Contents 1. Overview 2. Key Innovation 3. Innovation Type 4. Technological Innovation Strategy 6....
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Transcript of Contents 1. Overview 2. Key Innovation 3. Innovation Type 4. Technological Innovation Strategy 6....
MOT in Hyundai Motors
Con
ten
ts
1. Overview
2. Key Innovation
3. Innovation Type
4. Technological Innovation Strategy
6. Suggestion for Strategies
- 2 -
5. Analysis of the Present Situation
Worldwide Industry Descrip-tion
Overview
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Automotive In-dustry
Designs, Develops, Manufactures, Mar-kets, and Sells the world’s motor vehi-cles
Over than 70 million motor vehicles
Worldwide Industry Descrip-tion
Overview
- 4 -
Pressures
Oil PriceExternalCompeti-tion
S. Korean Automobile Industry & Hyundai Motors
Overview
- 5 -
Automotive In-dustry
5th largest in the world in terms of production volume6th largest in the world in terms of export volume
1955: Sinjin Motor Co. founded – 1st automotive company in Korea1968: Hyundai Motor Co. founded.
Hyundai Cortina, Hyundai Ford 20M, Hyundai Ford D-series, and Hyundai Ford DK-Series launched.
1973: Hyundai New Cortina launched.
1975: Government established "Systematization Promotion Act" for medium and small enterprises in automobile industry;
Hyundai Motor Co. established its own research insti-tute, and
produced Hyundai Pony, the first Korean-developed car, designed by ItalDesign and based on Mitsubishi technology;
1976: Hyundai Motor made Korean history by exporting the "Pony“ to the Republic of Ecuador; 1983: Hyundai Motors established Hyundai Auto Canada Inc.;
S. Korean Automobile Industry & Hyundai Motors
Overview
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1985: Number of vehicles registered in S.Korea exceeded 1 million 1986: Hyundai Excel nominated by Fortune magazine for the "Best Product 10" award 1988: Annual domestic automobile production volume exceeded one million units; Hyundai named "Official Car" in Seoul Olympic;
1990: Hyundai's cumulative exports to the U.S. surpassed 1 million 1993: Hyundai Elantra (new model launched), and was selected "Best Car of 1993" in Aus-tralia; 1995: Number of vehicles registered in South Korea exceeded eight million;
Hyundai's Accent earned "Canadian Best Buy Award", and also won the "Asia-Pacific" Rally;
1998: Hyundai began investing heavily in quality, design, manufacturing, and long-term research, and added a 10-year or 100,000 mile warranty to its vehicles in the United States;
51% of Kia Motors acquired by Hyundai Motor; 2004: Hyundai tied with Honda for initial brand quality, second in the industry behind Toy-ota, in a survey conducted by J.D. Power and Associates. 2006: Hyundai Motor Company exceeds 100 trillion won in sales 2008: Hyundai Motor receives Global Green Management Excellence Award, Global Reporting Initiative Award 2009: Exceeded an accumulated export sales of 1 million cars in Africa
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- A division of the Hyundai-Kia Automotive
- Group Headquartered in Seoul - The world’s fourth largest automaker in terms of units sold. - The world’s largest integrated automobile manufacturing facility in Ulsan - Hyundai vehicles sold in 193 countries through 6,000 dealer-ships and showrooms worldwide.
