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Personality and Behavior

In: Business and Management

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Hyundai Motor Company
Question 1
Hyundai is a Korean Motor company which is a part of Hyundai Group. It has been established 29th December 1967. It has achieved a high success domestically and internally. In this question we will highlight the difficulties faced Hyundai including its competitors, how they overcome these problems domestically and internally and the strategies adapted to compete effectively .
HMC has faced some of the difficulties & problems that affect its market position & brand image. Their problems is going around three main problems which are "Sales, rate & quality". HMC rates was so cheap which made the product is undervalued by the customers. In fact, the cheap price of their cars reflect its quality as some customers are needed for expensive cars. Therefore, Hyundai goal in US only to maintain its share not to gain more profits & sales in one had. On the other hand, segmenting low level –moderate level people and focus on cost saving cars rather than high quality oriented cars affected it's brand image & identity. Moreover, Hyundai is caring only to save money by having cheap labor which also affect its quality of working and having lots of workers strikes. In addition, we can't forget that inherited Chairmanships that gave the priority to the family to run the business rather than the qualified professional from management. These family chairmens' never listen to the experts inside organization and never take their advice. As well as they had a problem with working efficiency by having a functional organization which affect its production. As a result, all these reasons leads to bankruptcy, liquidity crisis, bad brand image & market positions.
Hyundai has not focused on the competitors production in market and it has no competitiveness advantage over them. They decided to cheap their rates to attract more customers and never thought that this way will affect on its production. Their focus on small size stylish cars which targeting old people has not support its brand image and market position when its decrease it. Moreover, The limitability of Hunda Logo made American thought that Hyundai it's a Japanese cars not Korean which leads to increase their trust by thinking of having at least the same quality which did not happened.
Hyundai tried hard to overcome these problems in order to compete in the market and gain a competitive advantage to success. First, they focus their attention of cars quality by increasing cars rates, introduce mid size cars (Sonata Fe) and lunching sporty cars (Sporty Tiburon) as their competitors. Also, they tried to manufacture its plant in US to have better name in the market and by comparing competitors labor wages to Hyundai, competitors has focused to manufacture in countries with cheap labor than its home countries to save money which increase Hyundai competitiveness in the market. Therefore, changing engines and transmissions, listening to consumers needs in cars markets and listening to their labors need by paying pay more salaries to increase quality performance have lead to improve their working strategy in general. In addition Hyundai cars value in market was different than other competitors high value cars which affect negatively and positively in the same time. Negatively which reflect its quality image and positively which target low level people as students and new couples who have limit budget. Hyundai products was not rare in the market as well as they tried to imitate Honda Logo which reflect badly on its image.
Hyundai continued to change its strategies to meet their consumers expectations domestically & internationally. they tried to diverse it's production and producing prestige car in order to be away of its cheap image. Also, they offered a warranty for 10 years by which they called "Best Warranty" and by "Packaging Strategy" which states that Hyundai should change their cheap car image by increasing prices compared to high competitors cars which leads to market success. Their challenge started when other competitors as Mazda and Chrysler adopted the same strategy of 10 years warranty, undervalued of Hyundai high quality cars (Santa Fe & Sonata) compared with their competitors and cars engines of Hyundai compared with Nissan and Honda is still cheaper which led to think that Hyundai can't produce expensive cars. As a result, Hyundai shift its strategy focus from entry level small cars to higher end medium size cars. By taking advantages of Toyota high prices, they had the chance to compete on all levels. At the end, Hyundai had to differentiate its products than Kia in order to gain competitiveness but this didn't happened. In order for Hyundai to achieve high quality working in time of increasing the prices, they have to have a comparable wages otherwise will leads to have more strikes then more unemployed which will hurt its brand value and name.
Hyundai succeed in the domestic side and tried to go internationally in US to spread these success. Hyundai entering time in US market was perfect. Almost of the markets in US was targeting high level so Hyundai had filled up this gap with cheap prices and lots of students & young couples were attractive to buy their cars. In US, Hyundai cars had the worst quality cars before until Hyundai changes its strategy to have a better TV advertisements which opened its door and attracts the majority of US citizen. As well as Hyundai tried to upgrade to quality image by launching new Accent and Elantra models which increased its market sales. Although, it's starts new promotions, lineups, financing and dealer incentives to attract people more to buy. They worked on divisional organization structure to guarantee a better performance working than functional structure. Hyundai has adopted many strategies support it to succeed. They had Knowledge management strategy which focused on doing high researches and development for their products and work as well as innovation strategy to create new technology and new engines that meet consumers needs. Hyundai adopted learning curve strategy that get Hyundai to learn from its failure history and experience in the motor market to develop, create a great image and success. Also, it has changed its pricing strategies and tried to understand the market where it compete as the cheap prices reflecting bad image about the company. Finally Advertisement and marketing strategies which support Hyundai to overcome the problems had and attract consumers by focusing on the quality of cars which needed by the consumers as well as we can't forget it's supporting to the environment by eliminating the pollutions and protecting the greenmarket which affect its reputation and brand image (Melissa Bushman 2007,p1). (Hyundai Case Study 2012).

