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STRATEGIC
MANAGEMENT
Individual Assignment
Given By: Praveen R. Kshirsagar
Prepared By:
Vishnuvardhan Krishnakumar
21020141243 (44343)
ABOUT THE
COMPANY & ITS
OFFERINGS
1
ABOUT KIA & ITS
CULTURE
Agile: a bold attempt, quick execution
Flexible: creative approach, challenging thinking
Horizintal: inclusive communication, borderless collaboration
KIA Motors India Private Limited is a company that manufactures and
distributes automobiles to customers in India. Sedans, sports utility vehicles,
hatchbacks, and mini vans make the companies product categories.
Culture
To implement Kia's vision of "Movement that inspires," they have developed
a flexible and horizontal organizational culture that encourages movement.
Based on its new brand purpose, which was announced in 2021, Kia is
working to radically alter the way the company thinks and behaves. They
share inspiration with coworkers, clients, and the rest of the world through
Kia's inspiring culture. To adopt the Inspiring Culture, Kia is moving forward
with fundamental company-wide improvements to become "Agile, Flexible,
Horizontal."
Culture Survey
(Units: points)
*Score changes show the changes in positive response rates from the previous year (positive answer
results)
2
MISSION, VISION
STATEMENT
Mission
"Building a new future and realizing humanity's dreams by thinking creatively
and tackling challenges head on"
In order to align their employees with the company's mission, their
management philosophy encapsulates the three key phrases: full
accountability, realizing potential, & practicing humanity.
Vision
"Providing a new space that makes life more convenient and enjoyable by
realizing superlative mobility based on innovative people-oriented, eco-
friendly technologies and comprehensive services"
With their innovative products and dynamic designs that are inspired by
India, Kia entered the country with a desire to win the hearts of the youthful
automobile consumers. They stunned the Indian automobile customers and
transformed the Indian automotive market with their #BadassByDesign
Seltos, #ExtravagantByDesign Carnvial, and #WildByDesign Sonet. They built
the foundation for a new manufacturing facility in the Anantapur District of
Andhra Pradesh in April 2017, investing $2 billion in it with the intention of
producing about 300,000 units annually.
Values
3
Customer First
Challenge Yourself
Collaborate
People Focused
Globality
PRODUCT
SEGMENTS
Sedans, sports utility vehicles, hatchbacks, and mini vans make the
companies product categories. But in India, they have 3 major product
segments as shown in the table below:
The SP2i version of the Seltos and the compact SUV Sonet are two vehicles
that Kia India produces that were created especially for the Indian market.
Segment Model
Launch Year
(In India)
SUV/Crossover
Seltos 2019
Sonet 2020
MPV
Carnival 2020
Carens 2022
EV EV6 2022
4
COMPANY
PERFORMANCE
5
6
They actively responded to customer demand by producing 26.64 million
vehicles, up 6.4% from the year before thanks to flexible production
management, and they sold 314,764 EVs, up 50% from the year before,
laying the groundwork for a leading electrification brand.
Kia elevated its standing in 2021 as a result of praise for the high caliber
of its models' products. For the first time by a Korean automaker, the EV6
was named the "2022 European Car of the Year," and at the "2021 Good
Design Awards," the EV6 and Carnival received recognition in the
Transport Design category.
The base effect helped the worldwide automotive demand in 2021 reach 78.7
million units, an increase of 8% from the year before despite the erratic
semiconductor supply throughout the year. By selling 2.78 million units at
wholesale and 2.96 million units at retail, Kia attained a market share of 3.8%
worldwide. Thanks to the successful introduction of new models like the K8,
Sportage, and EV6, as well as the robust sales of important models like the
Telluride, Sorento, and Carnival, Kia in particular increased its market share
in important markets like Korea, the United States, and Europe.
The following are some of Kia's major accomplishments in 2021:
KIA'S RECENT
NUMBERS
EXTERNAL
ENVIRONMENT
ANALYSIS
7
PORTER'S FORCES
8
1. Threat of a New Entrant (Low)
Kia Motors is one of the top automakers with a significant global presence.
The automobile markets, where Kia Motors is currently active, requires
significant capital investment to enter. To develop new and intriguing
features that can draw clients, a significant expenditure in research and
development is necessary in addition to the price of the raw materials.
Customers want to purchase updated and new models because there are
highly differentiating products on the market. As a result, the new business
must first struggle to build up operations before figuring out and meeting
client expectations. The economies of scale are a significant advantage that
Kia Motors is now utilizing. Before the business may introduce its product to
the market, numerous legal criteria must be satisfied and permits must be
obtained, in addition to the associated costs. Additionally, the cost of
advertising is significant, and clients typically anticipate not just the goods
but also the after-sale services. Since it is difficult for any new business to
enter the market due to all of these considerations, there is no threat from
new competitors.
2. Threat of Substitutes (Low)
There are a wide range of 4-wheelers on the market, and any of them may be
a replacement for Kia Motor's goods, but Kia has endeavored to establish a
market presence and a name by offering an equally effective car at a
significantly lower cost. They have competition from other brands, including
Honda, Hyundai, Suzuki, and others, but the business has built a reputation in
the marketplace and customers look forward to their products. There is
always the option to replace their products with more expensive cars, but
the majority of their customers are highly unlikely to do that. The products
are very differentiated, and consumers are aware of the advantages of
purchasing from Kia Motors. As customers wanting to buy Kia vehicles prefer
convenience, other substitutes like 2-wheelers and public transport do not
count. The threat of substitutes is hence low for Kia.
PORTER'S FORCES
9
3. Bargaining Power of Customers (Low)
First off, there are other possibilities on the market, but the buyer's options
are constrained due to the fact that the goods or services they offer vary at
every level. Market competition for prices is fierce for Kia Motors. Price is a
significant element in the vehicle market as well, and because the buyer has
restricted income, the purchasing alternatives are similarly constrained.
Because the buyer is buying something expensive, they take their time
making a decision and occasionally find a superior option at a lower price.
Due to the complexity of the product, there are also very few opportunities
for backward integration on the part of the customer. All these variables
indicate that suppliers' bargaining power is on the lower end, but that
doesn't mean the business shouldn't pay attention to its consumers and
change to meet their needs. Even with few options, clients have little to no
switching costs and are likely to be willing to pay a little bit more for superior
services.
