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.