Question 2

Hyundai starts its international name globally in U.S. In February 1986 it had launched its U.S subsidiary in California. It sales focused on the west, east and opened it's central region in Chicago. Hyundai keeps updating and upgrading it's product lines by having international operation and services network to more than 300,000 Square foot distribution center in California. It has 500,000 units of Hyundai plants in India, Turkey, and China. It has four international research centers and end of 2002 Hyundai had four regional offices and around 600 dealerships nationwide. Hyundai had broke the U.S market by establishing its first automobile assembly plant in Alabama which made Hyundai to plan to become one of the world's top five manufacture in 2010. Hyundai trusts that their assembly "Made in U.S" will be stronger than Hyundai "Made in Korea". In fact, U.S younger generation were thinking that Toyota & Honda were American Cars and some older generation were thinking that Lexus and Infiniti were Japanese cars.
Hyundai continued its success internationally by having a competitiveness in their production. They introduce the midsize Sedan "Sonata", then after 10 years in U.S they had introduced Accent, Elantra Sedan, Santa Fe Sporty and Sporty Tiburon which achieved the best selling model in U.S. Furthermore, Hyundai tried hard to meet their consumer expectation by having better engines and transmission which reflect its brand image successfully. Moreover, U.S consumers were really attracted to their products as hotcakes to reach a total sales 168,822 in 1986.
Hyundai entered U.S market in the perfect time. It understand U.S market and it's needs by marketing strongly its cheap cars when U.S market has high end level cars "expensive". They filled the gap or hole by selling cheap cars for low level people who were looking for this kind of cars as students and new couples. "Hyundai has many core competencies and competitive advantage which supports its sustainability in the market. Competencies in Knowledge, innovation, experience, management which relayed on in order to compete successfully in domestic and international market. Achieving competitive advantages over other competitors was one of the important strategy to be followed by Hyundai. They started to care more about the quality and performance which became more important than price. Hyundai has the ability to produce and manufacture 1.6 units per year and operated wide world including Europe and other counties in Asia which is a high number comparing to other competitors. Hyundai has a good management working otherwise it will not manage their work efficiently especially in the exits of rivals companies. Furthermore, Hyundai supports social environment by producing products which environmental friendly Ex. Dealing with the greenhouse gases Globally. They adopted a new technology which tried to decrease amount of CO2 emissions. Moreover, Hyudai focused on its R&D department which support it by introducing new products by less cost in an innovative way. In order to achieve more competitiveness it has applied a wise rates prices and introduced a diesel engines which are cost effective & able for anyone to buy it which is cheaper than its rivals one. Products like these created a good image for the company and helped it to achieve a competitive advantage wide world". "In addition, they had geographical diversification by having a new manufacture plant in Turkey 1997, India in 2000 and China 2002. As a result it had benefits from these plants by having inexpensive process and high available quality of labors in these locations. Also, by investing in Kia, Hyundai has access the R&D, Quality control and marketing department which support their working internationally (Nukhet Vardar 2010 [online],p1). Finally we can't forget how Hyundai offers 10 years warranty and "joint venture with partners to cooperate in R&D (The Struggle for International Business 2010 [online],p1). which leads to increase its margin profits. Hyundai has not only succeeded in US but also in China. It has cooperation contract with Chinese Government to provide Hyundi cars for taxies and official cars for government. It has an excellent understanding of Chinese marketing and introducing new models and building a corporate image by seeing what can make Chinese people happy all of these things enable to compete better in the global market against their rivals (Success factors of Hyundai and future direction in China [online] 2010,p1) (Aubrey Chang 2012,p1).Also, it has success in India by having a great marketing strategy, marketing research, lots of surveys, attractive features and designs and campaigns which leads to great growth in India and high profits (Gaurav 2010 [online],p1). (Hyundai Case Study 2012).

