Hyundai Motor Company | Marketing Essay

Hyundai Motor come with Marketing EssayEstablished in 1967, Hyundai Motor Company has sustained, grown and become the pieces fourth largest automaker in bournes of units sold. Automobile manufacturing manufacture is in the maturity stage and exposed to a lot of difficulties. To work and develop, the party withd freshs to identify and develop see factors of achievement such as innovation, technology development, shade forward motion, and node service associated with cutting addresss and modify products. Moreover, the company take to school into account the characteristic of forces driving industry competition on the way to success.To sustain emulous, Hyundai postulate to maximize its military groups that include go on technology, valu open stationing experience, qualified labor force, cost efficiency, trade flexibility and experiences. On the other hand, Hyundai also has to minimize weaknesses that are cultural contraventions, goodness wrong risk, late(a) en trant, conversion and currency fluctuation. In addition, there are about opportunities for Hyundai to take payoffs consist of unfermented constituent of hybrid simple machine, governmental support, buyers accent mark on meek cost design, competitors weakness and potential market. While avoid threats that take globular scotchal crisis, new entrants, low market growth, environmental want and policy-making inst cleverness.Hyundai must consider system for short, intermediate and long term. Firstly, to minimize adverse impact of world(a) frugal crisis, company should reduce costs expenses. Secondly, Hyundai should take advantage of core strengths as advanced technology such as eco-friendly null to comply with environmental issues. Lastly, the company should target into potential markets from developing countries. In addition, it is burning(prenominal) to improve the structure, system and policy. Continuous decentralization of management structures and the scheme of diversification should be applied associated with new system to intensify the availability of back-end data, improving customer service and lowered system management costs. Finally, hiring policy and global environmental management policy should be applied to sum up Hyundai to success.(309 words)Brief of companySince its instauration in 1967, Hyundai Motor Company has grown into angiotensin-converting enzyme of Koreas well-nigh recognizable and trusted firms. Today, Hyundai stand the worlds fourth largest automaker in terms of units sold and one of the Big Asian. Hyundai Motor is operating globally and allows diverse product portfolio supported by its 6,000 sales points and 23 overseas manufacturing plants and distributors in 180 countries worldwide. The total receipts of company has recorded as 31 December 2008 is US$35,053,637 thousand and damages on investment is 3.38%.Reason for selectingFrom the beginning to recent time, Hyundai has made of import inroads in building i ts brand from the Worst Car Ever Made to a 72nd ranking in the 2007 Best Global Brand survey. Public erudition of the Hyundai brand has been transformed as a result of dramatic improvements in the persona of Hyundai vehicles which are sold with reasonable set. While others competitors are lining with losses and struggling with economic downturn, Hyundai still make network and has come up impressively as a phenomenon in political machine industry.Main strategic issues facing the companyCoping with climate change and complying with regulations on CO2 emissions. Decreasing environmental impact and promoting recycling.Difficult economic environment that restricts number of car consumers and uplifted gear oil damages.Companys contribution to the National EconomyAs of December 2008, machine industry which is vital to Korean manufacturing industry, accounted for 14.4% in production, 13.4% in export, and 14.3% in employment. Hyundai has created 56,204 employees in southwest Kor ea and contribute about 70% to Korean automobile industry and 5.4 % to Koreas GDP.Companys contribution to the regional economyThere are 22,066 overseas employees under Hyundai Motor Company, comprise of 6,956 employees in North America, 5,101 employees in China, 5,457 employees in India, 4,694 employees in Europe and 218 in other countries. late strategic dilemmaIn applying of Blue Strategy, some of its eco-friendly cars were highly-developed to meet environmental regulations set by European Union, the performance of vehicle is meant to deteriorate when he carbon dioxide emission is reduced, it lessen Hyundais products competitiveness as compared to its rivals.Recent strategic choiceHyundai is taking climb up toward increase quantitative growth through global in combination with quality and brand management to enhance global competitiveness and further raising sales results.Hyundai applies strategy of Green Management by plan of Blue Drive as the key toward sustainability approach and to comply with regulation on emission issue.Source of Information on CompanyHyundai Motor Annual Reporthttp//worldwide.hyundai.com/(375 Words)Industry purport cycle cartridge holderAutomobile manufacturing industryIndustry outputIntroductionGrowthMaturityDeclineAutomobile manufacturing industry is in the maturity stage of the industry life cycle. In this period, the industry does not grow as much as last 5 or 6 years. The market is very competitive, many shaper whirl their products, the producers continue with the product differentiation in many segments and hence, the market result in saturation with many manufacturers offering many models of the product. In this stage, that the best efficient and effective company survives. There are about 806 million cars and light truck on the road in 2007, the number is increasing rapidly especially in China and India. The biggest market currently is in North America which is about 250 million vehicles, go overing are Asia and Europe market. In 2009, with stable economic growth, China is going to become the largest automobile producer and market in the world.The automobile