Name

Registration No
Batch
Term
Course Name
Assignment Title
Submission Type
DATE
There was no time in the Human History where Economics of Strategy was not used. From
the time of Pharos in Egypt through the silk trade in china to the 20 years long battle of
crusaders in Jerusalem and in this Computer Age, the difference existed in the way people
use to channelize their thoughts and ideas. The strategy process is a territory, which goes
back a long time. Starting in the ancient warfare with a famous Chinese writer as Sun Tzu,
writing about it became very popular in the modern business of today. The budget process is
maybe less old than the strategy process, still it is in use a very long time. This involves the
application of economic principles and methods to provide/coin-out unique insights aimed at
addressing specific issues/problems and/or enhancing their long-term performance of an
organization or institute. The Main Objective of this course was to understand how market
environment and firm’s strategy influence firm performance which considers into account the
economic aspects which include the Bottom-line profits, Efficiency, Sustainability, Stability
& etc.

Today’s Business Conditions / Scenario’s:

 Large vertically integrated firms have been declining. Alliances and joint ventures could
work better than mergers and acquisitions. Firms adopt complex matrix structures.

 Infrastructure & Transportation: Air, water, rail and ground transportation have become
better coordinated. Sophisticated communication and data processing technologies enable
container shipping. Cities like Atlanta have grown relying on air transport in spite of poor rail
and water connections.

 Communications Technology: Capacity for instantaneous transmission of complex

information makes possible global markets for products and services. Technology has
enhanced worker productivity. Coordination of activities has become easier with modern
computer and communication technologies.

 Finance: Regulation of banking and securities markets resulted in a stable financial

services sector. Capital markets and financial institutions became more active in evaluating
firm performance. Globalization of financial markets made many mergers and acquisitions
possible. Liquidity crisis of 2008 has slowed economic and entrepreneurial activity.
 Production Technology: Modern technologies such as CAD/CAM have made low cost
tailor-made production feasible. Use of new technologies often means reorganizing the firm
around these technologies.

 Government: In some areas (airlines, trucking and financial services) traditional regulation
has been relaxed. Regulation has increased in other areas (workplace safety, discrimination
and environmental protection). Intergovernmental treaties and agreements create regional free
trade zones. Government’s antitrust policy encourages in-house development of capabilities.
Government policy supports basic research and the commercialization of R & D projects.

In this Subject every Case is related with a unique strategic learning. It gives one idea of how
an organization performs by adopting various strategies and counters the issues arrived
during the same using suitable approaches and methodologies.

I could correlate many concepts pertaining to this subject with The Company I work in i.e.
Hyundai Motors India Private Limited.

Company Profile: Hyundai Motor India Ltd is a wholly owned subsidiary of the Hyundai Kia
Motor Company headquartered in South Korea. It is the second largest automobile
manufacturer with 16.2% market share as of February 2019 and US$5.5 billion turn-over in
India. It has a huge export business to South American Countries, Middle East, South Africa
etc. Hyundai sells several models in India, the most popular being the Santro Xing , i10 and
the i20 . Other models include Getz Prime, Accent, Terracan, Elantra, second generation
Verna, Tucson, Santa Fe and the Sonata Transform. They say themselves to be Mobility
providers.

Similar to the case of Paradox of Samsung’s Rise, Even Hyundai Motors follows a similar
model for selling their products / Cars. As both of these OEM’s have a Korean Origin, there
work culture, production methodologies, Marketing Methodologies are very much alike.
Hyundai Has been following the Japanese model from the beginning that is from the time
Korea was under Japanese rule. The hierarchical labour model had been practiced. In this
model employees remained loyal to the organization and there were hardly migrations. The
model promoted diversification. Not keen on borrowing capital but on reinvesting profits.
The focus was primarily on plant optimization and price competition. The recruitment was
rare done only for the lower pay scale. The incentives and promotions were seniority based
and were standardized.