Question 3
Hyundai has adopted many of strategies which helps to build a unique brand image and reputation in the market. It has a great Knowledge Management Strategy by having a great research and development department and getting advantage of its share with Kia and use the market information for improving their products. Moreover, Hyundai improved its management knowledge by hiring experienced customer services and giving training to achieve consumer needs. As well as providing high quality services online, phone and dealership (New Hyundai Strategy Too Superficially [online] 2012,p1). Also, Globalization Strategy to go internationally and produce outside in US, Turkey, India, China.. ect in order to maximize it's production and margin profit. Building a great image globally especially in US gave it a great reputation especially after building its manufacture there. As well as it has Economic of scale by having high quality labors by less cost and product differentiation according to their consumer needs, desires and to their threat in markets. It has adopted many exterior design and engineering (Abigail Zhu 2009,p1) which reflect on its brand image successfully. Furthermore, Pricing Strategy which focus on having economical prices which beat their rivals prices in the market. With the recession in USA, Hyundai low prices cars hit the market. Instance, Hyundai lunched Accent which attractive lots of American people which increase its margin profits when the market was very expensive (Nick Bunkly [online] 2009,p1). Also, It has a great Marketing & Advertisement Strategy which focused on less profit for a short period only to have a good quality image in the market then started their advertisements as instance the commercial advertisement show of the Elantra in a perfect way which hit the market and increase its profit. Moreover, Innovation Strategy by trying to create and manufacture special kinds of engines and cars that support diesel to be cost effective and affordable. On the other hand it has some Environmental & Technological Strategies, which focused on the external environment by being green friendly and creating new technologies which reducing CO2 in their production as well as pollutions and it has cooperate with Green House globally for protecting for the same reason.
Hyundai learning curve is representing a good view of their success after a period of failure. Their learning curves shows the experience Hyundai gain with the time. It shows that their sales has been decreased in 1987 from 350,000 in sales with 2.5 % market share to 150,000 with 1% market share in 1998 then increase after the experience they had gradually between 2000 & 2002 till it reach 2% market share and productions 270,000 in sales. This supports Hyundai to know what kind of process should be done, what kind of products to should be launched ect. Therefore their learning curve of quality between 1990 and 2001 was down which let Hyundai learn from its experience and running behind fixing the situation and producing high quality products. Also, Their targeting Strategy was very effective to focus on low level in the beginning then goes further to medium and high level cars to meet their consumer needs. It was targeting old people with stylish design then starts to go for medium cars as Santa Fe. Their launching strategy especially in U.S demonstrate the smart thinking of Korean as they chose the right time to enter the market as lot's of low level people were needed to their cars in high and expensive American market ex. Students and new couples ect. They also had a great Creative strategy which try to create unique products inspired from the international cars in Europe, India and China with different styles & colors that matching the majority needs of consumers. Finally they had change their organizational structure from functional to divisional structure which focus on having three main points market structure, geographic structure and product structure. By having a separate product divisions, employees who's doing sales & customer services and having specified employees location it could process its work easily and in an effective way (Melissa Bushman 2007,p1).
Hyundai development strategy focused on their engineered who tried their best to differentiate their products than rivals one to get a competitive advantage over them. After Hyundai experience had in the market it has changed from an imitated co. for the foreign manufacture and became a good innovative and developed by its own researches. Successful company not who overcome their crises only but who learn and benefits from it for the long term. (Hyundai Case Study 2012).

