...operate, ensure a consistent pool of resources that are required for the business to perform its functions, and to generate profits. The Acquisition of Kia Motors by Hyundai Motors Fikre Y. Wondimu CalUniversity Author Note Fikre Y. Wondimu is a student at California Intercontinental University. Special thanks to Dr. Troy Roland and Dr. Fathiah Inserto for providing suggestions to improve this document format and content. Correspondence concerning this thesis should be addressed to Fikre Y. Wondimu, CalUniversity, 1470 Valley Vista Drive #150, Diamond Bar, CA 91765. Contact: fikre_y@yahoo.com Abstract The last decade demonstrated decreased revenue and higher value of development costs, which led the automobile industry to engage in domestic and international mergers and acquisition (M&A). This case analyis examines one of the largest M&As in the Korean automobile industry in recent years, the acquisition of Kia Motors (Kia) by Hyundai Motors (Hyundai). The case study briefly analyses the conditions of the acquisition, the integration and stabilization processes undertaken by both companies. By acquiring Kia, Hyundai enhanced its competitive position in both domestic and global markets, achieving economies of scale, scope and strengthened its local and global market. The M&A process of Hyundai/Kia did not come easy. The Post-acquisition and restructuring process faced several challenges of synergy effects prompting for strategy change in order to align...
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...2011 영업보고서 C o n t e n t s 06 Chairman’s message 08 ViCe Chairman’s message 10 FinanCial reView 기아자동차는 2011년 쉽지 않은 국내외 경영환경에도 불구하고 전년 대비 19% 성장하며 역대 최고의 성과를 달성하였습니다. 글로벌 경영, 디자인 경영, 그리고 지속가능경영으로 기아자동차는 새로운 미래, 더 나은 내일을 향해 질주하고 있습니다. 2010년에 이어 다시 한번 세계 10대 자동차 메이커 반열에 합류하며 진정한 글로벌 기업으로 도약하고 있는 기아자동차. 재무성과에서 뿐만 아니라 국내외 유수의 디자인 어워드 수상, 브랜드 가치 상승 등을 통해 지속성장의 기반을 다져가고 있습니다. 추후에도 기아자동차는 빠르게 변화하는 시장을 선도하며 고객의 기대를 뛰어넘는 새로운 가치를 지속적으로 창출하며 활력과 즐거움을 제공하는 기업으로 거듭나기 위해 최선을 다할 것입니다. 2011 영업보고서 Chairman’s Message 세계적인 자동차 메이커이자 모범적인 기업시민으로서 지속가능한 성장을 이루어 나가겠습니다. 06 Kia motors Chairman’s message 지난 2011년은 현대자동차 그룹의 위상을 더욱 공고히 하는 매우 의미있는 한 해였습니다. 현대 기아차는 세계 시 장에서 5대 자동차 메이커로서의 위상을 더욱 확고히 하였습니다. 그러나 2012년은 유럽 재정위기와 세계 경기 침체로 인해 자동차 산업의 성장세는 둔화되고, 업체간 경쟁은 더욱 치열해 질 것으로 예상됩니다. 따라서, 올해는 보다 내실 있는 경영활동을 통해 글로벌 일류 기업으로 도약하기 위한 기반을 다지고자 합니다. 이 를 위해서 그 동안 꾸준히 추진해 온 품질경영을 더욱 강화해야 하며, 이를 통해 고객에게 만족과 감동을 주는 품질 의 고급화에 더욱 주력해 나갈 것입니다. 아울러, 현대자동차 그룹은 소외된 계층을 보살피는 사회공헌과 협력업체와 공생발전을 위한 활동을 더욱 강화하 여, 국가 경제와 사회발전에 공헌하는 모범적인 기업이 되도록 최선의 노력을 다할 것 입니다. 또한, 우리 기아자동차는 금년 한해 사업목표 달성과 함께, 미래를 대비하는 마음으로 중장기전략인 “기아비전 2016”을 수립하였으며, 차질없이 진행해 나갈 것입니다. 기아자동차는 위기를 기회로 만드는 불굴의 도전정신과 무한한 잠재력이 있습니다. 미래를 향한 꿈과 열정으로 모 든 임직원이 한마음 한 뜻으로 다시 한번 도약하는 뜻깊은 한 해를 만들어 나가겠습니다. 감사합니다. 회장 정몽구 07 2011 영업보고서 Vice Chairman’s Message 존경하는 주주 여러분 제68기 정기 주주총회를 맞아 지난 한 해 동안 기아자동차에 성원을 아끼지 않으신 주주 여 러분께 진심으로 감사의 말씀을 드립니다. 주주 여러분! 2011년은 일본 대지진, 아중동 민주화 시위, 유럽발 경제 위기 등 유난히 큰 사건 사고가 많았던...