industry crisis and oil shock in 2008 is a part of global financial recessional. It affected Asian and Europe automobile manufacturers but it is primarily felt in Ameri push aside automobile manufacturing industry. With rapidly rising slope oil price, automobile industry is experiencing high pricing pressure from raw clobber costs and changes in consumer buying habits. Also, there is an increase in outside(a) competition from earthly concern transport sectors and consumers are re-evaluating their private vehicle usage. Moreover, the social expectation and related concerns regarding carbon emissions had lead to the restricted standard setting that automakers receive to be fulfil in order to penetrate into these high askment markets.In addition, customers now are seeking a car with higher quality demand, much functional and price is cru cial factor. In combination with the challenging economic environment, the companies strategy has to be more effective, innovative, cost reduction as headspring as making product differentiation and improve customer services. Also, automobile companies progress to to implement more creative marketing strategies to lure consumers as about of them are experienced decline in sales.The solution to climate change whitethorn have a greater impact on the automobile manufacturing industry than all the other factors. It leads automaker to develop toward green technology and alternative fuel and material to lessen impact of automobile industry to environment.Key factors of success (KFS)The factors listed above are some of the most important factors that company needs to achieve in order to be happy in the industry. Nowadays, Toyota is the most successful company in automobile industry beca affair they achieve key factors successfully. Among all factors, innovation is the most important factor contributes to the success of company. In contrast, Nissan had average performance. Hyundai is in the middle, growing stably and strikingly. As we see from above, the total weighted score of Toyota is highest, following is Hyundai then Nissan. Among all of the factors, technology is the most important as automobile industry is under pressure of high competition and the issue of climate change. Technology is not simply satisfying customers with a simple car, it need to bring a car with more functions, more model and technological. Also, technology needs to enable the company to develop car in combination with new material and fuel. Leading technology with above average rating of 4.5 enables Toyota to be more successful than Hyundai and Nissan.Innovation is second important factor that lead to the success of company. As customers concern more about the appearance of the car, more innovative is needed. New models are required to have more impressive design and that will functio n company to gain market share and increasing sales value. In term of innovation, Hyundai has launch new models with remarkable improvement of design that is more dinky to the customers over the past few years. It helps Hyundai gaining more market share in compare with less innovative Toyota and Nissan. So the company need to keep up this advantage, more skilled workers are needed and necessitate of a breakthrough idea.In addition, Quality and safety is one of important factor that customers always fend for in mind when making buying decision. Hyundai has done it well since the past few years. They receive good signs from customers knowledge of companys brand that is improvement of quality safety. expense is crucial factor an impressive design only attracts customers if it comes with reasonable price. Thereby, company always need to develop strategy toward cost reduction. Company should have diversity of product to argue with others and to enjoy economy of scale and scope. To be more successful in improving brand of company, not only design, quality and price but also customer service needs to get betters. Customers want a good after-sale service that they can rely on. Company has to take these factors as a basis in combination with economic situation to develop suitable strategy in order to grow successfully and stably.Threat of new entrantsSluggish state of economyRequirement of high RD and fixed costDifficulty in accessing to distribution channelsFew newer with low competition relation power of other stakeholderInternal stakeholders shareholders, management, employees and creditorsExternal stakeholders government, partner firms, clients and potential investorProvide feedbacks opinionForce Driving Industry CompetitionSuppliersOther stakeholdersBuyers second-stringersIndustry competitors contender among existing firmRivalry among existing firmRivalry among existing firmHighly competitive of technologies, costs and servicesHigh number of competitors sor t of productsSlow growth, high fixed costThreat of substituteThe cost of automobiles and environmental issues lead to many transportation options negociate power of buyersPrice peeledRequire improvement of quality.Nice design better service requirementImpact of cars to health and environmentNeed for alternative fuelPotential EntrantsBargaining power of suppliersThe automobile fork up business is quite fragmentedSuppliers have little responsibilityRivalry among existing firms (High)Hyundai dominates the Korean automobile market and has low domestic help rivalry. However, in global competition, rivalry among existing firms is high. Rival companies compete on prices, quality and customer service a company watches very conservatively every movement of rivals in order to adapt appropriately. There are high numbers of competitors and they diversify into many market segments. Company earns lower profit when cost of competition is high. To be more successful, Hyundai has to keep worki ng their competitive advantages, launching strategy to reduce cost, better service to suit with this sluggish economic condition, keeping up with developing of new design, quality and especially looking answer for technology toward Green Environment that I predict it