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  • Subject Name : Management

Contents

Introduction.

Company introduction.

Business ownership model

Stakeholder management

Mission, vision, and objectives of the company.

Mission.

Vision.

Plan.

Core values.

Customers.

Challenges.

Collaboration.

People.

Globality.

External analysis.

PESTEL.

Political

Economical

Social

Technology.

Environmental

Legal environment

Porter’s five forces and industry analysis.

Bargaining power of suppliers.

Bargaining strength of buyers.

Threat of substitute.

The threat of new entrant

Competitive rivalry.

Internal VRIO analysis.

Value.

Rarity.

Inimitability.

Organizational support

Recommendation

References.

Introduction to Hyundai Motor Group

Hyundai motor group is a well-established South Korea multinational conglomerate company headquartered in South Korea. The company was formed after purchasing 51% of the stakes from Korea’s second-largest automobile company, Kia motors. Following the slogan of “Better drives us”, Hyundai motor group is understood to be one among the most demanded and successful companies on the global platform. It was understood that the Hyundai motor group is looking to expand its operations in Australia. This report will focus on the several strategic problems that would be faced by the Hyundai motor group while expanding in Australia. PESTLE analysis, Porter’s 5 factor analysis, VRIO, and other tools will be critically taken into consideration for evaluation. These strategic tools will be used to understand the internal and external factors for formulating accurate entry plans for Hyundai Motors in Australia.

Hyundai Motor Group Introduction

Hyundai Motor Group popularly known as Hyundai Motors is a South Korean multinational company that is known to specialize in its car production. According to the 2018 records, it was understood that the Motor Group has produced 6,868,000 car units and is expected to increase the production by 10x times with its expansion in more regions (Hyundai Motor Group, 2020). Established in 1967, the Hyundai Motor Group was ranked 5th largest automaker in the world in 2017. The wholly subsidized company is known to the second-largest company manufacturer and number one car exporter car inception in many Asian countries like India (Nel, 2017, p. 11). The company is known to current export to 88 different countries including America, Australia, Asia Pacific, and African regions.

To support the expansion plans of the company it is known that the company is having 5882+ dealers and has more than 78,999 service points across the world (Hyundai Motor Group, 2020). In its commitment to provide additional customer service and satisfaction, it is understood that Hyundai motor group undertakes cutting edge global technology and believes in installing more than research and development centers across the world. Mr. Chung Mong-Koo is the current CEO of the company and had joined the venture in 2012. According to the 2019 reports published by the company, 105.57 lakh crore is the estimated earning of the company. Additionally, the total assets of the company were valued to be $ 194.51 trillion and have more than 104, 731 employees across the world (Nel, 2017, p. 11). Hyundai motors have differentiated themselves by providing highly reliable and quality products to the customers. Brand equity and brand trust have been the major driving reason behind increased sales.

Business Ownership Model

Hyundai motor group is a South Korean multinational conglomerate company. According to the conglomerate, the organization holds a controlling stake in the different small companies which helps to conduct the business separately (Nel, 2017, p. 11). This further means that the Hyundai motor group is held by the objective and goal of financial returns to the original owners of the company.

Stakeholder Management

Hyundai Motor Group takes stakeholder management seriously because stakeholders are the lifeblood of the effective group projects. The company makes appropriate plans and mitigation action which not only helps to understand the stakeholders but also understands their communication need at the various point of the project. According to the information published on the website the company believes in good faith resolution of matters for which stakeholders concern will further help to contribute to the long term increase in the value and also carry out the company responsibility effectively (Ramkissoon, & Mavondo, 2017, p. 41). Additionally, the company in its mission values also states that they would be further committed to protecting the rights of the stakeholders under the different contracts and legislation act (Hartwell, 2017, p. 91). The important stakeholders of the Hyundai motor group include and are not limited to employees, partners, local society, and customers. Hyundai motor group positions employees and customers to be the most important stakeholders of the company.

Mission, Vision, and Objectives of Hyundai Motor Group

The pride of the Hyundai motor group is not only measured in the Korean market but it has excelled in all the different markets and international countries (Ramkissoon, & Mavondo, 2017, p. 41). As a responsible car manufacturing company, Hyundai has been striving to improve its products and services through its development of mission, vision, and plans.