Company Over-view
Overview
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Key Innovation
Background
1886
1937
1968
Mercedes-Benz, founded
Toyota, founded
Hyundai Car, founded1968
Hyundai Car, founded
Quality
Productivity
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Key Innovation
Six-Sigma
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Key Innovation
Define Problem
Measure Current Situation
Analyze Causes
Improve
Control the Improvement
Six Sigma
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QualityKey Innovation
Quality
1999
2000
2001
Trained Professionals & developed Q-star sys-tem
Expanded direct-quality Sections- Manufacturing Section- Research Section- All Partners
Expanded indirect-quality Sec-tions
• Trained 16 Gold Stars (Expert of Improvement)
• Solved the critical quality problems in the factory• Developed Hyundai-Style System
• Trained 200(+) Gold Stars• Expanded direct manufacturing and research sections• Expanded to major partners
• Trained 200(+) Gold Stars• Expanded indirect manufacturing sections• Expanded to all partners
• Trained 200(+) Gold Stars• Expanded to all parts and compa-nies
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2003
QualityKey Innovation
Unit field quality improved
Achieved
6 Sigma
First Pass Yield increased90%99%
of claim cost reduced50%
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97 163
244
346
375
420
1998 1999 2000 2001 2002 2003
257
224
189
175
145
143
Relationship Between Quality and Sales
IQS ( Complaint per 100 cars )
Number of Sales ( Unit : 1000 cars )
QualityKey Innovation
Initial Quality Study (IQS): measure of problems experi-enced within the first 90 days of ownership
2009
102
In 2009, Hyundai’s IQS : 102 Toyota’s IQS : 101
660
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ProductivityKey Innovation
Has short assembling lines
Uses buffer to reduce error
Manufactures automatically
Has information networks
Over all manufacturing stepsManufacturing Efficiency
Asan Plant
Operating ratio
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ProductivityKey Innovation
Ulsan Plant
Asan Plant
87.7%
97.5%
89.5%
107.6%
2004 2006
Types of Innovation
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Types of Innova-tion
Innovation Type
Product
Radical
Competence - enhanc-ing
Architectural
Process
Incremental
Competence - destroy-ing
Component
Quality
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Types of Innova-tion
Innovation Type
Types of Innovation
Product /Process
Q star: Process
Radical /Incremental
Core Machinery Components: RadicalSix Sigma: Incremental
Competence-enhanc-ing / Competence de-stroying
Quality rather than Technology: Competence-enhancing
Architectural /Component
Core Machinery Components: Component
Productivity
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Types of Innova-tion
Innovation Type
Types of Innovation
Product /Process
Manufacturing Process: Process
Radical /Incremental
Hyundai Asan Plant: RadicalLean-type Manufacturing Process: Incre-mental
Competence-enhanc-ing / Competence de-stroying
Productivity than Technology:Competence-enhancing
Architectural / Compo-nent
Manufacturing Process: component
Choosing Innovation Project
Technological Innovation Strate-gies
Car Infotainment• Vehicles of the future will offer diverse information and en-tertainment for drivers and greater safety features than ever before. This car would be called Smart car. Smart cars with infotainment systems will also offer the latest electronic technologies and equipment so that driving will be more comfortable and enjoyable as well as safer
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Choosing Innovation Project
Technological Innovation Strate-gies
New Automotive Electronics Technology For Customers
Driver Information System(DIS)DIS is a comprehensive information system that provides easy control of multimedia, navigation and telematics functions
Smart Cruise Control (SCC)radar to help maintain a safe distance from other vehi-cles. Thus, the device helps prevents collisions
Hologram HUD
This futuristic technology places various useful informa-tion in front of the driver on the windshield using a 3D hologram
Auto-pilot Driving
Ultimately, the goal is to create a car that can assess the traffic situation and operate without any manipulation from the driver
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Choosing Innovation Project
Technological Innovation Strate-gies
Hybrid CarHybrid Car
Hyundai introduced a new standard of green vehicles in 2009 when they begins commercial mass production of the Elantra(Avante) LPI hybrid, which runs on LPG.Hyundai started world’s first mass production of LPI hybrid electric vehicles in July 2009.
Hyundai is trying to develop fuel cell electric vehicle to accomplish zero- emission to reality. Fuel cell electric vehicles are powered by the electricity. Except water, the vehicles produce no- emissions and moreover the amount of energy is unlimited.
Fuel Cell CarFuel Cell Car
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Collaboration StrategiesTechnological Innovation Strate-gies
In March 1999, Hyundai Motors absorbed Kia Motors. By union with two rival companies, Hyundai took advantages from Kia Motors and consolidate its first position in domestic market.
- First, Hyundai established a constituency for their overseas expansion- Second, Hyundai got Kia’s high technologies - Third, Hyundai could restrain foreign companies from holding domestic market.
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Collaboration StrategiesTechnological Innovation Strate-gies
In May2008, Hyundai collaboratedwith Microsoft to develop infotainment for next generation’s car together.
Microsoft will focus on developing software platform for car and Hyundai will adopt those technologies.