will be a crucial factor in near future.Threat of new entrants (Low)Automobile industry is highly capital and labour intensive, it require very high fixed cost as well as RD, so threat of new entrants is low. It is not easy to repose automobile industry and it is harder since the economy downturn is happened that decrease the demand of customer. Brand loyalty of customer is also an obstacle there are wide choices for customer. Moreover, the requirement of innovation, technology and product diversification makes it more difficult to enter the market. Established in 1967, Hyundai has a long time experience and enjoying benefit of economies of scale through operation all over the world so new entrants are not a pressure f or a company.Bargaining power of buyers (High)The bargaining power of buyers is high. The manufacturers depend on them to stay in business. Buyers purchase a significant proportion of output. If manufacturers cannot keep their buyers satisfied then they will lose their buyers to competitors. Nowadays, there are various brand and models that buyers can choose, buyers have many choices so that their requirements are high. The factors that affect buyers to make buying decision are the design, quality, price and environmental effect. Especially, current time is under economic recession and climate change issues, decrease in buyers demand and their consideration of impact on environment creates more pressure on company.Threat of substitute products or services (Low)It is true that there are many of transportation that can be a substitution of an automobile such as bus, train, bicycle, motorbike, etc. Substitute products depend on geographical location. In some cities such as Singapore, N ew York, having a car is not necessary because those cities has good infrastructure of public transportation and there are policy to reduce number of car in order to reduce heavy traffic, avoid traffic jam and comfort environment. However, the need of automobile is always great. Developing countries are potential market and the need in those countries is getting greater.Bargaining power of suppliers (Low)Hyundai had a good supply chain management system and had long relationship with suppliers. Suppliers have little power in automobile industry because there are numerous lot suppliers that help company to avoid shortage of material and selecting suppliers with lower cost. Automobile companies work to maintain cost strategies so that suppliers must compete on price with one another to acquire contracts with them. Since it is very competitive among number of suppliers, an automobile company could easily switch to other supplier along with high requirement of price and quality.Relati ve power of other stakeholders (Medium)The internal stakeholders of Hyundai include the shareholders, management, employees and creditors. The immaterial stakeholder of the company is the government, partner firms, clients and potential investors. Internal stakeholders help company to apply strategy in proper way while external stakeholders helping with feedbacks, opinions and require responsibility of company. As the company is very large, it has great effects to stakeholders. In response to them, company develops strategy of Blue Drive that represents commitment to develop environmental-friendly vehicle along with enhancing basic features of products.Internal cipher Analysis compendium (IFAS Table)StrengthsHyundai has core strength of innovative technology and becomes a leader in developing environment friendly technology to compete in the recent time when the impact of cars to environment are highly concerned and high requirement of buyers on innovation, quality and design. A long with innovative technology, Hyundai is well managed on costs and expenses that enable company to compete on price with its rivals it is such a significant advantage especially in this economic downturn condition. Qualified labour force helps Hyundai to gain competitive advantage, manage and operate company effectively. Hyundai has strong corporate philosophy that focus on customer first, flexible marketing strategy and rich experience of producing car for export market. Finally, its value of global branding experience is raising that enable Hyundai gaining more market shares.WeaknessesOn the other hand, there are some weaknesses that need to be taken into consideration. Drawbacks occur due to differences between national and business cultures. For example, the national culture of Korea is collective while it is highly individualist in America. Hyundai commodity price risks arise from changing price effect of inputs such as steel, glass, plastics and rubber. As a global company, Hyundai is also exposed to the risks related to fluctuations of currencies in countries where company doing manufacture. When making buying decision, customers seek information and feedbacks from previous buyers late enter into market means lesser information and feedback, hence provide drawback. Finally, Hyundai has limited ability in adding new models in order to diversify products and compete in many automobile segments, especially in luxury automobile segment.External Factor Analysis Summary (EFAS Table)OpportunitiesStrong research development and advanced technology leading in producing car in hybrid segment enable Hyundai to take advantage to expand market share and gain more profits. As high tax contributor, Hyundai enjoy governmental supported policy in domestic market, thus enjoy less competitiveness from competitors and spreads its wings to enfold domestic market. Sluggish economic condition makes buyers focus more on low cost design in which Hyundai has personality of improvement of quality design associated with lower cost of products as compare to other competitors. Moreover, crisis of key rival Toyota on quality create big opportunity to Hyundai focusing on quality improvement and reputation. The company should put more emphasis on potential markets from developing countries provide promising opportunity for the company to expand and