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...Executive Summary This report would provide a thorough application of Accounting Information System concepts, accompanied with thorough findings on Kia Motors, South Korea’s second largest automobile manufacturer. The findings were based on mainly secondary data through research obtained from web-based sources such as online articles, analyst reports, financial reports, academic journals and academic databases. The report aims to present the detailed findings of Kia Motors and the fraud that occurred in 2002 through a Balanced Scorecard (“BSC”), Document Flowchart Diagram (“DFD”), as well as the facts and role of the accountant, Cecile Campbell in the fraud committed on Kia Motors in 2002. The report consists of mainly three components. Firstly, a BSC that was developed using Kia Motors’ mission, vision and strategies that were identified and inferred from online research and Kia Motors’ financial statements and sustainability reports. Key information that was included in the BSC were Kia Motors’ performance and risk-based goals, initiatives, measures and their performance target. Secondly, a DFD was created to reflect one of Kia Motors’ key operations. The diagram that was drawn up was based on Kia Motors’ expenditure cycle. It showcased a detailed description of the relevant source documents involved, as well as their flow throughout the business process. The report further highlighted the key internal control strengths, the risk of material misstatements they serve...
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...Hyundai Motor Company Question 1 Hyundai is a Korean Motor company which is a part of Hyundai Group. It has been established 29th December 1967. It has achieved a high success domestically and internally. In this question we will highlight the difficulties faced Hyundai including its competitors, how they overcome these problems domestically and internally and the strategies adapted to compete effectively . HMC has faced some of the difficulties & problems that affect its market position & brand image. Their problems is going around three main problems which are "Sales, rate & quality". HMC rates was so cheap which made the product is undervalued by the customers. In fact, the cheap price of their cars reflect its quality as some customers are needed for expensive cars. Therefore, Hyundai goal in US only to maintain its share not to gain more profits & sales in one had. On the other hand, segmenting low level –moderate level people and focus on cost saving cars rather than high quality oriented cars affected it's brand image & identity. Moreover, Hyundai is caring only to save money by having cheap labor which also affect its quality of working and having lots of workers strikes. In addition, we can't forget that inherited Chairmanships that gave the priority to the family to run the business rather than the qualified professional from management. These family chairmens' never listen to the experts inside organization and never take their advice. As well as they had a problem...
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...Using sports marketing to engage with consumers: A Kia Motors case study Introduction Today’s consumers have higher expectations than ever before. Dramatic improvements in media, communication and transport have made the world’s economy more connected. Products developed in one country have become increasingly attractive in other parts of the world. However, entering markets in other parts of the world is not an easy task. Entrants face many different challenges as they try to develop their brand profile. This is especially evident in mature markets like the UK car market. This market has a number of long established brands. The awareness and brand loyalty that exists for established brands form a barrier to entry for new organisations. This case study illustrates how Kia , a South Korean motor company, has used sports marketing to develop its brand identity in the European motor market. The Kia Motors Corporation, based in South Korea, has 12 manufacturing and assembly plants and subsidiaries in 165 countries around the world. Globally the Hyundai Kia Group is now the fourth largest car company in the world. Kia Motors UK has more than 166 dealerships. It also has plans to grow the network to support the increasing demand. Kia is a relatively new entrant to the UK car market. However, it has become more well known in recent years. Kia does not have the same level of brand heritage in the UK as it does elsewhere in the world. Kia aims to overcome this through its massive ambition...
