Case Study Description of HyundaiCard's Marketing Strategy
In the competitive South Korean credit card market, a review of the past decade of HyundaiCard's marketing strategies and evaluation of anticipated possible difficulties of being a market follower revealed several challenges for senior management. Despite a tremendously successful creative business model based on customer needs, innovative products and integration of online and offline customers, the company's performance had not progressed in the past seven years. HyundaiCard had difficulty relating its creative business model to the strong personas of the leading players in the credit card industry. How could HyundaiCard, a market follower, successfully position itself as a market leader? Could HyundaiCard's marketing strategy keep enhancing its competitive edge in the market? What future strategy would be best for HyundaiCard?
Swot Analysis of "HyundaiCard's Marketing Strategy" written by Chan Soo Park, Ronald D. Camp includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hyundaicard Hyundaicard's facing as an external strategic factors. Some of the topics covered in HyundaiCard's Marketing Strategy case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the HyundaiCard's Marketing Strategy casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, technology disruption, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, wage bills are increasing,
increasing energy prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of HyundaiCard's Marketing Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in HyundaiCard's Marketing Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hyundaicard Hyundaicard's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hyundaicard Hyundaicard's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of HyundaiCard's Marketing Strategy can be done for the following purposes –
1. Strategic planning using facts provided in HyundaiCard's Marketing Strategy case study
2. Improving business portfolio management of Hyundaicard Hyundaicard's
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hyundaicard Hyundaicard's
Strengths HyundaiCard's Marketing Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hyundaicard Hyundaicard's in HyundaiCard's Marketing Strategy Harvard Business Review case study are -
High brand equity
– Hyundaicard Hyundaicard's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hyundaicard Hyundaicard's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Hyundaicard Hyundaicard's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Chan Soo Park, Ronald D. Camp can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Hyundaicard Hyundaicard's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study HyundaiCard's Marketing Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Hyundaicard Hyundaicard's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hyundaicard Hyundaicard's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Sales & Marketing industry
– HyundaiCard's Marketing Strategy firm has clearly differentiated products in the market place. This has enabled Hyundaicard Hyundaicard's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Hyundaicard Hyundaicard's to invest into research and development (R&D) and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Hyundaicard Hyundaicard's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hyundaicard Hyundaicard's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Hyundaicard Hyundaicard's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in HyundaiCard's Marketing Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Hyundaicard Hyundaicard's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Hyundaicard Hyundaicard's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Hyundaicard Hyundaicard's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Hyundaicard Hyundaicard's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in HyundaiCard's Marketing Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Hyundaicard Hyundaicard's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– Hyundaicard Hyundaicard's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hyundaicard Hyundaicard's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses HyundaiCard's Marketing Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of HyundaiCard's Marketing Strategy are -
No frontier risks strategy
– After analyzing the HBR case study HyundaiCard's Marketing Strategy, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study HyundaiCard's Marketing Strategy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hyundaicard Hyundaicard's 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Hyundaicard Hyundaicard's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hyundaicard Hyundaicard's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study HyundaiCard's Marketing Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Hyundaicard Hyundaicard's, firm in the HBR case study HyundaiCard's Marketing Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Hyundaicard Hyundaicard's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study HyundaiCard's Marketing Strategy, in the dynamic environment Hyundaicard Hyundaicard's has struggled to respond to the nimble upstart competition. Hyundaicard Hyundaicard's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study HyundaiCard's Marketing Strategy, it seems that the employees of Hyundaicard Hyundaicard's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Hyundaicard Hyundaicard's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the HyundaiCard's Marketing Strategy HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Hyundaicard Hyundaicard's has relatively successful track record of launching new products.
Need for greater diversity
– Hyundaicard Hyundaicard's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities HyundaiCard's Marketing Strategy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study HyundaiCard's Marketing Strategy are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hyundaicard Hyundaicard's can use these opportunities to build new business models that can help the communities that Hyundaicard Hyundaicard's operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hyundaicard Hyundaicard's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Hyundaicard Hyundaicard's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hyundaicard Hyundaicard's in the consumer business. Now Hyundaicard Hyundaicard's can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hyundaicard Hyundaicard's is facing challenges because of the dominance of functional experts in the organization. HyundaiCard's Marketing Strategy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Hyundaicard Hyundaicard's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Developing new processes and practices
– Hyundaicard Hyundaicard's can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Hyundaicard Hyundaicard's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hyundaicard Hyundaicard's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hyundaicard Hyundaicard's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hyundaicard Hyundaicard's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Loyalty marketing
– Hyundaicard Hyundaicard's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Leveraging digital technologies
– Hyundaicard Hyundaicard's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Hyundaicard Hyundaicard's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats HyundaiCard's Marketing Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study HyundaiCard's Marketing Strategy are -
Stagnating economy with rate increase
– Hyundaicard Hyundaicard's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hyundaicard Hyundaicard's in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Hyundaicard Hyundaicard's in the Sales & Marketing sector and impact the bottomline of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Hyundaicard Hyundaicard's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Hyundaicard Hyundaicard's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Hyundaicard Hyundaicard's can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Consumer confidence and its impact on Hyundaicard Hyundaicard's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Hyundaicard Hyundaicard's is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Hyundaicard Hyundaicard's.
High dependence on third party suppliers
– Hyundaicard Hyundaicard's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Hyundaicard Hyundaicard's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Hyundaicard Hyundaicard's.
Technology acceleration in Forth Industrial Revolution
– Hyundaicard Hyundaicard's has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Hyundaicard Hyundaicard's needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hyundaicard Hyundaicard's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of HyundaiCard's Marketing Strategy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study HyundaiCard's Marketing Strategy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study HyundaiCard's Marketing Strategy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study HyundaiCard's Marketing Strategy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of HyundaiCard's Marketing Strategy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Hyundaicard Hyundaicard's needs to make to build a sustainable competitive advantage.