Mission

Hyundai motor group's mission is to create exceptional and high-grade automotive value to the customers which are a careful blend of safety, efficiency, and also quality. Additionally, with a diverse team, the company plans to provide responsible stewardship towards the community and environment. The company aims to achieve stability and security for the current and also for the future generation.

Vision

The Hyundai motor group has developed a new vision in 2020. According to the information published on the website, it was understood that the Hyundai motor group’s vision is “Together for a better future” to fulfill its role and responsibility and rise as a trusted global firm (Conlon & Perkins, 2018, p. 91). The company aims to add value to the life of people through innovation creation in the lives of people in diverse ways. Concerning the environment and also the people, the company can pursue a better future in the sector.

Plan

Hyundai motor group is currently striving to provide freedom of movement to the customers who are interested in investing in mobility services. The company wants to expand its role beyond automotive transportation services. According to the source, it is understood that the Hyundai motor group plays a pivotal role in environmental society by providing environmentally-friendly vehicles.

Core Values

The goal of the Hyundai motor group is to serve the best as much as they can to the global citizens and also human beings. The core values of the company can be best explained below

Customers

The company provides customer-driven culture which focuses on providing high quality and impeccable product to the customers. The company aims to keep all the values centered on the customers.

Challenges

The company refuses to stay back, instead accept all the upcoming challenges in the industry with greater confidence (Prideaux, Wei & Ruys, 2001, p. 5). The company undertakes different challenges and stay confident while achieving goals with ingenious thinking and also an unwavering passion.

Collaboration

Hyundai motor group tries to create synergy through “togetherness” which is later fostered by mutual communication and co-operation within the company. The company focuses on collaboration with the business partners.

People

The company emphasizes the people and states that the future the organization is in the people. It lies in the heart and capabilities of individuals which can help the company to develop the potential to meet the organization's aims and objectives.

Globality

Hyundai motor group in its core value explains that they respect the diversity of the culture and the customs of the different customers across the world. The company commits to serve their best and strive to become a respected global corporate citizen.

External Analysis of Hyundai Motor Group

PESTEL

Political

According to the Corruption Index 2019, Australia ranks 13th out of 176 countries which means the corruption is negligible in this country (Ramkissoon, & Mavondo, 2017, p. 41). The corruption in Australia is uncommon when it comes to other countries in the world. However, with the low corruption rate, it would not impact the company’s e entrance in Australia. Due to the lower corruption index rate, it can help to promote transparency as well as objectivity in the sales of the motor company (Dowling & Kent, 2005, p. 91). Additionally Australia today enjoys a good relationship with other nations which can also allow the Hyundai company to enjoy networks of trade as they further plan to expand in other regions.

Economical 

Political High disposable income is one among the biggest economical element which can help in boosted sales of the Hyundai cars in Australia. Australia is currently experiencing a stable economy and hence it would be an opportunity for Hyundai to expand in the country. The economy of the country has grown by 4% in 2018 which was below the expectation. However, it is expected the economy of the country will grow by 7% in the next 5 years (Ramkissoon, & Mavondo, 2017, p. 41). The current company tax rate of Australia is 30% which is less as compared to other nation’s tax which can prove to be a benefit for the Hyundai company. Kriven & Ziersch (2017, p. 11) states that Australia holds 13th place in having the largest economy worldwide which makes it to be the best place for Hyundai to expand. Although the economic growth of the company is increasing they expect to improve further. Additionally, the current exchange rate of the company is favored outside countries including America where other companies are encouraged to enter the country and conduct trade.

Social

The social demographic of the people usually tend to govern the people’s attitude as well as the behavior of the Australian government. Australia is known to be one among the best countries to live in in the term of health, education, and quality of life (Ramkissoon, & Mavondo, 2017, p. 41). Compared to other countries, Australia has a smaller population and also the life expectancy of the people is more than 80 years. Having a large working population is one of the biggest benefits for Hyundai to sell its car in this country. Additionally, it is understood that Australians are hardworking and looking forward to spending a large amount of money on cars which again proves to be a benefit for the company. According to the Conlon & Perkins (2018, p. 91), 57% of the young population decide to spend 60% of their income on purchasing high-quality cars at least once in 5 years.

