The Hyundai Company

THE HYUNDAI COMPANY 5

TheHyundai Company

SWOTANALYSIS

Opportunities

PESTEL ANALYSIS

  1. Economic Factors

  • The South Korean has grown at double-digits.

  • Growth in urbanization.

  • Rise in household income levels.

  1. Technological factors

  • The evolution of Internet services makes it easy for the company to gather and analyze customer feedback.

  • Technology solutions assist with the integration of supply chain, thus reducing losses and increasing profitability.

Threats

  1. Political factors

  • The South Korean government established an international hub for the manufacturing of affordable, small cars, two wheelers, and tractors.

  1. Economic factors

  • The economic pressures in the automotive industry are causing related companies to adopt a traditional sales process.

  • Global market emphasizes on automotive testing.

  • Major global companies like BMW and Audi have set up manufacturing units in South Korea.

  • Physical infrastructure, for example, bridges and roads, affect automobile use.

  1. Core Competency Analysis

  • Financial Strength.

  • Strong Market shares in the Korean market-74%.

  • Creation of barriers to resources in the Korean market.

  1. Key Success Factors

  • Production of high quality automobiles.

  • Use of High tech motor production facilities.

  • Use of social media in marketing.

  • Integrated production plants ensure quality.

  • Efficient shipping of products.

  • Effective use of advertisements and promotional sales.

  • Ability to coordinate and integrate activities related to the production of given car brands.

  • Highly trained employees.

  • Use of hard to imitate processes.

  1. Value Chains

  • Lack of fully integrated global operations

  • Over reliance on home market and developed nations.

THEGENERIC STRATEGY

Thegeneral strategy of the Hyundai Motor Company aims at achieving itsmission by employing efficient production processes to minimizecosts. First, the company uses dealers to enhance the distribution ofits products. The provision of efficient shipping processes is key toensure that the firm does not need to open a processing plant insecondary markets. Such a strategy saves the company on costs andquality and minimizes costs by producing its products from a givenlocation and then shipping the products to the various distributors.Specifically, the company has established large production plantsthat can hold large volumes of goods and raw materials in strategiclocations within its primary markets to facilitate additionalshipping to the secondary markets. Besides, it has a large port withan anchoring capacity of three ships to enhance the shipping of itsproducts.

TheHyundai Motor Company’s minimum costs strategy is furtherillustrated by its financial ratios. The company has managed tomaintain higher liquidity levels than the average liquidity in theindustry. As indicated by the fixed assets turnover ratio, ensuresefficient use of its capital in the process of revenue generation.For example, the ratio indicates that the firm generates 4.14 SouthKorean Won for every Korean Won invested in its fixed assets.

Sinceinception, the Hyundai Motor Company has strived to establishefficient processes to ensure the production and distribution ofhigh-quality automobiles. The sales strategy aims at increasing thenumber of car dealers. For example, the production processes aremodified to accommodate six thousand dealers all over the world. Thesales of the company have seen an upward trend through its dealershipprocesses located in thirty countries out of the fifty states wherethe company has established its operation.

TheHyundai Motor Company has adopted a research and development strategyto build both its reputation and profitability. First, the companyhas continuously introduced innovative automobiles with the aim ofmaximizing customer satisfaction. The cars suit diverse customerrequirements ranging from color to performance. The company hasenhanced its processes to ensure the production of highly competitiveproducts and minimizing the cost of production to ensureprofitability using high-tech facilities. The ability to reduce thecost further influences the capacity of the company in offeringcompetitive prices for their automobiles.

Themanagement of the company heavily insists on the need to employhighly qualified employees in the company’s production plants tooversee the research and development activities. The employees areengaged in a series of training and development activities to enhancetheir skills. Continuous training and development of its employeesmaintains the competitiveness of its operations besides, the employeedevelopment policy of the Hyundai Motor Company provides thattraining and education of the employees widen their skills andexpertise. Therefore, training improves the employees’ ability toundertake their activities in a more efficient manner. The HyundaiMotor Company has invested in employee education and training forumsindicating its commitment to training. During training, new hirescommunicate and exchange their ideas with old and skilled employeesas a way to improve and develop new talent. Consequently, the companyhas maintained the generation of high returns through the productionof high-quality products.

Second,the human resource strategy of the company also calls for theacquisition of highly qualified engineers who contribute to designingand joining of different parts to come up with an automobile. Thecompany has an employee population of over seventy-eight thousandattached to various plants all over the world. In addition toresearch, the high human capital base enables the company to producea large number of units to meet the market demands. Second, thecompany ensures there is a low employee turnover rate by providing asatisfactory and safe working environment.

