Business Analysis Report: Impact of Change on Kia Motors' Strategy

This report provides a comprehensive business analysis of Kia Motors, focusing on the drivers and impact of change on its organizational strategy, operations, and culture. The introduction highlights the importance of adapting to change in the business environment, particularly in the context of rapid technological advancements and globalization. The main content delves into various drivers of change, including technology, government regulations, globalization, and media, and their influence on Kia Motors' strategic decisions. The report includes case studies, PESTLE and Porter’s Five Forces analyses, and discussions on the impact of change on strategy, operations, and culture. It also explores how change affects leadership, individual, and team behavior, along with appropriate models for processing change efficiently. Finally, the report presents a comprehensive plan for organizational change in terms of strategy, operation, and culture, addressing the current needs of Kia Motors in the Vietnamese market. The analysis covers topics like technological innovation, government policies, globalization, and media influence, as well as internal factors like culture and leadership, to provide a holistic understanding of the challenges and opportunities facing Kia Motors.

Table of Contents
INTRODUCTION.....................................................................................................................................3
MAIN CONTENT.....................................................................................................................................4
I. Driver and impact of change and how it affects organizational strategy..................................4
1. Technology.................................................................................................................................4
2. Government regulation.............................................................................................................4
3. Globalization..............................................................................................................................5
4. Media..........................................................................................................................................5
II. Organization case studies..........................................................................................................6
III. Driver of change.........................................................................................................................8
1. PESTLE......................................................................................................................................8
2. PORTER’s FIVE FORCES......................................................................................................9
3. CULTURE..................................................................................................................................9
4. ECO..........................................................................................................................................10
5. SWOT.......................................................................................................................................11
IV. The impact of change and the effects it has on the organization’s strategy and operations
and culture...........................................................................................................................................14
1. Strategy.....................................................................................................................................14
 Competiveness..........................................................................................................................14
 Structure...................................................................................................................................14
 Business....................................................................................................................................14
2. Operation..................................................................................................................................14
3. Culture......................................................................................................................................15
V. How change will have affected leadership, individuals and team behavior............................16
1. Loss Resources.........................................................................................................................16
2. Location....................................................................................................................................16
3. Managing Commitment...........................................................................................................17
 Evaluate how the impact of the change was minimized:.......................................................17
VI. Appropriate models to process change efficiently.................................................................19
1. 7S model...................................................................................................................................19
2. Maslow’s hierarchy.................................................................................................................22
VII. Comprehensive plan with for the organization change in term of strategy, operation and
culture for current need......................................................................................................................26
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1. Strategy.....................................................................................................................................26
2. Operation..................................................................................................................................28
3. Culture......................................................................................................................................28
CONCLUSION........................................................................................................................................29
REFERENCES........................................................................................................................................30
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INTRODUCTION
As we all know, catching up with changes in the business is the key to addressing
the needs of the business. A rush of progress is coming will make the way we work
almost unrecognizable with today's business leaders. In the quick advancing innovation
period, business models, demographics or even attitudes in the workplace-all
simultaneous changes are changing ceaselessly. Organizations from start-ups and online
businesses to pioneers in all industries will encounter effect is far-reaching and changing
ways.
In this assignment, I am training to become a business analyst in a large multinational
organization. My first task was to analyze a big organization namely Kia Motor. Then,
that change is a necessary part of life means businesses must embrace it without excuse.
It is important to understand that the barriers that make it difficult to implement change
are usually the reasons behind the resistance to change. A leader always has the idea that
a certain change needs to be implemented to enable the organization to accomplish set
strategic goals. But no matter how necessary the change is, it will be difficult for an
organization to implement the planned strategic change successfully if barriers to change
do exists. In a case study, Kia is a company that has a very good background but they
lacked success when entering the Vietnamese market. This part will determine how
barriers to change influence leadership decision-making. To demonstrate that change is
always accompanied by difficulties that any organization must undergo.
