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HYUNDAI MOTOR INDIA LTD

Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company (HMC). HMIL is the largest passenger car exporter and the second largest car manufacturer in India. It currently markets eight passenger car models across segments -- in the A2 segment it has the Eon, Santro, i10 and the i20, in the A3 segment the Accent and the Verna, in the A5 segment Sonata and in the SUV segment the Santa Fe.
HMIL's fully integrated state-of-the-art manufacturing plant near Chennai boasts of advanced production, quality and testing capabilities. HMIL forms a critical part of HMC's global export hub, it touched 1.5 million in exports in March 2012. It currently exports to more than 120 countries across EU, Africa, Middle East, Latin America and the Asia Pacific. HMIL has been India's number one exporter for seven years in a row. To cater to rising demand the company commissioned its second plant in February 2008 having an installed capacity of 330,000 units per annum. To support its growth and expansion plans HMIL currently has 346 dealers and around 800 service points across India. In its commitment to provide customers with cutting-edge global technology, HMIL set up a modern multi-million dollar R&D facility in Hyderabad. The R&D centre endeavors to be a center of excellence in automobile engineering.
Mission
To create exceptional automotive value for our customers by harmoniously blending safety, quality and efficiency. With our diverse team, we will provide responsible stewardship to our community and environment while achieving stability and security now and for future generations.
Vision
Our Team provides value for your future.
Strategy
Hyundai's share of the passenger vehicle market has slipped from around 15.8 percent in 2008 to 14.4 percent in the six months through September this year, according to the Society of Indian Automobile Manufacturers, even as it cuts back on export volumes from a peak in 2009. This is in line with the strategy of Hyundai not to expand aggressively in emerging market like India.
Hyundai's strategic decision to focus on quality over quantity, even as its production lines are stretched in India and elsewhere, risks losing hard-won market share and is forcing it to divert output from its plant outside Chennai away from exports to other high-growth markets to meet domestic demand.

Revised Mission and Vision
Vision
To become a trusted lifetime partner of our customers, we will bring a new perspective to automobiles through innovative mobility solutions based on human-centric, eco-friendly technologies and services
Mission
Hyundai is committed to give importance to quality rather than quantity in all aspects of its business. We are commited to become the number one car company in India with the contribution of our employees, partners and customers.

Objectives * Best customer services * Best technology * Best quality products * Best value for people

Porters five force model:

1) Rivalry among competitors | Attractiveness | | | Low | | | | High | | | 1 | 2 | 3 | 4 | 5 | | No. of competitors | Large | Grocery store | * | | | | | Wide bodied jetliner | Small | Industry growth | Slow | Vinyl record | | | * | | | Internet browser | Fast | Fixed cost | High | Steel | * | | | | | Real estate agency | Low | Differentiation | Low | Sugar | | | | * | | Beer | High | Switching cost | Low | Diskette | | | * | | | Software | High | Openness of terms of sales | Secret | Used car | | | * | | | Stocks | Open | | Interpretation: Level of attractiveness 15/6 = 2.5 (Low attractiveness) | 2) Barriers to entry | Attractiveness | | Remark | | Low | | | | High | | | | 1 | 2 | 3 | 4 | 5 | | | Economies of scale | Small | Tea stall | | | | | * | Oil refinery | Large | | Product differentiation | Low | Sugar | | | | * | | Beer | High | | Brand identity | Low | Sugar | | | | * | | Cigarette | High | | Switching cost | Low | Diskette | | | * | | | Software | High | | Access to channels of distribution | Easy | Newspaper | | | * | | | Petrol | Limited | | Capital requirement | Small | Tea stall | | | | | * | Oil refinery | Large | | Access to technology | Easy | Generic drugs | | | | * | | AIDS medicine | Restricted | |

Interpretation: Level of attractiveness=28/7=4.0(High attractiveness)

3) Threat of substitutes | Attractiveness | | Remark | | Low | | | | High | | | | 1 | 2 | 3 | 4 | 5 | | | Availability of close substitutes | High | Fountain pen | | | * | | | AIDS medicine | Low | | Switching cost | Low | Diskette | * | | | | | Customized Software | High | | Substitute’s price-value | Better | Vinyl record | | | | | | Suburban trains in Mumbai | Worse | | Profitability of the producers of substitutes | High | Vinyl record | | | * | | | Trans-Atlantic flight | Low | |

Interpretation: Level of attractiveness:20/7=2.8(low level of attractiveness).