4. Bargaining Power of Suppliers (Low)
The alternatives available to Kia Motors to swap suppliers are good because
there are many suppliers in this business and the majority of them sell the
same type of base product to all these vehicle companies. The suppliers
must abide by company policies and processes because switching is
inexpensive and the business cannot afford to purchase low-quality goods.
Suppliers' ability to negotiate is further weakened by the lack of any
alternate uses for the commodity they are offering. These variables
collectively show that suppliers have poor bargaining power. Additionally,
they have virtually little possibility of forward integration, so working with a
big corporation like Kia Motors not only helps them stay in business in this
cutthroat industry, but it also gives them an advantage over rival suppliers.
5. Competitive Rivalry (High)
In the market Kia competes in, there aren't many rivals, yet the majority of
them own a considerable portion of the market. Since they are all major
players, their level of competition is at least equal. Due to the low switching
costs, the substantial product differentiation does little to significantly
reduce competition. Due to rising disposable income and the desire to raise
one's standard of living, this market has been expanding at a constant rate.
This indicates that there won't be as much competition for market share,
but everyone will still endeavour to win over new clients. Marketing
PORTER'S FORCES
10
strategies and after-sale services have a significant impact, and all
businesses make an effort to meet client expectations. Due to the high exit
barriers, businesses that are experiencing losses attempt to form
partnerships with other businesses so that they can share research and
benefit from one another's findings rather than closing down. All of these
indications point to intense industry competition, and Kia must be vigilant to
get an advantage over its rivals.
PESTEL ANALYSIS
11
Looking at the leading forces that can shape the future of Kia Motors
including Political, Economic, Social, Technological, Environmental and Legal
forces, will help us understand the company better:
Political
In the world of multinational commerce, political concerns are becoming
more important. Businesses must exercise caution when it comes to local
political climate, government control and influence over business in the
markets in which they operate. For instance, the political climate of a market
has a direct impact on the vehicle supply chain and sales in that country.
Sales of automobiles in a particular market are also impacted by
governmental policies and laws pertaining to the automotive sector.
For instance, while Kia has enjoyed greater success in the Indian and US
markets, its sales in China have continued to decline. Comparatively
speaking to other markets, the political climate and market structure in
China are significantly more complicated. In China, Kia has teamed with a
regional company to produce and sell Kia vehicles there. But even though
China is the biggest auto market worldwide, Kia's sales and market share
there have been declining since 2014. Only 1.3% of the Chinese market is now
occupied by it.
Local enterprises are mostly supported by the Chinese government and its
policies. Businesses can access the market through local partnerships, but
there are still challenges because of the convoluted political and tax system.
As a result, local automakers have a better chance of succeeding in the
Chinese market than foreign automakers. Sales of automobiles by Kia
Motors increased more quickly in India and the US than in China.
The success of big, global companies in a given market is greatly influenced
by political issues. The country's tax system and trade relations, for instance,
may have an impact on car sales in that market. Additionally aggravating the
situation and making it challenging for foreign vehicle makers, particularly
American ones, to compete against domestic brands are the trade disputes
between the US and China.
Economic
The performance of auto brands in international markets is partly influenced
by economic reasons. The volume of economic activity and market stability
in the local and worldwide marketplaces affect auto sales. The world
economy was in good health before the pandemic, but all the main markets
PESTEL ANALYSIS
12
have since suffered significantly. Even China, the world's largest auto
market, suffered severe losses. Nevertheless, compared to other markets, it
rebounded more quickly. The US and a number of European nations were
among the other markets where car sales were severely hampered.
Sales of automobiles decreased by almost 20% worldwide. The majority of
automakers—including some of the biggest, like VW, Toyota, and GM—saw a
significant fall in sales and revenue, primarily as a result of the economy.
Despite the pandemic, Kia and its parent company Hyundai managed to post
strong sales. The two businesses' stable revenues were mostly attributable
to their significant investment in R&D while simultaneously expanding and
improving the range of their product offerings. If the global economy had
been more stable, their performance might have been even better.
Millions of individuals worldwide lost their employment as a result of the
pandemic and the subsequent recession. Car brands saw a fall in sales as
people shunned any non-essential purchases as the unemployment rate
rose in major countries like the US, China, India, and several European
markets. Sales are anticipated to increase more quickly in 2021 as the global
economy recovers and moves past the pandemic's effects.
Companies see an increase in sales and revenue when the global economy is
doing well and there is a high level of employment in key areas. On the other
hand, sales of automotive brands may be the first to suffer greatly if
unemployment rates are high and the economy is experiencing decreased
activity. In this approach, the future of car companies like Kia Motors is
greatly influenced by economic issues. Kia has however maintained growth
despite the poor economic climate, mostly as a result of its emphasis on
innovation and the customer experience. The industry is very competitive,
and once the markets recover and consumer confidence returns to high
levels, businesses like Kia may be able to increase sales and boost income.
Due to the magnitude of the impact that economic conditions may have on
the sales of autos, these companies take them into account when
developing market-specific strategies. Lower sales may result from the
introduction of more expensive models in a market where economic activity
is weak.
Sociocultural
Sociocultural aspects are also quite important when it comes to the
automotive industry. Global social and cultural shifts may directly affect the
auto industry and affect whether certain car models sell more or fewer units.
PESTEL ANALYSIS
13
Global demographic shifts have caused a number of changes, some of which
have an impact on the auto industry.
The millennial generation is drawn to cutting-edge designs. It seeks
automotive types that are simple to suit into its highly digitalized lifestyle.
This generation's taste and preferences are different from those of the
generations before it. Because the current generation is more interested in
SUVs, SUV sales have increased in recent years.
The automobile business has been impacted by like other sociocultural
developments. For instance, the millennial generation is more enthusiastic
about environmentally friendly vehicles. As a result, businesses are now
placing a strong emphasis on creating electric and hybrid vehicles that have
no or minimal environmental impact.
When marketing to specialized audiences across various cultures and
societies, automotive manufacturers must also take sociocultural
considerations into consideration. When promoting their products across
diverse geographic regions, they may need to adopt distinct marketing
strategies, mostly because of the social and cultural variations. For instance,
the corporation might not be able to succeed in the Chinese, Indian, or
Japanese markets using a few strategies that have proven successful in the
US and Canadian markets. The SP2i version of the Seltos and the compact
SUV Sonet are two vehicles that Kia India produces that were created
especially for the Indian market.
Technology
In the twenty-first century, technology has continued to be the primary
force behind progress in the automotive sector. There is intense
competition in the auto sector. On the international market, Kia Motors is up
against a number of rivals, including GM, Toyota, Ford, and many others.
