Ryan Mickiewicz
Final Paper
BUS 301-01
December 2, 2013

1. Open systems can be used to define living organisms, markets, economies and organizations. In this class we have used the open systems model to describe organizations. An open system operates by transforming inputs into outputs by constantly interacting with its external environment through feedback. Inputs in open systems include data (information and knowledge), labor, raw materials, capital and technology. Data includes raw facts and summaries, information from research that was previously conducted and expert knowledge. Labor is defined by employees who carry out any processes within the organization, from a custodian to a manager. Raw materials are the products or pieces from which a company makes its products. If we were talking about Frank’s Pizza Shop, the raw materials would be the dough, pepperoni, sausage, chicken and any other toppings used on the pizzas. Data at Frank’s Pizza would include blueprints and business strategies from other successful pizza shops, personal knowledge from owners of both successful and unsuccessful businesses in the area and any other knowledge business owners in the area are willing to give. Technology includes machines, IT hardware and software. At Frank’s Pizza, the technology would include the ovens, refrigerators, freezers, registers, phones and any other technology management choose. Finally, most companies need capital, or money to start operations.
All of these inputs go into the “process”. People are needed to operate Frank’s pizza. From the people making the pizzas all the way to dishwashers, cashiers and waitresses. Included in the process is the information technology. This includes what the prime operating hours are of the restaurant (so staff can be scheduled accordingly), payroll and optimal cooking times for different pizzas and other plates of food. Finally, the actual business processes. At Frank’s Pizza this would be the making of the food, the cleaning of the cooking equipment, delivery of pizzas, service of the waitresses and cashiers and any other duties required to keep the shop operating.
The process leads to the final products or “Output”. The output includes products, services, waste and pollution the business produces. Also a major aspect of the output is the feedback from customers. This feedback is directed towards the organizational decision makers such as the owner, Frank, and any other important people who hold a strong position in the company. It is important to note a couple other factors about Open Systems. All of these actions take place within the organizational environment. Also, the company not only has a relationship with its customers, but with all of its stakeholders. These stakeholders include the shareholders, board of directors, the government, suppliers and new potential customers. Open systems are truly complex in every way, and provide a great blueprint to run a successful business.

2. Initially, Hyundai was focused on lower income customers with a low cost approach. Today Hyundai targets young executives, families and car buffs. In order for Hyundai to make this progress over the past 10 years, the company had to identify its strengths, weaknesses, opportunities and threats. Hyundai’s strength was its undeniable reliability. Its weakness was its apparent quality, as it was the car of choice for the lower income class. Hyundai’s opportunity was the emerging luxury car market, but faced the challenge of changing its image as a non-luxury car. The company’s threats lied in the other car companies attempting to penetrate the luxury car market such as Honda, Toyota and Volkswagen. Hyundai has penetrated the US market in an effective way because the company identified an opportunity for growth and executed a successful change in image when it had the opportunity. Hyundai’s quality was recognized on a global scale when, in 2012, the Hyundai Elantra was named the North American Car of the Year. The newest release of the Hyundai Equus has rivaled the Lexus LS and Mercedes S-class in the luxury car market (Equus by Hyundai, 2013), which is an indication just how far Hyundai has come in the past 10 years. After making its weakness an apparent strength, Hyundai improved upon its own strength of reliability in an unprecedented move. In the hybrid market, where the biggest concern is the battery life of the car, Hyundai guaranteed the battery life on its Sonata hybrid vehicle in 2012 (The Rise of Hyundai Motors, 2013). This guarantee adds to an already unrivaled 10-year/100,000 mile guarantee that was offered in the late 90’s that turned the company around. So far, Hyundai has pulled all the right strings in its attempt to penetrate US market.

