Building business level strategies in automobile industry the case of huyndai vietnam

V IE T N A M N A T IO N A L U N IV E R S IT Y , H A N O I S C H O O L O F B U SIN E SS lfậ —H I s B— U C M -rv r t N guyen H H a B U IL D IN G B U S IN E S S - L E V E L S T R A T E G IE S IN A U T O M O B IL E IN D U ST R Y T H E C A S E O F H Y U N D A I V IE T N A M M a jo r: B usiness A d m in istra tio n C o d e : 603405 M A S T E R O F B U S IN E S S A D M IN IS T R A T IO N T H E S IS S u p e rv iso r: D r T a Ngoe C au E d w a rd M cA lv an ah , M B A ĐẠI HỌC QUOC GIA HA NOI TRUNG TÂM ĨHQNG TlN THỰVIỆN A r lo / ĩ £ I Hanoi - 2010 TABLE OF CONTENTS A C K N O W L E D G E M E N T i A B S T R A C T ii T Ó M T Ẩ T iii T A B L E O F C O N T E N T S V L IS T O F F IG U R E S A N D T A B L E S vii In tro d u ctio n 1 R a tio n a le R esearch O b je c tiv e R esearch sc o p e R esearch m e th o d D ata so u rc e s L im itatio n E x pected íin d in g T he th esis s tru c tu re C h ap ter 1: L iterature R e v ie w 1.1 S trategy and B usiness-L evel S tra te g ie s 1.1.1 Strategy d e íìn itio n 1.1.2 B usiness-level stra te g ie s 1.1.3 T he im portance o f B usiness-level s tra te g ie s 1.2 B usiness-L ev el S trategies F o rm u la tio n 1.2.1 V ision and M iss io n 1.2.2 E x tem al a n a ly s is 1.2.2.1 M acro A n a ly sis: 1.2.2.2 M icro A nalysis: F ive Forces M o d e l 12 1.2.3 Intem al a n a ly s is : 19 1.2.3.1 V alue Chain m o d e l 19 1.2.3.2 C o m p etitiv e a d v an tag es 21 1.3 F o rm ulatio n and C h o ice 23 1.3.1 S W O T A n a ly s is 23 1.3.2 G R E A T m o d e l 25 1.3.3 S trategy Im p le m en tatio n 25 1.3.4 M atch in g S trate g y 26 C h ap ter 2: C ase study o f H yundai V ie tn a m 27 2.1 O verview o f C ars m a rk e t 27 2.1.1 O verall m arket grovvth 27 2.2 Introd uction o f H yundai V ie tn a m 30 2.2.1 D evelop m ental h is to ry 30 2.2 C o m p an y V is io n 31 2.2.3 P ro d u c ts 31 2.2 C o m p etitiv e p o sitio n 31 2.3 S trategic a n a ly s is 31 2.3.1 E x tem al a n a ly s is 31 2.3.1.1 P E S T 31 2.3.1.2 Forces .39 Intem al a n a ly s is 44 2.3.2.1 V alue c h a in 44 2.3 2.2 C o m p etitiv e a d v an tag es 49 2.3.3 Formuỉation and choice 50 2.3 3.1 SWOT cmaỉysis 50 3 G R E A T m o d e l 54 C h ap ter 3: R e c o m m e n d a tio n 54 3.1 O b je c tiv e s 55 3.3 R eco m m end atio ns to H yundai V ie tn a m 61 C O N C L U S IO N 62 R E F E R E N C E S 63 vi LIST OF FIGƯRES AND TABLES B u sin e s s le v e l s tra te g ie s PE S T m odel F iv e F o rc e s M o d e l 12 V a lu e C hain m o d e l 19 C o m p e titiv e A d v a n ta g e 22 S W O T a n a ly s is 24 S W O T M a trix 25 G R E A T m odel 25 M a rk e t s e g m e n ta tio n 28 N u m b e r o f re g is te re d c a rs in V ie tn a m 29 'T o ta l n e w re g is te re d c a r in V ie tn a m 30 Im p o rt ta x c h a n g e s fo r n e w v e h ic ỉe s 32 s p e c ia l c o n s u m p tio n ta x 32 G D P G ro w th R a te 34 A n n u a l In íla tio n 35 T e c h c o m b a n k s u p p o rt c h a rt 36 V ie tn a m p o p u la tio n 39 vii IntroductioD R atio n ale V ie tn a m is n o w lo o k in g fo rw a rd to ủ ir th e r d e v e lo p m e n t a n d g lo b a liz a tio n by jo in in g W T O in 0 a n d a d ịu s tin g o p e n p o lic ie s to m u lti-n a tio n a l c o m p a n ie s vvho h a v e s tro n g p o s itio n in th e g lo b a l m a rk e t V ie tn a m c o m p a n ie s h a v e to suíT er h ig h c o m p e titio n a n d p re s s u re fro m th o s e ío re ig n c o m p a n ie s In a n o th e r h a n d , c o n su m e r in te re s ts c o n s ta n tly c h a n g in g a n d in d u s try c o m p e titio n in c re a s in g , m a s s p ro d u c tio n s y s te m s o fte n d o n o t a