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MAIN CONTENT
I. Driver and impact of change and how it affects organizational strategy
 Definition of drivers
Business drivers are the factors that spur growth in the areas most important
to an enterprise’s success. Such factors might include economic and market
conditions, key players, critical information, assets, and processes. It is
important to identify business drivers, regardless of whether they are within the
control of a business or not. (Prosci, 2012)
1. Technology
Information technology (IT) is dramatically changing the business
landscape. Because the equipment is one of the direct participants in the
production process, the modernization of machinery and equipment or
technological innovation is very important for every business. An industrial
production enterprise that wants to survive and develop must develop its own
technological innovation plan. Scientific and technological advances and
technological innovations will allow to improve product quality, create new
products, diversify products, increase productivity, increase labor productivity,
and use rationally and economically. materials ... Therefore, it will increase
competitiveness, expand markets, promote rapid growth and improve
production and business efficiency. Kia Motor Company knows that, so the
company always chooses to strive for scientific and technological progress,
technological innovation is the right direction for the company in the context of
the potential automotive industry.
2. Government regulation
Vietnam is always a potential market that auto companies aim to develop.
Kia Motor also always puts the criteria for improvement and product
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diversification to the forefront. In addition, Kia also has a concern that will
make it difficult for the company to develop that is the tax and the laws of the
Vietnamese government. Every year, the Vietnamese government keeps
revising policies and taxes, Kia Motor keeps updating and complying, but in
recent years, the increase in import tax of cars has made Kia reduce part of the
revenue.
3. Globalization
In the context of international economic integration, the process of
globalization has become an objective trend that affects all aspects of social
life such as culture and economy, etc. , is both a necessary outcome for all
social development processes. Kia always tries to follow and catch up with the
pace of globalization in the Vietnam market in particular and the world market
in general.
4. Media
It can be said that Social Media is a great way for Kia Motor Company to
increase brand awareness to customers, the company can also create a
playground for the participation of customers as well as strengthen their
sentiments. for Kia Motor products and services. In addition to the positive
factors mentioned above, Social Media is also a giant "trap", because it can
cost the mountain company money to show and connect the community to
participate in marketing campaigns. Kia's or where Kia is most vulnerable to
being smeared by rivals.
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II. Organization case studies
Kia, Korea's oldest automobile manufacturing company was founded in 1944
as Kyungsung Precision Industry, specializing in manufacturing steel pipes and
bicycles. In 1952, Kyungsung Precision Industry was officially changed to Kia
and switched to manufacturing motorcycles, trucks and cars. In 1997, Kia went
bankrupt due to the Asian financial crisis and was acquired by a rival company,
Hyundai Motor Company, to establish Hyundai Hyundai Corporation. (33.88%
stake) In 2007, THACO and KIA signed a cooperation agreement.
The THACO Kia vehicle range offers a wide variety of segments: (KiaMotor,
2019)
 Segment A: Kia New Morning
 Segment B: Kia Rio
 Segment C: Kia Forte, Kia Cerato
 Segment D: Kia Optima, Kia Cadenza
 Segment SUV: Kia New Carens, Kia Carnival, Kia Sedona
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 Segment MPV: Kia Sorento.
The strategy of Kia Motor in Vietnam market
 Reasonable price
 Focus on design, variety of models and segments.
 Target customers in urban or home
The scenario of Kia Motor in Vietnam market
Kia's growth rate has gradually increased in recent years and reached nearly
30,000 units in 2018. (AnnualReportKia, 2017)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
21,310
33,014
22,136
28,986 Sales
Doanh Số
2015 2016 2017 2018
In 2016, Kia Morning made a breakthrough with a difference of more than
6,000 units for the same period, Kia Cerato (about 2,000 units).
With a total sales of 28,986 in 2018, KIA is the fourth best-selling car
company in the Vietnamese market, contributing greatly to the growth of KIA
Morning, KIA Cerato models, these two models are in the top 10 models a best
seller in Vietnam. In particular, KIA Cerato suddenly surpassed KIA Morning to
become the highest-selling model of KIA Vietnam with 11,678 cars in 2018.
