International Business Individual Assignment - Name Li King...

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Name: Li King Nam, Zenith-Scarlet Student number: 20009154 Date: October 19, 2016 International Business Individual Assignment Hyundai’s International Success Introduction The Hyundai Motor Co. (Hyundai) is an indigenous automotive company headquartered in South Korea. It was founded in 1947, and was a part of the large South Korean five major chaebol – Hyundai, Samsung, Daewoo, LG, and SK – in which they are highly vertically integrated. It utilises the world’s biggest sized desegregated automobile manufacturing resources in Ulsan, which makes it the number one carmaker in South Korea, and is the tenth greatest automakers in the world. In recent years, Hyundai has been well-capable of initiating itself all over the world as an automotive company manufacturing authentic, technically durable and stylish automobiles. Hyundai – Porter’s Diamond Model Porter’s Diamond Model is a theory which explains why a nation achieves international success in a particular industry and identified four attributes that promote or impede the creation of competitive advantage. There are four determinants of national competitive advantage in Porter’s Diamond Model, which includes demand conditions; factor conditions; related and supporting industries; and firm strategy, structure, and rivalry to international success. In terms of Porter’s Diamond Model, the following will be illustrating Hyundai and its position in the global car industry. The first of the four elements is known as demand conditions, which describes the nature of home demand for the industry’s product or service. It influences the development of capabilities 1
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and also increases pressures for the firms to be competitive from sophisticated and demanding customers. Throughout the whole global financial crisis which happened in recent years, there was a quite significant drop in the global automotive sales, which has made the automotive industry suffer due to the surplus of production capacity, and in such difficult times, it was very tough for motor companies to earn profits. As for the case of Hyundai, they also could not get away from the disastrous event. Their total global demands ran at only about 60 million a year during the crisis while they actually have the capacity to produce 80 million cars globally, which had the supply much greater then the demand. When the supply exceeds demand, it ends up having excess inventory that needs to be sold at a discount or just to be thrown away. In addition to that, prices need to be lowered since there is a surplus. So in Hyundai's situation, the lowering of the price of cars is one of the many solutions that they could choose to deal with the excess inventories since this way would attract more consumption so that the leftover automobiles can be sold eventually. Since it is not that customers are desperately trying to search for a more reasonable price alternative, but it is in fact that companies are actually competing for business in order not to just survive in the industry but to also ace up to the top in the market. Another
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  • Spring '15
  • Chan Sai Hung
  • Hyundai

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