lig n an o rg a n iz a tio n vvith its c u s to m e rs A d o p tin g m a ss c u s to m iz a tio n is in c re a s in g a s a m e th o d fo r c o p in g w ith th e s e c h a n g e s H ov vever, in o rd e r to a d o p t m a ss c u s to m iz a tio n , b u s in e s s fu n c tio n s m u s t im p ro v e H y u n d a i V ie tn a m s p e c ia liz e s in a u to m o tiv e in d u s try a n d it h a s to fac e h ig h c o m p e titio n a s w e ll vvhich o th e r V ie tn a m e n te rp ris e s a re fa c in g H y u n d a i V ie tn a m is y o u n g to a u to m o tiv e in d u s try o r A u to m o b ile in d u s try a n d th e c u rre n t s tra te g y o f H y u n d a i V ie tn a m d o e s r r t w o rk w e ll to m e e t c u s to m e r n e e d s T h a t’s w h y I d e c id e d to b u ild u p a b u s in e s s le v e l s tra te g y fo r H y u n d a i V ie tn a m u s in g c o m p a n y ’s c o re c o m p e te n c ie s to g a in c o m p e titiv e a d v a n ta g e s o v e r o th e r c o m p e tito rs R e se a rc h O b jectiv e T h e o b je c tiv e o f th is th e s is is to fín d o u t a n a p p ro p ria te b u s in e s s -le v e l s tra te g y fo r H y u n d a i V ie tn a m to g e t th ro u g h th e re c e s s io n tim e a n d lo o k in g fo rw a rd d e v e lo p m e n t R esearch scope T h e re s e a rc h íb c u s e s o n ly o n H y u n d a i V ie tn a m in V ie tn a m m a rk e t R esearch m eth o d M e th o d to b u ild u p a b u s in e s s s tra te g y fo r H y u n d a i V ie tn a m b a s e o n a S tra te g ic m a n a g e m e n t th e o rie s to fo c u s o n íĩn d in g a p p ro p r ia te a p p ro a c h e s to b u s in e s s s tra te g y fo rm u la tio n , a n d in d e n tiíy a c o m m o n p ro c e s s to b u ild b u s in e s s s tra te g ie s b F a c to rs c a n b e a ffe c te d to th e b u s in e s s c C a s e a n a ly s is a n d re c o m m e n d a tio n s to b u s in e s s D ata so u rces L ite tu re s revievv p a rt h a s b e e n ta k e n fro m b o o k s , n e w s p a p e r, in te rn e t s o u rc e s A n d p rim a ry d a te h a s b e e n ta k e n fro m H y u n d a i V ie tn a m lo c a lly L im ita tio n T h e s e c o n d a r y in fo rm a tio n so m e h o v v is n o t u p d a te d ; th e s ta tis tic o f im p o rt c a r w a s n o t c o v e re d c o rre c tly a n d fu lly b y c u s to m s d e p a r tm e n t b e c a u s e o f d iffe re n t re a s o n s A n d th e p rim a ry d a ta fro m H y u n d a i V ie tn a m , s o m e in íb r m a tio n is c o n fid e n tia l a n d n o t a llo w e d to p u b lic E x p ected íĩn d in g T o fín d o u t th e rig h t b u s in e s s -le v e l s tr a te g ie s f o r H y u n d a i V ie tn a m d u rin g th e re c e s s io n tim e a n d it w ill g e t g o o d re s u lt in a p p ly in g th is s tra te g y in to H y u n d a i V ie tn a m T h e thesis str u c tu r e T h e th e s is is d iv iđ e d in to c h a p te rs : C h a p te r íị c u s e s o n lite tu re re v ie w w ith th e ílin d a m e n ta l th e o ry o f s tra te g ie s b u s in e s s -le v e l s tra te g ie s a n d th e im p o rta n c e o f b u s in e s s -le v e l s tra te g ie s C h a p te r w ill g iv e y o u th e o v e rv ie v v o f V ie tn a m a u to m o b ile in d u s try a n d th e c a s e o f H y u n d a i V ie tn a m w ith b a c k g ro u n d , e x te m a l a n d in te m a l a n a ly s is o f H y u n d a i V ie tn a m to fín d s o m e k e y fa c to rs o f s tr e n g th s a n d w e a k n e s s e s o f H y u n d a i C h a p te r id e n tifíe s th r e a ts a n d o p p o r tu n itie s b a s e o n a n a ly s is in c h a p te r to b u ild u p a p p ro p ria te s tra te g y fo r H y u n d a i V ie tn a m T h e la st p a rt vvill b e c o n c lu s io n o f th e th