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...The Acquisition and Restructuring of Kia Motors by Hyundai Motors 1. Since the mid-1990s, the global automobile industry was characterized by oversupply and a production capacity well in excess of demand. There were, and still are, many competitors in the industry. Advances in technology have allowed for rapid growth within the industry. Research and development costs increased due to consumer environmental and safety concerns. With this social consciousness, automobile producers were forced to develop new types of automobiles to meet demand. This allowed bargaining power in the buyer’s hands. This caused automobile companies to increase their production efficiency, restructure, and enter strategic alliances (mergers and acquisitions) to realize the economies of scale and scope. The Korean automobile industry was characterized by weak domestic demand, which resulted in continuous oversupply. The market was also completely dependent on Japanese technology to produce automobiles. Korean automobiles were cheap but subpar in quality. Many manufacturers did not run their facilities to full capacity, increasing unit costs. Through the acquisition of Kia, Hyundai hoped to influence the economies of scale, influence the economies of scope, and develop a superior global network. The merger with Kia could potentially improve competitiveness by allowing the use of common parts, integrated quality control and shared functional improvements, as well as reduce costs through the purchase...
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...damage and my personal outrage.” He also personally apologized to former and present NBA players, the Clippers organization, and the fans. Silver addressed in the press conference that he urges all NBA owners to stand by him in forcing Donald Sterling to sale the Clippers franchise. In order for Silver’s wishes to happen he would have to cast a vote amongst NBA owners and 75 percent of the owners have to agree with forcing the sale. Silver stated he was optimistic that he’ll get the support he needs to move forward. Unfortunately as a result of Sterling’s racist rant sponsors have quickly dis associated themselves from Clippers organization. In rapid succession, the mass exodus included used car seller CarMax, State Farm Insurance, Kia Motors America, airline Virgin America, P. Diddy's water brand, AQUA Hydrate, Red Bull, Yokohama tires and Mercedes-Benz. It doesn’t stop there some NBA corporate sponsors Amtrak and Corona beer have also threatened to pull...
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...This is especially evident in mature markets like the UK car market. This market has a number of long established brands. The awareness and brand loyalty that exists for established brands form a barrier to entry for new organisations. This case study illustrates how Kia, a South Korean motor company, has used sports marketing to develop its brand identity in the European motor market. The Kia Motors Corporation, based in South Korea, has 12 manufacturing and assembly plants and subsidiaries in 165 countries around the world. Globally the Hyundai Kia Group is now the fourth largest car company in the world. Kia Motors UK has more than 166 dealerships. It also has plans to grow the network to support the increasing demand. Kia is a relatively new entrant to the UK car market. However, it has become well known in recent years. Kia does not have the same level of brand heritage in the UK as it does elsewhere in the world. Kia aims to overcome this through its massive ambition and plans for growth in the European market. Developing brand identity To support this growth plan, Kia has to develop its brand identity. In the past Kia has competed mainly on price, using a competitive pricing strategy. The challenge for Kia has been to increase awareness of its brand within European markets. Alongside this it has created positive perceptions of its products through high profile sponsorship deals. It wants consumers to view the brand as a...
