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KIA MOTORS CASE STUDY

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Kia Motors which is a popular name in the automobile industry had a humble beginning as a bicycle manufacturer in the year 1944. Its business emerged from South Korea and Seoul stands to be the headquarters of the brand today. From being an establishment that manufactured bicycles to being one of the most famous motor companies case study, Kia has been through quite the journey. With its roots in South Korea and parented by Hyundai, it has a strong presence in Mexican, Indian as well as European markets. Kia emphasizes providing innovative creations with design at its main form while being ecologically sensitive.  As an organization that hosts more than 50,000 worldwide employees, the brand believes in promoting corporate stability and concrete management. Further, this content dives into the factors that have influenced Kia Motors over the years and the attributes that are continuing to do so. For this competitive analysis, the SWOT and PESTLE analysis has been undertaken.  Our online essay helpers offer instant assignment help No matter what is your deadline,

SWOT analysis of KIA Motors

Strengths

Kia has designated itself as one of the most innovative automobiles which has much more to offer than just elegant design. The product encompasses strong and well-built features which is a nod towards its safety quotient along with maximum utilities for an enjoyable experience. This attribute of the brand has enabled it to become promising name in the automobile industry, followed by a diversified product portfolio such as hybrid vehicles. The organization has further attested to add more variations in the coming years. you can still score the perfect grades with the support of our plagiarism checker tool.

Weaknesses

Although the brand has notable strengths, several weaknesses have been dragging the market value of the company towards the ground. The brand has yet to make a lasting impact on the consumers as the sale has been comparatively low in comparison to other automobile brands. This can also be because several vehicles have been called back due to irreparable failure. Further, the firm has also been dealing with low returns in terms of the product manufacturing cost and this has impacted the financial position of the firm to a great extent. Moreover, there have been several reports over the past few years that have sparked controversies concerning labor costs and union disturbances.

Opportunities

In terms of opportunities, in accordance with Kia’s strengths concerning innovative technology, the brand has a good scope to enter the electric car market and expand its customer base. Hyundai has been furthering the plans to further the electric car segment with Kia by the year 2030. Furthermore, since they have a limited presence in the international market, they have an opportunity to expand their market area towards several other nations and carve their space.

Threats

All brands and products are subject to threats; therefore Kia too is not exempted from this column. The automobile industry fosters heavy competition and Kia is subject to the same. Each year new models of vehicles with superior performances are rolled out and the intensity of the completion between automobile brands brews deeper. Similarly, the firm serves the international market and is privy to international conflict and tension. This may reflect poorly on the brand’s economic value. In a similar aspect, currency fluctuations and the international exchange rate can deeply affect the business of the brand.

Strengths

Diversified product base

Innovative concept

Sleek designs

Credible international presence

Concrete growth strategy

Effective Management

Weaknesses

Fewer sales in comparison to its competitors

Called back products

Differences between the management and the workers union

Low return on cost investment

Opportunities

Further expansion into international spaces

Innovative ideas that can be used to foster the  electric vehicles segment

Threats

Constant growth in competition

International tension

Currency rates

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PESTLE Analysis

Kia under Hyundai’s wing has been seeking to expand its ventures by developing electric cars and investing in intelligent innovation. However, with the evolving market, economy, and customer conscience, Kia has to overcome numerous challenges. Thus, this PESTLE analysis is aimed towards determining how external factors such as political, economical, social, technological, and ecological determinants affect Kia.

Political factors

In the case of any business, political factors play an important role and the same is deepened in the case of international business. Firms are required to be extremely mindful in handling politics as it can greatly influence the market position of the brand. For instance, a nation’s political scenario greatly influences the operations, supply chain as well as sale quotient of vehicles in the market. This is since political entities are responsible for developing rules and regulations that affect the sale value in the market.

Concerning Kia, it is to be noted that it has been successful in claiming the Indian and the American market while the sales in the Chinese market have been constantly degrading. This can be attributed to the complex political structure of the Chinese market. The Chinese market has a policy of encouraging local brands and businesses. Therefore, foreign brands are levied with heavy taxes which inhibit their growth. This is the main reason the sale of Kia automobiles has been declining in the Chinese market since 2014.