e s is Chapter 1: Literature Review 1.1 Strategy and Business-Level Strategies 1.1.1 S tra te g y d e íin itio n S tra te g y A c c o rd in g to G e o rg e S te in e r G e o rg e S te in e r, a p r o íe s s o r o f m a n a g e m e n t a n d o n e o f th e fo u n d e rs o f T h e C a liíb m ia M a n a g e m e n t R e v ie w , is g e n e lly c o n s id e r e d a k e y fíg u re in th e o rig in s an d d e v e lo p m e n t o f s tra te g ic p la n n in g H is b o o k , S tra te g ic P la n n in g is c lo s e to b e in g a b ib le o n th e s u b je c t Y e t, S te in e r d o e s n o t b o th e r to d e íĩn e s tra te g y e x c e p t in th e n o te s a t th e e n d o f h is b o o k T h e re , h e n o te s th a t s tra te g y e n te re d th e m a n a g e m e n t lite tu re a s a w a y o f r e íe r r in g to w h a t o n e d id to c o u n te r a c o m p e tito r’s a c tu a l o r p re d ic te d m o v e s S te in e r a ls o p o in ts o u t in h is n o te s th a t th e re is v e ry little a g r e e m e n t a s to th e m e a n in g o f s tra te g y in th e b u s in e s s w o rld S o m e o f th e d e íĩn itio n s in u s e to w h ic h S te in e r p o in te d in c lu d e th e fo llo w in g : • S tra te g y is th a t w h ic h to p m a n a g e m e n t d o e s th a t is o f g re a t im p o rta n c e to th e o rg a n iz a tio n • S tra te g y re fe r s to b a s ic d ire c tio n a l d e c is io n s , th a t is, to p u rp o s e s a n d m is s io n s • S tra te g y c o n s is ts o f th e im p o rta n t a c tio n s n e c e s s a ry to re a liz e th e s e d ire c tio n s • S tra te g y a n s w e rs th e q u e s tio n : W h a t s h o u ld th e o rg a n iz a tio n b e d o in g ? • S tra te g y a n s w e rs th e q u e s tio n : W h a t a re th e e n d s w e s e e k a n d h o w s h o u ld w e a c h ie v e th e m ? 1.1.2 B usiness-level s tra te g ie s T h e b u s in e s s - le v e l s tra te g y r e fe rs to th e p la n o f a c tio n th a t s tra te g ic m a n a g e rs a d o p t to u s e a c o m p a n y ’s r e s o u r c e s a n d d is tin c tiv e c o m p e te n c ie s to g a in a c o m p e titiv e a d v a n ta g e o v e r its r iv a ls in a m a r k e t o r in d u s try P ro c e s s o f b u s in e s s d e íĩn itio n e n ta ils d e c is io n s a b o u t (1 ) c u s to m e rs ' n e e d o r w h a t is to b e s a tis íìe d ; (2 ) c u s to m e r g ro u p , o r w h o is to b e s a tis íìe d ; a n d (3 ) d is tin c tiv e c o m p e te n c ie s , o r hovv c u s to m e r n e e d s a re to b e s a tis íie d T h e s e th re e d e c is io n s a re th e b a s is o f th e c h o ic e o f a b u s in e s s -le v e l stra te g y b e c a u s e th e y d e te rm in e h o w a c o m p a n y w ill c o m p e te in a b u s in e s s o r in d u stry C ustom ers’ needs and product diíĩerentiation: C u s to m e r s ' n e e d s a re d e s ire s , w a n ts , o r c v in g s th a t c a n b e s a tis íĩe d b y m eans o f the characteristics o f a product or Service P ro d u c t d if f e r e n tia tio n is th e p ro c e s s o f c re a tin g a c o m p e titiv e a d v a n ta g e b y d e s ig n in g p ro d u c ts -g o o d s o r s e rv ic e s to s a tis lỳ c u s to m e r s ' n e e d A ll c o m p a n ie s m u s t d if fe re n tia te th e ir p ro d u c ts to a c e rta in d e g re e in o rd e r to a ttra c t c u s to m e rs a n d s a tis íỳ s o m e m in im a l le v e l o f n e e d H o w e v e r, s o m e c o m p a n ie s d iffe re n tia te th e ir Products to a m uch greater degree than others, and this difference can give them a c o m p e titiv e e d g e C ustom er groups and M ark et segm entation: M a rk e t s e g m e n ta tio n is th e w a y a c o m p a n y d e c id e s to g ro u p c u s