What is
the Competitive Advantage?
Competitive Advantage means something that places a company
or a person above the competition. The company will be able to apply to strong
point. Without being what does not evaluate a property and the ability which
the company possesses. Competition company comparison will lead and the strong
point which is relative could be grasped. The strategy which sees from
viewpoint of competitive advantage continuous a competitive advantage
reinforcement and competitive advantage endeavours not to disappear.
Competitive advantage seeks to address some of the
criticisms of comparative
advantage.
Michael Porter proposed the theory in 1985. Competitive
advantage occurs when an organization acquires or develops an attribute or
combination of attributes that allows it to outperform its competitors. These
attributes can include access to natural resources, such as high grade ores or
inexpensive power, or access to highly trained and skilled personnel human
resources. New technologies such as robotics and information technology can
provide competitive advantage, whether as a part of the product itself, as an
advantage to the making of the product, or as a competitive aid in the business
process (for example, better identification and understanding of customers).
Now, I would like to explain about the competitive advantage
of Hyundai Company.
History
Chung Ju-Yung founded the Hyundai Engineering
and Construction Company in 1947. Hyundai Motor Company was later established
in 1967. The company's first model, the Cortina,
was released in cooperation with Ford Motor Company in 1968. When Hyundai wanted
to develop their own car, they hired George Turnbull, the
former Managing Director of Austin Morris at British
Leyland. He in turn hired five other top British car engineers.They
were Kenneth Barnett body design, engineers John Simpson and Edward Chapman, John
Crosthwaite ex-BRM
as chassis engineer and Peter Slater as chief development engineer. In 1975,
the Pony,
the first Korean car, was released, with styling by Giorgio Giugiaro of ItalDesign
and powertrain technology provided by Japan's Mitsubishi
Motors. Exports began in the following year to Ecuador
and soon thereafter to the Benelux
countries.
In 1984,
Hyundai exported the Pony to Canada, but not to the United States,
because the Pony didn't pass emissions standards there. Canadian sales greatly
exceeded expectations, and it was at one point the top-selling car on the
Canadian market. The Pony afforded a much higher degree of quality and
refinement in the lowest price auto segment than the Eastern-bloc imports of
the period then available. In 1985, the one millionth Hyundai car was built.[11]
In 1986,
Hyundai began to sell cars in the United States, and the Excel
was nominated as "Best Product #10" by Fortune
magazine, largely because of its affordability. The company
began to produce models with its own technology in 1988, beginning with the
midsize Sonata. In the spring of 1990, aggregate
production of Hyundai automobiles reached the four million mark. In 1991, the
company succeeded in developing its first proprietary gasoline engine, the
four-cylinder Alpha, and also its own transmission, thus paving the way for
technological independence.
In 1996, Hyundai Motor India Limited was
established with a production plant in Irungattukottai near Chennai,
India.
In 1998,
Hyundai began to overhaul its image in an attempt to establish itself as a
world-class brand. Chung Ju Yung transferred leadership of Hyundai Motor to his
son, Chung Mong Koo, in 1999. Hyundai's parent
company, Hyundai Motor Group, invested heavily in the
quality, design, manufacturing, and long-term research of its vehicles. It
added a 10-year or 100,000-mile (160,000 km) warranty to cars sold in the
United States and launched an aggressive marketing campaign.
In 2004,
Hyundai was ranked second in "initial quality" in a survey/study by J.D. Power and Associates. Hyundai is now
one of the top 100 most valuable brands worldwide. Since 2002, Hyundai has also
been one of the worldwide official sponsors of the FIFA World
Cup.
In 2006, the
South Korean government initiated an investigation of Chung Mong
Koo's practices as head of Hyundai, suspecting him of corruption.
On April 28, 2006, Chung was arrested, and charged for embezzlement
of 100 billion South Korean won (US$106 million). As a result,
Hyundai Vice Chairman and CEO, Kim Dong-jin, replaced him as head of the
company.
On September
30, 2011, Yang Seung Suk announced his retirement as CEO of Hyundai Motor Co.
In the interim replacement period, Chung Mong-koo and Kim Eok-jo will divide
the duties of the CEO position.
What are the contents of competitive advantage?
1.
Cost
Leadership
Cost Leadership (Low Cost Strategy)
cost Leadership mean that produce goods level of equal more in expensive. When
competition's range is narrow, in other words when target on specific customer
segment will be focused cheap price and differentiation strategy.
The goal of Cost Leadership Strategy
is to offer products or services at the lowest cost in the industry. The
challenge of this strategy is to earn a suitable profit for the company, rather
than operating at a loss and draining profitability from all market players.
A firm sets out to become the low
cost producer in its industry. Note: a cost leader must achieve parity or at
least proximity in the bases of differentiation, even though it relies on cost
leadership for it’s CA. Note: if more than one company aim for cost leadership,
usually this is disastrous. Often achieved by economies of scale.
