Key Competitive Factors of Automotive Industries

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  • Topic: Marketing, Hyundai Motor Company, Hyundai Kia Automotive Group
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  • Published : January 9, 2011
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THE COMPETITIVENESS ANALYSIS OF HYUNDAI MOTORS & TOYOTA
(THROUGH THE GENERALIZED DIAMOND MODEL)

Group 2# Kim, Byung Kyun / Kim, Do Hyoung / Kim, Soon Mi / Lee Yong Joo / Lee, Joong Hyun / Son, Dong Jin / Song, Ha Bong / Yoo, Chung Sik (ABC sequence)

PROJECT BACKGROUND

“Our automotive business in the global market is stable, but the group needs businesses that can compensate for uncertainties of the industry,” - Hyundai Motor Group official -

Recent quarterly results of Toyota that shows that it earns more than previous was impressive because the result was achieved despite of the world’s decrease in automotive sales and strong yen.

In order not to lose the opportunity of grabbing the initiative of Hyundai, we tried to analyze current situation and draw a meaningful conclusion for Hyundai to survive by utilizing Porter’s Diamond Model. Also, we tried to derive the implications based on the result of analysis.

KEY COMPETITIVE FACTORS OF AUTOMOTIVE INDUSTRY

Chance

S.S.R. (Firm strategy, Structure and Rivalry)

F.C. (Factor Conditions)

Generalized Diamond Model

D.C. (Demand Conditions)

R.S.I. (Related & Supporting Industries)

Gov.

* The 4 main factors are in the dynamic position of mutual influences, and the external force majeure such as free trade agreement and war (Government) / natural disaster are considered (Chance)

PRECEDENT STUDY OF SUB COMPETITIVE FACTORS

S.S.R. Considering specialized and advanced factor that competitors cannot catch up with, as well as basic quality of labor work force and capital strength and research & development

R.S.I. Competitiveness goes up as the competitiveness of related and supporting industries Is heighten along with the automotive affiliations and clusters

COMPETITIVENESS OF AUTOMOTIVE FIRM

D.C. Put importance on automotive consumers’ sophistication rather than size of a market. Innovation of firms is likely To increase depends on the market growth and clutter

S.S.R. International competitiveness depends on the domestic rivalry. Especially, competitiveness goes up when the common Value of the members of firm harmonized with innovation of firm

3

Key Main Factors & 15 Sub Factors

Key Factors

15 Sub Factors Capital Strength / Labor / Production Capacity / Rate of Operation / Production Quantity / Level of Technology (R&D)

Factor Conditions

Demand Conditions

Market Share / Brand Awareness

Firm strategy, Structure and Rivalry

Leadership / Future Automotive Development / Marketing Strategy

Related & Supporting Industries

Part Suppliers / Localization / Supporting Affiliates / Distribution Channel

METHODOLOGY OF ASSESMENT AND QUANTITITIVE

① Methodology of measuring data for 15 sub factors 1# Conducting survey targeting industrial experts 2# Use of current reference of reputable organization Conducting international survey targeting each nations is unavailable due to the limited time and budget, so we mainly use references from reputed organizations and PR materials of automotive industries

② Quantitative method of 15 sub factors 1# Interviewing experts from Hyundai Motors to avoid arbitrariness 2# Let interviewers evaluate on 15 sub factors for each significance 3# Evaluate assuming the total score of each main factor is 100 (Ex.) If we assume that total score of demand condition is 100, we can distribute each score on ‘market share’ and ‘brand awareness’ to 20:80

KEY DATA SAMPLING – HYUNDAI (GLOBAL)
Category Capital Strength Labor (FTE) Production Capacity (unit) Rate of Operation (%) Production Quantity(unit) Level of Technology Market Share (%) Brand Awareness Leadership Description Quick Ratio (26.7%), Debt Ratio (43.9%), Operating Profit(6.7%) 102,293 (Domestic) 3,340,000 (Domestic), 1,900,000(international) 88 (Global) 2,740,000 (Domestic), 1,890,000 (Overseas), 4,630,000 (Global) Ranked ‘Average Credibility’ in 5 categories 80% (Domestic), 6.7% (International) 13 point (Design,...
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