to m e rs , b a s e d o n im p o rta n t d iíĩe r e n c e s in th e ir n e e d s o r p re fe re n c e s , in o rd e r to g a in a c o m p e titiv e a d v a n ta g e Distinctive Com petencies: T h e th ird is s u e in b u s in e s s -le v e l s tra te g y is to d e c id e w h ic h d is tin c tiv e c o m p e te n c ie s to p u rs u e to s a tis íy c u s to m e r s ’ n e e d s a n d c u s to m e r g ro u p s 1.1.3 T h e im p o rta n c e o f B usiness-level stra te g ie s B u s in e s s -Ie v e l s tra te g ie s e x a m in e h o w a c o m p a n y c a n c o m p e te e íĩe c tiv e ly in a b u s in e s s o r in d u s try a n d s c ru tin iz e th e v a rio u s s tra te g ie s th a t it c a n a d o p t to m a x im iz e c o m p e titiv e a d v a n ta g e a n d p ro íìta b ility W h e n a c o m p a n y p u r s u e s b u s in e s s -le v e l s tr a te g ie s th e y c a n g a in c o m p e titiv e a d v a n ta g e s th a t a llo w th e m to o u e ríb rm r iv a ls a n d a c h ie v e a b o v e -a v e g e re tu m s T h e y c a n c h o o s e íío m th re e b a s ic g e n e ric c o m p e titiv e a p p ro a c h e s : c o s t le a d e rs h ip , d iffe re n tia tio n , a n d fo c u s 1.2 Business-Level Strategies FormuIation F ig u re 1.1 B usiness level stra te g ie s V ision and M ission _ _ SW O T Strategic choice B usiness Level Strategy P ro du ct d iíĩeren tiatio n M arket segm ent D istin ctive com petencies S trategy Im plem en tation (source: S tra te g ic m a n a g em en t a n in te g te d a p p ro a ch b y C h a rles W L H ill a n d G arethr Jo n es) 1.2.1 V ision a n d M ỉssion T h e m is s io n se ts o u t w h y th e o rg a n iz a tio n e x is ts a n d w h a t it s h o u ld b e d o in g V is io n : d e íìn e s a n d d e s c rib e s th e íìitu re s itu a tio n th a t a c o m p a n y w is h e s to h a v e , th e in te n tio n o f th e V ision is to g u id e , to c o n tro l a n d to e n c o u g e th e o rg a n iz a tio n a s a w h o le to re a c h th e d e s ira b le State o f th e o rg a n iz a tio n 1.2.2 E x te rn a l an aly sis: to id e n tiíy s tra te g ic o p p o rtu n itie s a n d th re a ts in th e o r g a n iz a tio n 's o p e tin g e n v iro n m e n t T h re e in te rre la te d e n v iro n m e n ts sh o u ld 2.3.3 Formulatỉon and choice 2.3.3.ỉ SWOTanalysis Strengths T h e Q u a lity A d v a n ta e e H y u n d a i o w n e rs e x p e rie n c e fe w e r p ro b le m s w it h th e ir v e h ic le s th a n a n y o th e r c a r m a n u fa c tu re r in V ie tn a m T h e G e n e s is \vas ch o s e n th e b e st c a r in H y u n d a i a n d th e G e tz in th e e n try le v e l m id - s iz e c a r se g m e n t a cro ss s e v e l p a m e te rs T h is s tu d y m e asures o w n e r in te rm s o f d e s ig n , c o n te n t, la y o u t a n d p e ríb rm a n c e o f v e h ic le s a cro ss s e v e l p a m e te rs A B u y in g E x p e rie n c e lik e N o O th e r H y u n d a i has a sa les n e tw o r k o f s ta te -o f-th e -a rt s h o w ro o m s a cro ss 189 c itie s , vvith a w orkforce o f over 6000 trained sales personnel to guide our custom ers in íìn d in g th e r ig h t ca r O u r h ig h sa les a n d c u s to m e r ca re s ta n d a rd s le d us to a c h ie v e h ig h e r n a m e p la te in th e J D P o w e r S S I S tu d y Q u a lity S e rv ic e a cro ss C itie s In th e J D P o w e r C S I p a m e te rs : le a st S tu d y H y u n d a i s c o re d th e h ig h e s t across a ll problem s e x p e rie n c e d w ith v e h ic le serviced, h ig h e s t Service quality, best in-service experience, best Service delivery, best Service ađvisor experience, most user-frienđly Service a n d best Service initiation experience T h e % o f H y u n