Technology

Australia is understood to be a highly technological country in the world. Australia is known to be adopting the new technology at a faster rate as compared to other countries. According to the Dowling & Kent (2005, p. 91) it was understood that Australia witnesses 5.8% in 2018 technological purchases which contribute to approx. $63 million and is expected to be $85 billion (Conlon & Perkins, 2018, p. 91). The Kriven & Ziersch (2017, p. 11) has stated that Australians are looking forward to purchasing the high technological product which again is an opportunity for the Hyundai group (Clarke & Cheshire, 2018, p. 9). Today the Hyundai group is understood to provide a highly technological product to its customers which are expected to observed growth and the high sales rate in Australia.

Environmental

With stunning beaches, mountains, and forests, Australia is one of the popular tourist centers and beautiful countries in the world. The country is widely known for its biodiversity. However, currently, there were many environmental laws introduced in the country as it is witnessing a high level of global warming. Climate change is the biggest challenge for Australia and hence it lays strict compensation on the organizations that do not abide by the environmental laws of the country (Ramkissoon, & Mavondo, 2017, p. 41). Australia is looking to motivate and encourage those industrial and manufacturing companies who adopt eco-friendly practices for attaining high sustainability in the company (Dowling & Kent, 2005, p. 91). Apart from the water security, pollution is a great problem in the country which should be keenly taken care by Hyundai motors while trying to expand in Australia

Legal environment

The legal environment of Australia is understood to be ethical, strict, and practical as compared to other developed nations. Clarke & Cheshire (2018, p. 9) has stated that today Australia has laid many regulatory laws that intend to promote safe and ethical trade between the customer as well as the company. On deeper analysis, it was understood that Australia has fair trading laws, consumer laws, and also competition laws. Apart from this, The Force Work Act is an important legal framework of the company which takes care of the employment of the country (Kriven & Ziersch, 2017, p. 11). With frequent labor strike problem in Australia, employee safety is the biggest issue in the country. However while expanding in the country, Hyundai motors should critically take care of the employee and their compensation to survive long in the Australian economy.

Porter’s Five Forces and Industry Analysis

Proposed by Micheal Porter in 1979, Porter’s five force analysis is considered to be one of the important tools which help to analyze the company’s competitive environment. Porter’s 5 forces are mostly used by different organizations to understand the force that helps to shape the competition within the industry (Conlon & Perkins, 2018, p. 91). It is additionally helpful in shaping the strategy to suit the competitive environment further helping to improve the profit. Before the Hyundai Motor group intends to expand in Australia, the organization should also consider Porter's 5 forces to make its strategy according to the internal and external forces.

Bargaining power of suppliers

The bargaining power of the Hyundai is understood to be weak. Apart from the large suppliers and the moderate size, the suppliers cannot influence the Hyundai. Generally, the suppliers are usually moderate or small in size and hence their bargaining power against Hyundai is understood to be weak. Thus it was further understood that the chances of competing with Hyundai were nil or extremely less. Furthermore, it was also identified that the Hyundai can easily switch to different suppliers according to their needs and wants. Hyundai being an international brand holds a strong position against the suppliers making their bargaining strength low (Prideaux, Wei & Ruys, 2001, p. 5). Additionally, Hyundai can combat high supplier power through its capitalizing on international supplier relationships.

Bargaining strength of buyers

The bargaining strength of the buyers in the Australian car industry is expected to be extremely high. The bargaining strength was strong because they are exposed to many car companies in the market at no extra switching cost. Additionally, many competing firms provide similar features and technology in cars, thus helping the customers to hold a strong place in the market. Due to the technological advancement of the country, there are a large number of options available for the customers. However, it was understood that Hyundai can bargain based on design innovation and technology. Based on both of these factors, the brand has earned high customer loyalty which sometimes affects to persuade their purchasing decision. Hyundai will be able to hedge against the increased bargaining power as the switching cost of the product is a bit higher as compared to other brands.

Threat of substitute

The threat of substitutes for Hyundai Motors is moderate in Australia due to encouragement from the government to the car industry (Clarke & Cheshire, 2018, p. 9). From vehicles that are made by other brands and also the public mode of transportation, there are many substitutes for the Toyota products. Additionally, it was also understood that switching cost is low and also in some areas of Australia it is easy for the buyers to get hands-on the substitutes. However, to moderate the threat of new entrants, Hyundai has tried to introduce eco-friendly, high quality, highly sustainable, and low fuel consumption cars in the market which can attract the customers and prevent them from switching.

