An Analysis of Hyundais Business Strategy - Case Study Example

Section/# An Analysis of Hyundai’s Business Strategy It is without question that the past several years haverepresented extraordinarily difficult period of time for business growth and development. The economic downturn of 2007/2008 has created a situation in which consumers are hesitant to spend money and producers are desperate to find consumers. However, even within this extraordinarily difficult climate, some firms have been able to experience an extraordinarily high level of success. One of the most notable of these is Hyundai. Yet, rather than recognizing the fact that Hyundai has been able to achieve growth and expansion throughout the world within an extraordinarily difficult economic time and accepting this at face value, the business analyst should perform a level of discussion and inquiry into the metrics for why Hyundai has succeeded and others have faltered. In order to do this, it is necessary to look at the business strategy that underpins each and every decision that is made within the Hyundai motor company. Accordingly, the following analysis will provide an in-depth review and discussion of Hyundai’s business strategy; analyzing it based upon its strengths and the means by which has been able to capitalize upon extraordinarily difficult economic time period, resonate with consumers, and appeal to individuals that might have otherwise been dismissive of the brand. Whereas there are many elements of Hyundai’s business strategy that could be discussed, the forthcoming analysis will focus specifically upon the elements of quality, warranty, low-cost leadership, design, and the reduction in production costs that have allow the firm to be relevant and engage with consumer interest and need within the current market. Firstly, with respect to quality, and I suffered an extraordinarily horrific brand recognition with regard to quality dating from the late 1980s. During this particular period of time, and exported extraordinarily cheap and relatively poorly built vehicle into the US market; souring the United States consumer market against any Hyundai product for several years afterwards. However, in the late 1990s, a reorientation took place within the Hyundai motor company and a decision to pursue quality while the same time representing low-cost leadership, something that will be discussed as a fundamental business strategy at length later in this analysis, came to be represented as a pivotal reorientation that the company was committed towards pursuing. Recognizing the fact that Toyota, Honda, and other Japanese manufacturers were able to engage consumer interest based upon extraordinarily high levels of quality and style, not to mention low-cost leadership, and I determined that it was readily able to deliver on two of these aforementioned; however, it lacked the third (Hyung Je and Jong-Sung 65). As such, a fundamental business strategy that was engaged was a focus upon quality and a means of assuring the buyer that the quality of the product they purchased is not in question. Naturally, differentiating the Hyundai of the late 1990s as compared to the Hyundai of the early and late 1980s was a difficult task. The latest quality came to be represented to a greater and greater degree within subsequent models of Hyundai’s offerings, the consumer was still naturally rather unconvinced; as a function of the fact that previous experience and bad publicity and created such a negative impression within the market. Recognizing this, the guys business strategy determined that the most effective means of seeking to change consumer identification of the product was to create and fully warranty the product that they were selling. Likewise, in order to do this, Hyundai engaged on one of the most rock solid war entities that any auto manufacturer within the current market was willing to provide. Prior to Hyundai’s approach to warranty their cars, common warranties involved three years or 30,000 miles; whichever came first. This was represented with respect to many of the major American auto manufacturer’s (inclusive of Dodge, Chevrolet, Ford, and their subsidiaries). Whereas it would have been relatively easy for Hyundai motor company to match this level of warranty, in order to change the hearts and minds of individual consumers, it was necessary to provide a type of warranty that no one within the market was willing to provide. As a function of this, Hyundai motor company engaged upon an unbelievable 10 year or 100,000 mile warranty of the power train of their products. This essentially guaranteeing the consumer that even though Hyundai had experienced difficulties in the past with respect to quality, a new era had gone and Hyundai was committed to ensuring that their products would perform as it is expected and meets the ongoing needs of the consumer. Additionally, as the economic downturn of 2007/2008, business strategy of Hyundai took another interesting development. They first determined that one of the major reasons for why individuals were not purchasing cars was due to the fact that they were fearful that they might lose their jobs and be saddled with a car payment they could no longer afford. The fear of repossession and negative hits on the credit score of these individuals were sufficient to encourage a significant downturn in the overall rate of new cars that were being purchased. Recognizing this fact, Hyundai developed a fascinating financial and business strategy approach. The firm provided a guaranteed by which if an individual lost their job for the car itself was paid off, they could return it to Hyundai and a percentage of the remaining balance owed would be returned to them. Whereas this is only one aspect of the business strategy that Hyundai motor company engaged in within