INTB CASE 1

Topics: Automotive industry, Ford Motor Company, Volkswagen Group Pages: 10 (3143 words) Published: November 18, 2014
INTB 3101 / 01

Hyundai Case Questions

Group # 2
Merna M Ibrahim
Hend M El Deeb
Nahla El Gendy
Nesma S Mardini
Yomna M Ali

Question 1: What are the roles of comparative and competitive advantages in Hyundai’s success? Illustrate your answer by providing natural and acquired advantages that Hyundai employs to succeed in the global car industry. Korea has one of the largest automotive industries in the world and is becoming one of the fastest growing in the global markets. Hyundai Motor is one of the huge contributors in the Korean automotive industry, and it is also the largest South Korean market, which makes it have a huge value to the country’s economy. There are many advantages that are behind the success of Hyundai, and those advantages include Korea’s competitive advantages and Korea’s comparative advantages. The comparative and competitive advantages play a very significant role in Hyundai’s success as without these advantages it would have been difficult for Hyundai to succeed, as Korea’s market is very small. Here are the comparative and competitive advantages that Hyundai has. Comparative Advantages:

The Strategic position that Korea adopts, where it lies between Japan, which is known for its high technology and high prices, and China known for its very low manufacturing costs. This geographic position helps Korea in achieving and equilibrium between cost and quality. (Natural advantages) Korea is a center of technological advancements and demanding consumers that cause intense rivalry in the car industry that ensures them to improve products continuously (Graf). (Natural Advantage) Effective Labor: It has high percentage of low cost and skilled labor that contribute to the country’s progression. (Natural advantage) High savings and inward foreign direct investment (FDI) guarantees a ready supply for capital. Industrial Cluster: Korean government are cooperating with the business sector to promote raw materials, also they are taking measures to attract a cluster of suppliers and manufacturers. The government also promotes imports of raw materials and technology at the expense of consumer goods and encouraged savings and investment over consumption, due to this efforts Korea’s car industry is in success including Hyundai (Hyundai's Competitive Advantage & Strategy). (Acquired advantage) Weak Currency: due to the weak value of Korean Won, Hyundai was able to benefit from this by being an attractive provider of products as a result of its very cheap prices (Graf). (Acquired Advantage)

Competitive Advantages:
Hyundai had acquired geographic diversification where it built factories in Turkey, which enabled Hyundai to have easier access to Middle East and Europe. (Acquired advantage) Geographic diversification that Hyundai has by building a plant in India and a factory in china in 2002, this helped it for having easier operations and access to the global markets. (Acquired advantage) Hyundai has a well-developed research and development strategy where R&D centers are strategically located in Europe, Japan and North America. Quality control, this is a very important of Hyundai’s formulation, it has headquarters also strategically located in Asia, Europe and North America to ensure high quality received by consumers around the world. Low cost suppliers: the company sources its imports such as the tires, engines and electronics from low cost suppliers. Hyundai has the competitive advantage of innovative marketing initiatives like the “Hyundai Assurance Program” (Graf) Entering many collaborative ventures to help it in R&D, know-hows, manufacturing and other elements that could be value added to the company itself and its products (Graf).

Question 2: In terms of factor proportions theory, what abundant factors does Hyundai leverage in its worldwide operations? Provide examples and explain how Hyundai exemplifies the theory. In what ways does Hyundai’s success contradict...

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"Hyundai for Domestic Sale Has Better Early Quality than Audi." BusinessKorea. 16 Oct. 2013. Web. 24 Oct. 2014.
"Hyundai 's Competitive Advantage & Strategy." HubPages. Web. 27 Oct. 2014.
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