Strategies to Achieve Competitive Advantage: Comparison of Nissan and Hyundai in Car Industry

2996 Words Sep 21st, 2013 12 Pages
Executive Summary
This essay will focus on the process of technological accumulation of Nissan (Japan) and Hyundai (Korea) in shaping their competitive advantage. Technological capabilities can be achieved from leveraging multinational corporations via external or internal modes. Government should also play an active role in providing institutions and supportive industrial policies to enhance the economy. Last but not least, a good adaptive strategy is required in order to compete in the ever-changing economy. The interactions of these three factors together with the presence of innovation in the evolutionary learning process could then yield Nissan and Hyundai with distinctive competitive advantage over a long period of time.

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However, the current economic crisis has significantly affected the Japanese economy, particularly the automobile industry. A steep reduction in government incentives for Nissan is imminent.

Initially, Hyundai attempted to imitate Nissan's Japanese system of lean production, however, it eventually formed its own processes of technology accumulation under the influence of Korea's institutional environment. This environment is subject to the privatization of commercial businesses i.e. Hyundai, allowing for the government to own large-scale operations. Korea's government intervention directed the private industry by designing production and export targets in order to expand Hyundai's capital/technology, and provide new jobs. With the profits generated, Korea's government intervention allowed for a motivated and well-educated work force producing high quality and low cost cars. Therefore Korea's industrial policy had allowed Hyundai to promote its "technological nationalism" within its processes within 1991 to present, relying on its own "state-of-the-art" technology allowing for the mass scale production of original products.

Hyundai's relationship with Korea's government is associated with Hyundai's direct intervention of creating industrial policies and regulatory functions. Unlike the Japanese providing both a direct and indirect source of intervention

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