III. Driver of change
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1. PESTLE
 Political
In recent years, the Vietnamese market has increasingly attracted
FDI from the outside, in order to facilitate investment and state
development, there have been new policies to attract the investment of large
companies, especially because tax incentives. As a result, the amount of
FDI in recent years has increased and accounted for 20% of the national
GDP. Policies on labor law, personal income tax, and businesses also turn
and improve to suit the transition to a market economy like in Vietnam.
Particularly in certain industries subject to restrictions, the cost of importing
cars from the outside is quite expensive, in large part because of the state
tax. Kia is significantly affected by the fact that the current Kia Sportage
and Kia Soul cannot be mass produced in Vietnam.
 Economy
Vietnam has always created and maintained relationships with
neighboring ASEAN countries to facilitate free trade between countries. In
recent years, Vietnam market is receiving a relatively stable investment
from ASEAN countries such as Thailand and Phillip. Other countries such
as Korean and SAMSUNG (nearly 80% of SAMSUNG products are
manufactured in Vietnam, LOTTE, HYUNDAI, etc.) with famous
companies such as HONDA, TOYOTA. Unilever has a well-known and
familiar name. According to the people, some people think that the first
step at Unilever will create a premise for future careers. The most recent
event is Trade War between China and USA has created many
opportunities for Vietnam. He jumped to invest in Vietnam to avoid and
reduce taxes when exporting to the US market.
 Social
Over the past 5 years, the change of Vietnamese society has become
more and more pronounced. People with higher standards on human rights,
social issues, social networks began to become more popular and quickly
became a popular tool for everyone. Kia Motor has taken advantage and
taken that as its strong point, for more than 10 years Kia has continuously
accompanied as a sponsor of FIFA competitions, in addition Kia is
cooperating with RIOT to organize the LEC professional tournament
(League of legend European Champion) to promote the brand, the LEC
tournament brings together a lot of players as well as a huge audience that
is broadcast live on YouTube channels and social networks Facebook,
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Twitter. The step towards sponsoring E sport is a different step for
competitors.
 Technology
In the current technology competition, especially technology-
focused industries such as information technology and automobiles. Then a
breakthrough in technology will bring a great competitive advantage. In the
future, Kia Motor is developing the R.E.A.D System (Real-time Emotion
Adaptive Driving System) and V-Touch (Virtual Touch). READ System is
the system that recognizes the face and voice then through memorizing,
assessing the actions and responses of the owner in the past under the
control of the AI will store and record the statistics, situation as well as data
for the whole distance. In addition, R.E.A.D System also allows to adjust
brightness, sound, windows, air conditioning and other features directly by
voice. V-Touch is a system that controls the operation of the vehicle by
touching it directly on the screen, the screen shows all parameters and many
other functions (slope, speed, fuel volume, outside temperature, light).
(AnnalysReportKia, 2018)
2. PORTER’s FIVE FORCES
 Supplier power
Manufacturing: THACO partners
 Customer power:
 Customers demand more and more Kia's quality, high requirements
on environment-friendly, engine as well as new design, better
design, competitive price with the market.
 Kia Motor's customers are mostly young and mostly concentrated in
urban areas.
 Threat of Substitution
 In Vietnam, the majority of the population is still using large
numbers of motorbikes, buses, and trains. The number of cars on the
market is still small, with an average of 33 car owners per 1,000
cars.
 Rivals
 Competitors of Kia Motor in the Vietnam market such as Hyundai,
Toyota, Mercedes, Suzuki, Ford, Honda, Isuzu, Mitsubishi, BMW,
Vinfast.