The threat of new entrant

The threat of the new entrant in the Australian car industry is weak. The threat of entrant is weak because of the huge investment required by the company to enter the market and also extensive work on building brand loyalty among the Australian market. Additionally, analysis has stated that a new company entering the car industry will need a new good supply chain, distribution system, marketing team, and highly skilled human resources (Clarke & Cheshire, 2018, p. 9). However, it was also understood that car companies would need high innovation and research department teams so that it can sustain in the market. Moreover, for a new company to enter the car industry should spend a large amount of money on marketing and promotion work. These factors together lead to the obstacle in the path of the car industry.

Competitive rivalry

 With the high number of global players in the car industry, it was understood that level of competition is extremely high. Other companies in the car industry are known to be extremely aggressive in their marketing, promotion, and also the products (Clarke & Cheshire, 2018, p. 9). Apart from the innovation, it is also stated that the car brand also competes with others in design, colors as well as fuel efficiency. However further analysis stated that competition has grown intense as most of the rivals in the same market. This also includes the high cost of research and development. Some of the competitors of the Hyundai include Ford, Toyota, Honda, and much more (Prideaux, Wei & Ruys, 2001, p. 5). Thus it was identified that the competitive rivalry in the car industry is extremely high. However, Hyundai’s ability to compete with these car companies depends upon the innovation, attractive pricing strategies, and also the technologies used by them.

Internal VRIO Analysis

Internal VRIO analysis is important as it forms to be an important part of the organization’s largest strategic firms (Prideaux, Wei & Ruys, 2001, p. 5). This analytical technique is extremely important for the company’s resources development as well as a competitive advantage. This section will focus on the VRIO analysis of the company

Resource

Valuable?

Rare?

Inimitable?

Organized to exploit?

Impact on the competitive advantage

Financial resource

Strongly needed

Strongly Agree

Yes

Yes

Long term advantage

Skilled resources

Strongly needed

Strongly Agree

Yes

Yes

Long term advantage

Patents

Strongly needed

Strongly Agree

No

No

Unused advantage

Customer

Strongly needed

Strongly Agree

Yes

Yes

Long term advantage

Value

  • Being one of the highly reputed car industry from South Korea, Hyundai Motor group possess high financial resources which can assist them in creating value in the market. However, with the help of high financial resources, the Motor Group can expand to different international, national as well as a regional market for expansion of the profits. The organization can also adopt technology when important.
  • Additionally, Hyundai focuses on highly skilled employees who can help the organization to grow. Through effective training and motivation programs, employees are extremely happy here.
  • Patents are valuable for the company and help in raising funds for the company.
  • Hyundai has a great customer base as compared to its competitors which can help them to win competitive advantage in the market (Clarke & Cheshire, 2018, p. 9). Customer is the largest valuable resource for the company.

Rarity

  • The financial resources which are possessed by the Hyundai group are rare and not most of the business will lose high financial capacity thus making it hard to compete with the Hyundai/
  • Highly skilled employees are considered to be extremely rare which can help the company to earn a competitive advantage in the Australian car industry. However, it is not easy in Australia to find skilled labor as much as it is possessed by Hyundai.
  • Patents used by the Hyundai company are rare and unique as Hyundai holds the complete authority to use it whenever required. Patents provide a huge opportunity for the company.
  • Customer base is extremely rare as not most of the companies enjoy a good customer base. It takes years to have a good customer base which is already earned by Hyundai Motor Group.

Inimitability

  • Financial resources hold by the Hyundai company would be extremely difficult for the company to imitate.
  • Highly skilled employees are expensive and costly and hence imitating skilled laborers is not easy. However, it is possible competitors like Toyota can offer better packages to the writers to attract them towards the other companies.
  • Patents are also difficult to imitate because Hyundai is the sole owner and holder of the patents.
  • A large customer base is difficult to imitate as it usually takes years to give dedicated services to earn brand loyalty thus building a customer base.

Organizational Support

  • The financial resources are used by the Hyundai where development is needed. Usually, the company uses a huge amount of finance in the research and development department.
  • Skilled employees help in earning a competitive advantage in the country further helping to meet customer needs (Clarke & Cheshire, 2018, p. 9).
  • Hyundai patents are understood to be not appropriately used by the company to expect to create brand loyalty through it.
  • The customer base is used by Hyundai to improve brand presence in the company through its customer-oriented firm. The company uses customers to improve engagement in the market.

