Cross Cultural Analysis of Hyundai

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Hyundai: A cross-cultural analysis with special focus on India and USA

VIVEK Roll No. 51 MBA (IB), IIFT Delhi, 2010-12

Executive Summary

The current issue in the world economy is characterized by globalization. Corporations have built up a world-wide network economy by promoting production and trade. An important cause for the globalizing trend of the world economy lies in relocation of production sites and management strategies of business. Firms need not only partnership with foreign companies in the form of direct investment and joint ventures, but they need also to develop cross-border buyer supplier relations. Globalization is an increasingly important aspect of the automobile industry. In the past decades, the automobile industry has been one of the mains driving forces in globalization. The pattern of globalization followed by the major car makers can so far be split into three stages. The first stage is export. At this stage the goal is to create a car that fits into a worldwide car category. The second stage of globalization comes after the expansion of export. This is the setting up of transplant in major market regions. The last stage of globalization is complete localization of transplants on one hand and the establishment of a global business network on another hand. In the early 1980s, Hyundai constructed a new plant for the first front-wheel drive car in Korea and created the "Excel Phenomena" in 1985 and successfully entered the market in the United States in 1986. Initially considered to be a low quality manufacturer, Hyundai rose to prominence in the late 90s and then further in the 21 st century through innovative international marketing strategies. This phenomenal rise from being a Korean manufacturer to a global giant has been an interesting topic of discussion and research worldwide. In this report we look at the problems faced by Hyundai in the international perspective and the steps taken by it to overcome the same.

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Hyundai Motor Company: An Introduction

H

yundai Motor Company is a Korean automaker which along with Kia comprises the Hyundai Kia Automotive Group, the world’s fifth largest automaker as of 2009. As of 2009, it is the world's fastest growing automaker. In 2008, Hyundai (without Kia) ranked as the eighth largest automaker. Chung Ju-Yung founded the Hyundai Engineering and Construction Company in 1947. Hyundai Motor Company was later established in 1967. The company’s first model, the Cortina, was released in cooperation with Ford Motor Company in 1968. Headquartered in Seoul, South Korea, Hyundai operates the world’s largest integrated automobile manufacturing facility in Ulsan, which is capable of producing 1.6 million units annually. The company employs about 75,000 persons around the world. Hyundai vehicles are sold in 193 countries through some 6,000 dealerships and showrooms worldwide. The Hyundai logo, a slanted, stylized H, symbolizes the company shaking hands with its customer. In 2004, Hyundai was ranked second in "initial quality" in a survey/study by J.D. Power and Associates. Hyundai is now one of the top 100 most valuable brands worldwide. Since 2002, Hyundai has also been one of the worldwide official sponsors of the FIFA World Cup. Some of the famous cars from Hyundai’s stable are: Accent, Sonata, Santa Fe, Tucson, Genesis, Santro, i10.

Problems faced Operations

by

Hyundai

in

International

Hyundai entered the United States market in 1986 with a single model, the Hyundai Excel. The Excel was offered in a variety of trims and body styles. That year, Hyundai set a record of selling the most automobiles in its first year of business in the United States compared to any other car brand (c. 126,000 vehicles). Initially well received, the Excel’s faults soon became apparent; cost-cutting measures caused reliability to suffer. With an increasingly poor reputation for quality, Hyundai sales plummeted, and many dealerships either...
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