However, Kia's emphasis on technical innovation has been the key driver in
helping it establish itself as the brand for the public and see faster growth
globally. Automobile businesses already find it difficult to set their products
apart from others due to the fierce competition in the sector. Customers
seek exceptional performance, passenger safety, and digital technologies
that enhance the appeal of automobiles in addition to product quality and
design. Innovative items are appealing to millennial consumers. Hence it is
vital for companies to focus on tech-innovation.
The need for electric vehicles has grown over time. In order to address the
rising global demand for electric vehicles, Kia will invest in developing its
PESTEL ANALYSIS
14
line-up of electric vehicles over the coming years. In addition, the
corporation is making investments in other technologies, such as driverless
driving. Autonomous driving technology in automobiles is also becoming
more and more common. While it will be a while before completely
autonomous vehicles are used on public roads around the world, Kia
anticipates developing fully automated driving technology by 2030. It plans
to introduce new vehicle types with autonomous technologies in 2021.
In a highly competitive market, technology has emerged as the key
difference for automotive brands. As a result, they now place more
emphasis on research and development. Companies are spending money to
produce safer, more environmentally friendly, or fuel-efficient car models.
Since technology will be the primary differentiator and driver of automobile
sales in the future, the emphasis on technology in the automotive sector will
only increase over time as competition increases. In order to produce
cutting-edge vehicles that outperform the competition in terms of fuel
efficiency, environmental effect, design, and passenger safety, Kia and
Hyundai are investing in research and development and developing a
number of new technologies together. Tech-innovation is going to drive the
future of mobility sector more and more.
Environmental
The successful operation of vehicle brands depends on environmental
elements as well. To keep up their growth momentum and avoid falling
behind other companies, businesses in this area must place just as much
emphasis on sustainability as they do on other variables. In addition,
governments all over the world have created legislation that support the
development of electric vehicle manufacturers. The epidemic has increased
awareness of environmental issues and sustainability significantly.
Nowadays, people are more likely to choose electric vehicles, eco-friendly
vehicles, or vehicles with minimal emissions.
As a result, automakers must intensify their efforts to produce
environmentally friendly vehicles (electric cars and hybrids). Governments
have enacted strict pollution regulations, and any infractions can result in
financial losses for car companies like Kia Motors. Kia is constantly
attempting to improve its standing in the European markets. However, the
EU has also strengthened laws pertaining to emissions. To be a sustainable
brand, Kia has always prioritized developing automobiles with low emissions
in addition to innovations that improve fuel efficiency.
PESTEL ANALYSIS
15
Numerous advantages of sustainability exist. Businesses that put more of an
emphasis on sustainability have better market brand recognition. Kia has
continued to place a strong emphasis on sustainability, and by projecting a
clean, ethical image, the corporation has benefited greatly in the long run.
The business has made great strides in becoming a highly sustainable
business.
Legal
Automobile brands must also take legal considerations into account. All
automotive brands must comply since failure to do so could result in hefty
fines for the businesses involved. Government and judicial authorities have
increased control and monitoring of the auto industry. Automobile
manufacturers cannot afford to lose sight of regulations and compliance
because doing so will harm their bottom line and drive up operational costs.
Additionally, it will damage a company's reputation.
The players in the automotive industry must abide by a number of laws.
There is a complicated network of laws that the vehicle brands must abide
by, from labor to product quality, passenger safety, and supply chain.
Additionally, these rules may differ from one market to another and one
nation to another. Therefore, the organizations must develop internal
policies and business strategies for each market based on the legal
framework of the local market and local legislation. All of the top automakers
with international operations have established policies requiring that their
employees and suppliers abide by all local regulations.
Kia continues to place a strong emphasis on ethical management of its
business operations in addition to legal compliance. While simultaneously
continuing to abide by all local rules in each area where it operates, the
company has expanded its business overseas.
INTERNAL
ENVIRONMENT
ANALYSIS
16
VRIO
17
The financial resources of Kia Motors are extremely useful since they
support investing in new prospects that occur outside of the company.
These aid Kia Motors in fending off dangers from without.
Due to the fact that their products are so differentiated, its local product
designs are a precious resource. Customers therefore believe these to be
of high value. Due to the uniqueness of these products, people value
them higher than the competition.
The staff of Kia Motors is a crucial asset to the company. A sizable
fraction of the personnel has received advanced training, which boosts
the organization's output productivity. Additionally, the workforce is
devoted, and the company enjoys strong employee retention rates. All of
this adds to the value of Kia Motors' products for the final customers.
Its patents are a crucial asset since they let the company sell its products
free from competition. As a result, Kia Motors earns more money. When
Kia Motors licenses these patents to other manufacturers, it also
receives licensing income.
The distribution network of Kia Motors is a useful asset. This enables it to
connect with an increasing number of clients. This guarantees more sales
for Kia Motors. Additionally, because the products are readily available, it
ensures that promotional efforts result in sales.
Its pricing structure is not a useful asset. This is because the production
processes result in higher costs than those of the competition, which has
an impact on the firm's overall earnings.
The research and development department at Kia Motors is not a useful
asset. This is because the costs of research and development outweigh
the advantages that innovation brings. In the last few years, there haven't
been many groundbreaking items or unique features. Research and
development therefore give Kia Motors a competitive disadvantage. It is
advised that the research and development teams be strengthened and
that their expenses be reduced.
With VRIO Analysis of Kia Motors we will look at each of its internal resources
to classify them into Valuable, Rare, Imitable & Organizational resource and
assess whether these provide them with a sustainable competitive
advantage.
Valuable
Positives
Negatives
VRIO
18
Only a small number of businesses in the sector have substantial financial
resources. Hence this is a rare resource, that Kia Motors posesses
A valuable resource for Kia Motors is its workforce. Unlike employees at
other companies, these workers have extensive training and expertise.
These workers are less likely to depart for other companies because of
the higher pay and working conditions. Hence, Kia's workforce is a rare
resource
The patents held by Kia Motors are a rare asset. These patents are hard
to come by and are not held by rivals. As a result, Kia Motors can use
them unhindered by rival companies.
Kia Motors' distribution network is a scarce resource. This is due to the
fact that it would take a lot of money and effort for rivals to develop a
distribution network that is superior to Kia Motors'. Very few businesses
in the sector also have these.
In the market, distinctive products are not uncommon. As a result, Kia
Motors can compete on an equal footing with the others. This could
become a competitive advantage if innovation happens more quickly and
with agility.