4) Bargaining power of buyers | Attractiveness | | Remark | | Low | | | | High | | | | 1 | 2 | 3 | 4 | 5 | | | Number of buyers | Small | Air bags for cars | | | | | * | Toothpaste | Large | | Availability of substitutes | Many | Fountain pen | * | | | | | AIDS medicine | Few | | Switching cost | Low | Diskette | | | | * | | Software | High | | Buyer’s threat of backward integration | High | Air bags for cars | * | | | | | Cars | Low | | Industry’s threat of forward integration | Low | Air bags for cars | * | | | | | Oil refinery | High | | Contribution to quality | Low | Low end packaging | | | | * | | Semi-conductor chips | High | | Contribution to cost | High | Housing | | | * | | | Paper clips | Low | | Buyer’s profitability | Low | Public bus service | | | | | * | Luxury cars | High | |

Interpreatation:24/8=3(low level of attractiveness)

5) Bargaining power of suppliers | Attractiveness | | Remark | | Low | | | | High | | | | 1 | 2 | 3 | 4 | 5 | | | Number of suppliers | Small | PC | | | | | * | Tea stall | Large | | Availability of substitutes | Few | PC | * | | | | | Tea stall | Many | | Switching cost | High | PC | | | * | | | Garment | Low | | Supplier’s threat of forward integration | High | PC | | | | | * | Wide bodied jetliner | Low | | Industry’s threat of backward integration | Low | Petrol pumps | * | | | | | Garment retailers | High | | Contribution to quality | High | PC | * | | | | | Low end packaging | Low | | Contribution to cost | Low | Oil refining | | | | * | | Talcum Powder | High | | Industry’s importance to supplier | Low | Vinyl record | | | | | * | Cars | High | |

Interpretation=25/8=3.1(high level of attractiveness)

6).Goverment actions | Attractiveness | | Remark | | Low | | | | High | | | | 1 | 2 | 3 | 4 | 5 | | | Industry protection | Low | Tea stall | | * | | | | Public bus in UK | High | | Industry regulation (pollution, etc.) | High | Chemicals | | | * | | | Software | Low | | Customs and tariff restrictions abroad | High | Garment | * | | | | | Software | Low | |

Interpretation=15/6=2.5(low level of attractiveness)

Porters five Force- Overall assessment | Attractiveness | Remark | | Low | | | | High | | | 1 | 2 | 3 | 4 | 5 | | Rivalry among competitors | | | | | | 2.5 | Barriers to entry | | | | | | 4 | Threat of substitutes | | | | | | 2.8 | Power of buyers | | | | | | 3 | Power of suppliers | | | | | | 3.1 | Government action | | | | | | 2.5 | Overall attractiveness | | | | | | 2.98 |

| Maruti Suzuki | | | TATA | | | Hyundai | | | Critical Success Factor | Weight | Rating | Score | Weight | Rating | Score | Weight | Rating | Score | Market Share | .20 | 4 | .80 | .19 | 3 | .57 | .15 | 3 | .45 | Product Quality | .18 | 4 | .72 | .16 | 3 | .48 | .12 | 3 | .36 | Management | .04 | 2 | .08 | .08 | 3 | .24 | .10 | 2 | .20 | Financial Position | .08 | 3 | .24 | .08 | 3 | .24 | .10 | 2 | .20 | Global Expansion | .05 | 2 | .10 | .08 | 2 | .16 | .10 | 3 | .30 | Advertising | .06 | 2 | .12 | .08 | 2 | .16 | .08 | 2 | .16 | Customer Service | .9 | 3 | .27 | .08 | 2 | .16 | .6 | 2 | .12 | Price Competitiveness | .9 | 3 | .27 | .10 | 2 | .20 | .10 | 2 | .20 | Customer Loyalty | .08 | 3 | .24 | .06 | 2 | .12 | .07 | 2 | .14 | Sales Distribution | .08 | 2 | .16 | .05 | 2 | .10 | .05 | 3 | .15 | ProductionCapacity | .05 | 2 | .10 | .04 | 2 | .08 | .07 | 3 | .21 | Total | 1.00 | | 3.12 | 1.00 | | 2.51 | 1.00 | | 2.49 | Competitive Profile Matrix
The Competitive Profile Matrix here is used to compare auto giants Maruti Suzuki, TATA, Hyundai.
Legends: The ratings are Good = 4, Ok = 3, Weak = 2, Too weak = 1.
According to competitive profile matrix Maruti has given more priority to the market share, product quality, Customer service and Price Competitiveness compared to the other companies like Hyundai and TATA. So the market share is the deciding factor, and they are leaders in the product quality and the other key factors like sales distribution and finance. As the result shows in the competitive profile matrix Maruti Suzuki have more critical success factor because the total weighted score is high compared to TATA and Hyundai. The Maruti score is 3.12 TATA score being 2.51 and Hyundai score being 2.49.
The price competitiveness is high for Maruti Suzuki because they rely on good segment pricing strategy for high end models to lower end models. Plus a multitude of other factors also provide consistent customer retention and loyalty which is very important to sustain any business environment so we can deduce that Maruti Suzuki is the market leader.
The Internal Factor Evaluation Matrix (IFE) Key Internal Factors: Strength | Weight | Rating | Weighted Score | Brand equity | .10 | 3 | 0.30 | Domestic sales | .08 | 3 | 0.24 | Quality Advantage | .12 | 3 | 0.36 | Network | .10 | 2 | 0.20 | Quality Service | .15 | 2 | 0.30 | Weakness | | | | Commodity price risk | .1 | 1 | .10 | Exchange Rate Risks | .10 | 2 | 0.20 | Customer Loyalty | .10 | 3 | 0.30 | Price Competitiveness | .15 | 2 | 0.30 | Total | 1.00 | | 2.30 |

