Competitive Strategy (MGT333)

Section 2
Group 8
Hyundai Case Analysis
Name Roll no
Akshat Mehta AU1811147
Hemant Sachwani AU1811137
Harsh Lakhani AU1811160
Preet Modi AU1811159
Saransh Agrawal AU1811155

Summary
Hyundai Motor Company, a significant organization in the Hyundai Kia Automotive Group
which is the world's fifth-biggest automaker as of the end of 2009, (In 2008, Hyundai
positioned the eighth biggest vehicle manufacturer, without including Kia.) and the world's
quickest developing automaker.

Headquartered in Seoul, South Korea, Hyundai works as the world's biggest coordinated
vehicle fabricating office in Ulsan, which is equipped for delivering 1.6 million units every
year. The organization utilizes around 75,000 people far and wide, Hyundai vehicles are sold
in 193 nations through somewhere in the range of 6,000 vendors and showrooms around the
world. The Hyundai logo, an inclined, adapted 'H', symbolizes the organization warmly
greeting its client. Hyundai deciphers from "advancement" and is articulated as "Hyon-dae"
in Korean.
Hyundai Engineering and Construction Company was established by Chung Ju-Yung in
1947. Hyundai Motor Company was formed in 1967. Cortina was the first model developed
by the HMC in collaboration with Ford Motor Company. Hyundai Motor Company's brand
power keeps on ascending as it was positioned 72nd in the 2007 Best Global Brands by
Interbrand and BusinessWeek study. Brand esteem assessed at $4.5 billion. The open view of
the Hyundai brand has been changed because of emotional enhancements in the nature of
Hyundai vehicles.

Hyundai is one of the leading group of Companies established in South Korea. The enterprise
works its business worldwide through 34 overall workplaces. Through its worldwide
nearness, it gives ideal answers for the client agreeing with their prerequisites. It is useful to
upgrade its monetary ability in the business. Hyundai Motor Company is one of the divisions
of the Hyundai Corporation, which is the fourth biggest automaker on the planet. Hyundai
Heavy Industries division is the biggest shipbuilder on the planet (Hyundai Corporation,
2010).

Industry Analysis
Porter’s Five Forces

1. Threat of New Entrants (low)

The threat of new entrants is low in automobile industry as for establishment of an
automobile company it requires huge investment and expertise for building a car.
Also, there are various barriers prescribed by law for automobile industry.
2. Threat of substitutes (moderate)
The threat of substitutes is moderate as close substitute of car is public transport like
bus or local train and also the bikes. But these substitutes create some impact on
buying pattern of consumer like place where the public transport is easily available
then they would not buy a car.
3. Bargaining power of customers (high)
The bargaining power of customers is high as consumer could easily choose from
various competitors’ product and also the UBER, ZoomCar etc. have increased the
buyer power as the customer now they don’t require to buy the car but they could
easily rent it.
4. Bargaining power of suppliers (low)
The bargaining power of suppliers is low as the suppliers in automobile industry are
scattered small in size and each supplier is not able to exert it power on market price
of the materials. Also, the brand image of the automobile company reduces their
bargaining power.
 5. Competitive rivalry (high)
The intensity of the competition in the automobile sector is very high as there are
various big company who compete with each other to gain the market share and for
that all invest heavily in R&D as well as marketing.

PESTEL

1. Political
The political factors of each country are different so each company requires the
prevailing political party support to grow in that country as they require many
permissions to enter in any country.
2. Economical
The exchange rate has shown a significant impact on the exports and imports of the
cars. The increase in the disposable income of the consumer has shown great effect
for the growth in the sales of the automobile companies.
3. Social
The automobile company sell and market the product in each country’s depending on
social environment of that country. Nowadays a car is considered as prestige symbol
in many countries due to such social factors’ car sale is increasing. Also, people are
more ready to accept the brand only if feels like it is a brand of their own country.
4. Technological
 The technology in the automobile sector is improving day by day. The electronic
vehicles (EV) cars are creating a revolution in the industry. Also, the safety has
improved lot in various automobile companies.
5. Environmental
The biggest environmental factor that automobile industry faces is the increase in the
pollution while making the cars and also emitting poisonous gas by cars.
6. Legal
Also, there are various different laws regarding the safety of the car, the emissions
rules etc. of each country and to meet legal requirement increase the cost. Also, there
are various copyright issue in automobile industry as many countries try to steal the
design of some foreign cars.

Porter’s Generic Strategy in Hyundai

Hyundai has been a major player in the passenger car industry. It has seen tremendous growth
in its sales and revenue. After the introduction of EV (electronic vehicles) have gone up by
more than 13.3% in global markets. The following points cover the porter’s generic strategy
followed by Hyundai:
i. Cost leadership
Since, price is an important factor in the automotive market, Hyundai has
always been seen winning the race on cost of operations, as it produces a wide
range of cars varying from compact hatchbacks, sedans to SUV’s. Talking
about the global markets, Hyundai is known for its lower costs and higher
profits. As Hyundai is a recognized brand in both domestic and international
markets, Hyundai’s raw materials suppliers give low competitive pressure to
the organization.
ii. Differentiation
As Hyundai is world leader and competes with a ton of automotive brands in
each segment of the industry, the stakeholders expect some promising
differentiation in their ideas, strategies and products. To survive the existing
competition, automotive brands are expected to have advancements in their
technologies and innovations and creations in their final products is the key to
last in the market.
 iii. Hybrid Focus Strategy
Hyundai’s key strategies play a major part in the industry as the industry
requires organizations to focus more on Target segmentation and Hyundai
plays a very well job in doing so, as its marketing techniques involves niche
marketing which fills the gap between customers and the brand.

Thus, by the above analysis we can say Hyundai as a competitive player in the automotive
market is selling its products tactfully and by the means of Target segmentation and niche
marketing, it focuses on a group of specialised customers who in turn increase the goodwill
of the brand.

Recommendations for Hyundai

To expand and grow Hyundai needs to make certain changes in their strategies. Various other
strategies should be adopted in the company in the company management structure of the
company. There should be autonomy in the management. Certain amount of decentralization
needs to be prevailed in the organization so that the decision making makes more effective
and efficiently. Many strategies such as growth strategy or integration strategy etc will help
to expand the business. Using these strategies would be use as it reduces the effect of political
and legal factors on business operations. Also, the company should study the market
behaviour to have the proper knowledge of the customer preferences. Hyundai has a diverse
workforce and application of integration strategy will be helpful to the company as it would
motivate the employees resulting into better output. The evaluation of business effectiveness
in timely manner is essential for the rapid growth of the business. on timely basis the
company should review its administration work. Proper plan should be made for the
applications of various strategies so the operations are done properly and result into the
profitability of the firm. Also, the company should focus on the EV vehicles as it is the future
of the automobile industry.