Rare
Positives
Neutral
VRIO
19
It is expensive to replicate Kia Motors' financial capabilities. The
corporation has amassed these resources throughout the years through
consistent profitability. For competitors and new entrants to amass huge
sums of money, they would need to generate comparable earnings over a
protracted period of time.
Its patents are extremely challenging to copy. This is due to the fact that
copying a patented product is illegal. The process of creating
comparable resources and obtaining a patent for them is similarly
expensive.
It would be exceedingly expensive for competitors to copy the
company's distribution network. Kia Motors has increasingly developed
this over the years. If competitors want to copy a comparable
distribution method, they would need to invest a lot of money.
Imitating differentiated products doesn't cost that much money. If
competitors spend a lot of money on research and development, they
can also acquire these. Additionally, these do not call for years of
experience.
The company's personnel are also not difficult to replicate. This is due to
the fact that other businesses can train their employees to increase their
skills. These businesses can attract Kia Motors employees by presenting
them with greater pay, benefits, and employment prospects. As a result,
Kia Motors' staff is a resource that offers a short-term competitive
advantage. These may eventually be acquired by the competition.
Inimitable
Positives
Neutral
VRIO
20
The financial resources are strategically employed to make the proper
investments, take advantage of opportunities, and counter threats. As a
result, these resources enable Kia Motors to maintain a competitive
advantage.
By making sure that goods are offered at all of its stores, Kia Motors uses
this distribution network to connect with its customers. As a result, these
resources enable Kia Motors to maintain a competitive advantage.
The company's patents are not adequately organized. This indicates that
the organization is not making the most of these patents. If Kia Motors
starts selling patented products before the patents expire, an untapped
competitive advantage could be transformed into a long-lasting
competitive advantage.
Financial Resources
Distribution Network
Employees & Workforce
The Patents (untapped source of sustainable competitive advantage)
Differentiated Products
Cost Structure
R&D
Organizational
Positives
Neutral
Summary
Sustainable Competitive Advantage:
Temporary Competitive Advantage:
Competitive Parity:
Competitive Disadvantage:
VALUE CHAIN
ANALYSIS
21
PORTERS VALUE
CHAIN ANALYSIS
22
Primary Activities
Inbound Logistics
Building trusting connections with suppliers is crucial since they provide the
assistance needed to acquire, store, and distribute the product. Without
looking at in-bound logistics, Kia Motors may run into a number of problems
during the product development process. An organisation must analyse all
facets of transformation, from raw materials to completed goods, when
doing in-bound logistics analysis. Retrieving raw materials, keeping the
inputs, and internally dispersing the raw materials and components to begin
production are some instances of inbound logistics.
Operations
When raw materials are delivered and Kia Motors is prepared to turn them
into finished goods and market them, the significance of analysing
operational activities increases. Machine work, packing, assembling, and
testing are a few instances of operational activities. This includes servicing
and maintaining equipment as well.
Both manufacturing and service operations are included. To increase
productivity, maximise efficiency, and ensure Kia Motors' competitive
performance, operational activity analysis is crucial. Kia Motors may be able
to generate constant economic growth, boost profitability, and create a
strong competitive edge with the support of the increased productivity.
Outbound Logistics
The operations involved in delivering a product to a client after going
through various middlemen are referred to as outbound logistics. Material
handling, warehousing, planning, order processing, transportation, and
delivery to the destination are some examples of outbound logistics
activities. In order to uncover sources of competitive advantage and meet
its goals for company expansion, Kia Motors can analyze and optimize
outbound logistics.
Because customers are more satisfied and there are more prospects for the
company to grow when outbound activities are timely managed with optimal
PORTERS VALUE
CHAIN ANALYSIS
23
prices and minimal negative effects on product quality. When Kia Motors is
offering perishable goods that must be delivered quickly to the end user, it
should give its outbound value chain activities special attention.
Marketing and Sales
In order to convince clients that its offering is superior than that of rivals, Kia
Motors will now emphasize the advantages and points of differentiation of
the items supplied. Until Kia Motors makes an investment in its marketing
and sales efforts, delivering a high-quality product with competitive prices
and unique features won't generate value. Here, sales representatives and
marketers are crucial. The sales force, advertising, promotional activities,
pricing, channel selection, quoting, and fostering relationships with channel
participants are a few examples of Kia Motors' marketing and sales activities.
The business can organize its marketing and sales activities using the
marketing funnel strategy. Depending on the corporate goals, brand image,
competitive dynamics, and present market conditions of Kia Motors,
marketing tactics can either be push or pull in nature. Effective and carefully
considered integrated marketing initiatives may strengthen Kia Motors'
brand equity and make it stand out from the competitors. However, Kia
Motors must refrain from making erroneous promises about product
features that the production team cannot provide. It suggests that
coordination between various value chain operations is necessary.
Services
The pre- and post-sale services provided by Kia Motors will be crucial in
fostering repeat business. Post-sale services are just as crucial to today's
consumers as marketing and promotional efforts. In the modern,
technologically enabled world, the influence of bad e-WOM brought on by
subpar support services cannot be understated. In order to protect the
reputation of the brand and to promote positive word-of-mouth through
prompt, effective, and timely support services, the company must analyse
its support activities.
PORTERS VALUE
CHAIN ANALYSIS
24
Secondary Activities
Firm Infrastructure
The infrastructure of the company refers to a variety of tasks, including
quality control, resolving legal issues, accounting, financing, planning, and
strategic management. Kia Motors may be able to maximize the value of the
entire value chain with the help of effective infrastructure management. Kia
Motors can manage infrastructure expenditures, also known as overhead
expenses, to improve its competitive positioning in the market.
Human Resource Management
When raw materials are delivered and Kia Motors is prepared to turn them
into finished goods and market them, the significance of analyzing
operational activities increases. Machine work, packing, assembling, and
testing are a few instances of operational activities. This includes servicing
and maintaining equipment as well.
Both manufacturing and service operations are included. To increase
productivity, maximize efficiency, and ensure Kia Motors' competitive
performance, operational activity analysis is crucial. Kia Motors may be able
to generate constant economic growth, boost profitability, and create a
strong competitive edge with the support of the increased productivity.
Technology Development
Nearly all value chain activities rely on technology support in today's
modern, technologically evolved society. Kia Motors must acknowledge the
significance of technology development given the technological integration
in the company's activities related to production, distribution, marketing,
and human resources. It can be broken down into technological
development activities for products and processes. Examples include
automation software, customer service assisted by technology, product
design research, and data analytics. This category includes Kia Motors'
research and development division.