Steps in Strategic of Cost Analysis:
1. STEP1. Identify the appropriate
value chain and assign costs and assets to it.
2. STEP2. Diagnose the cost drivers of
each value activity and how they interact.
3. STEP3. Identify competitor value
chains, and determine the relative cost of competitors and the sources of cost
differences.
4. STEP4. Develop a strategy to lower
relative cost position through controlling cost drivers or reconfiguring the
value chain and/or downstream value.
Automotive industry labour costs
make up only 10 percent of total operational costs. In order to be able to gain a competitive
edge, therefore, not only must HMC seek out cheap labour, it must also source
from locations that can supply low-cost input good (such as engines, tires, car
electronics, etc.). The
cost-effectiveness of suppliers is a life and death matter in the global
automotive industry. HMC is cooperating
with DaimlerChrysler to develop new technologies and improved supply chain
management. Projects include a new
four-cylinder engine and a joint purchasing plan.
Differentiation strategy
Differentiation (Differentiation Strategy) Differentiation
is that provide inventive value can improve of perceive valued of consumers
toward product (or service) in the market.
Main aspects of five forces analysis1. the rivalry between
existing sellers in the market2. the potential threat of the entry of new
competitors3. the threat of substitute products becoming available the market4.
the bargaining power of consumer5. the bargaining power of suppliers.
Innovation Strategy
Hyundai benchmarked Toyota, then the
industry's quality leader, to understand its processes. It installed Six Sigma
at its engineering centre to measure its improvement. It made quality a
cross-functional responsibility, with involvement from procurement, finance,
and sales and marketing. It enlisted outside suppliers and put them together
with designers and engineers to work out problems before they occurred. Quality
oversight meetings, which had been poorly attended, became must-go events after
chairman Chung began to show up for twice-monthly gatherings.
In
response to complaints about product quality, HMC introduced a “10 year
warranty” program. The rationale was
that, in order to erase any negative image, management had to go beyond the
typical guarantee period and offer a very substantial warranty. The strategy
was a major turning point for Hyundai, and the firm set about designing and
building cars based on much higher quality standards. While still maintaining low prices, HMC was
able, over time, to provide substantially extra value to consumers.
Another
major step was geographical diversification.
Putting lessons from the failed Canadian investment into practice, HMC
built a factory in Turkey in 1997, in India in 2000, (with second plant in
2007), and in China in 2002. The main
advantage of these plants is the inexpensive, high quality labor available at
these locations. The Turkish plant gave
HMC a foothold in the Middle East, a market it wants to develop. Turkey’s proximity to Western Europe is also
a major advantage. In 2006, HMC had more
than ten production plants in locations such as Taiwan, Vietnam, Iran, Sudan,
and Venezuela. HMC’s first U.S. plant
opened in Alabama in May 2005, with an investment of $1.1 billion and annual
production of 300,000 cars.
By
investing in Kia, HMC gained access to the firm’s competitive advantages in R&D
and production. During its lifetime, Kia
had managed to acquire a substantial base of highly knowledgeable workers,
engineers, and design staff. Together,
the two firms achieved synergies and economies of scale in R&D,
engineering, purchasing, quality control, and marketing. HMC also invested in R&D centers in North
America, Japan, and Europe.
Operational Effectiveness Strategy
Hyundai
adopted the slogan "Cars that make sense" and set another record,
selling 264,000 Excels. In its haste to grow, Hyundai made two near-fatal
errors. It made fragile cars and sold them to noncreditworthy customers. When
the cars were repossessed, their quality was so poor that they were worth less
than the outstanding loans.
Hyundai
is making another big gamble this year by introducing a premium luxury car
called the Equus that is priced thousands of dollars higher than any car
Hyundai has sold before. The Equus (Latin for "horse"), expected to
cost around $60,000, will cost more than most Cadillacs and is designed to compete
with top-of-the-line models marketed by Mercedes, BMW, and Audi that sell for
$20,000 more.
Depending
on your point of view, the introduction of the Equus is either ambitious,
arrogant, or ignorant. Popular brands like Hyundai are not supposed to stretch
into premium luxury territory; consumers want a prestige label when they pay a
prestige price. Volkswagen found that out a couple of years ago when it tried
to sell a $70,000 car called the Phaeton. Despite its technical excellence,
potential buyers didn't associate the people's car with a high-priced sedan.
Value Chain
A value chain is a chain of activities
that a firm operating in a specific industry performs in order to deliver a valuable
product
or service
for the market.