 The opponent's actions greatly influence the organization's benefits
from technological innovation to market campaigns
3. CULTURE
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Culture in Kia:
Kia culture is a blend of Vietnamese and Korean cultures. Korean
culture focuses on job performance but less attention to people so many
conflicts have occurred. There is a saying in Korea that "a good employee is
the one who leaves the latest", which not only reduces work efficiency but also
loses credibility and relationships with employees
Culture in VN:
Culture in the work of Vietnamese people is evaluated as enthusiastic,
doing well in both individual and teamwork but it is easy to lose focus, and
sometime it requires supervision to work effectively. Vietnamese employees
often make their own point of view in front of the crowd but often share
personal opinions with managers. Often accepting opinions from managers
because of position differences in the company, although disagreeing with that
opinion and they do not speak their mind for fear of losing your job.
4. ECO
Vietnam has a rich ecosystem with a subtropical climate, a coastline of
3260 km and an East Sea border, which helps Vietnam own a considerable amount
of resources. In addition, the potential strategic geographical position of Vietnam
in the near future may become a transit place by customs gate instead of
Singapore. The biggest minus point is that the air pollution level in Vietnam has
reached alarming levels mainly in big cities and surrounding satellite provinces
where a large number of factories are located. Although Vietnam is affected by
climate change as well as the consequences of global warming, most of the
pollution comes from industrial waste and the lack of remedies. Kia Motor has
observed and introduced timely measures to improve the living environment by
reducing CO2 emissions such as hybrid cars with more environmentally friendly
engines. Kia is also researching and developing the line. The electric car is
currently the current trend but also faces many difficulties because Vietnam often
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rains so ensuring this car can work as well as safety for users is a difficult question
for the manager.
5. SWOT
Strength Weakness
 Unique diverse design, Stylish
youthful luxury.
 Another strong point of Kia is always
respect for talents people.
1. For example, in 2006 to create a
unique style for KIA, the car
company invited the chief designer
of Volkswagen, Mr. Peter Schreyer
and in 2013, he was promoted to
the position design director of KIA
and Huyndai.
2. And also in 2013, Mr. Pierre
Leclercq - former director of
designing high performance feature
car division of BMW to be the style
director for KIA.
3. These factors have helped the
design of KIA cars increasingly
 Engine durability is easily degraded,
emitting noise after long periods of
use.
 With some feedback from customers,
the chassis is often not sure after
running 90000 km (The reason may be
due to the poor road terrain in
Vietnam).
 Air conditioner fitted on the car is not
really good.
 KIA's soundproofing is not good.
 Steering quality reduce after a long
time of use, making the driver
uncomfortable to handle.
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luxurious, elegant and helps the
company grow.
 Reasonable price for the majority of
customers in Vietnam market.
 In addition to the above, KIA's interior
and options are fully furnished and
comfortable, with space for the driver
and the occupant to sit comfortably.
 Technology and functions for safe
operation of the vehicle are fully
equipped.
 Moreover, it is quite easy to repair and
maintain because KIA's equipment and
materials are quite popular and diverse.
Opportunities Threat
 Vietnam's car ownership rate is still
low, 23 cars per 1,000 people.
Therefore, the potential and market are
still very large so that KIA can grow
car sales
 Vietnam's economy is growing, so the
ownership of Vietnamese cars is
increase easily.
 The roads in Vietnam have been
improved, there are many highways so
this is an advantage for the car
industry. And another opportunity is
that the population of Vietnam is
concentrated in big cities like Ho Chi
Minh and Hanoi which are the key
areas that can be develop more.
 Import taxes and vehicle
registrations may increase,
affecting vehicle sales but this
cannot be controlled.
 Thaco and KIA may not cooperate
anymore because the quality of
KIA vehicles assembled in Thaco
is being assessed poorly.
 More and more competitors in
Vietnam. The most recent is
Vinfast, a domestic car company so
it will be supported by many
Vietnamese people.
 The negative feedback on the
media affects the company's sales.
 Due to KIA's decision is influenced
by Hyundai, there were still many
limitations and lost the talent to
Hyundai, for example Peter
Schreyer in 2013, because of
recognizing his talent, Huyndai
appointed him to Huyndai's design
director and KIA. He will not
focus on a single company KIA
like before.
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