gaining profit in the future.ThreatsOn the other hand, the company is facing with some threats indicated above. Global economic crisis and oil price shock have adverse impact to automobile manufacturing industry as well as the Hyundai, reducing investment and raising cost of fuel and raw materials. Also, the brake on worldwide auto demand has created low growth market, decrease sales and profits. More pressure of competition when there are some new entrants enter into market, targeting into some specific segments and acquire market share portion. Additionally, environmental requirement puts more pressure to the company to technological change toward eco-friendly energy. Finally, economic implication of political imbalance increases transaction costs and insurance cost associated with security and flow of capital, goods between many countries.Strategic Factor Analysis Summary (SFAS) hyaloplasmShort termThe global economic crisis and oil shock affect the company in short term. It put brakes on automobile demand, increasing cost of fuel and raw materials, reducing investment and RD cost while putting pressure on cutting price of products hence require strategy of the company toward reducing operating expenses and workforce. In this situation, well manage costs and expenses become the core strength of Hyundai in competing with other competitors and attracting more customers. In addition, the crisis of key competitor as broken top-quality image creates opportunity to Hyundai by launching campaign focusing more on quality improvement, gaining reputation and boost sales value.Intermediate term Hyundai can take advantage of advanced technology in intermediate term as well as in the long term. Advanced technology is core competency of company to compete on quality and functions of products that are more interested from customers nowadays. Late enter into automobile manufacturing industry making less information and feedbacks of Hyundai products so that the company need to launch strategy of marketing brand value, raising level of perception of customers. Furthermore, potential markets from developing countries should be considered and prepared in intermediate term in order to expand business and gain market share.Long termEnvironmental effect is the most concern of all people and society and it affects all industry, not just automobile manufacturing industry. Therefore, advanced technology toward eco-friendly energy is the most concern of the company in long term as well. Not only improving quality, design and function of products but also company needs to put more emphasis on reducing impact of car to environment as a means of sharpening its competitive advantage. Moreover, the company should be able to create more new models to compete with competitors especially in luxury and hybrid car segments which are less competitive areas but very paying areas. Similarly, targeting into potential market from developing countries should be considered for long term strategies as they have such a lot of potential demands and providing valuable source of profitability.TOWS MatrixInternalFactorsExternal (IFAS)Factors(EFAS)Strengths (S)S1 Advanced technologyS2 Branding experienceS3 Qualified labour forceS4 Cost efficiencyS5 Flexibility marketing experiencesWeaknesses (W)W1 Cultural differenceW2 Commodity price riskW3 Late entrantW4 DiversityW5 Currency fluctuationOpportunities (O)O1 Hybrid car segmentO2 Governmental supportO3 High emphasis of buyers on low cost designO4 Competitors weaknessO5 Potential market from developing countriesSO strategiesFocus on resear ch and developmentBuild up strong brand image.Expand business to potential marketWO strategiesSet up more distribution channels plantsGlobalizationInnovative productsThreats (T)T1 Global economic crisisT2 New entrantsT3 Low market growthT4 Environmental requirementT5 Political instabilityST strategiesUse eco-friendly fuelCutting costs expensesFocus on marketing and public relationWT strategiesIncrease advertisementReduce ineffective distributor to minimize costsImprove market researchSO strategiesTo strengthen companys choice ability, company need to use its own strengths to take advantages of opportunities. Firstly, Hyundai should focus on research and development to reach out the potential hybrid car segment trend by taking advantages of its own advanced technology. Furthermore, Hyundai needs to know the competitors and how they operate, as well as exploit their weakness. For example, exploit weakness of Toyota that has been facing a crisis of quality. With flexibility marketin g and organisational experience, Hyundai may identify the problems and avoid same mistakes that can be made hence building up new and strong brand images associated with lower price. With a branding experience and qualified labour force, Hyundai may gain a large market share from these potential markets.WO strategiesTo take advantages of opportunities to dominate weaknesses, Hyundai can set up more distribution channels and plants in new markets and segments. One of Hyundais weaknesses is the lacking competitiveness in luxury car segment. Thereby, strategy which should be applied here is globalization they may aim to export their products to developing countries, where customers mostly have an average income that put high emphasis on low price design and willing to purchase an affordable car instead of a luxury car. Moreover, late entrance to the market can be covered by the appearance of innovative products, which are hybrid car segment which Hyundai has focused and developed.ST strategiesCompany always faces various threats from both internal and external factors. There is a need to cover the threats using companys own strength. Nowadays, environmental requirements from customers are getting higher since they are starting to concern about health care and impact of cars to environment. By using their advanced technology, Hyundai should develop technology toward eco-friendly energy such as bio-diesel, liquefied pet useum gas and electric energy to combine their engines