the United States, it underscores and highlights the fact that the firm was committed to current market analysis and responding immediately to consumer needs and frustrations that had otherwise confounded and harmed some of the largest auto manufacturers throughout the world. Without question, perhaps the most important component of Hyundai motor company’s business strategy is with respect to being a low-cost leader. With even a cursory review of the United States auto manufacturing market, it is clear that the market is entirely saturated with respect to luxury automobiles and mid priced offerings. For instance, GMC, Ford, Mercedes, BMW, and even Honda and Toyota have progressively ventured in to the 30 and $40,000 range; targeting consumers within the upper middle class. Although Honda and Toyota both began in much the same way that Hyundai motor company did, the focus on the upper middle class and offerings that average over $30,000 was an opportunity that Hyundai motor company sought to exploit. Essentially, there were not many low-cost leaders within the United States market; and none that could provide the other benefits that Hyundai you that it could fulfill stop as a direct result of this, Hyundai motor company placed low-cost leadership as a linchpin of their business strategy; focusing upon the way in which this could be represented and promoted in nearly each and every aspect. As can reasonably be seen, cutting corners and providing high quality as well as a bulletproof warranty is oftentimes indicative of a competing interest. In terms of the actual strategy that has been utilized as a means of representing a low-cost leaders within the auto manufacturing sector, Hyundai motor company has focused upon automating almost all of their production lines. Moreover, whereas auto manufacturers such as GMC, Ford, and others have focused upon the Northeastern United States as a means of production, the highly unionized structure of employees within this particular region has discouraged the likes of Hyundai and others from investing within Detroit or similar areas (Ulrich 2). A review of Hyundai motor company’s business strategy indicates the fact that the firm has focused its industrial production potential primarily within the South. However, there are two distinct reasons for this. The first of which is that the state in which Hyundai and others have focus their manufacturing base are nonunionized. The second is that Hyundai motor company has sought to reduce the overall number of individual employees on the production line and focused a renewed interest on automation and mechanism by which robotic processes piece the cars together and the potential for strikes or disagreements within the workforce are inherently reduced. Furthermore, as machines do not require raises and cost-of-living adjustments, the overall ability of Hyundai motor company to continue to provide low-cost leadership and integrate this within its business strategy is inherently maximized. Finally, an aspect of Hyundai motor company’s business strategy that is oftentimes overlooked is with respect to the importance that design plays with regard to engaging with the needs and desires of consumers. Whereas this is not necessarily spelled out within any of Hyundai’s visionary goals or statement of policy, a review of the design and development sector of Hyundai elicits the understanding that the firm has placed a reduced emphasis upon developing cutting-edge technology or breakthroughs within automotive sectors. Instead, their primary focus has been hiring and developing new employees that can bring a decided change to Hyundai; at least with respect to styling and the way in which the brand is understood by the casual consumer. Furthermore, by focusing upon demographic groups under the age of 35, Hyundai has recognized the individual consumers I stylishness and the overall “chic” factor (Warner 43). Whereas Mercedes-Benz and a variety of other auto manufacturers focus upon internal technology that can increase the experience of the individual motorist, Hyundai motor company has recognized the fact that being a low-cost leader affords them only a certain variety of focuses; the most important of these being quality and exceptional/intriguing design within their individual offerings. From the information that has been presented thus far, it is clear and apparent that the business strategy of Hyundai motor company, at least with respect to its operation within the United States, is complex and involves the various approaches in order to achieve a level of success. With this in mind, it does not come as a surprise that the success of Hyundai motor company, even during the difficult economic period that has existed over the past 6 to 7 years, has been all but guaranteed. As a function of informing other firms that seek to craft an effective business strategy, a review and analysis of Hyundai motor company’s business strategy is an extraordinarily successful tool. This is not only the case due to the fact that it allows individual producers to understand the demands of the consumer market and react accordingly; but also to recognize the weaknesses that are inherent within the competition and to exploit these as a function of seeking to engender a further level of consumer loyalty and engagement. Work Cited Hyung Je, Jo, and You Jong-Sung. "Transferring Production Systems: An Institutionalist Account Of Hyundai Motor Company In The United States." Journal Of East Asian Studies 11.1 (2011): 41-73. Academic Search Complete. Web. 2 Oct. 2014. ULRICH, LAWRENCE. "This Time, the Cake Is Fully Baked." New York Times 29 June 2014: 1+. Academic Search Complete. Web. 30 Sept. 2014. WARNER, ROBIN. "Hyundai’s Rebirth." Road & Track 65.10 (2014): 42-44. Academic Search Complete. Web. 2 Oct. 2014. Read More