Porters five forces model for the Korean truck industry
Barriers to entry
Medium
Truck manufacturing was considered as a regional or local industry than a global industry because it requires more customization and less mass production than car manufacturing.
Saturated domestic market-truck market in Korea declined after 1997 with units sales falling in each subsequent year. Three local firms exited leaving Hyundai and DCVC as local manufacturers.
The Korean automobile industry’s most serious weakness is strong movements by hard labor unions in Korea. The labor union movements are generally very strong and hostile especially in the Korean automobile industry, which hurt not only those companies’ business, but also the Korean economy seriously …show more content…
More over Tata was looking at a world Truck program as part of their global expansion and by acquiring Daewoo they could save two years of development costs. Also expansion of their product line and possibility of entry to Chinese markets because of proximity were all favourable factors for the acquisition.
Blue ocean strategy
Tata motors decided to enter the unconsolidated market in the truck industry especially the midsize trucks. They applied the blue ocean strategy in deciding the target customers and the value proposition that customers prefer.
Value Elements are those value creating components an organization invests in including resources, processes and capabilities and entails strategic choices and strategic intent. Value elements chart with current and future value curves in the following categories of countries or markets diagram below. These are relevant to the customers and are what they would prefer in their product or service.
Source-PwC Global trucks report
Barriers to entry
Medium
Truck manufacturing was considered as a regional or local industry than a global industry because it requires more customization and less mass production than car manufacturing.
Saturated domestic market-truck market in Korea declined after 1997 with units sales falling in each subsequent year. Three local firms exited leaving Hyundai and DCVC as local manufacturers.
The Korean automobile industry’s most serious weakness is strong movements by hard labor unions in Korea. The labor union movements are generally very strong and hostile especially in the Korean automobile industry, which hurt not only those companies’ business, but also the Korean economy seriously …show more content…
More over Tata was looking at a world Truck program as part of their global expansion and by acquiring Daewoo they could save two years of development costs. Also expansion of their product line and possibility of entry to Chinese markets because of proximity were all favourable factors for the acquisition.
Blue ocean strategy
Tata motors decided to enter the unconsolidated market in the truck industry especially the midsize trucks. They applied the blue ocean strategy in deciding the target customers and the value proposition that customers prefer.
Value Elements are those value creating components an organization invests in including resources, processes and capabilities and entails strategic choices and strategic intent. Value elements chart with current and future value curves in the following categories of countries or markets diagram below. These are relevant to the customers and are what they would prefer in their product or service.
Source-PwC Global trucks report