According to the internal factors evaluation Matrix Hyundai has high strength factors compared to its weaknesses. Their main strength lies in their brand equity and quality product & service but not very great when compared to Maruti, plus their network and domestic sales are not as great when compared to other competitors. And coming to their weaknesses which are very little but very strong deciding variables tell us that Hyundai’s customer loyalty is not strong and their weakness with forex for exports has significant effect on company’s performance. Overall company scores 2.30 total weighted score which implies that company is on a positive note when it comes to performance in the market.
EFE Matrix (External Factor Evaluation):

Opportunity | Weight | Rating | Weighted score | Export markets | .20 | 3 | 0.60 | Growth in passenger car sector | .15 | 3 | 0.45 | Small car segment | .08 | 3 | 0.24 | Premium vehicles and SUV’S | .16 | 3 | 0.48 | Threats | | | | Variety of markets Business | .12 | 3 | 0.36 | direct competitors | .15 | 4 | 0.60 | Foreign Direct Investments | .14 | 1 | 0.14 | Total | 1.00 | | 2.87 |

Legends: Poor = 1, average = 2, good = 3, High = 4

INTERNAL ENVIRONMENT ANALYSIS
STRENGTH
* Strong financial position. * Strong brand image. * Product innovation. * The quality advantage. * Quality service across 1036 cities. * Good share in share of mind, heart and mouth. * Infancy stage of other global competitors like BMW,VOLKSWAGON etc in India. * Highest number of manufacturing plants only next to Maruti. WEAKNESS * Unavailability of spare parts at all places unlike Maruti. * No catering to premium sector – lack of models in high end. * Commodity price risk. * Exchange rate risk. * Stiff competition from Indian players like Maruti and Tata, Mahindra. * Low operational efficiency when compared to giants like Toyota ( 3.08). * Heavily dependent on Indian suppliers for operations which makes it vulnerable to changes in Indian supply environment. * Lack of supplier integration like Toyota.

EXTERNAL ENVIRONMENT ANALYSIS

OPPORTUNITY * Loan facility due to tie-ups with various financial firms like HDFC Bank, ICICI Bank, Mahindra Finance, Punjab National Bank and Sundaram Finance. . * Indian rural market – an untapped area is now open for exploitation due to high industrial growth and rapid urbanization. * Leading growth compared to competitors. * Clean image among consumers in terms of management and quality unlike maruti’s turmoil. * Introduction of New variants in LPG etc.
THREAT
* Cut-throat competition from Maruti, Tata. * Rising petrol prices in India is a biggest threat for Hyundai. Due to price rise of petrol many people are moving towards diesel variant car and for Hyundai most of the cars are in petrol variant. * Steady increase in price of raw materials. * Lack of proper supply chain infrastructure in India.

STRATERGIES FOR COUNTERING SWOT * Hyundai should focus on SUV segment since it does not have any market share in that segment. Competitors like Mahindra made great impact in SUV segment with its products like Scorpio, Xylo, XUV 500.Tata has made a hit with ARIA, Honda with CRV, Ford with FORTUNER and Maruti with ERTIGA.The main reason for failure of Hyundai’s SUV is because of they were highly priced. After failure Tucson and other SUVs’ Hyundai didn’t venture into that segment. * Manufacture SUV’s in India than importing it from other countries which will reduce cost. * Dedicate special units for Segment wise manufacturing. * After Maruti, Hyundai has highest market share in India which can be improved by increasing its no of service stations across India to cover its all customers which is the core competency of Maruti. * Improving availability of spare parts at cheap cost and multiple locations. * Hyundai can try to become No 1 Company in India by introducing new cars which will have a competitive advantage over its competitors. * Brand image of Hyundai is good when it comes to small segment cars so they can use this image as a ladder to market their middle and other segment cars.