Hyundai
has been the world’s fastest growing major automaker since 1999. Sales in the U.S. increased by 360 percent
from 1998 to 2004. HMC’s growth is
coming from international markets. These
days the firm generates about a third of its sales from North America and 10
percent from Europe. The firm’s profit
margins are among the highest in the industry, worldwide. It has won numerous quality assurance prizes
from reliable organizations such as Consumer
Reports, J. D. Power and Associates,
and the 2005 Total Quality Study.
Chairman Chung was named one of most successful businessmen in the world
by Business Week magazine.
HMC
invests heavily in various value-chain activities. It utilizes FDI to develop key operations
around the world. Management chooses
foreign locations based on the advantages they can bring to the firm’s global
business. R&D is targeted to
developing safer, more convenient automobiles of superior quality. HMC is developing environmentally-friendly
technologies that emphasize fuel efficiency.
HMC conducts market research to help with choosing designs, as well as
interior and exterior styling of automobiles.
HMC
aims to become one of the top five global car manufacturers by 2010. Hyundai plans to have a 20 percent share of
the Chinese market. To that end the
automaker has signed a $1.24 billion joint venture with Guangzhou Motor Group,
giving HMC access to the commercial-vehicle market in China. With 1.3 billion people increasingly anxious
to buy passenger cars and trucks, China will be a major market for HMC. The firm benefits from its proximity to China
and management’s understanding of the Chinese culture. Chung Ju Yung’s ‘can do’ spirit prevails
throughout the entire HMC network.
 |
Performance
of Various Car Manufacturers
SOURCE: The Economist, “The Car Company in Front,” January 27 2006.
resource-based
view (RBV)
The resource-based view (RBV) as a basis for a competitive
advantage
of a firm lies primarily in the application of the bundle of valuable
interchangeable and intangible tangible resources at the firm's disposal
(Mwailu & Mercer, 1983 p142, Wernerfelt, 1984, p172; Rumelt, 1984,
p557-558; Penrose, 1959). To transform a short-run competitive advantage into a
sustained competitive advantage requires that these resources are heterogeneous in nature and not perfectly mobile
(:p105-106; Peteraf, 1993, p180). Effectively, this translates into valuable
resources that are neither perfectly imitable nor substitutable without great effort
(Barney, 1991;: p117). If these conditions hold, the bundle of resources can
sustain the firm's above average returns. The VRIO and VRIN (see below) model also
constitutes a part of RBV. There is strong evidence that supports the RBV
(Crook et al., 2008).
Hyundai: Hitting the Accelerator When Competitors Throttle
Down
Consider the state of affairs when viewers tuned into the Super
Bowl in February 2009. Banks had failed, the stimulus package still hadn’t been
announced, and unemployment was surging. Escapism was the order of the day, and
most advertisersplayed right along, with brands like Bud Lite and Coke offering
happy-happy, joy-joy ads that jarred with reality. There was one advertiser,
however, that didn’t. In the third quarter, in an otherwise standard-issue,
cars-rolling-throughthe- landscape spot, a voice-over brought into the light of
day something that most people didn’t want to talk about. “Now finance or lease
a new Hyundai, and if you lose your income in the next year, you can return it
with no impact on your credit.” With that bold stroke, Hyundai—yes, Hyundai—an automaker
not historically known for fearless marketing, began in earnest a frontal
assault on a recession that was not only dampening consumer enthusiasm but also
drowning it. Then, in sharp contrast to the tail-between-the-legs mode of
Hyundai’s rivals, many of whom had slashed their marketing budgets, the Korean
carmaker put the pedal to
the marketing metal by repeating the Hyundai Assurance
promise in an eye-popping nine high-profile spots on the
Academy Awards.
Hyundai’s aggressive, customer-focused marketing strategy
in the face of the economic downturn produced stunning results.
The Hyundai Assurance program resonated with debt-wary consumers,
and Hyundai’s sales rocketed 59 percent for January and February 2009 as
compared with the previous year. Nielsen’s postgame survey showed that 43 percent
of participants who saw the ads improved their opinion of Hyundai. The Hyundai
Assurance program, “made people feel Hyundai cared about their situation—that
they were sympathetic,” said one analyst. The ads said, “We hear you. We
understand. We’re in this together.” Hyundai’s competitive marketing strategy
is all about opportunity, aggressiveness, and speed. In 1986, then virtually
unknown Hyundai entered the U.S. market with its small, entry-level Hyundai
Excel, priced at an incredibly low $5,000. After some early success, Hyundai
hit a speed bump with design and quality. The car’s outdated looks,
underpowered engine, and flimsy engineering made it the butt of jokes by late-night
comics. David Letterman once joked that if you Chapter 18|Creating
Competitive Advantage 527 wanted to really frighten the astronauts in space,
just place a Hyundai logo on the space shuttle’s control panel. Undeterred,
however, Hyundai stepped up its investments in quality, new model
introductions, and marketing. In late 1998, Hyundai introduced the industry’s
first 10-year, 100,000-mile drivetrain warranty, and by 2007 it had
substantially improved both its quality and its reputation. In 2008, the
company introduced its new Genesis upmarket sedan—a step up from its
bestselling midsize Sonata model and the priciest Hyundai ever. Then came the
Great Recession and the virtual implosion of the U.S. auto industry. But rather
than throttling down, Hyundai hit the accelerator. As rivals were cutting their
marketing budgets, an opportunistic Hyundai increased its spending. More
spending, however, means little without good marketing ideas. With the economy
down, what could Hyundai possibly say that would get reluctant consumers buying
again? Joel Ewanick, Hyundai’s chief marketing officer, asked consumers directly.