They will also promote car IT venturecompanies to advance global market
In Dec 2005, Hyundai collaborated withLG telecom to start navigation ser-vice,telematics, based on cellular phone
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S W
O T
• High brand awareness• High quality• High market share• Diverse vehicle types• Customer Value Program• High technology in Green Car
SWOT AnalysisAnalysis of the Present Situation
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World Best Brand Rank 69
S<Interbrand>
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SWOT AnalysisAnalysis of the Present Situation
S W
O T
• High brand awareness• High quality• High market share• Diverse vehicle types• Customer Value Program• High technology in Green Car
• Frequent recalls• Bankruptcy of middle/small sized companies supply-ing components
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WHYUNDAI IS RECALLING 531,894 MY 2006-2007 ACCENT, ENTOURAGE, SONATA, MY 2007 AZERA, ELANTRA AND SANTA FE, MY 2005-2007 TUCSON AND MY 2007-2008 VE-RACRUZ VEHICLES. THE STOP LAMP SWITCH IN THE AFFECTED VEHICLES MAY MAL-FUNCTION. A MALFUNCTIONING STOP LAMP SWITCH MAY CAUSE THE BRAKE LIGHTS TO NOT ILLUMINATE WHEN THE BRAKE PEDAL IS DEPRESSED OR MAY CAUSE THE BRAKE LIGHTS TO REMAIN ILLUMINATED WHEN THE BRAKE PEDAL IS RELEASED. A STOP LAMP SWITCH MALFUNCTION MAY AFFECT THE OPERATION OF THE BRAKE-TRANSMISSION SHIFT INTERLOCK FEATURE SO THE TRANSMISSION SHIFTER WOULD NOT BE ABLE TO BE SHIFTED OUT OF PARK POSITION. IT MAY ALSO CAUSE THE ELECTRONIC STABILITY CONTROL (ESC) MALFUNCTION LIGHT TO ILLUMINATE, AND IT MAY NOT DEACTIVATE THE CRUISE CONTROL WHEN THE BRAKE PEDAL IS DEPRESSED.
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SWOT AnalysisAnalysis of the Present Situation
S W
O T
• High brand awareness• High quality• High market share• Diverse vehicle types• Customer Value Program• High technology in Green Car
• Frequent recalls• Bankruptcy of middle/small sized companies supply-ing components
• Solved Labor & Mngt prob-lems• Removed customs (KOR-US FTA)• Increased brand aware-ness in foreign countries• Risen demand of small cars
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OWhile Korea exports about 700,000 cars it only imports 7,000 U.S. cars. Korean car companies have about 5 percent of the U.S. auto market share.
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SWOT AnalysisAnalysis of the Present Situation
S W
O T
• High brand awareness• High quality• High market share• Diverse vehicle types• Customer Value Program• High technology in Green Car
• Frequent recalls• Bankruptcy of middle/small sized companies supply-ing components
• Solved Labor & Mngt prob-lems• Removed customs (KOR-US FTA)• Increased brand aware-ness in foreign countries• Risen demand of small cars
• Decreasing world auto-motive brand value• Low rate of R&D in Korea• Foreign cars imported in cheap prices
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Decreasing WorldAutomotive BrandValue <Interbrand>
Very difficult to found a new car company
Threat of Potential Entrants
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5 – Force Model
` There’s no competitor for Hyundai Motors in domestic car market. Hyundai Motors established their position in market quite well.
Intensity of competitive rivalry
Short Distance - Bicycle, Subway Long Distance – KTX, Airplane
Threat of Substitute Product
Price of foreign cars ↓→ Gradual in-crease in bar-gaining power of buyer
Bargaining Power of buyerLot of compo-
nent companies → Low Bargain-ing powerDeveloping new tech → High Bargaining power
Bargaining Power of sup-
plier
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Balanced Scorecard
Vision of Hyundai Mo-tors
Global orientationRespect for human values
Customer satisfactionTechnology innovation
Cultural creation
Increasing sales
amounts
Financial
Reducing the recall rate
CustomerFamiliar Busi-
ness Environment
Internal Busi-ness
Green carStrategy
InnovationLearning
If Hyundai vision succeeds, how will Hyundai differ?
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Development of
new technol-ogy
Financial
ContinuousCustomer
management
Customer
EmployeesManagement
Internal Busi-ness
Producing the hybrid car
InnovationLearning
What are the critical success factors?
What are the critical measurements?
Sales amountsof cars
Financial
Recall rate &Customer
Satisfaction
Customer
Rate of strikein a year
Internal Busi-ness
Amounts ofSold hybrid car
InnovationLearning
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Suggestion for Strategies
1. Hyundai Motor Co. should occupy US middle-classed consumers by releasing various small cars
2. Using increasing brand awareness, Hyundai Mo-tor Co. could apply pre-mium price on their hy-brid or fuel cell vehicles
1. Hyundai should have stable growth focused on domestic sales
2. Hyundai should establish policy to widen chance to select car models, devel-oping new products
1. Hyundai should supple-ment their weakness in supply network by adding additional supplying com-panies
2. Hyundai should decrease strikes and labor conflicts building stable relation-ship
1. Hyundai should quit pro-ducing unprofitable mod-els
2. Hyundai should minimize their export to unprof-itable foreign markets
O T
S
W