Hyundai is launching the new Genesis model to target the premium car market and move away from its past strategy of focusing on low cost. To gain a competitive advantage, firms can pursue either a low cost strategy, differentiation strategy, or focused strategy. Michael Porter's model outlines how firms can analyze their value chain activities to lower relative costs or create unique differentiation to deliver extra value for customers.

1. Competitive AdvantageG2Subject : Global FirmProf. : Tae Koo KangG2 : Koo min-woo(200510085) Song Eun-gwon(200510227) Kim Jun-won(62338) Jang Seo-young

2. Opening CaseIn 2007, Hyundai motor company has put a new car on markets. The new car is “GENESIS” Genesis’ main consumer target is high-income grade. The reason of launching Genesis is that Hyundai motor will be target a high-grade car market over the world. Until 1990s, Hyundai was treated “ Cheep price, suitable quality “ In US car market.But, Global car market is more and more intense. So, Hyundai do not survive existing cost-leadership strategy.

3. Opening CaseIn 2007, Hyundai motors has launching High-Class Premium Car “GENESIS” The Means of GENESIS is that Hyundai will be concentrate the premium car market and Differentiation is new strategy on Hyundai.

4. Contents

5. What is the Competitive Advantage?Competitive Advantage meansSomething that places a company or a person above the competition

6. What is the Competitive Advantage?The company will be able to apply to strong pointWithout being what does not evaluate a property and the ability which the company possessesCompetition company comparison will lead and the strong point which is relative could be grasped.The strategy which sees from viewpoint of competitive advantageContinuous a competitive advantage reinforcement and competitive advantage endeavors not to disappear

7. What is the Competitive Advantage?The reason of enterprise have a competitive advantageResource/Performance1. Customer satisfaction and loyalty increase, Increase of profit, Increase of market share-> bring market perfomance2. The product offering which is value in the market-> competitive advantage offering valuable product and service 3. various size and scope and profitability of company ->The competitive advantage makes the base will be able to expand the enterprise which is various.

8. What is the Competitive Advantage?Competitive Advantage Cycle. Step 1. Source of Competitive Advantage Superior assets Super Capabilities Key Success Factor Step 2. Barriers to Imitation higher the barrier to entry to company When the new business opportunity coming from the Market which enters first mover advantage barriers to imitation

9. What is the Competitive Advantage?Step 3. Value proposal form of competitive advantage Operational Excellence Product Leadership Customer Intimacy Step 4.Eencroachment prevents of competitive advantage New competitive advantage position construction effort encroachment prevents of competitive advantage Reinvestment of profit asset and capability accumulation resource strengthen of competitive advantage

10. What is the Competitive Advantage?Cost advantageSimilar productAt lower costCompetitive AdvantageHigher priceFor unique productDifferentiationAdvantage

11. What is the Competitive Advantage?A Model of Competitive advantageResourcesCost advantageOrDifferentiation advantageDistinctiveCompetenciesValueCreationCapabilities

12. What is the Competitive Advantage?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

13. What is the Competitive Advantage?Main aspects of five forces analysis

14. What is the Competitive Advantage?Competitive advantage strategies

15. What is the Competitive Advantage?Cost Leadership (Low Cost Strategy) cost Leadership mean that produce goods level of equal more in expensive2. differentiation (Differentiation Strategy) Differentiation is that provide inventive value can improve of perceive valued of consumers toward product(or service) in the market.3. Focus Cost Leadership / Differentiation: When competition's range is narrow, in other words when target on specific customer segment will be focused cheap price and differentiation strategy.

16. 2. Sorce of Global Competitive Advantage

17. 2. Sorce of Global Competitive AdvantageAdapting to Local Market DifferencesCompanies must respond to the inevitable heterogeneity they will encounter in these markets. Differences in language, culture, income levels, customer preferences, and distribution systems.

18. 2. Sorce of Global Competitive Advantage(a) Increased market share.(b) Improved price realization.Offering standard products and services across countries reduces the boundaries of the served market to only those customers whose needs are uniform across countries.- Tailoring products and services to the preferences of local customers enhances the value delivered to them.- A portion of this increased value should translate into higher price realization for the firm

19. 2. Sorce of Global Competitive Advantage© Neutralizing local competitors.One of the natural advantages enjoyed by most local competitors stems from their deep understanding of and single-minded responsiveness to the needs of the local market.

20. 2. Sorce of Global Competitive AdvantageExploiting Economies of Global Scale Building a global presence automatically expands a company's scale of operations, giving it larger revenues and a larger asset base.Potential benefits of economies of scale in various ways: spreading fixed costs, reducing capital and operating costs, pooling purchasing power, and creating critical mass.

21. 2. Sorce of Global Competitive Advantage

22. 2. Sorce of Global Competitive AdvantageExploiting Economies of Global Scope Global scope refers to the multiplicity of regions and countries in which a company markets its products and services.

23. 2. Sorce of Global Competitive AdvantageTapping the Optimal Locations for Activities and resources A firm that can exploit these intercountry differences better than its competitors has the potential to create significant proprietary advantage

24. 2. Sorce of Global Competitive AdvantageMaximizing Knowledge Transfer Across Locations (a) Faster product and process innovation.(b) Lower cost innovation.- A second by-product of not reinventing the wheel is considerable savings in the costs of innovation.(c) Reduced risk of competitive preemption.- A global company that demands constant innovations from its subsidiaries, but does not leverage these innovations effectively across subsidiaries, risks becoming a fount of new ideas for competitors.

25. 3. Competitive Advantage By PorterHow a firm can actuallycreate and sustain a competitive advantagein its industry?

26. 3. Competitive Advantage By PorterCompetitive Advantage Definition“Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value.” -- Michael Porter

27. 3. Competitive Advantage By PorterTwo Basic TypesBoth can be more broadly approached or narrow, which results in the third viable competitive strategy

28. 3. Competitive Advantage By PorterApproach 1 to Competitive advantage: Cost leadership A firm sets out to become the low cost producer in its industry.

29. 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.

30. Note: if more than one company aim for cost leadership, usually this is disastrous.

31. Often achieved by economies of scale

32. Examples of Cost Leadership: Nisson; Tesco; Dell3. Competitive Advantage By PorterApproach 1 to Competitive advantage: Cost leadershipSteps in Strategic Cost AnalysisSTEP1. Identify the appropriate value chain and assign costs and assets to it.STEP2. Diagnose the cost drivers of each value activity and how they interact.STEP3. Identify competitor value chains, and determine the relative cost of competitors and the sources of cost differences.STEP4. Develop a strategy to lower relative cost position through controlling cost drivers or reconfiguring the value chain and/or downstream value.