“You can only learn so much by reading research numbers,” he said. “It’s
another thing to have them look you in the eye and say how they feel.” In focus
groups, Ewanick kept asking, “Why aren’t you buying a car right now? You say you
want to buy one, but you aren’t doing it.” As he pressed the question, people
began to open up. “We realized the elephant in the room was the fear of losing
your job,” Ewanick recounts. “This was a recession of fear.” Hyundai acted quickly
on this insight. Within only 37 days, it had fashioned the Hyundai Assurance
program and produced TV ads. It purchased two spots in the 2009 Super Bowl,
along with sponsorship of the pregame show, followed by those nine Academy
Award spots. These bold marketing moves and Hyundai’s customer-focused value
proposition helped the brand turn the corner on customer perceptions. Even
though only about 100 customers returned their cars, the Hyundai Assurance program
won Hyundai enormous amounts of attention and goodwill. The ads alerted
customers that Hyundai stood behind its brands and with its buyers. “The idea
of giving people the option to give the car back if they were struggling . . .
seemed to make customers comfortable and increase our market share in an
economy like this,” said Ewanick. Moving forward, despite the still-slowed
economy, Hyundai showed no signs of slowing down. In 2010, it introduced a new
premium luxury model called Equus (with a price tag of about $60,000), designed
to compete with top-of-the-line models marketed by Mercedes,BMW, andAudi that
cost $20,000 more. It also introduced the Sonata Hybrid and the Sonata Turbo
models. Although it continued its Hyundai Assurance program through 2010, in
line with a changing economy, Hyundai’s more recent ads have shifted from “the safety of purchasing a Hyundai to
the safety of driving one.” And whatever the economy, Hyundai continues to pour
resources into marketing. Customers seem to be getting a new message about
Hyundai. “Five years ago, Hyundai was known for its low prices, so quality, and
a 100,000-mile power-train warranty,” says an industry observer. “Today, . . .
Hyundai stands for softer, more positive qualities like smart, fresh, and
high-tech.” Sixty percent of U.S. consumers are now aware of the brand and
willing to buy it, up from 40 percent two years ago. Astonished Hyundai dealers
are seeing consumers trade in Acura, BMW, and even Mercedes vehicles for the
Hyundai Genesis and Equus models. “We’re really eroding other brands,” crows
one dealer. Thanks to its marketing hustle, improved quality, and aggressive tactics,
Hyundai is now one of world’s fastest-growing major auto manufacturers. Its
U.S. market share has climbed to 4.3 percent, up from 3.1 percent a year
earlier, making it the nation’s sixth biggest brand by sales. Last year,
Hyundai passed Ford to move into fourth place globally. Moreover, Hyundai ranked
seventh in last year’s J.D. Power’s Annual Initial Quality Survey—right up
there with Honda and Lexus and well ahead of Toyota. And to top things off, the
brand ranked number one last year in the well-respected Brand Keys customer
loyalty ratings, surpassing even perennial front-runners Toyota and Honda.
“Fans show their loyalty in all kinds of ways,” says onead. “Ours just buy
another Hyundai.” Thus, Hyundai has the right competitive marketing strategy
for its customers, the changing economy, and the competitive
marketplace. “Hyundai is for real,” concludes
an analyst. “Competitors hate them. Customers love them.”1 “Hyundai
is for real,” says one analyst. “Competitors hate them. Customerslove them.”
My Competitive Advantage
My competitive
advantage are I can speak English well. I have many talents in art. I ever join
drawing course and English course.
Since I
was younger, I’ve like join organisation. I ever became first division
basketball team at my senior high school. I joined dance team at my senior high school. I’m
a member of karang taruna in my house too. In collage, I get full scholarship from
STMT Trisakti. I ever become a committee
of SMART FC STMT. I’m a member of UKM Al Faatih KM STMT Trisakti. I’m a member
of Himpunan Mahasiswa KM STMT Trisakti.
I have
certificate first winner of biology
Olympiad 13 senior high school. And participant biology Olympiad in Bekasi.