Hyundai Kia Motor Company to mark its presence in foreign countries could not stick to the
old Japanese model and alternatively cannot forgo the existing model as it has deep roots in
the company. To balance this, the company developed a combination of both the models
and created the hybrid models where in the best practices which are very much region
specific are used. The hybrid model promoted both the diversification and focused strategy.
Hyundai diversified on a focus business setup. For example they launch new models on the
basis of different countries. the same Vehicle is named as Verna in India and Accent in
middle east. They focused on optimization of the process and turned away from Price
competition and followed premium pricing. Establish long term relationship with suppliers
but with contingents on pricing.

Hyundai Marketing Strategy: Hyundai marketing strategy is differentiated marketing. The

primary consumer target is middle to upper income professionals, who need value for their
money and comfortable ride in city conditions .The secondary consumer target is college
students who need style and speed. The primary business target is mid-sized to large sized
corporates that want to help their managers and employees by providing them a car with
ease of transport. The secondary business target is entrepreneurs and small business
owners who want to provide discounts to managers buying a new car.

I could Relate Hyundai Motors with Nissans Electric Vehicle Strategy As well. Hyundai
Motors is the first Automobile Company which launched EV in India which could go up to
450km in single nights charge. The South Korean carmaker is working with the government
to bring in a superior network of charging facilities backed by ready accessories. Hyundai
will be installing fast chargers in all electric selling dealerships.

Also, the company will offer Kona Electric support vehicles starting with selected cities and
then moving onto additional places for emergency charging. The company has already tied
up with MapMyIndia to offer complete details where you can find the Kona Electric
compatible charging stations. Kona has an Early Introduction advantage and Hyundai seeks
to demonstrate that even they can launch a EV vehicle. Kona Costs nearly 25 Lakhs which is
a bit expensive in Indian Market. However in a years’ time Hyundai is planning to introduce
another new Model which will cost in the range of 10 Lakhs INR and can give a mileage of
close to 200km.

Similar to the Corning Industry where in Mr.Armory Houghton bought two glass companies
and established Corning Glass works in 1875. The company established its reputation for
innovation and technology prowess. Similar to this, In 1998, after a shake-up in the South
Korean auto industry caused by overambitious expansion and the Asian financial crisis,
Hyundai acquired the majority of rival Kia Motors. Hyundai owns 33.88% of Kia.

In 2000, the company established a strategic alliance with DaimlerChrysler and severed its
partnership with the Hyundai Group. In 2001, the Daimler-Hyundai Truck Corporation was
formed. In 2004, however, DaimlerChrysler divested its interest in the company by selling its
10.5% stake for $900 million. Hyundai has six research and development centers, located in
South Korea (three offices), Germany, Japan and India. Additionally, a center in California
develops designs for the United States.

As demonstrated in the case Strategy and Society, Hyundai Motors from the time of its
inception has done numerous CSR & sustainability activities. Hyundai’s CSRs can be divided
among economic, social, and environmental responsibilities. The economic responsibilities,
touching the fundamental basis of any profitmaking organization and including the needs to
create jobs and to receive investments, are fulfilled by ensuring trustworthy management.
Hyundai, as an active corporate citizen, also fulfills its social responsibilities through its
various CSR campaigns, projects, and programs catering to the needs of its stakeholders,
including the marginalized of society at large, employees, customers, partner businesses,
and local communities. The company also implements systems of environmental
management in order to fulfill the environmental responsibilities it bears as a leading
automaker. At heritage sites, the volunteers have undertake activities to upkeep the
amenities, maintenance of gardens and will conduct awareness activities to educate the
visitors on the value of heritage.

As part of the initiative volunteers will undertake school premises cleaning, school wall
designing, maintenance of gardens and design competitions for a positive and conducive
study environment.

KANPUR CONFECTIONERIES is another case which can be correlated with the Unsung story
of Hyudai Motors Corp. Chung Ju-yung founder of Hyundai Motor Company had 8 Sons and
3 Daughter. There were many disputes when it came to property participation like it
happens in most of the companies. Hence Mr. Chairmen distributed each of his company
like Hyundai Motors, Hyundai Rotum, Hyundai Constructions, Hyundai Ship Building, Mobis,
Mando to various of his Family member and even now the business is closely held within
the family Members.

So this is how I could correlate my learnings form Economics of Strategy with the company I
work for and over year their strategies have evolved drastically in order to cope up with the
changing word.

-------------------------------------------x--------------------------------------x----------------------------------