d a i o w n e rs fe e l th a t w o r k g e ts d o n e r ig h t th e í ĩr s t tim e d u r in g Service T h e J D P o w e r C S I s tu d y a ls o re v e a ls th a t % o f H y u n d a i ovvners w o u ld p ro b a b ly re c o m m e n d th e sa m e m ake o f v e h ic le , w h ile 90% o w n e rs w o u ld p ro b a b ly re p u rc h a s e th e sam e m a k e o f v e h ic le H a N o i A u to m o b ile C o r p o r a tio n has a g ro u p o f o f te c h n ic ia n w h o are a lw a y s a v a ila b le to se rve c u s to m e rs at a n y tim e b e íb re o r a fte r sales Weaknesses C o m m o d ity P ric e R is k s H y u n d a i c o m m o d ity p r ic e ris k s to h ig h e r c o s ts d u e to ch a n g e s in p ric e s o f in p u ts s u c h as Steel, a lu m in u m , p la s tic s a n d ru b b e r, w h ic h g o in to th e p ro d u c tio n o f a u to m o b ile s , In o rd e r to m itig a te th e s e ris k s , th e c o m p a n y c o n tin u e s to a tte m p ts to 50 e n te r in to lo n g te rm c o n tra c ts based o n its p ro ịe c tio n s o f p ric e s In a v o la tile c o m m o d ity m a rk e t w h e re y o u r c o m p a n y g iv e s to p p r io r it y to e n s u rin g s m o o th a v a ila b ilit y o f in p u ts lo n g te rm c o n tra c ts are h e lp íìil T h e y a ls o h e lp m in im iz e th e im p a c t o f g r o w in g in p u t p ric e s C o n v e rs e ly , lo n g te rm c o n tra c ts d ilu te th e b e n e fíts , i f a n y o f a d e c lin e in in p u t p ric e s E x c h a n g e R a te R is k T h e c o m p a n y is e x p o s e d to th e ris k s a ss o c ia te d w it h ílu c tu a tio n s in íb r e ig n e x c h a n g e te s m a in ly o f im p o r t o f c o m p o n e n ts & w m a te ria ls and e x p o rt o f v e h ic le s T h e c o m p a n y has a w e ll s tru c tu re d e x c h a n g e r is k m a n a g e m e n t p o lic y T h e com pany m anages th e exchange r is k by u s in g a p p ro p ria te hedge in s tru m e n ts d e p e n d in g o n th e p r e v a ilin g m a rk e t c o n d itio n s a n d th e vie vv o n th e c u rre n c y A f t e r sa le s Service is v e r y w e a k in V ie tn a m w h e n th e y h a ve to d e p e n d m u c h o n h e a d q u a rte r W h e n c a r g ets b ro k e n th e y h a v e to in f o r m V ie tn a m d e a le rs a n d th e n in íb r m h e a d q u a rte r to ta k e sp are p a rts re p la c e m e n t I t ta ke s c o u p le o f w e e k s to g e t replacem ent Service done Opportunities • 'H y u n d a i has been a c c e le tin g T h e y are th re a t n o t o n ly w it h b ig g e s t us b n d s b u t a ls o w it h Japan b n d s '” M r E r ic h M e r k le , T h e íb u n d e r o f w e b s ite A u to e c o n o m y c o m G o v e rn m e n t has g iv e n m u c h e n c o u g e m e n t to a u to m o b ile in d u s try to h e lp th e m g e t th r o u g h th e c ris is so H y u n d a i has a b ig ch a n c e to d e v e lo p b n d re p u ta tio n a n d c o m p e te w it h o th e r b ig p la y e rs as T o y o ta , G M , F o rd B e s id e th is th e stea d y m a rk e t g ro v v th a n d ch e a p la b o r fo rc e in a d e v e lo p in g c o u n try is a b ig o p p o r tu n ity o f any co m p an y T o y o ta , th e b ig g e s t p la v e r in th e m a rk e t ju s t g o t in v o lv e m e n t in c a r speeđ c o n tr o l p r o b le m a n d th e y h a d to w it h d r a w fe w m illio n s ca rs w h ic h cause d speed c o n tr o i B e c a u s e o f th is p ro b le m T o y o ta lo s t th e ir re p u ta tio n a nd m a rk e t share as w e ll 51 Threats R is k F a c to rs In th e co u rse o f its b u sin e ss, H y u n d a i is e x p o se d to a v a r ie ty o f m a rk e t a nd o th e r ris k s in c lu d in g th e e ffe c ts o f d e m a n d d y n a m