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Case Study on Hmc

Essay by   •  September 10, 2015  •  Essay  •  619 Words (3 Pages)  •  1,469 Views

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This form can be used to organize your thoughts about a case. As you perform your analysis remain open to the fact that your interpretation of the facts may change and therefore you should constantly revisit your answers. 

Define the Problem: Describe the type of case and what problem(s) or issue(s) should be the focus for your analysis.

  • What corporate composition strategy was used by HMG
  • What corporate management ensures the most synergy

List any outside concepts that can be applied: Write down any principles, frameworks or theories that can be applied to this case.

DeWit and Meyer Business Systems Model :Resource Base/Stock of Assets, Activity System/Value Chain/, Product Offering/Value Proposition

Drivers of industry Development: New Entrants, Suppliers, Buyers, Substitutes & Complementors, Rivals

Political/Regulatory, Economic, Socio-Cultural, Technological

List relevant qualitative data: evidence related to or based on the quality or character of something.

List relevant quantitative data: evidence related to or based on the amount or number of something.

  • 1960 South Korean economy on the rise
  • 1961 Park Chung Hee seized control
  • 1947 Company founded
  • HMC established in 1967
  • In the 1990’s Hyundai had 60 subsidiaries, 200 000 employees, with total annual revenue at $90 Million
  • 1997 Asian financial crisis
  • Owner acquired Kia Motors and 60 % of LG Semicon
  • 5 major Chaebols went bankrupt
  • 30 conglomerates were seen as financially stable
  • Recorded $8.7 billion deficit In Asian financial crisis
  • HMC posses 34 % of Kia motors, which holds 17 % of parts and in turn Mobis owns 21 % of HMC
  • HMC into vertical structure would cost $9.6 Billion according to research in 2012

Describe the results of your analysis: What evidence have you accumulated that supports one interpretation over another.

After analysis of the case, it is clearly evident that HMC started as a integrated organization that focus on

Syndergy as a whole, but as government pressures grew HMC had to re structure the family conglomerates

And focus on the core businesses. (portfolio organization perspective)

Describe alternative actions: List and prioritize possible recommendations or actions that come out of your analysis.

Alternative actions are listed in the case, it provides two options:

1 – take apart the current structure into vertical and estimated expenses sit at $9.6 billion but as

sacrifice to make HMC a chaebol once again.

2 – Keeping HMC as is now is risky, as cross shareholdings are looked down upon and perceived

as a problem

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