Hyundia
Did Hyundai make a strategically correct choice when it acquired Kia? Why? (Hint: How was the automobile industry globally and in Korea in the late 1990s? What benefits did Hyundai expect from acquiring Kia?)
Yes Hyundai made a strategically made a correct choice
The automobile industry in the late 1990’s was was oversupplied and production capacity was in excess of demand information technologies
Many companies were facing mergers and acquisitions
Competing was difficult because diversifying customer preferences
Korea’s automobile was always oversupplied because new intro to companies and expanding facilities
1997 Asian financial crisis
Kia would improve Hyundai’s competitiveness- Economies of scale, scope, and construction of global network
What administrative tasks did Hyundai need to complete after acquiring Kia?
Kia and Hyundai were maintained as two separate companies- Hyundai Motors and Kia Motors
Hyundai switched Kia from direct management to horizontal management
Hyundai integrated its R&D with Kia to develop new models
Materials divisions- parts were integrated
Hyundai’s chairman of the board, CEO, and COO would hold concurrent positions
The Automobile Planning Coordination Committee
How did Hyundai do in terms of achieving synergy effects by acquiring Kia?
Much better than Gillette acquiring Duracell!
Hyundai used coordination strategy- production, sales, R&D, parts supply, workforce operations- horizontal strategy- reduces their inter-unit competition
Shared tangible resources- Integrated R&D and began developing new models, materials division as well and parts supply networks were rearranged- combining and rearranging their parts supply networks gave them bargaining power- reduce costs and improve quality-
Hyundai clearly put thought and effort behind this acquisition, in-depth analysis prior to the acquisition was to their advantage
What do you learn from this case?
Importance of the six different types of
Yes Hyundai made a strategically made a correct choice
The automobile industry in the late 1990’s was was oversupplied and production capacity was in excess of demand information technologies
Many companies were facing mergers and acquisitions
Competing was difficult because diversifying customer preferences
Korea’s automobile was always oversupplied because new intro to companies and expanding facilities
1997 Asian financial crisis
Kia would improve Hyundai’s competitiveness- Economies of scale, scope, and construction of global network
What administrative tasks did Hyundai need to complete after acquiring Kia?
Kia and Hyundai were maintained as two separate companies- Hyundai Motors and Kia Motors
Hyundai switched Kia from direct management to horizontal management
Hyundai integrated its R&D with Kia to develop new models
Materials divisions- parts were integrated
Hyundai’s chairman of the board, CEO, and COO would hold concurrent positions
The Automobile Planning Coordination Committee
How did Hyundai do in terms of achieving synergy effects by acquiring Kia?
Much better than Gillette acquiring Duracell!
Hyundai used coordination strategy- production, sales, R&D, parts supply, workforce operations- horizontal strategy- reduces their inter-unit competition
Shared tangible resources- Integrated R&D and began developing new models, materials division as well and parts supply networks were rearranged- combining and rearranging their parts supply networks gave them bargaining power- reduce costs and improve quality-
Hyundai clearly put thought and effort behind this acquisition, in-depth analysis prior to the acquisition was to their advantage
What do you learn from this case?
Importance of the six different types of