This document discusses Porter's value chain analysis for Hyundai and Toyota. It analyzes Hyundai's primary and secondary activities, noting the value or benefits each provides to customers, such as reduced time and cost through just-in-time logistics or improved consumer interactions. For Toyota, it analyzes Porter's five forces and generic strategies, including their use of cost leadership through efficient manufacturing and product differentiation through incremental innovations.
2. Porter’s Value Chain-Hyundai
Primary Activities Value or benefit to the customer
1.Inbound Logistics • Just In Time Approach
• Worldwide availability of raw materials
Reducing Time Cost
2.Operations • Increased production capacity
• Having separate departments for
activities like painting, welding, etc.
Product Benefit
3.Outbound Logistics • Hyundai sells vehicles in 193 countries
• They manage their own showrooms in
different countries
Reducing time and energy cost by making
the product easily accessible
4.Marketing and
sales
• Supporting diverse sport events soccer,
baseball, and tennis to cricket
• Promoting their product through road
shows
Image Benefit and also improving
consumer interactions to identify and
cater to their needs better
5.Services • Providing time and cost estimation
• Making contact within 3 business days
to ensure satisfaction.
Service Benefit
3. Secondary
Activities
Value or benefit to the customer
1.Procurement • Hyundai outsources components which are
costlier to produce in-house
• Automated purchase system
• Proper quality testing of raw materials
Product Benefit and reducing monetary
costs
2.R&D • Innovative technologies like infotainment
system, head up display, AVM system, Driver
state monitoring system, etc.
Product Benefit by providing ultimate
driving experience
3.HRM • About 120000 employees including staff and
managers, considered as human capital
• Provides training and development of human
resources to improve job performance
Personnel Benefit
4.Infrastructure • Usage of mechanisms and MIS for planning
and control in different departments
• The Chennai plant has the capacity for
producing almost 6.5 lakh units annually
Reducing Monetary Cost
4. Porter’s five force-Toyota
• Rivalry among existing competitors-High
o Presence of top players like Volkswagen, Hyundai, Honda, Ford, General Motors
o Not much differentiation between players and their products
• Bargaining power of suppliers-Low
o High availability of supply used for manufacturing Toyota’s products
o Suppliers do own the power to change the price
• Bargaining power of buyers-Moderately high
o Low switching cost for buyers
o Oligopoly market
• Threat of substitutes-Moderate
o Two wheelers
o Public transports
o Taxi services like Ola and Uber cost less
• Threat of New Entrants-Low
o High capital requirements in the automobile industry
o Toyota has established brand image and reputation
5. Porter’s generic strategy-Toyota
• Cost Leadership
o Just in Time manufacturing method to minimize waste, inventory cost, and response time
o Market based pricing to compare their vehicles with similar vehicles in the internet market
• Product Differentiation
o Toyota focuses on small incremental innovations rather than making big changes
o From hybrids and electric vehicles to fuel cell technology, a key for tomorrow’s eco driving.
For example-highlander, camry
o Automated Driving to ensure safe and smooth ride
• Focus
o Toyota believes in “Right car at the right place” and they do not focus only on a particular
market segment
o Land cruiser, Parado and Camry for high income group who have the purchasing power to
buy these cars
o Toyota Atlis Sport model and Toyota Fortuner for high income group who have a sporty
attitude
o Using different products of different prices for different market segments
6. Ansoff Matrix-Toyota
Market penetration:
• Together Green program that supports environmental initiatives
• Meal Per Hour program that donates food to Food Bank
• Toyota launches Etios motor racing in India-2012 to attract youth segment
• Sponsorship agreement with speedway for Indy racing league weekend
Market development:
• Fortuna in India in 2009, followed by the diesel Corolla and the Etios in 2010.
• In 1980, they strategized to build manufacturing plant and research to increase global
sales
• The company has sedans, trucks, SUVs, luxury vehicles, and other product lines for every
type of customer
• Overseas business from making in Japan and exporting, to producing in regions where
demand exists
• In Brazil, production of Corolla FFV began in 2007
7. Product development:
• Innovation processes-For example, through the Toyota Prius and Ravev technology
including electric and lithium battery models
• Focusing on small incremental innovations rather than making big changes
• From hybrids and electric vehicles to fuel cell technology, a key for tomorrow’s eco
driving
• Automated Driving to ensure safe and smooth ride
Diversification:
• In 1997, Toyota established its Marine Business Division and also set up a boat and sales
network
• In 1998, Toyota established the Biotechnology and Afforestation Business Department
• Toyota takes part in International Digital Communications Planning Inc. and invests in
Tokyo Telecommunication Network Co., Inc. and International Telecom Japan Inc-1986
• Toyota acquires Japan Flying Service Co., Ltd.-1988
• Toyota to launch ski boat line
Ansoff Matrix-Toyota
8. BCG Matrix-Volkswagen Group
• Stars-Volkswagen, Audi
o Extremely popular brands in Europe and US.
o Deliver innovative products to the market every year, with new model releases
o Sell most units of all VW brands
• Cash Cows-Bentley, Lamborghini
o For the high end luxury market which is fairly stagnant
o However, these high price vehicles continue to bring in millions every year
• Question Marks-SEAT(Fiat 500)
o Environmental and social factors related to it and there is a growing market for such
vehicles
• Dogs-Commercial vehicles such as vans, trucks, and passenger carriers
o Produces quality vehicles but the market is very low
9. Competition-Toyota
Competition strategies of Toyota:-
• Counter-Offensive Defense-Toyota launched the Lexus to respond to
Mercedes attack of introducing Series 190
• Market follower strategy-Toyota launched its first passenger car, the model
AA, in 1936, copying the body design of Airflow and the engine of
Chevrolet
• Flank strategy-During 1973 oil crisis Toyota came up with two fuel efficient
models, Corona and Corolla as an answer to Ford’s Model T
• Mobile defense-Market broadening by introducing Scion for young adults
and marketed it as music events
• In 2013, the company edged past General Motors to become the world’s
largest carmaker
10. Volkswagen-Segmentation
• Offers car models in Luxury, midsize and compact car segments in India
• Example-Polo(compact), Vento & Jetta(Mid-size), Beetle(Luxury)
• Volkswagen mainly focus on market segments such as SUV, sedan and hatchback
• Volkswagen also has plans for the ultra-low-cost hatchback segment in India
11. Volkswagen-Targeting and positioning
Targeting:
• Young executives, businessmen and urban families
• Phaeton launched in order to target the niche market in India
• Earlier, they had outlets in all major cities but they are now targeting semi-metro
cities like Lucknow and Bhopal to expand their target market
• Used LinkedIn’s broad reach to connect with professionals
• A series of Recommendation Ads inviting community to recommend their
favourite Volkswagen model
Positioning:
• VW has positioned itself as the safety leader also offering lower operating costs
and eco-friendly driving
• Positioned themselves as a “premium, innovative brand” and the biggest
automobile giant
• World’s first talking newspaper
