Hyundai Case Study

4218 Words 17 Pages
Register to read the introduction… Mass production and exports In the early 1980s – at a time when Korean domestic sales barely reached 250,000 cars a year –US based General Motors (GM) announced its decision to build a new American factory that would assemble 300,000 cars a year. Hyundai analysed GM’s plans and also decided to build a 300,000 carsa-year factory at a much lower price, which would enable the company to manufacture a new compact model entirely dedicated to ‘real’ exports, targeting the lower end of western markets (Steers 1999). In 1985 ‘Pony II’ was successfully exported to South America, Canada and Africa and Hyundai took a lead on its domestic rivals (Kia and Daewoo). At the same time Korean exports in general were significantly increasing in value and per GDP (see Exhibit A1) and Korean companies were gaining recognition worldwide. The Hyundai group itself was becoming a major MNC. Following Toyota’s example (see Figure 2), HMC decided to target the industry benchmark as well as the largest market of all: the United States. It was a question of status for Hyundai and Korea itself, proving the company had become an international player able to compete against the Western auto makers and that the country was now an emerging …show more content…
OLI framework applied to HMC in phase 4

Presence of:

Internalization advantages Manufacturing factors

Location advantage (factor dotation) Market factors Sales subsidiaries Technology and talent R&D centres

Entry mode Europe/ Middle East/ Africa

Exports

Local production and assembling subsidiaries Russia, Czech Republic, Ukraine, Turkey, Egypt, Sudan

America Asia-Pacific

170 countries, no particular factor dotation

Russia, Norway, UK, Spain, France, Italy, Germany, Czech Republic, Poland Canada, US Korea, Japan, China, Australia

Germany

Brazil, Venezuela, Mexico, US Korea, Taiwan, China, India, Pakistan, Vietnam, Malaysia, Indonesia

Canada, US Korea, Japan, China, India

OLI framework applied to Hyundai’s current international operations to analyse the choice between exports and local subsidiaries (data from company’s 2011 Annual Report)

A6. Hyundai’s internationalization strategies projected on a world map

18

06/06/2013 Research project: Hyundai globalisation strategy

19

06/06/2013 Research project: Hyundai globalisation strategy

Source: report and company data

20

06/06/2013 Research project: Hyundai globalisation strategy

Related Documents