ic s , c o m m o d ity p ric e s , c u rre n c y e x c h a n g e tes, in te re s t tes, as w e ll as r is k a sso cia te d w it h fin a n c ia l issues, h a za rd e v e n ts and s p e c ific assets ris k Insurance th e ris k to mitigate W h e n e v e r p o s s ib le , w e use th e in s tru m e n t o f B u s in e s s R is k s T h e a u to m o tiv e in d u s try is v e ry c e rta in sca le o f o p e tio n to Capital in te n s iv e S u ch in v e s tm e n ts re q u ire a g e n e te v ia b le re tu m s T h e se sca le s d e p e n d o n dem and R is k fr o m lo w s k ille d la b o r V ie tn a m is a c o u n try w h e re a u to m o b ile te c h n o lo g y is v e ry p o o r, and m o s tly V ie tn a m C o m p a n y has to im p o r t f ù l l set o r spare p a rt fr o m o th e r c o u n try th e n assembling it in Vietnam Strengths Weaknesses Q u a lity A d v a n ta g e H ig h in p u t c o s t W id e d is tr ib u tio n n e tw o rk F lu c tu a tio n o f e x c h a n g e te R e a s o n a b le p ric e A f t e r sales G o o d q u a lity o f Service Service M a r k e tin g s u p p o rt fr o m h e a d q u a rte r Opportunities Threats E n c o u g e d p o lic ie s H ig h in í la tio n o f e x c h a n g e te S te a d ily m a rk e t g r o w th L o w - s k ille d la b o r íị rc e C h e a p la b o r fo rc e T e c h n o lo g y a n s íe r C a p ita l in te n s iv e 52 Hyundai Vietnam SWOT matrix W eaknesses S tre n g th s Q u a lity A d v a n ta g e P o te n tia l stra te g ie s H ig h in p u t c o s t F lu c tu a tio n o f e x c h a n g e te W id e d is tr ib u tio n n e t w o r k It’s w eak in high class cars R e a s o n a b le p ric e segm ent G o o d q u a lity o f s e rv ic e s O p p o r tu n itie s Hncouraged policies In c re a s e P O M e íT ic ie n c y In c re a s in g m a rk e t sh are in M id E x p a n d in g m a rk e t share in S te a d ily m a rk e t g r o w th cla ss ca rs H ig h cla ss ca rs Cheap labor force T h re a ts H ig h in f la tio n o f e x c h a n g e rate In c re a s in g P O M e ffíc ie n c y 53 M a in ta in in g m a rk e t share 2.3.3.2 G R E A T model A ppropriate business-level strategy selection (G R E A T M O D EL) E x p a n d in g In c re a s in g In c re a s in g m a rk e t s h a re in m a rk e t s h a re in POM h ig h class M id -c la s s ca rs eíT iciency M a in ta in in g C r ite r ia W e ig h t m a rk e t sh are G a in 0.3 R is k 0.25 E xpense 0.2 4 A c h ie v a b le 0.15 3 T im in g 0.1 3 2.95 4.1 3.7 3.0 T o ta l S core 54 C h a p t e r : R e c o m m e n d a tio n • O b je c tiv e s • A c t io n p la n f o r the ch o s e n b u s in e s s -le v e l s tra te g ie s • R e c o m m e n d a tio n s to H y u n d a i V ie tn a m 3.1 Objectives F ir s t y e a r O b je c tiv e s : H y u n d a i V ie tn a m is a im in g f o r % m a rk e t s h a re o f th e V ie tn a m m a rk e t S e c o n d y e a r O b je c tiv e s is to a im 13% m a rk e t sh a re o f th e V ie tn a m m a rk e t A n im p o rta n t o b je c tiv e is to e s ta b lis h a w e ll- r e g a r d e d b n d n a m e lin k e d to a m e a n in g ủ il p o s itio n in g T h e y w i l l h a v e to in v e s t h e a v ily in m a r k e tin g to cre a te a m e m o b le a n d d is tin c tiv e b n d im a g e p r ọ ịe c tin g in n o v a tio n , q u a lit y a n d v a lu e We a ls o m u s t m e a su re avvareness a n d re s p o n s e so w e can a d ju s t o u r m a rk e tin g e ffo r ts i f n e ce ssa ry Target Markets H yundai m a rk e tin g c o n s u m e r ta rg e t is m id d le s tra te g y is d iffe r e n tia te d m a rk e tin g T h e ir in c o m e p ro fe s s io n a ls w h o n e e d tru e v a lu e p r im a r y f o r t h e ir m o n e y a n d c o m ío r ta b le rid e