are able to generate profits. And if organisations need not go
to other countries then, they need to face different issues such as meeting local consumers
demands, knowing the laws of regional government, language difficulty etc. If company mix
such difficulties then, emergence of three primary issues for shifting the organisation to overseas
countries these issues are social, cultural and economic component. Organisation have to know
the culture of the nation so that the company can effectively operate their business. They have to
know their social and economy of the country. For example McDonalds, KFC or Subway, these
are the company which are operated in restaurant sector and they have their activity around the
globe. Such companies ready to sale poultry and meat products. Now diversification of their
organisations to Asian nations, they firstly need to have the knowledge about their social,
cultural and economy factors. While in the Muslim countries, such companies cannot sell Pork or
Non-Halal products as this is completely against their cultural values or religious values. This
reflects that organisations have to modify themselves as per regional culture to do better
operations in other countries(Farndale and et. al., 2010). Also they do provides prices as per local
economy or buying power of customers. Company need to understand all issues so that the
company can recognise globally. Now, multinational companies is attempting to expand their
business in the emerging markets so that they can produce products at large scale at reasonable
cost and distributes to developed nations. Company requires to analyse over the factors which

reduce or effect its brand image. As when a company is operating at global level at that moment
it requires to mould itself as per different culture and different social values. As cited entity is
responsible towards society because everything which it uses actually belongs to the society it
becomes the duty of managers and owners of entity to take proper steps so that they fulfil the
expectation and requirements of different communities in different market places at global level.
If a company is making efficient plans and its managerial personnels takes effective steps in
implementation of such plans then it can achieve its goal of profitability and customer
satisfaction. Dacia Renault requires to be technically sound so that they can provide better
features in their Cars(Wang and et. al., 2010). As in auto mobile industry people buy vehicles for
travelling and for style statement. Some luxurious cars of cited entity are used as status symbol
by their owners. So entity requires to make add on in features and technology of its products.
CONCLUSIONS
From the above research, it has been found that any company which expands their operations in
other countries, will need to look carefully of political issues, economic issues, socio-cultural
issues, technological issues, legal and environmental issues. And make the company's policy
according to their need. Dacia Renault is the most powerful auto mobile company and have the
competitive advantages in price of the product from other competitors. Now, company is looking
to set its business in Switzerland so that it need to check all above mentioned issues and then
make policies. Any foreign investors who wants to do trading, manufacturing or other activities
that is engaged in business is required to be registered in the concerned register of commerce.

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