Hyundai Motors: External and Internal Environment Analysis

This report provides a comprehensive analysis of Hyundai's global strategy. It begins with an introduction to global strategy and its importance for businesses seeking international expansion. The report then delves into an external environment analysis using the PESTEL framework, assessing political, economic, social, technological, environmental, and legal factors impacting Hyundai. It also employs Porter's Five Forces model to evaluate the competitive landscape of the automotive industry. Following the external analysis, the report examines Hyundai's internal environment through a value chain analysis, identifying primary and support activities. The strategic analysis section focuses on Hyundai's business-level strategy, specifically cost leadership, and the application of the RACE model for online marketing. The report also addresses key ethical issues impacting Hyundai, such as employee relations. The conclusion summarizes the key findings and insights derived from the analysis.

Global Strategic

INTRODUCTION...........................................................................................................................1
Analysis of External environment...............................................................................................1
Analysis of the Internal Environments........................................................................................3
The Strategic analysis..................................................................................................................4
CONCLUSION................................................................................................................................6
REFRENCES...................................................................................................................................7

INTRODUCTION
Global strategy is one that an organisation takes when its want to compete as well as
expand their business in global market. In simple term, a strategy businesses pursue when they
wish to expand internationally as well as global strategy is the plan an organisation has
developed for targeting growth beyond its borders (Kamal, Grodzińska-Jurczak and Brown,
2015). This report is based on Hyundai is service industry organisation founded in 1947 and its
founder is Chung Ju-Yung. Headquarter of respective firm is in Seoul, South Korea but they are
offering at worldwide level. Below mention assignment is going to conduct PESTEL for analysis
external environmental factors as well as internal environment analysis also. Apart from this in
the end of report business strategic analysis is also conducted.
Analysis of External environment
External environment is composition of several factors which is outside the organisation
and have wide impact on business. It is divided into two types i.e., micro and macro environment
where micro have direct impact on the operation of enterprise. On the other hand, macro
involves general factors on which business have control. For analysing external environment
Hyundai conduct PESTEL analysis explanation of this is given below :-
Political – This is the term which play important role in identifying the factors which can
impact Hyundai in their long term profitability in certain nation or market. As various forms of
taxes heavier oversight has resulted to create complexity for Hyundai company in doing its
business over worldwide. Respective organisation have to analyse several political factors before
they enter in new market or invest such as:- Government is increasing oversight of businesses but have kept hight control on them
that create complexity for different businesses to operate their services easily in market.
But Hyundai company are able to remain stable in this situation that assist in creating
opportunities for them to raising sales and revenue from market.
Economic – Economic factor have its direct impact on automotive business including
Hyundai and these are powerful sources which affect business at worldwide level (MacKenzie,
Ross and Lee, 2017). There are several factor which must be consider when Hyundai doing their
business at global level are :-
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 Hyundai company is surge in global economy due to increased affordability of people
coupled with favourable factors of production. Asian market have been very high of economic activities since after the period of
recession that has lead to higher sales of Hyundai vehicles in Asian market.
Social – Culture of particular culture as well as way of doing things impact entire culture
of Hyundai within environment (Lewis and et.al.,2017). The Hyundai company is able to enhanced customer requirements and perceived social
value by maintaining class structure, hierarchy and power structure of society. Thus, it
lead to create opportunity for them to grow its market share as they are maintaining their
business and society equally.
Technological – Technology is advancing day by day because of this Hyundai also have
to make modifications in their products as well as services.
 Hyundai company are making large investment in research and development in order to
attain customer requirements so they are able to offer them not only reasonable but also
environment friendly cars. As today's generation are attracted towards e co- friendly
product and services. Thus, it creates an opportunity for them to come up e co friendly
cars at affordable price both in domestic or international market.
Environment - Before entering new markets or starting a new business in existing market
the firm should carefully evaluate the environmental standards that are required to operate in
those markets. Herein, Hyundai is focusing and devolving opportunities of hybrids and electrical
vehicles apart from environmental friendly vehicles that are low on carbon emission.
Legal – Rules and regulation of every country is different which must be kept in mind by
Hyundai while doing business at global level. If they will not follow laws like health and safety,
data protection, intellectual property act and so on then it will give negative impact on working
of Hyundai as well as may be penalised by the government. Because government of UK have
abided certain rules and legislation for product and service organisation that they needs to
implement properly.
Porters Five force Model – This is an analytical model introduced by Michael E Porter
and it is used by industries for analysing competition as well as for generating competitive
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advantages. It have 5 forces explanation of these in relation to auto-mobile industry are as
follows :- Threat of new entrants: For companies it is difficult to enter in auto-mobile industry
because it require huge amount investment. Thus, threat of new entrance is low. Bargaining power of suppliers: In the automotive industry bargaining power of supplier
is termed as low due to limited population of suppliers around the world creates a
moderate force that influences Hyundai. In addition majority of suppliers in global
automotive do not have forward integration or ownership to control distribution channel. Bargaining power of buyers: The bargaining power is moderately strong because mainly
numerous people purchase single vehicle (Rieckmann, Wan and Meng, 2017).
Moreover, there are some corporations or government agencies which purchase fleets of
vehicles and they can bargain for reducing prices. Threat of substitute products: Their are numerous substitutes but none of them are
offering kind of product that are more accessible, affordable and convenient in their
product and services they are offering to their customer. (Singh, 2015). Thus, they have