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...Experience Que: Match the following sphere 1. Public Sphere 2. Social Sphere 3. Trival Sphere 4. Psychological Sphere With the examples. a. Charmin pop-up dacilities b. Nike’s “Just do it” c. Louis Vuitton Bags d. Walmart Shopycat a. 1+a, 2+d, 3+c, 4+b b. 1+a, 2+b, 3+c, 4+d c. 1+d, 2+c, 3+b, 4+a d. 1+c, 2+b, 3+a, 4+d Article 46: Creative That Cracks the code Match the following codes----- 1. A new social movement 2. Ads that “go native” 3. Just Enough Humor 4. The Ad as a game 5. Collaborating with the Crowd 6. Variations on the Meme ---- with the organization that correctly references it. a) Wonderful Pistachios b) OREO Cookies c) COCA-COLA China d) KIA Motors America e) Target and Neiman Marcus f) Marks and Spencer a. 1+a, 2+b, 3+c, 4+d, 5+e, 6+f b. 1+f, 2+e, 3+d, 4+c, 5+b, 6+a c. 1+b, 2+d, 3+c, 4+e, 5+a, 6+f d. 1+f, 2+e, 3+d, 4+c, 5+b, 6+a e. None is correctly matched Article 47: The Rise of Experiential Marketing Which quote is MISMATCHED with the person who expressed it? a. Brian Martin -“An experience’ has much more important than an ‘exposure’” b. Lenderman- “Experiential marketing lessens the distance between the consumer and the brand” c. Rick Condos – “We always used to have to push messages out and we used to tell stories. We still tell stories, but now we ask our consumers to be a part of those stories.” d. Jon Hayes – “There are lot...
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...management are Kia and Chrysler. Both car companies have been around for well over 60 years, both are major car dealers and have established a huge name for themselves in the United States. These two companies have one major difference though; Kia competes within the global market, and Chrysler competes in the domestic market. Even though Kia and Chrysler compete in different markets, they both have the same similarities concerning their systems of prevention of problems, and quality products. Kia was established first in Korea in 1944, and launched into America in 1996. The name Kia translates into Rising out from Asia (NA, 2010). Kia has had difficulties through the years; however, they always have had the same problem prevention and quality of products. Kia starts with reviewing the parts that come from overseas. After reviewing the parts several times over, Kia then has the personnel tests the parts before making the car. These steps are taken to test each part that goes into making the cars. For Kia’s car safety, there is training for local and overseas personnel on new testing and procedures. This training consists of three parts. The first stage will be done by the manufacturer of the parts. The second stage will be for the research and development team and the purchasing department. When parts have successfully passed the first and second stages of testing, those parts will then be sent to the personnel that assemble the modules of the Kia...
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...SWOT analysis and it’s importance in market segmentation. SWOT (Strength, Weakness, Opportunity and Treat) Analysis is one of the management tools which provides management an overview on the Strengthen, Weakness, Opportunities and Treat that points out the core issues about the company’s position on it’s operation. It “serves as a catalyst to facilitate and guide the creation of marketing strategies that will produce desired result” O.C. Ferrell, Michael D.,George h and David l (1999) using the SWOT analysis organizations can examine the various factors both internally (Strength and Weakness) and Externally (opportunities and treats) to improve business performance. The analysis will be used to “quickly overview the business strategy” Jobber and Ellis-Chadwick, (2013). Swot Analysis provides a core information on the business organization not only the marketing aspect but also other components that contribute and affects the success of it’s business operation, Management can prepare itself for taking proper course of action in identifying marketing objectives and designing core strategies and gain competitive advantage in breaking the market. Marketing Audit Organizations develop a plan of action through which they proceed with their business operation, in order to assess their past performance, current position in the market as well as where they want to be in future operations. One of the tool that can answear these issues are to have an internal and external audit...