in c it y c o n d itio n s T h e ir s e c o n d a ry c o n s u m e rs ta rg e t is u p p e r le v e l w h o n e e d s ty le a n d speed A n d p r im a r y b u s in e s s ta rg e t is m id - s iz e d to la rg e s iz e d c o rp o te th a t vvant to h e lp th e ir m a n a g e rs a n d e m p lo y e e s b y p r o v id in g th e m a c a r f o r ease o f tra n s p o rt S e c o n d a ry b u sin e ss ta rg e t is e n tre p re n e u rs a n d s m a ll b u s in e s s o w n e rs vvho w a n t to p r o v id e d is c o u n ts to m a n a g e rs b u y in g a n e w c a r E a c h o f th e f o u r m a rk e tin g s tra te g ie s c o n v e y s H y u n d a i d if fe r e n t ia t io n to th e ta rg e t m a rk e tin g s e g m e n ts id e n t iĩie d a b o v e Forecasts number up to 2020 55 Table Forecasts of Automobile Output up to 2020 ( U n it : n iu n b e r o f v e h ic le s ) 2005 2010 2020 35,000 70,000 144,000 0 0 0 1 0 0 0 0 0 15,000 36,000 79,900 - seat 0 0 4 0 -2 se at 0 0 1 0 -4 seat 0 0 ISO > seat 0 0 68,000 127,000 159,800 U p to to n s 0 0 0 0 0 -7 to n s 0 0 0 -2 to n s 0 0 0 > to n s 400 ,0 0 ,2 0 2,000 6,000 14,400 120,000 239,000 398,000 Cars p to -s e a t c a r -9 se at c a r Coaches Trucks Specialized vehicles TOTAL Source: com piled Ễrom the Decision 177/2004/ỌĐ-TTG approveà the Mastei- Pìart fo r D e\ eỉoping Vietnam 's Automobiìe Irtdustry, Oct 2004 Positíoning U s in g p ro d u c t d iffe r e n tia tio n to m ake H yundai as th e m ost v e rs a tile , c o n v e n ie n t, v a lu e a d d e d c a r m o d e l fo r a b o v e ta rg e t m a rk e t used T h e m a rk e tin g s tra te g y w i l l be fo c u s e d o n p r o m o tin g th e c a r as e c o n o m ic c a r f o r th e n e x t g e n e tio n S tr a te g ie s P r o d u c ts Its p la n f o r lu x u r y m o d e ls m a y s lo w d u r in g c ris is tim e so H y u n d a i v v ill fo c u s on s m a ll ca rs w h ic h lo w p ric e as G e tz o r K ia H y u n d a i is a d d in g to its o ffe r in g s o f d im in u tiv e v e h ic le s to ta k e a đ v a n ta g e o f o p p o r tu n ity T h e c o m p a n y th is y e a r v v ill 56 in tro d u c e a n e \v E la n tra w a g o n based o n a c o m p a c t c a lle d th e Ì3 s o ld in E u ro p e is f u lly lo a d e d a nd w i l l be s o ld w it h y e a r v v a a n ty H y u n d a i's s m a ll cars are a h it in fầ s t- g ro w in g e m e rg in g m a rk e ts in C h in a a n d In d ia , H y u n d a i's sales ro se a c o m b in e d % , to ,5 0 in th e íìr s t s ix m o n th s o f th is y e a r as it has a d d e d n e w , s m a ll m o d e l (B u s in e s s W e e k c o m ) T h e c o m p a n y 's ta rg e t is to b o o s t m a rk e t share to m o re th a n % in V ie tn a m th is y e a r Distribution • T h e D e a le r w i l l re p re s e n t a d is tr ic t o r m a in C ity • T h e S u b - D e a le r sh all • T h e b o o k in g represent a p a r tic u la r area agents v v ill be in d iv id u a ls \v o rk in g o n íre e la n c e b asis Marketing Communications B y in te g tin g a ll m essages in v a rio u s m e d ia w e w i l l re in ío r c e th e b n d n a m e & m a in p o in ts o f p ro d u c t d iffe r e n tia tio n R e se a rch a b o u t m e d ia c o n s u m p tio n , p a tte m w i l l h e lp o u r a d v e rtis in g a g e n c y to ch o o s e a p p ro p ria te m e d ia a n d t im in g to re a ch p ro s p e c ts b e ío re & d u r in g th e p ro d u c t in tro d u c tio n T h e re a íìte r, a d v e rtis in g w i l l a p p e a re d o n a p u ls in g b a sis to m a in ta in b n d a w a re n e ss a n d c o m m u n ic a te v a rio u s d iffe r e n tia tio n m essages T h e a g e n c y v v ills a ls o c o -o rd in a te p u b lic re la tio n e ffo r ts to b u ild