less threat of substitute.
 Competitive rivalry among existing players: Auto-mobile industry have high level of
competitive rivalry. Such as high aggressiveness of firms against each other such as
innovation and marketing their products.
Analysis of the Internal Environments
Value Chain is the activity conducted for determining cost and affecting profits. Their are
several activities in which organisation is engaged for converting input to outputs (Porter's Value
Chain, 2016). These activities are divided in primary and supportive which must be taken by
Hyundai in some form. As per the value chain primary activities which result in increasing
customer value and reducing operation cost are:-
Primary activities - Inbound Logistics – It involve relationship of Hyundai with suppliers as well as all the
activities bargaining in price, receive, store and disseminate inputs which result in
reducing operational cost.
 Outbound Logistics – It involve activities related to customers value like distribution of
output, store and collection. Hyundai company are maintaining their global supply chain
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that leads to create sustainability in their business . Thus, its global supply chain creates
their strength in automotive market place and help them to attain competitive position.
Supportive Activities -
 Technology development – With the implementation of high and advancement
technology such as innovative structure that provides comfort for an individual in
driving. Thus, from this Hyundai can directly contact with their customers which result in
enchaining their values.
With the helps of different services as technological factor, inbound and outbound
logistic, organisation can easily enhance competitive advantages in target market (Fleischmann
and et.al.,2016). By providing better services to customers with reducing prices as well as direct
communication with customers.
The Strategic analysis
The Business level Strategy – Business strategy is the course of action as well set of several
decisions which help an entrepreneur in accomplishing particular business objectives. In other
words, it is master plan which use by management department for gaining competitive place in
business environment. There are several strategies using by Hyundai explanation of these are as
follows :-
 Cost leadership – Cost strategy of Hyundai help them in maintaining their position as one
of the best automotive company in the industry. In society there are different type of
people for catering them respective company is manufacturing numerous vehicles and for
them they kept wide-ranging of pricing policies (Verbeke and Asmussen, 2016). Thus,
some their case belong to competitive pricing category on the other hand, other are
luxury car genesis which have premium cost. Hence, Hyundai is using penetration policy
for managing cost of their products affordable for everyone in society. But there are
several competitors in market which is external factor due to that company have to take
care of their offering price.
The RACE consist of four step or online marketing activities designed to help brands
engaged their customer through the customer life. REACH: This model help mangers of Hyundai in building awareness of brand, its
product, and services on their website and in offline media. In order build traffic by
driving visits to different web presence like main sites, microsites or social media (Cranz
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and Anquez-Traxler, 2014). The manager of Hyundai are using reach model to in cost
leadership strategy to reach each and every individual. It also helps them to maximize
reach over time to create multiple interaction using different earned media touch points. ACT: Act is short of interact. It is a separate signs of encouraging interactions on
websites and in social media to generate leads is a big challenge of online marketing. It
helps manager of Hyundai Company in generating leads, finding more attractive and
innovative product that leads to a blog post and maintaining cost leadership in market.
This can be sharing of convert via social media or customer reviews. It’s all about
engaging the audience through relevant and compelling clear and navigation path ways to
reach the challenging environment. CONVERT: This model is conversion of sale and useful for an organisation in
maintaining cost effective leadership strategy. It helps mangers of Hyundai to get into
next level to tale vital next step which turns them into playing customer whether the
payment is taken through online. Such as e commerce transaction or through offline
channels. ENGAGE: This is long term engagement which is developing a long time relationship
with the person who is buying first time for building loyalty as well as purchasing
communication on websites and merchandise store (Gillespie and Riddle 2015). It helps
mangers of Hyundai to create life time value for them as well as to their customer as well
as benefit them to maintain their cost effective leadership strategy. This also helps them
to measure the percentage of customer retention and customer satisfaction and
recommendations using their system.
Key issues that impacted on ethical issues - Recently auto-mobile organisation Hyundai
has underwent a series of negotiation as well as employ outcry. This change increases their net
income by 10 % this lead is going through several issues with their dispatched man-power.
The influential stakeholders as well as managing officials of enterprise were included because
they are in the control of direct treatment and authority of dispatched, union and full time staff
members (Lanciotti and Bartolomé, 2014). Moreover, overall Hyundai auto-mobile company
affected by stories of media or production problems which is taken as an result of issues by
which Korean plants is going on.
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Individualism focuses on motivation of company while stressing making profit as being
number one goals of a company while not breaking any Laws. According to ideas of
individualism affected ethically girded dispatched employees before they were receiving full
employment benefit.
Utilitarianism matters required to be analysed for identifying the maximum of happiness which
will be acquire in short duration planning as well as pertains to business holders. Hyundai
neglect grudge of their plant employees and forgotten their correct manner of handling
dispatched workers in short term or arguably the long duration. Moreover giving dispatched
workers full time jobs with advantages and paid their employees their bonuses regularly would
save several problems with other countries (Taylor and Derudder, 2015). Thus, agreeing to make
business as an effective place for employees such as paying bonus part of regular salary that
would motivate and keep employees happy. It will lead them to gain their losing significant
profit for change.
CONCLUSION
From the above assignment it has been concluded that, when an organisation doing
business at global level they have to implement several strategy for satisfying their customers’
needs and wants. Moreover, business environment is combination of external as well as internal
factors which should be analysed in proper manner so that threats can be minimised and
opportunities can be gained. Apart from this for external environment analysis PESTEL and
Porter five force is conducted whereas, for internal analysis Value chain model is applied this
result in enhancing customers value and minimising operating cost. Although, there are several
business level strategy which is ethically implemented by Hyundai for their better working.
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