DISCUSSIONAND RECOMMENDATIONS.

TheHyundai Motor Company has experienced tremendous growth in terms ofits operations and profitability. The company’s mission statementaims at creating valued automotive for the customers by blendingsafety, efficiency and quality. The company aims at utilizing itsdiversified team to offer responsible stewardship of the environmentand the community while achieving the security and stability now andin the future.

Theanalysis reveals that the Hyundai Motor Company is on the verge ofattaining its strategic objectives. First, the company should utilizeits strengths to support its strategic goals. Consequently, it shouldfurther the global expansion strategy beyond the current 165countries and approximately 6,500 dealers all over the world. Globalexpansion is key to achieving the company’s commitment to thestrategic objective of increasing the number of sales throughcustomer satisfaction and global orientation. Besides, the companyshould utilize the opportunities provided by the advancement intechnology to enhance the marketing activities. The evolution ofinternet services serves an opportunity for to gather and analyze thefeedback from its customers. The advancement in technology alsoserves an opportunity to improve the operation of the supply chainoperations.

Besides,the company has a strategic goal that aims at making money andselling automobiles by adopting technological innovation to increasedemand. The ranking of the company as the largest in terms ofprofitability in the year 2014 further confirms the commitment toachieve the strategic objective. Consequently, there is need toadvance its investment in human resources through training anddevelopment. The aim is to enhance employee creativity andinnovativeness to beat the increasing competition. The use of hightech production facilities proves strong enough to achieve thestrategic objective

Thestrategic objectives of the company are realistic and achievable. TheHyundai motor company should improve the level of customersatisfaction by upholding communications with clients. Theopportunity provided by the social media platforms serves as uniqueto increase communication with clients on their needs. Consequently,the organization will be capable of providing customized solutions toits clients.

Theanalysis of the core competencies revealed a strong financial muscle.It is imperative to use the financial strength in marketing andincreasing sales. Specifically, the company should utilize the highmarket share within the Korean market. The financial muscle shouldfurther be reinvested in research and development through highertechnology and training activities for its employees to foster aspirit of development and research. Through continuous development,the company has the chance to beat competition, venture into moremarkets and increase profitability.

Theeconomic factors present threats as pressure has led the automotivecompanies adopt the traditional sales process. Besides, the call forautomotive testing is expected to result into more recall rates dueto the increase in the emphasis on quality. Additional economicthreats include the entry of key automobile manufacturers such as BMWand Audi into the South Korean market. However, such threats areinsignificant given the market share enjoyed by the Hyundai motorcompany. Besides, the company has built a strong reputation withinthe Korean markets that makes due to the loyalty accorded bycustomers.

Theacquisition of highly trained employees serves as a strength of theHyundai Motor company. Specifically, highly qualified employeesenhance the company’s creativity and foster innovation. Besides,innovation increases sales, wins customers loyalty and lowers thecost of production. It is imperative for the company to uphold itsemployee acquisition and training strategy as a way of maintaininghigh quality products and providing competition in the automobilesmarket.

Conclusion

Thepestle analysis of the Hyundai motor company reveals that theautomobile industry presents opportunities that the company can seizeby utilizing its strengths. First, the company can utilize itsreputation to maximize sales from the growing South Koreanpopulation. Specifically, the growth in urbanization creates demandfor automobiles enforced by the rise in household income levels.

Second,the company can grab the opportunity provided by technology tominimize on its weaknesses. For example, the evolution of internetservices serves as an opportunity for the company to enhancemarketing initiatives and client management. Besides, it serves as anopportunity to improve the supply chain management process, reducelosses and enhance profitability.

Thekey threats identified are the establishment of an international hubfor the manufacturing of affordable small cars and two wheelers. Theinitiative by the government enhances the possibility of directsubstitutes for the Hyundai automobiles. However, it also provides achance for the company to diversify its activities to the productionof two wheelers. The initiative to diversify can save the companyfrom competition and increase revenues.

Thepaper has recommended the company to extend its key strategies toensure the achievement of its mission. Specifically, as a way ofincreasing sales, the current literature has guided the company topursue global operations by increasing its global presence. Besides,there is need to utilize the advantages provided by technologicaladvancements into promoting the company’s automobiles throughmarketing. Besides, the current literature has called for the companyto improve its communications with the customers using social media. Finally, the paper has observed the need for the Hyundai MotorCompany to persist in the training and development of its humancapital. Through training, the company will be able to foster aculture of creativeness and innovation that is key to the survival ofthe company.