H y u n d a i b n d & s u p p o rt th e d iffe r e n tia tio n m essage T o a ttra c t m a rk e t a tte n tio n & e n c o u g e p u rc h a s in g , w e w i l l o f f e r a lim it e d tim e , re g is tra tio n & in s u n c e T o a ttra c t, re ta in & m o tiv a te c h a n n e l p a rtn e rs f o r a p u s h s tra te g y , w e w i l l use tra d e sales p ro m o tio n s a nd p e rs o n a l s e llin g to c h a n n e l p a rtn e r Promotion Road Shows T h e c o m p a n y p la n s to stage ro a d s h o w s , to d is p la y v e h ic le s in th e p a v ilio n s d u r in g v a rio u s c o lle g e fe s tiv a ls a n d e x h ib itio n 57 Television advertisements A d v e rtis e m e n ts to p ro m o te a n d m a rk e t o u r p ro d u c t w i l l be shovvn o n le a d in g te le v is io n c h a n n e ls M ịo r m u s ic and sp o rts c h a n n e ls v v ill p ro m o te a n d th e y w i l l reach o u t to th e c u s to m e rs Radio R a d io is th e m e d iu m vvith th e vvid e st c o v e g e S tu d ie s h a v e re c e n tly s h o w n h ig h le v e ls o f e x p o s u re to d io b ro a d c a s tin g b o th w it h in u rb a n a n d ru l areas, vvh eth er o r n o t lis te n e rs a c tu a lly o w n a set M a n y p e o p le lis te n to o th e r p e o p le ’s d io s o r h e a r th e m in p u b lic p la c e s S o d io a n n o u n c e m e n ts v v ill be m a đ e a nd a d v e rtis e m e n ts w i l l be a n n o u n c e d o n th e d io a b o u t th e p ro d u c t fe a tu re s and p ric e , q u a litie s , e tc PríttíAds D a ily a d v e rtis e m e n ts in le a d in g n e w s p a p e rs and m a g a z in e s w i l l be used to p ro n io te th e p ro d u c t L e a íle ts at th e in it ia l stage w i l l be d is trib u te d at r a ilw a y s ta tio n s , m a lls , c o lle g e areas a n d v a rio u s o th e r lo c a tio n s Workshops and Semittars W o rk s h o p s and s e m in a rs v v ill be h e ld in c o lle g e s a n d b ig c o rp o te to m a k e p e o p le a w a re a b o u t th e c o m p a n ie s p a st p e ríb rm a n c e a nd p ro d u c t fe a tu re s , its a ff o r d a b ilit y a n d usage, v a s t d is tr ib u tio n n e tw o rk R o a d s h o w s w i l l be c o n d u c te d \v h e re fre e t r ia ls o f th e c a r w o u ld be g iv e n Banners, neon sigrts H o a rd in g s , b a n n e rs, n e o n s ig n s w i l l be d is p la y e d at c lu b s , d is c s , o u ts id e th e a tre s a n d sh o p s to p ro m o te o u r b n d car 58 Bookìets and pamphỉets B o o k le ts v v ill be k e p t at c a r s h o w ro o m s , r e ta il b a tte ry o u tle ts , e tc f o r th e c u s to m e r to re a đ T h e se b o o k le ts w i l l p ro v id e in íb r m a tio n a b o u t o u r c o m p a n y ; th e Products o ffe r e d w h ic h s u its th e c u s to m e rs n eed a c c o r d in g ly Recruítment and Training program T e c h n o lo g y is a lw a y s u p d a te d th a t?s w h y c o m p a n y s h o u ld c a tc h u p b y send people to be trained or on-job-training I t ’ s good for Corporation i t ’ s s e lf and for c u s to m e r Service as w e ll A/ter sales Service E s ta b lis h a s s e m b lin g m a n u fa c tu re in V ie tn a m to g e t p ric e re đ u c e d a n d q u ic k after sales Service 3.2 Hyundai Vietnam’s Action plan 59 Increase Market Share in Middle Class A c tiv itie s R esources R e s p o n s ib ilitie s T im e D ire c to r 1/9/2010 Board o f director 1/9/2010 A c t iv it ie s S e le c tio n B u d g e t e s tim a tio n V N D b illio n s R & D Im p r o v e m e n t V N D b illio n U p d a te w e b s ite a n a ly tic s F o c u s G»n v ỉs ito r engagem ent M a r k e t in g c a m p a ỉg n - Workshop and seminar - BanneTS and neo signs - Road shows - TV Ads - R adi