PORTERS VALUE
CHAIN ANALYSIS
25
Procurement
The activities involved in acquiring the inputs, which can include machinery,
supplies, raw materials, equipment, and other items required for making the
finished product, are referred to as procurement in the value chain. Kia
Motors should carefully analyze its procurement efforts to optimize the
inbound, operational, and outgoing value chain given its linkage with
numerous value chain activities.
SUPPORTING
DATA
26
FINANCIALS
27
KIA'S NUMBERS
28
KIA'S NUMBERS
29
KIA'S NUMBERS
30
KIA'S NUMBERS
31

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44343_KIA_Original.pdf

  • 1. STRATEGIC MANAGEMENT Individual Assignment Given By: Praveen R. Kshirsagar Prepared By: Vishnuvardhan Krishnakumar 21020141243 (44343)
  • 2. ABOUT THE COMPANY & ITS OFFERINGS 1
  • 3. ABOUT KIA & ITS CULTURE Agile: a bold attempt, quick execution Flexible: creative approach, challenging thinking Horizintal: inclusive communication, borderless collaboration KIA Motors India Private Limited is a company that manufactures and distributes automobiles to customers in India. Sedans, sports utility vehicles, hatchbacks, and mini vans make the companies product categories. Culture To implement Kia's vision of "Movement that inspires," they have developed a flexible and horizontal organizational culture that encourages movement. Based on its new brand purpose, which was announced in 2021, Kia is working to radically alter the way the company thinks and behaves. They share inspiration with coworkers, clients, and the rest of the world through Kia's inspiring culture. To adopt the Inspiring Culture, Kia is moving forward with fundamental company-wide improvements to become "Agile, Flexible, Horizontal." Culture Survey (Units: points) *Score changes show the changes in positive response rates from the previous year (positive answer results) 2
  • 4. MISSION, VISION STATEMENT Mission "Building a new future and realizing humanity's dreams by thinking creatively and tackling challenges head on" In order to align their employees with the company's mission, their management philosophy encapsulates the three key phrases: full accountability, realizing potential, & practicing humanity. Vision "Providing a new space that makes life more convenient and enjoyable by realizing superlative mobility based on innovative people-oriented, eco- friendly technologies and comprehensive services" With their innovative products and dynamic designs that are inspired by India, Kia entered the country with a desire to win the hearts of the youthful automobile consumers. They stunned the Indian automobile customers and transformed the Indian automotive market with their #BadassByDesign Seltos, #ExtravagantByDesign Carnvial, and #WildByDesign Sonet. They built the foundation for a new manufacturing facility in the Anantapur District of Andhra Pradesh in April 2017, investing $2 billion in it with the intention of producing about 300,000 units annually. Values 3 Customer First Challenge Yourself Collaborate People Focused Globality
  • 5. PRODUCT SEGMENTS Sedans, sports utility vehicles, hatchbacks, and mini vans make the companies product categories. But in India, they have 3 major product segments as shown in the table below: The SP2i version of the Seltos and the compact SUV Sonet are two vehicles that Kia India produces that were created especially for the Indian market. Segment Model Launch Year (In India) SUV/Crossover Seltos 2019 Sonet 2020 MPV Carnival 2020 Carens 2022 EV EV6 2022 4
  • 7. 6 They actively responded to customer demand by producing 26.64 million vehicles, up 6.4% from the year before thanks to flexible production management, and they sold 314,764 EVs, up 50% from the year before, laying the groundwork for a leading electrification brand. Kia elevated its standing in 2021 as a result of praise for the high caliber of its models' products. For the first time by a Korean automaker, the EV6 was named the "2022 European Car of the Year," and at the "2021 Good Design Awards," the EV6 and Carnival received recognition in the Transport Design category. The base effect helped the worldwide automotive demand in 2021 reach 78.7 million units, an increase of 8% from the year before despite the erratic semiconductor supply throughout the year. By selling 2.78 million units at wholesale and 2.96 million units at retail, Kia attained a market share of 3.8% worldwide. Thanks to the successful introduction of new models like the K8, Sportage, and EV6, as well as the robust sales of important models like the Telluride, Sorento, and Carnival, Kia in particular increased its market share in important markets like Korea, the United States, and Europe. The following are some of Kia's major accomplishments in 2021: KIA'S RECENT NUMBERS
  • 9. PORTER'S FORCES 8 1. Threat of a New Entrant (Low) Kia Motors is one of the top automakers with a significant global presence. The automobile markets, where Kia Motors is currently active, requires significant capital investment to enter. To develop new and intriguing features that can draw clients, a significant expenditure in research and development is necessary in addition to the price of the raw materials. Customers want to purchase updated and new models because there are highly differentiating products on the market. As a result, the new business must first struggle to build up operations before figuring out and meeting client expectations. The economies of scale are a significant advantage that Kia Motors is now utilizing. Before the business may introduce its product to the market, numerous legal criteria must be satisfied and permits must be obtained, in addition to the associated costs. Additionally, the cost of advertising is significant, and clients typically anticipate not just the goods but also the after-sale services. Since it is difficult for any new business to enter the market due to all of these considerations, there is no threat from new competitors. 2. Threat of Substitutes (Low) There are a wide range of 4-wheelers on the market, and any of them may be a replacement for Kia Motor's goods, but Kia has endeavored to establish a market presence and a name by offering an equally effective car at a significantly lower cost. They have competition from other brands, including Honda, Hyundai, Suzuki, and others, but the business has built a reputation in the marketplace and customers look forward to their products. There is always the option to replace their products with more expensive cars, but the majority of their customers are highly unlikely to do that. The products are very differentiated, and consumers are aware of the advantages of purchasing from Kia Motors. As customers wanting to buy Kia vehicles prefer convenience, other substitutes like 2-wheelers and public transport do not count. The threat of substitutes is hence low for Kia.