The grand strategy matrix

Quadrant 2Market developmentMarket penetrationProduct developmentHorizontal integrationDivestitureLiquidation | Quadrant 1Market developmentMarket penetrationProduct developmentForward integration, Backward & Horizontal integrationRelated diversification | Quadrant 3RetrenchmentRelated diversificationUnrelated diversificationDivestitureLiquidation | Quadrant 4 Related diversificationUnrelated diversification Joint ventures |

Hyundai Motors falls in the quadrant 1. They should follow product development to manufacture new cars especially for the Indian market. They should develop a new SUV for the Indian market. They should also look into related diversification and launch new variants of the existing models.

BCG MATRIX I 20

Santro, Santa Fe
Tucson, Terracan
Terracan
Santa Fe

I 10
Eon, Elantra, Sonata,
Fluidic Verna

QSPM Key External Factors | Weight | | | | | | | | | Global Expansion | | Local Expansion | | | X | | | | Total | | Global | Total | Local | Total | Strength | 0.0 - 1.0 | 1 – 4 | X * Global | 1 – 4 | X * Local | Brand equity | .1 | 3 | 0.3 | 2 | 0.2 | Domestic sales | .09 | 3 | 0.27 | 2 | 0.18 | Quality Advantage | .12 | 4 | 0.48 | 3 | 0.36 | Network | .08 | 3 | 0.24 | 2 | 0.16 | Quality Service | .12 | 4 | 0.48 | 3 | 0.36 | Weakness | | | | | | Commodity price risk | .1 | 1 | .10 | 1 | 0.1 | Exchange Rate Risks | .11 | 1 | 0.11 | 1 | 0.11 | Customer Loyalty | .13 | 2 | 0.26 | 1 | 0.13 | Price Competitiveness | .15 | 2 | 0.30 | 1 | 0.15 | Total | 1 | | 2.54 | | 1.75 | Opportunities | | | | | | Export markets | .20 | 4 | 0.8 | 3 | 0.6 | Growth in passenger car sector | .13 | 3 | 0.39 | 2 | 0.26 | Small car segment | .15 | 4 | 0.6 | 3 | 0.45 | Commercial vehicles and Recreational vehicles | .12 | 3 | 0.36 | 2 | 0.24 | Threats | | | | | | Variety of markets Business | .12 | 1 | 0.12 | 1 | 0.12 | No direct competitors | .15 | 2 | 0.30 | 1 | 0.15 | Foreign Direct Investments | .13 | 1 | 0.13 | 1 | 0.13 | | 1 | | 2.7 | | 1.95 |

According to the QSPM matrix we have analysis the internal and external factor and give the weight age and global expansion and local expansion. After that we multiply the weight with global expansion rating with weight age and local expansion to weight age. At the end we got some total score that mean for global total internal and external factor are strong which show 2.7 and local expansion which show 1.95. It means company has to focus and go for the global because they have more strength.

Financials and Recomendations Year | Revenue in $ (cr) | Percentage Change | 2007-08 | 7.9736351 | 14.56122737 | 2008-09 | 9.1463064 | 14.70685936 | 2009-10 | 11.2589679 | 23.09852095 | 2010-11 | 7.7797895 | -30.90139728 |

As it can be seen from the above table that there has been a steady growth in the revenue growth rate of Hyundai till the FY 2009-10.Even global recession didn't affect it revenue any hard but in the FY 2010-11 its revenue growth has declined and got a big hit in its revenue growth. It had very good growth in its era and because of heavy competition it started declining. So if it wants to maintain the same growth the strategy which Hyundai needs to develop is Product development. Using which they should focus on utility vehicles segment as because they don't have any market share in it. And if it is coming up with the new strategy it should be implemented in India itself because they already had a failure in trying to import and market.
And already Hyundai has good market share in the segments which they operate. So it has its reputation in the market. If it comes up with new segment of vehicles, obviously there will be good demand. Hyundai can be competitive enough and sustain enough in its revenue growth only if it starts Product development.
Cost of implementing the project
To make product development and enter into utility vehicles segment Hyundai needs around 56000 million which includes setting up of new plants, Research and development and all other expenses.
Projected Revenue growth Year | Growth rate | Revenue in $ (cr) | 2012-13 | 10 | 8.56 | 2013-14 | 10 | 9.41 | 2014-15 | 15 | 10.83 | 2015-16 | 20 | 12.99 | 2016-17 | 20 | 15.59 |

There will be continuous growth rate in the market as because the vehicles sales will increase a lot in the years to come.

The growth rate is projected with 10 percentage for first two years and 15 percentage in third year and 20 percentage thereafter.

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