3. Hyundai has had some unprecedented marketing ploys over the past few years. In order for Hyundai to be associated with the likes of companies as prestigious as Lexus and Mercedes, Hyundai had to separate itself from competitors such as Honda and Toyota. Hyundai, as previously stated, has been known lately for its marketing and unrivaled guarantees. In order to be named in the same breath as other luxury carmakers, the company had to have a luxury vehicle that was worthy of a price in the range of $50,000. The product worthy of this price ended up being the Hyundai Equus premium sedan, which is listed from $56,000-$68,000 (Hart, 2013). This product is marketed with “more standard speakers than the 2013 Mercedes-Benz S550 and the 2013 Lexus LS 460”, “A silky-smooth V8” and “Luxury and performance that has never looked so good”(Equus by Hyundai, 2013). What separated Hyundai from the rest were its promotions. As previously stated, Hyundai offered a 10-year/100,000 mile warranty in 2010, and a battery guaranteed for life in the 2012 Sonata hybrid. One of Hyundai’s more memorable marketing strategies was Hyundai’s employment-based return policy. Hyundai implemented a policy that allowed customers to return a newly purchased vehicle if the owner lost his or her job. This policy initially sounded like a huge risk, but only 350 cars ended up being returned and the company walked away with a lot more respect from the car buying community than it had. Finally, Hyundai has also intelligently placed its advertisements. In “Burn Notice”, a show on the USA network, the main character had a car chase in the most recent season finale (Hart, 2013). The car chasing the main character was none other than the Hyundai Equus. In one of the street races in the fourth Fast & Furious movies, the car of choice for one of the drivers was a Hyundai sports car. In addition, Hyundai has made George Clooney, one of the most sought after names in Hollywood, a key figure in some of their formal television advertisements. Hyundai’s leadership group has done an excellent job in terms of marketing their vehicles in ways that implement the goals of their business strategy.

4. Stock | Date | Stock Price | Dividend | | | Hyundai | 1-Jan-09 | $5.00 | $1.01 | | | Hyundai | 1-Jan-10 | $18.00 | $1.32 | | | Hyundai | 1-Jan-11 | $30.00 | | | | | | | | | | Toyota | 1-Jan-09 | $66.00 | $0.50 | | | Toyota | 1-Jan-10 | $84.00 | $0.50 | | | Toyota | 1-Jan-11 | $79.00 | | | | | | | | | | If you sold the stock on January 1, 2010, what was your overall yield on the stock purchase? | Hyundai | 280.20% | | | | | Toyota | 28.03% | | | | | | | | | | | If you bought the stock on January 1, 2010 and sold it on January 1, 2011 | Hyundai | 74.00% | | | | | Toyota | -5.36% | | | | | | | | | | | Calculate the same return on investment if you bought the stock on January 1, 2009 and held it for two years. | Hyundai | 546.60% | | | | | Toyota | 21.21% | | | | |

During this troubling time in the economy, Hyundai clearly outperformed Toyota. Holding the Hyundai stock for a one year period during 2009-10, the investor would see a 280% return on investment while seeing only a 28% return on investment over the same time period for Toyota. If the investor decided to invest during 2010-11, a Hyundai investor would have received a 74% return on investment over a one-year span, while a Toyota investor would have incurred a 5% loss on investment. Finally, if an investor decided to buy into Hyundai in 2009 and held on to the investment for two years, the return would have been a remarkable 546%. Over the same time span, an investor who chose Toyota would have seen a less attractive 21% return on investment.

5. Advancements in technology have greatly benefitted Hyundai. One of the advantages that pays dividends (literally) for the company is its integrated supply system. Hyundai has robots that assemble large parts of the car (limiting human intervention) that are brought in from the world’s eighth largest automotive supplier, Hyundai Mobis. This process is a large reason why Hyundai holds the largest operating margins in the automotive industry. Technology is a huge feature with Hyundai’s newest vehicles. The Hyundai Equus is equipped with features such as a 9.2 inch LCD navigation screen, 7 inch rear seat televisions, surround sound speakers, a lane departure warning system, blind spot detection and a vehicle stability management system (Equus by Hyundai, 2013). From a promotional standpoint, Hyundai has evolved where its advertisements are placed. In this day and age, people are on their phones just about every minute of the day. Realizing this, Hyundai ran a media campaign last year on the Nokia mobile network that advertised both the Super Bowl and the (at the time) new Hyundai Genesis. Technology has played an integral role in the advancement of Hyundai Company as a whole.

Works Cited

"Equus by Hyundai | Review 2014 Specs, Features & Prices | Hyundai." Equus by Hyundai | Review 2014 Specs, Features & Prices | Hyundai. Adobe, 20 May 2013. Web. 02 Dec. 2013.

Hart, Claudine. "Hyundai Evolution." Hyundai Evolution. Hyundai, 15 Jan. 2012. Web. 02 Dec. 2013.

"The Rise Of Hyundai Motor." HYUNDAI MOTOR CO LTD (HYMLF):. N.p., 10 Mar. 2012. Web. 02 Dec. 2013.