  • 10. PORTER'S FORCES 9 3. Bargaining Power of Customers (Low) First off, there are other possibilities on the market, but the buyer's options are constrained due to the fact that the goods or services they offer vary at every level. Market competition for prices is fierce for Kia Motors. Price is a significant element in the vehicle market as well, and because the buyer has restricted income, the purchasing alternatives are similarly constrained. Because the buyer is buying something expensive, they take their time making a decision and occasionally find a superior option at a lower price. Due to the complexity of the product, there are also very few opportunities for backward integration on the part of the customer. All these variables indicate that suppliers' bargaining power is on the lower end, but that doesn't mean the business shouldn't pay attention to its consumers and change to meet their needs. Even with few options, clients have little to no switching costs and are likely to be willing to pay a little bit more for superior services. 4. Bargaining Power of Suppliers (Low) The alternatives available to Kia Motors to swap suppliers are good because there are many suppliers in this business and the majority of them sell the same type of base product to all these vehicle companies. The suppliers must abide by company policies and processes because switching is inexpensive and the business cannot afford to purchase low-quality goods. Suppliers' ability to negotiate is further weakened by the lack of any alternate uses for the commodity they are offering. These variables collectively show that suppliers have poor bargaining power. Additionally, they have virtually little possibility of forward integration, so working with a big corporation like Kia Motors not only helps them stay in business in this cutthroat industry, but it also gives them an advantage over rival suppliers. 5. Competitive Rivalry (High) In the market Kia competes in, there aren't many rivals, yet the majority of them own a considerable portion of the market. Since they are all major players, their level of competition is at least equal. Due to the low switching costs, the substantial product differentiation does little to significantly reduce competition. Due to rising disposable income and the desire to raise one's standard of living, this market has been expanding at a constant rate. This indicates that there won't be as much competition for market share, but everyone will still endeavour to win over new clients. Marketing
  • 11. PORTER'S FORCES 10 strategies and after-sale services have a significant impact, and all businesses make an effort to meet client expectations. Due to the high exit barriers, businesses that are experiencing losses attempt to form partnerships with other businesses so that they can share research and benefit from one another's findings rather than closing down. All of these indications point to intense industry competition, and Kia must be vigilant to get an advantage over its rivals.
  • 12. PESTEL ANALYSIS 11 Looking at the leading forces that can shape the future of Kia Motors including Political, Economic, Social, Technological, Environmental and Legal forces, will help us understand the company better: Political In the world of multinational commerce, political concerns are becoming more important. Businesses must exercise caution when it comes to local political climate, government control and influence over business in the markets in which they operate. For instance, the political climate of a market has a direct impact on the vehicle supply chain and sales in that country. Sales of automobiles in a particular market are also impacted by governmental policies and laws pertaining to the automotive sector. For instance, while Kia has enjoyed greater success in the Indian and US markets, its sales in China have continued to decline. Comparatively speaking to other markets, the political climate and market structure in China are significantly more complicated. In China, Kia has teamed with a regional company to produce and sell Kia vehicles there. But even though China is the biggest auto market worldwide, Kia's sales and market share there have been declining since 2014. Only 1.3% of the Chinese market is now occupied by it. Local enterprises are mostly supported by the Chinese government and its policies. Businesses can access the market through local partnerships, but there are still challenges because of the convoluted political and tax system. As a result, local automakers have a better chance of succeeding in the Chinese market than foreign automakers. Sales of automobiles by Kia Motors increased more quickly in India and the US than in China. The success of big, global companies in a given market is greatly influenced by political issues. The country's tax system and trade relations, for instance, may have an impact on car sales in that market. Additionally aggravating the situation and making it challenging for foreign vehicle makers, particularly American ones, to compete against domestic brands are the trade disputes between the US and China. Economic The performance of auto brands in international markets is partly influenced by economic reasons. The volume of economic activity and market stability in the local and worldwide marketplaces affect auto sales. The world economy was in good health before the pandemic, but all the main markets
  • 13. PESTEL ANALYSIS 12 have since suffered significantly. Even China, the world's largest auto market, suffered severe losses. Nevertheless, compared to other markets, it rebounded more quickly. The US and a number of European nations were among the other markets where car sales were severely hampered. Sales of automobiles decreased by almost 20% worldwide. The majority of automakers—including some of the biggest, like VW, Toyota, and GM—saw a significant fall in sales and revenue, primarily as a result of the economy. Despite the pandemic, Kia and its parent company Hyundai managed to post strong sales. The two businesses' stable revenues were mostly attributable to their significant investment in R&D while simultaneously expanding and improving the range of their product offerings. If the global economy had been more stable, their performance might have been even better. Millions of individuals worldwide lost their employment as a result of the pandemic and the subsequent recession. Car brands saw a fall in sales as people shunned any non-essential purchases as the unemployment rate rose in major countries like the US, China, India, and several European markets. Sales are anticipated to increase more quickly in 2021 as the global economy recovers and moves past the pandemic's effects. Companies see an increase in sales and revenue when the global economy is doing well and there is a high level of employment in key areas. On the other hand, sales of automotive brands may be the first to suffer greatly if unemployment rates are high and the economy is experiencing decreased activity. In this approach, the future of car companies like Kia Motors is greatly influenced by economic issues. Kia has however maintained growth despite the poor economic climate, mostly as a result of its emphasis on innovation and the customer experience. The industry is very competitive, and once the markets recover and consumer confidence returns to high levels, businesses like Kia may be able to increase sales and boost income. Due to the magnitude of the impact that economic conditions may have on the sales of autos, these companies take them into account when developing market-specific strategies. Lower sales may result from the introduction of more expensive models in a market where economic activity is weak. Sociocultural Sociocultural aspects are also quite important when it comes to the automotive industry. Global social and cultural shifts may directly affect the auto industry and affect whether certain car models sell more or fewer units.
