Porter’s Five Forces Analysis

Porter’s Five Forces for Hyundai in Korea

1. Barriers to Entry: HIGH

Multiple barriers to entry exist, which makes it difficult for any new automobile manufacturer to come into the industry and have success. One of the greatest barriers to entry in the automobile industry is the extremely high amount of capital that is required to purchase physical manufacturing plants, raw materials, as well as to hire and train employees. Manufacturing companies must also have the ability to mass-produce so that they can make cars affordable to customers.

2. Power of Suppliers: LOW

There are so many parts that are used to produce an automobile, that it takes many suppliers to accomplish this. When there are many suppliers in an industry, they do not have much power due to that industry manufactures can easily switch to another supplier if it is necessary.

3. Power of Consumers: LOW

With the huge tax that the Korean government put on foreign cars, people in Korea will likely get  a Korean brand car. Because there are only three major car company, the consumers have no power over the Hyundai’s market.

4. Availability of Substitutes: MEDIUM

As public transportation is very developed in Korea, it is much more efficient and cost effective to not buy a car. As a result more consumers are opting to take public transit. Also, in Korea, because there are lots of cars with limited land, there are usually a lot of traffic jam so taking subways and trains are more optimal.

5. Rivalry: LOW

The huge tax on the foreign brand cars implemented by the government gets rid of lot of competition in Korea. Because Hyundai is the biggest Korean car company, there aren’t many rivals.

 

Response to Angel’s Blog

In response to Angel’s blog on international student tuition increase in UBC for the incoming class of 2014, I, as an international student, felt that the 10% tuition increase is too overpriced, considering that the current tuition is already $28,000. It is certain that the tuition increase will raise UBC’s recognition and reputation to follow up with other major universities in Canada, such as McGill and University of Toronto; however, will the international students stay calm about this matter? and would the number of international students fluctuate after the increase? The answer isn’t that simple. Here are the pros and cons of tuition increase.

Pros:

-University of British Columbia will likely get reputation which might attract more students

-the current students that attend UBC will probably still go to UBC even after the increase

-will be able to improve the studying environment with the extra money

Cons:

-there are protests as international students are unhappy

-will impact the number of students in incoming class of 2015

In my opinion, if this tuition increase does not affect the number of international students from attending University of British Columbia, UBC will try to raise the tuition again until the it will have impact on the number of international students.

Customer Service

‘Bad’ customer service turns customers away and ‘good’ customer service builds loyalty.  Articles, a blog post, and class discussion support this idea. The key to ‘bad’ and ‘good’ service is how service is defined in the context of an organization’s brand and whether that service is delivered consistently.

If service is ‘bad’ (ie inconsistent with the brand), customers will respond negatively. They may even send their thoughts to ‘the world’ through social media, as discussed in a CBC article.

Some companies, such as Wal-Mart, intentionally downplay customer service. While this may seem strange, it is consistent with Wal-Mart’s brand: namely that customers shop at Wal-Mart for price and selection, not for customer service.  Wal-Mart customers expect low prices, not high customer service.

Consistency of service is fundamental in defining whether service is ‘good’ or ‘bad’.  The risks of call centers were examined in a recent COMM class. Zappos’ service reflects consistent customer service, driving customer loyalty.  However, the Dell example, presented an angry customer most likely due to inconsistencies in Dell’s service.

Customer service is important.  However, defining and delivering service that is consistent with the organization’s brand is key to organizational success.

Piracy is Hurting Sales

-the majority of the music that is consumed illegally by the individuals in our sample would not have been purchased if illegal downloading websites were not available to them

– Most of the effects were found by comparing people’s visits to “pirate” websites and legal music stores. After controlling for interest in music, the researchers found that visits to pirate websites are positively linked to visits to legal music stores.

“If this estimate is given a causal interpretation, it means that clicks on legal purchase websites would have been 2 percent lower in the absence of illegal downloading websites,” the researchers write.

 

“Taken at face value, our findings indicate that digital music piracy does not displace legal music purchases in digital format. This means that although there is trespassing of private property rights, there is unlikely to be much harm done on digital music revenues,”

Selling in store and online

Selling in store and online

How does retail businesses sell their product? If the business sells its product “only in-store” then the businesses is falling behind and will be losing quite a large percentage of potential customers. Consumers, nowadays, expect these in- store and online options when they shop and if not given so, the customers will most likely going to switch to a more tech-savvy competitor.

Joah Boaz, managing director and co-founder of digital marketing agency Direct Agents, said “the two worlds have merged.” What this means is that the consumers today use both the retail stores and internet to make a purchase. Some consumers go into stores, evaluate the products and buy online, or research online and go into the stores for purchase. Even a recent research done by UPS showed that 40 percent of today’s shoppers use a combination of online and in-store interactions to complete their purchases.

 

CSR and CSV of TOMS

 TOMS, a company that matches every pair of shoes purchased with a pair of new shoes given to a child in need, has been successful in its One for One campaign. The movement quickly expanded beyond shoes. Myscokie, the founder TOMS and the person behind the idea of One for One model, realized the model could serve other needs and launched the TOMS eyewear. With every pair of eyewear purchased, TOMS helps give sight to a person in need. Through increasing its Corporate Social Responsibility by its “One for One” campaign, TOMS differentiates itself from other major shoe companies. 

Companies can create shared value by creating societal value. There are three distinct ways to do this: by reconceiving products and markets, refining productivity in the value chain, and building supportive industry clusters. TOMS creates shared values by offering shoes with sustainable and vegan materials. Even  the shoe boxes are made from 80% recycled post-consumer waste and are printed with soy ink.