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...The auto industry suffered many hardships, enough that the government stepped in to offer bailout financing in order to keep operations and employment continuing. While the Ford Motor Company choose to restructure its own operations without accepting government assistance, General Motors Company had accepted the government funded bailout. This bailout encompassed numerous stipulations including changes in financial structure of operation and management. The end goal to stabilize the company, return from bankruptcy and back to providing affordable and dependable vehicles to its consumers. Reviewing past reports from various financial institutions, union employees and GMC’s annual reports I will discuss the change strategies since filing of bankruptcy and the government bailout. The second corporation I would like to research, for personal as well as scholastic purposes, is KIA Motors. During the time just prior to GMC’s financial crisis, KIA also had a change of management. This was working towards expansion, increase in profits, sales and producing award winning vehicles for the market. With the restructure of GMC and the difficulty of market finance, KIA had the opportunity to take market shares in America and further boost its standing as a solid competitor in the automotive market. KIA, being a new investment of ours, and GMC one of the alternatives to purchase, the vehicle was not the only factor regarding this recent purchase. History of financial difficulty,...
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...significant relationship with the demand for automobiles in each of the markets. An interesting finding of the research is that the factors apparently driving demand are different in the two markets suggesting the structure of automobile demand in South Korea differs significantly from the demand for that country’s vehicles in the United States. A major challenge facing the South Korean automobile industry is how to utilize its capacity when confronted with slowing growth in sales in both the domestic and United States markets. Key words: Economics of Korea; Automobile Industry; United States Markets; Domestic Markets The Republic of South Korea (RSK) produced 23,000 motor vehicles in 1971, which was 0.06 percent of world output. In 2005, South Korea produced nearly 3.7 million motor vehicles or 5.6 percent of the world output...
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...INTERACTIVE SESSION: ORGANIZATIONS INFORMATION SYSTEMS HELP KIA SOLVE ITS QUALITY PROBLEMS Korean car manufacturer Kia Motors started selling in the North American market, promising high-quality vehicles at prices well below the competition. In 1994, Kia sold 12,000 cars, and by 2004, Kia had sold 270,000 cars. From a marketing end standpoint, Kia has been a phenomenal success. But until 2002 Kia ranked at the bottom of J. D. Power and Associates’ annual initial-quality survey of new vehicle owners. In 1997 when the average North American car had 1.1 defects per vehicle, Kia had 2.75. In 2002 Kia had improved to 2.12 defects per vehicle, but the industry average was 1.33. Kia had a long way to go, and it was affecting its ability to sell cars, retain customers, and keep operational costs down. Like all manufacturers of vehicles sold in North America, Kia had to create a system by December 1, 2003 to report any defects, accidents, or injuries involving its vehicles to the U.S. National Highway Traffic Safety Administration (NHTSA). Kia Motors uses a manufacturing and production system to help in identifying sources of defects in their automobiles. Kia uses the information from the system to improve its production processes to eliminate or reduce defects. Improving vehicle quality lowers Kia’s costs for warranty repairs while increasing customer satisfaction. CASE STUDY QUESTIONS 1. Why was it so difficult for Kia to identify sources of defects in the cars it produced...
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...responded the way smart companies should in the face of the continuing global economic crisis by aligning our resources to meet the evolving needs of our customers and lead market changes. As a result, we achieved excellent results despite the challenging business environment by recording 2.478 million units in global retail sales, which is an 18.6% increase from the previous year. Kia Motors has consistently driven toward a better future through global management, design management and sustainable management. And now we are paving the way toward the future of mobility and greater value for all of our stakeholders. Contents 02~08 16~25 26~37 financial Highlights 02 & 2011 at a Glance Chairman’s message 06 Vice Chairman’s message 08 our PerformanCe Domestic Business Performance 18 overseas Business Performance 20 Global awards List 24 our strenGtHs Design management 28 Branding 32 marketing 34 2011 new models 36 38~47 48~121 our future research & Development 40 Global r&D network 44 eco-friendly models 46 & Concept Cars financial review 48 Product Line-up 114 Company History 116 Board of Directors 118 Global network 120 finanCiaL HiGHLiGHts 2011 2010 2009 2008 2007 30,255,179 26,275,144 25,962,876 25,583,550 19,461,002 3,934,169 2,914,146 2,792,286 1,408,847 1,156,943 Current assets 11,075,187 9,763,671 11,208,990 11,709,967 8,369,696 total liabilities ...
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