  • 14. PESTEL ANALYSIS 13 Global demographic shifts have caused a number of changes, some of which have an impact on the auto industry. The millennial generation is drawn to cutting-edge designs. It seeks automotive types that are simple to suit into its highly digitalized lifestyle. This generation's taste and preferences are different from those of the generations before it. Because the current generation is more interested in SUVs, SUV sales have increased in recent years. The automobile business has been impacted by like other sociocultural developments. For instance, the millennial generation is more enthusiastic about environmentally friendly vehicles. As a result, businesses are now placing a strong emphasis on creating electric and hybrid vehicles that have no or minimal environmental impact. When marketing to specialized audiences across various cultures and societies, automotive manufacturers must also take sociocultural considerations into consideration. When promoting their products across diverse geographic regions, they may need to adopt distinct marketing strategies, mostly because of the social and cultural variations. For instance, the corporation might not be able to succeed in the Chinese, Indian, or Japanese markets using a few strategies that have proven successful in the US and Canadian markets. The SP2i version of the Seltos and the compact SUV Sonet are two vehicles that Kia India produces that were created especially for the Indian market. Technology In the twenty-first century, technology has continued to be the primary force behind progress in the automotive sector. There is intense competition in the auto sector. On the international market, Kia Motors is up against a number of rivals, including GM, Toyota, Ford, and many others. However, Kia's emphasis on technical innovation has been the key driver in helping it establish itself as the brand for the public and see faster growth globally. Automobile businesses already find it difficult to set their products apart from others due to the fierce competition in the sector. Customers seek exceptional performance, passenger safety, and digital technologies that enhance the appeal of automobiles in addition to product quality and design. Innovative items are appealing to millennial consumers. Hence it is vital for companies to focus on tech-innovation. The need for electric vehicles has grown over time. In order to address the rising global demand for electric vehicles, Kia will invest in developing its
  • 15. PESTEL ANALYSIS 14 line-up of electric vehicles over the coming years. In addition, the corporation is making investments in other technologies, such as driverless driving. Autonomous driving technology in automobiles is also becoming more and more common. While it will be a while before completely autonomous vehicles are used on public roads around the world, Kia anticipates developing fully automated driving technology by 2030. It plans to introduce new vehicle types with autonomous technologies in 2021. In a highly competitive market, technology has emerged as the key difference for automotive brands. As a result, they now place more emphasis on research and development. Companies are spending money to produce safer, more environmentally friendly, or fuel-efficient car models. Since technology will be the primary differentiator and driver of automobile sales in the future, the emphasis on technology in the automotive sector will only increase over time as competition increases. In order to produce cutting-edge vehicles that outperform the competition in terms of fuel efficiency, environmental effect, design, and passenger safety, Kia and Hyundai are investing in research and development and developing a number of new technologies together. Tech-innovation is going to drive the future of mobility sector more and more. Environmental The successful operation of vehicle brands depends on environmental elements as well. To keep up their growth momentum and avoid falling behind other companies, businesses in this area must place just as much emphasis on sustainability as they do on other variables. In addition, governments all over the world have created legislation that support the development of electric vehicle manufacturers. The epidemic has increased awareness of environmental issues and sustainability significantly. Nowadays, people are more likely to choose electric vehicles, eco-friendly vehicles, or vehicles with minimal emissions. As a result, automakers must intensify their efforts to produce environmentally friendly vehicles (electric cars and hybrids). Governments have enacted strict pollution regulations, and any infractions can result in financial losses for car companies like Kia Motors. Kia is constantly attempting to improve its standing in the European markets. However, the EU has also strengthened laws pertaining to emissions. To be a sustainable brand, Kia has always prioritized developing automobiles with low emissions in addition to innovations that improve fuel efficiency.
  • 16. PESTEL ANALYSIS 15 Numerous advantages of sustainability exist. Businesses that put more of an emphasis on sustainability have better market brand recognition. Kia has continued to place a strong emphasis on sustainability, and by projecting a clean, ethical image, the corporation has benefited greatly in the long run. The business has made great strides in becoming a highly sustainable business. Legal Automobile brands must also take legal considerations into account. All automotive brands must comply since failure to do so could result in hefty fines for the businesses involved. Government and judicial authorities have increased control and monitoring of the auto industry. Automobile manufacturers cannot afford to lose sight of regulations and compliance because doing so will harm their bottom line and drive up operational costs. Additionally, it will damage a company's reputation. The players in the automotive industry must abide by a number of laws. There is a complicated network of laws that the vehicle brands must abide by, from labor to product quality, passenger safety, and supply chain. Additionally, these rules may differ from one market to another and one nation to another. Therefore, the organizations must develop internal policies and business strategies for each market based on the legal framework of the local market and local legislation. All of the top automakers with international operations have established policies requiring that their employees and suppliers abide by all local regulations. Kia continues to place a strong emphasis on ethical management of its business operations in addition to legal compliance. While simultaneously continuing to abide by all local rules in each area where it operates, the company has expanded its business overseas.
  • 18. VRIO 17 The financial resources of Kia Motors are extremely useful since they support investing in new prospects that occur outside of the company. These aid Kia Motors in fending off dangers from without. Due to the fact that their products are so differentiated, its local product designs are a precious resource. Customers therefore believe these to be of high value. Due to the uniqueness of these products, people value them higher than the competition. The staff of Kia Motors is a crucial asset to the company. A sizable fraction of the personnel has received advanced training, which boosts the organization's output productivity. Additionally, the workforce is devoted, and the company enjoys strong employee retention rates. All of this adds to the value of Kia Motors' products for the final customers. Its patents are a crucial asset since they let the company sell its products free from competition. As a result, Kia Motors earns more money. When Kia Motors licenses these patents to other manufacturers, it also receives licensing income. The distribution network of Kia Motors is a useful asset. This enables it to connect with an increasing number of clients. This guarantees more sales for Kia Motors. Additionally, because the products are readily available, it ensures that promotional efforts result in sales. Its pricing structure is not a useful asset. This is because the production processes result in higher costs than those of the competition, which has an impact on the firm's overall earnings. The research and development department at Kia Motors is not a useful asset. This is because the costs of research and development outweigh the advantages that innovation brings. In the last few years, there haven't been many groundbreaking items or unique features. Research and development therefore give Kia Motors a competitive disadvantage. It is advised that the research and development teams be strengthened and that their expenses be reduced. With VRIO Analysis of Kia Motors we will look at each of its internal resources to classify them into Valuable, Rare, Imitable & Organizational resource and assess whether these provide them with a sustainable competitive advantage. Valuable Positives Negatives