and social expectation. By making advantages of cost efficiency, Hyundai may cover their low market growth however they have to manage their capital and expenses wisely and effectively. New entrant is always a big threat facing a company. However, by having a good brand experience and flexible marketing, Hyundai can surpass their competitors by focusing on marketing and public relations to gain more market share.WT strategiesThere are some strategies Hyundai may use to minimize weaknesses and avoid threats. Firstly, global economic crisis has affected many industries and companies, Hyundai is not the exception. Under economic crisis, minimize unnecessary and ineffectively costs plays an important role to maintain company business. At the same time, company should increase advertisements to gain more reputation and build up their brand images. Last but not least, Hyundai should do more market research if they are planning to expand their business to other countries, in order to avoid unwanted political instability and cultural differences.Review of strategic options available to companyThere are several strategic options which are currently available for the success of Hyundai. Firstly, Hyundai should focus on short term strategies, such as operational efficiency program and globalization. The company is facing a low market growth compared with their competitors due to late entrant to the market. Hence they need to manage their capital and expenses effectively by cutting all unnecessary costs, operating expenses and other utilities costs. Moreover, globalization strategy should be concerned to gain more market share from potential market in developing countries. However, they need to be aware of the cultural differences and political instabilities which may occur during the plan.On the other hand, Hyundai must concentrate on long term strategies. Nowadays, the hybrid car segment has become the new trend in automobile market. Thus research and development department should be improved to reach the potential market trend, based on its existing advanced technology. From the improvement of RD department, a new innovative product may appear to distinguish Hyundai from other companies. Furthermore, health care and impact of cars to environment are being concerned by customers. Hyundai need to come up with new green and eco-friendly fuel such as bio-diesel, liquefied petroleum gas and electric energy to follow the trend.Recommend for future directionFor fu ture direction, Hyundai should pay attention to improve their brand images, by running more marketing programs such as offering loyal customers reward system and new advertisement campaign. These advertisements should be located at all available media which are being concerned by public, want newspaper, television, radio and over the internet. They need to learn useful strategies from their competitors as well. One way to the success is to increasing more options of products along with improving online ordering services. Hyundai may also offer more options available to customers through online service to maximize their customers satisfaction.Assessment of companys performanceEfficiencyDespite sluggish domestic sales amid the global economic downturn, Hyundai Motor expanded its global market share last year and the 2009 net profit was an all-time annual high. Hyundai had achieved 2.96 trillion won ($2.57 billion) in 2009, compared with a net profit of 1.44 trillion won in 2008. In 2 009, Hyundai sold a record 3.1 million vehicles, up 11.7 percent from 2008. In 2008, Hyundai has jumped up to fifth in the global standing of the worlds largest automobile manufacturers. However, latest sales figures in 2009 that place Hyundai to the worlds fourth largest automaker in terms of units sold.EffectivenessHyundai has utilize many strategies to increase companys effectiveness. Hyundai is seeking reductions of as much as 20% in consideration of supplier, volume and parts involved. The company is cutting costs not only by rationalizing its domestic plants, but also more and more by manufacturing in areas with lower production costs in oversea countries. As a result, company completed a 3 trillion won ($2.2 billion) cost-reduction program in 2008. Possessing about $7.1 billion in assets including Hyundai Motor share, Hyundai is very obstreperous in spending as RD and marketing. In general, Hyundai is implementing its strategies effectively.Return on investmentHyundai has r aised its global share in recent years, even as it has well-kept a stable position in Korea and well balanced market portfolio and currency settlement. However, in 2009, there are some decreases in term of return on investment due to the negative impacts of sluggish economic condition. Total dividend payout was KRW235.7 billion, down 14.6% from the previous year. However dividend payout level was maintained at the 16%. Hyundai enjoyed a rise in market share as the result of innovative marketing and successful launch of new models. In the first three months, the companys global market share rose to 4.7%, compared to 4% a year earlier. The company is expected to continue its success along with improved performance in key markets.Recommendations for Implementation of StrategiesStructureThe current economy is under sluggish condition that requires the company to make judgements and a need of improving organizational structure. Companys structure needs to work toward operational efficien cy in association with quality and technological improvement. Continuous decentralization of management structures and the strategy of diversification of output helped the company in coping with economic crisis. Hyundai needs to establish RD centres to take advantage of research infrastructure, so that the company can develop its products to satisfy the requirements of the environmental and safety regulations effectively. bodyHyundai is multinational automobile manufacturing company customers demand high-quality, customized services and they also look for different types of information when mak