Recommendation on Hyundai Motor Group Analysis

Entering the Australian market through competitive advantage

Today Australia is suffering from extreme climate change and hence Hyundai should focus on producing battery led cars in the company. Additionally today the Australian government is looking to encourage and provide tax redemption on the company contributing towards the environment through eco-friendly products. The battery led car would have decreased fuel consumption features and also produce extremely fewer carbon footprints in the environment. Hyundai motors can adapt to social media marketing to target the middle class and upper-middle-class families who are environmentally friendly and also looking for electric cars. Over the next 5 years, it is assumed that the demand for electric cars will increase by 48% with increased disposable income among the consumers. Focusing on providing a solution to Australia’s current issues, it is understood that introducing electronic cars would help to win a competitive advantage in the country.

Entering Australian market with effective customer service strategy

With a highly competitive market in the Australian market, setting up a dedicated customer center for the Hyundai customers can help to win the competitive advantage. A separate customer center should be set in the main cities of Australia like Brisbane, Queensland, etc so that the executives can focus on solving the problem of the people. Through online presence as well as launching dedicated customer service, Hyundai can win a competitive advantage in the country for providing personalized customer service. This can help to weaken the bargaining power of the customers as well as prevent them from switching to other customers. Using this strategy is cost-effective and can help in improving brand equity and brand awareness in the newly entered Australian market.

References for Hyundai Motor Group Analysis

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Breheny, S., Rozner, G., Begg, M., Wild, D., & Lesh, M. (2018). 5 IDEAS TO FIX AUSTRALIA. Review-Institute of Public Affairs70(1), 16-19.

Clarke, A., & Cheshire, L. (2018). The post-political state? The role of administrative reform in managing tensions between urban growth and liveability in Brisbane, Australia. Urban Studies55(16), 3545-3562.

Conlon, R., & Perkins, J. (2018). Wheels and deals: The automotive industry in twentieth-century Australia. Routledge.

Dowling, R., & Kent, J. (2015). Practice and public–private partnerships in sustainable transport governance: The case of car sharing in Sydney, Australia. Transport policy40, 58-64.

Fishman, E., Washington, S., & Haworth, N. (2014). Bike share’s impact on car use: Evidence from the United States, Great Britain, and Australia. Transportation Research Part D: Transport and Environment31, 13-20.

Hahn, C. K., Duplaga, E. A., & Hartley, J. L. (2000). Supply-chain synchronization: lessons from Hyundai Motor Company. Interfaces30(4), 32-45.

Hartwell, R. M. (2017). The industrial revolution and economic growth (Vol. 4). Taylor & Francis.

Hellwig, T., & McAllister, I. (2016). Does the economy matter? Economic perceptions and the vote in Australia. Australian Journal of Political Science51(2), 236-254.

History 2013~2019. (n.d.). Retrieved from https://www.hyundai.com/worldwide/en/footer/corporate/information/history/2013-2019

Hyundai Motor Group Homepage. (n.d.). Retrieved from https://www.hyundaimotorgroup.com/Index.hub

Hyundai Motor. (n.d.). Retrieved from https://www.forbes.com/companies/hyundai-motor/#45d04eb3ff3a

Kent, J. L., & Dowling, R. (2016). “Over 1000 cars and no garage”: how urban planning supports car (park) sharing. Urban policy and research34(3), 256-268.

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Ramkissoon, H., & Mavondo, F. T. (2017). Proenvironmental behavior: Critical link between satisfaction and place attachment in Australia and Canada. Tourism Analysis22(1), 59-73.

Rhee, J. H., Bohnsack, R., & Lee, S. (2017). Hyundai Motor Company Case–Fostering Social Enterprises. In The Role of Corporate Sustainability in Asian Development (pp. 119-143). Springer, Cham.

Shahbaz, M., Bhattacharya, M., & Ahmed, K. (2017). CO2 emissions in Australia: economic and non-economic drivers in the long-run. Applied Economics49(13), 1273-1286.

Simões, E. N. (2020). A decision support system application module-for PESTLE analysis-competitive intelligence algorithm (Doctoral dissertation).

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