  • 19. VRIO 18 Only a small number of businesses in the sector have substantial financial resources. Hence this is a rare resource, that Kia Motors posesses A valuable resource for Kia Motors is its workforce. Unlike employees at other companies, these workers have extensive training and expertise. These workers are less likely to depart for other companies because of the higher pay and working conditions. Hence, Kia's workforce is a rare resource The patents held by Kia Motors are a rare asset. These patents are hard to come by and are not held by rivals. As a result, Kia Motors can use them unhindered by rival companies. Kia Motors' distribution network is a scarce resource. This is due to the fact that it would take a lot of money and effort for rivals to develop a distribution network that is superior to Kia Motors'. Very few businesses in the sector also have these. In the market, distinctive products are not uncommon. As a result, Kia Motors can compete on an equal footing with the others. This could become a competitive advantage if innovation happens more quickly and with agility. Rare Positives Neutral
  • 20. VRIO 19 It is expensive to replicate Kia Motors' financial capabilities. The corporation has amassed these resources throughout the years through consistent profitability. For competitors and new entrants to amass huge sums of money, they would need to generate comparable earnings over a protracted period of time. Its patents are extremely challenging to copy. This is due to the fact that copying a patented product is illegal. The process of creating comparable resources and obtaining a patent for them is similarly expensive. It would be exceedingly expensive for competitors to copy the company's distribution network. Kia Motors has increasingly developed this over the years. If competitors want to copy a comparable distribution method, they would need to invest a lot of money. Imitating differentiated products doesn't cost that much money. If competitors spend a lot of money on research and development, they can also acquire these. Additionally, these do not call for years of experience. The company's personnel are also not difficult to replicate. This is due to the fact that other businesses can train their employees to increase their skills. These businesses can attract Kia Motors employees by presenting them with greater pay, benefits, and employment prospects. As a result, Kia Motors' staff is a resource that offers a short-term competitive advantage. These may eventually be acquired by the competition. Inimitable Positives Neutral
  • 21. VRIO 20 The financial resources are strategically employed to make the proper investments, take advantage of opportunities, and counter threats. As a result, these resources enable Kia Motors to maintain a competitive advantage. By making sure that goods are offered at all of its stores, Kia Motors uses this distribution network to connect with its customers. As a result, these resources enable Kia Motors to maintain a competitive advantage. The company's patents are not adequately organized. This indicates that the organization is not making the most of these patents. If Kia Motors starts selling patented products before the patents expire, an untapped competitive advantage could be transformed into a long-lasting competitive advantage. Financial Resources Distribution Network Employees & Workforce The Patents (untapped source of sustainable competitive advantage) Differentiated Products Cost Structure R&D Organizational Positives Neutral Summary Sustainable Competitive Advantage: Temporary Competitive Advantage: Competitive Parity: Competitive Disadvantage:
  • 23. PORTERS VALUE CHAIN ANALYSIS 22 Primary Activities Inbound Logistics Building trusting connections with suppliers is crucial since they provide the assistance needed to acquire, store, and distribute the product. Without looking at in-bound logistics, Kia Motors may run into a number of problems during the product development process. An organisation must analyse all facets of transformation, from raw materials to completed goods, when doing in-bound logistics analysis. Retrieving raw materials, keeping the inputs, and internally dispersing the raw materials and components to begin production are some instances of inbound logistics. Operations When raw materials are delivered and Kia Motors is prepared to turn them into finished goods and market them, the significance of analysing operational activities increases. Machine work, packing, assembling, and testing are a few instances of operational activities. This includes servicing and maintaining equipment as well. Both manufacturing and service operations are included. To increase productivity, maximise efficiency, and ensure Kia Motors' competitive performance, operational activity analysis is crucial. Kia Motors may be able to generate constant economic growth, boost profitability, and create a strong competitive edge with the support of the increased productivity. Outbound Logistics The operations involved in delivering a product to a client after going through various middlemen are referred to as outbound logistics. Material handling, warehousing, planning, order processing, transportation, and delivery to the destination are some examples of outbound logistics activities. In order to uncover sources of competitive advantage and meet its goals for company expansion, Kia Motors can analyze and optimize outbound logistics. Because customers are more satisfied and there are more prospects for the company to grow when outbound activities are timely managed with optimal
  • 24. PORTERS VALUE CHAIN ANALYSIS 23 prices and minimal negative effects on product quality. When Kia Motors is offering perishable goods that must be delivered quickly to the end user, it should give its outbound value chain activities special attention. Marketing and Sales In order to convince clients that its offering is superior than that of rivals, Kia Motors will now emphasize the advantages and points of differentiation of the items supplied. Until Kia Motors makes an investment in its marketing and sales efforts, delivering a high-quality product with competitive prices and unique features won't generate value. Here, sales representatives and marketers are crucial. The sales force, advertising, promotional activities, pricing, channel selection, quoting, and fostering relationships with channel participants are a few examples of Kia Motors' marketing and sales activities. The business can organize its marketing and sales activities using the marketing funnel strategy. Depending on the corporate goals, brand image, competitive dynamics, and present market conditions of Kia Motors, marketing tactics can either be push or pull in nature. Effective and carefully considered integrated marketing initiatives may strengthen Kia Motors' brand equity and make it stand out from the competitors. However, Kia Motors must refrain from making erroneous promises about product features that the production team cannot provide. It suggests that coordination between various value chain operations is necessary. Services The pre- and post-sale services provided by Kia Motors will be crucial in fostering repeat business. Post-sale services are just as crucial to today's consumers as marketing and promotional efforts. In the modern, technologically enabled world, the influence of bad e-WOM brought on by subpar support services cannot be understated. In order to protect the reputation of the brand and to promote positive word-of-mouth through prompt, effective, and timely support services, the company must analyse its support activities.
  • 25. PORTERS VALUE CHAIN ANALYSIS 24 Secondary Activities Firm Infrastructure The infrastructure of the company refers to a variety of tasks, including quality control, resolving legal issues, accounting, financing, planning, and strategic management. Kia Motors may be able to maximize the value of the entire value chain with the help of effective infrastructure management. Kia Motors can manage infrastructure expenditures, also known as overhead expenses, to improve its competitive positioning in the market. Human Resource Management When raw materials are delivered and Kia Motors is prepared to turn them into finished goods and market them, the significance of analyzing operational activities increases. Machine work, packing, assembling, and testing are a few instances of operational activities. This includes servicing and maintaining equipment as well. Both manufacturing and service operations are included. To increase productivity, maximize efficiency, and ensure Kia Motors' competitive performance, operational activity analysis is crucial. Kia Motors may be able to generate constant economic growth, boost profitability, and create a strong competitive edge with the support of the increased productivity. Technology Development Nearly all value chain activities rely on technology support in today's modern, technologically evolved society. Kia Motors must acknowledge the significance of technology development given the technological integration in the company's activities related to production, distribution, marketing, and human resources. It can be broken down into technological development activities for products and processes. Examples include automation software, customer service assisted by technology, product design research, and data analytics. This category includes Kia Motors' research and development division.
  • 26. PORTERS VALUE CHAIN ANALYSIS 25 Procurement The activities involved in acquiring the inputs, which can include machinery, supplies, raw materials, equipment, and other items required for making the finished product, are referred to as procurement in the value chain. Kia Motors should carefully analyze its procurement efforts to optimize the inbound, operational, and outgoing value chain given its linkage with numerous value chain activities.