Economic factors

A nation’s economy heavily influences the success of brands. Especially in terms of automobiles, economic stability is the main factor. The pandemic greatly affected the global economic position of several nations and over 20 percent of decline has been estimated concerning the sale of automobiles. However, during the pandemic, when major automobile companies such as Toyota, Ford, and Volkswagen incurred heavy losses, Kia remained strong due to its varied and intelligent product base.

The pandemic was also a tough time for the workforce around the world where many lost their jobs and refrained from making luxurious purchases. Therefore, the year 2020 saw a massive dip in car sales across the world. As Kia does not cater much towards basic services vehicles, it can only be afforded by people with a designated source of income. Thus, its price and the current global economy have led to a slow sale period for the automobile brand.  Our writers are talented to conclude a college case study assignment help for you in no time.

Social factors

Social factors play a major role in terms of purchasing behavior and capacity in any region. Various socio-cultural factors across the globe can have a great impact on the sales of the automobile. Similarly, demographic factors also influence the automobile market greatly. As Kia equips its vehicles with a sleek design and premium features, the age group from 25-55 identifies the most with the vehicle out of which the millennial generation forms a majority due to its innovative approach. Additionally, this generation also leans towards eco-friendly methods of commute, and for this reason; Kia seems to be more intent on catering towards the need of their primary consumers.

Kia has also kept the socio-cultural aspect in mind concerning the marketing approaches. Geographic locations and models in advertisements are selected keeping in mind the target market. Further, it also ensures that features in its automobiles are altered to an extent while catering towards an international consumer base. Such an approach has been one of the strategies that have been aiding in the aggressive growth of the company.

Technological factors

It has been abundantly clear that technology has been the backbone of the automobile industry since its conception and since then significant progress has always been made. Kia experiences heavy competition from popular automobile brands such as Toyota, VW, and Ford. However, the factor that has enabled Kia to rise among its competitors is its heightened focus on providing innovative vehicles. Therefore, they invest heavily in their R&D to uplift and widen their product base.

Apart from design and innovation, consumers also insist on safety, convenience, solvency, and digital aspects that add to the vehicle’s output. Thus Kia has been extensively working towards providing a vehicle with wholesome requirements. It is also heavily investing in electric cars to align with the demand. Recently the board of Kia motors announced that they are developing an automated car that is expected to hit the roads by 2030.

Legal factors

A firm has to abide by legal rules and regulations to ensure smooth operation in the market. Non-compliance to legal obligations can result in severe fines for the firm and legal action can also be imposed on the members. Furthermore, lawsuits reflect poorly on the company’s image as well as on the financial segment of the firm, therefore, it is best if they are avoided altogether.

Several legal obligations are ranging from quality, safety, supply chain, and labor. Kia being a global brand has to ensure that it follows rules in terms of market. However, in 2020, Kia and its parent company Hyundai had to call back more than 2,80,000 vehicles as they were at the risk of engine fires. During this situation, the company was fined heavily by the US as it failed to call back the faulty vehicles sooner. This was seen as violence in terms of consumer safety. Therefore, more focus needs to be provided towards increasing the safety quotient of the product.

Environmental factors

Kia has always tried to make a strong foothold in the industry through the medium of innovative products. In today’s global context, people are opting towards environment-conscious products and Kia has welcomed this requirement by the demographic by creating environment-friendly vehicles. It has currently been focusing on producing electric and hybrid vehicles for a sustainable future. This is being done by the firm while abiding by various emission laws in different nations. This sustainable image of Kia has greatly contributed towards making its brand image stronger and can ease entry to new markets.

In conclusion, Kia from humble beginnings has become a global brand and is continuing toward its journey to make its mark as a brand for the future. Several factors are threatening Kia as an automobile brand and to combat this better strategies and policy formulation is required.

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