What is interesting to solve our problematic statement?

First, a lot of information shows us that Russia is growing sharply. Even though the year 2009 will be less profitable than 2008, we saw that the emersion of a new middle class is growing rapidly since few years but also their power buying.

Second, Russia has a lot of natural resources at its disposal. It is very interesting for Renault if it wants to increase its market shares there. Indeed, Renault will not have to import some raw materials indispensable to build a car. Then, the abundant oil at a low price (less than 50$ the barrel) will also maintain the demand of car.

Third, we saw that RENAULT has to adapt his self to the trends of the Russian people like the average time of 11 years to keep a car. Thus, to increase his sales like his profitability, he will have to produce the cars at destination of the Russian market directly in Russia caused by the actual legislation which tax the import of foreign new cars.

FIVE FORCES

a) Threat of new entrants

A segment’s attractiveness varies with the height of its entry and exit barriers. The most attractive segment is one in which entry barriers are high and exit barriers are low. With that, few new firms can enter the industry.

In the car industry, competition has already become rough. That’s why, it is necessary to keep barriers high. As we can see below, the industry has already several entry barriers.

First, a big brand awareness is needed to enter in the Russian country which has an area of 17,075,400 km2. Secondly, the Russian consumers have the trend of high customer loyalty and to prefer homemade products rather than foreign products and also for the car, for example with the functions and the design of the car. The companies have to adapt their product to the Russian market.

Third, high capital, partnership or know-how about the Russian market are required to enter.

For all these reasons, it is difficult to have access to