Question 4 Hyundai successful has not completed without its creative technological policy which linked with their innovation strategy. Hyundai has opened Eco-technological Research Institute. Starting from R&D and operation to manufacturing, their institute has supported them to react friendly to environment. At the end of their product life they tried to minimize the vehicle wastage as much as possible and doing recycling in an efficient way. That's why they adopt a new program for "Design for Recycling" which try to support the recyclability in a good way. As well as they create a center "Automobile Recycling Center" for recycling end of life vehicles in a friendly way to environment. They had changed their cars bumpers to have a close loop recycling system to handle the recycling process. Also, they have improved their engines and transmission in a away to support eco-friendly technology. Hyundai has included new technologies which supports it's innovations in motor markets. They built a new technology for communication, GPS, telematics services called Mozon for better conditions for driver safety and convenient. Also, Driven State Monitoring which studying the changes in driver eyes through the movement of his eyes and facial muscles with a camera installed in Hyundai cars. Furthermore, Nono Glass to remove dust or water from mirrors without the need to clear it (Reshaping into a global green company [online] 2010,p1). Due to government regulations in pollutions, Hyundai was encouraged to innovate and adopt new technology in engines to eliminate the pollutions from diesel cars (Jong Guk 2002,p1).Therefore, the Korean government has put some policies to protect their labors which made Hyundai Labor wages to increase with high quality working. Moreover, Korean government was obsessed (Young deungpo 2010,p1). With development and economic growth which motivate the technological Development of Hyundai's engineers to create unique production which support them internationally. Moreover, the government has done some restrictions on the import by preventing foreign competitors to enter the market to support Hyundai their domestic automakers and tried to encourage them financially. As well as when the investment was over, it has limit the number of automakers which made Hyundai to take advantage of its economic of scale and dominant the market before going internationally (Hyung Je Jo 2010,p1).In addition, Korean government has done some policies on reducing the size of business which made HMC and its subsidiaries separated from Hyundai Group. This affect positively on Hyundai and tried to expand by having other businesses as establishing Hyundai engineering and constructions Company. As a result this leads to expand and maximize its economic of scale and scope (Lansbury, Russell D 2003,p1).On the other hand, Korea Government policy on financing consumers and tax incentives which support Hyundai Company and other automakers in Korea (Korean Government cut taxes to Help Slumping Auto Industry [online] 2010).Also, US policy was supporting the foreign investment which enabled Hyundai to manufacture there and serve their consumers. As well as the privacy policy in US supported Hyundai by having protected consumers' information online which supported their surveys and researched. They usually collect information in order to get product details to meet customer expectation for the long term. (PRIVACY POLICY [online] 2010,p1) Internationally in Japan, Hyundai was facing problem with their high non-tariff barrier which affect their production in Japan (Hyundai Complains about "invisible Barriers" in Japan [online],p1).

References: [1]Abigail Zhu (2009). The success of Hyundai Motors [online]. Available from: . [Accessed 5 December 2012].
[2]Aubrey Chang (2012). Hyundai Kia Automotive Group: Humble beginnings to Global prominence [online]. Available from: . [Accessed 5 December 2012].
[2]Gaurav (2010). Hyundai's Marketing Strategies in India [online]. Available from: . [Accessed 11 December 2012].
[3]Hyung Je Jo (2010). The Hyundai Way: The Evolution of a Production Model [online]. Available from: . [Accessed 12 December 2012].
[4]Jong Guk (2002). Technology Strategy in Korean Leading Edge Companies [online]. Available from: . [Accessed 5 December 2012].
[5]Lansbury, Russell D. (2003). The global strategies and employment relations practices of the Hyundai Motor Company in Korea and India. [online]. Available from: . [Accessed 5 December 2012].
[6]Melissa Bushman (2007). Functional, Divisional and Matrix Organizational Structures [online]. Available from: . [Accessed 12 December 2012].
[7]Nukhet Vardar (2010). Hyundai: A Global Success Story [online]. Available from: . [Accessed 10 December 2012].
[8]R.O.S Rao (2011). Operation Management Assigned [online]. Available from: . [Accessed 10 December 2012].
[9]Unknown (2010). The Struggle for International Business [online]. Available from: . [Accessed 9 December 2012].
[10]Unknown (2010). Success factors of Hyundai and future direction in China [online]. Available from: . [Accessed 8 December 2012].
[11]Unknown (2010). Reshaping into a global green company [online]. Available from: . [Accessed 5 December 2012]
[12]unknown (2009). Korean Government cut taxes to Help Slumping Auto Industry [online]. Available from: . [Accessed 11 December 2012].
[13]unknown (2007). Hyundai Complains about "invisible Barriers" in Japan [online]. Available from: . [Accessed 11 December 2012].
[14]Unknown (2010). PRIVACY POLICY [online]. Available from: . [Accessed 10 December 2012].
[15]Young deungpo (2010). Kia Motors Corporation History [online]. Available from: . [Accessed 10 December 2012].
[15]NICK BUNKLEY (2009). With Low Prices, Hyundai Builds Market Share [online]. Available from:. [Accessed 11 December 2012].
[15]unknown (2012). New Hyundai Strategy Too Superficially [online]. Available from: . [Accessed 11 December 2012].

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