KIA Motors: Sustainable Business Practices and Strategies Analysis

This case study examines KIA Motors' sustainable business practices and strategies, focusing on the challenges the company faces in a competitive global market. It highlights the importance of efficient resource utilization, human resource policies, and supplier relationships. The study identifies key issues such as inconsistent employee compensation and ineffective marketing strategies. Recommendations include improving global human resources management, developing effective sales strategies, and enhancing the supply chain process through technological advancements and economies of scale. The W.E.I.M. (Workforce, Economies of Scale, Innovation, and Marketing) strategy is introduced as a framework for improving market competitiveness, with specific metrics for evaluating progress. The analysis also incorporates a strategy map and balance scorecard to visually represent and measure the company's strategic themes and key performance indicators. The document is available on Desklib, a platform offering study tools for students.

4/24/2018
TO A NEW FUTURE | [Type the author name]
KIA MOTORS W.E.I.M.

1SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
Sustainable Business Practices and Strategies
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2SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
Executive summary
An organization can only be made effective by utilizing their resources in an efficient
manner and organization is completely aware of their strengths and weaknesses. Globalization
has changed the scenario in the global market due to increase in competition among the global
industry giants and entry of the smaller players in the market. Automobile industry is the global
market is always a highly competitive market due to the presence of companies such as Toyota,
Ford, Renault and Volkswagen. KIA motor is among the top companies in the automobile
industry but it is still is the follower in the market. There are different cases in the appendices
which depict the various strengths and weaknesses of the company and the various due to which
the organization has not been able to gain competitive advantage over the global leader, Toyota.
KIA motor is one of the South Korean automobile and is the second largest producer of
automobiles in South Korea. The stakeholders are not pleased with the performance of the
organization and they expect the organization to do much better and pose a significant threat in
the global market. The organization has developed effectively human resource policies to
provide employees with benefits and motivate them to work at their full potential. However, the
employees are provided with low compensation packages which have developed dissatisfaction
among a huge chunk of employees. On the other hand, the biggest concern for the organization is
the suppliers that always try to control the prices of the raw materials. Toyota is the market
leader and is the biggest competitor for KIA Motor. Toyota has established good relationship
with their suppliers and has used innovative ideas to introduce economies of scale into their
business model. This is the reason that they are able to serve better quality automobiles at similar
prices which has provided them with competitive advantage.

3SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
The main objective of the company is to gain competitive advantage in the market by
increasing their sales volumes and decreasing their production cost. The quality of product by
KIA motor is high but they lack in their marketing activities which has not been able to leverage
their position in the market. Moreover, the some of their cars sold in the United States had
technical issues which had an adverse effect on the brand image. Therefore, the organization
aims to improve their marketing strategies to enhance the recognition off the brand and the
product line. The organization wishes to use market development to enter new markets to
increase their sales volumes by keeping a close eye on the competitors.
The major issues faced by the organization are inconsistent payment of the employees in
the organization and development of effective reward system for the employees. Therefore, it is
essential for the organization to motivate their workforce to perform in a better way to gain
competitive advantage. The supplier policy of KIA motor is also faulty which shows that
developing better relationship with the internal stakeholders is another factor that the
organization will have to focus on. Therefore, the prime objective of this project is improvement
in salary structure, conduction sessions with the employees, develop effective marketing strategy
and add value to the brand by using technological advancement. However, the organization will
face issues due to lack of effective branding policies and absence of multicultural dimension.
There are three major recommendations that are being provided to the organizations for
sustaining their growth in the business are improvement in global human resources management
policy. This can be achieved by engaging the employees effectively which will boost the morale
the workforce. Moreover, this will facilitate in reducing the turnover rate of the organization thus
by decreasing the human resource cost. This can be achieved by using innovative strategies for
improving the engagement of employees. The organization has also been recommended to

4SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
promote positive attitude among the employees. These will enable to increase their
competencies in the international market. The organization will also have to develop rewards
and recognition programs for motivating the employees and thanking them for their service to
the organization.
The next strategy recommended to the organization is development of effective sales
strategy for attaining success in the global market that is sustainable. This is highly
recommended before making an expansion into foreign market and using market development
strategy. Therefore, analyzing the foreign market and understanding the needs of the local
consumers is essential. KIA motors will be able to develop automobiles based on these
specifications that will suit the need of the consumers. The organization will also have to analyze
the disposable income of the consumers so that they can develop products based on the
purchasing power of the consumers. In order to compete in the global market, KIA motors will
have to use competitive pricing as a strategy. The organization will also to make improvement in
their supply chain process which is necessary for increasing their production capacity. This can
be obtained by using innovative technological processes which will improve the overall logistics
process. The organization will have to use economies of scale to increase the efficiency of the
supply chain processes and reduce their cost of production. This will enable them to use
competitive pricing effectively to attain cost leadership in the market and gain majority of the
market share. Moreover, the organization can outsource their business units to reduce the cost of
production in developing countries where the labour costs are low. The organization will also
have to focus on their marketing strategy where they will have to make use of digital
communication to increase their market penetration.

5SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
W.E.I.M is a strategy which consists of factors such as Workforce, economies of scale,
innovation and marketing. These factors are the key factors for improving the market
competitiveness of KIA motors. These factors will have their own set of metrics which will be
used to identify the success of the strategy. Workforce management will consist of metrics such
as reduction in turnover art, increase in productivity, motivation level of employees and
employee participation. Economies of scale will deal with metrics such as cost reduction, quality,
production rate and stock availability. Innovation will use metrics such as increase in efficiency
of the processes and improvement in the quality of the products. Marketing will use metric such
as increases in sales volumes, increase the footfall in outlets, and increase in traffic on online
websites and social media websites. These factors will be essential for developing a balance
scorecard which will be essential for evaluating the progress of KIA motors.

Strategy map
KIA MOTORS
Financial
Customer
Internal
Capacity
Improve cost structure Increase asset utilization
price
Enhance customer value Expand revenue opportunities
quality
Differentiated product
Availability and selection
Function
Service image
Brand
operations
Customer management processes
distributions
Innovative processes
Technological advancement
Regulatory processes
Workforce
Rewards and Recognition
Skills and training
Strategic Themes Theme One Theme Two Theme Three

BALANCE SCORE
CARD
KEY PERFORMANCE
INDICATORS
TARGETS INITIATIVES
YEAR
1
YEAR
2
YEAR
3
PROGRAM
S
BUDGET
S
Workforce
Reduction in turnover art
Increase in productivity
Motivation level of
employees
Employee participation
Economies of Scale
cost reduction
Quality
production rate
Stocks availability
Innovation
efficiency of the processes
Improvement in the quality
of the products
Marke Increase in sales volumes

8SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
ting
Increase the footfall in
outlets
Increase in traffic on online
websites and social media
websites

9SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
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