Ingeniero Industrial

Hyundai and Kia vs Renault and Peugeot.

1.- Five Forces Diagram
Before explaining the strategy Hyundai may follow according to the influence of the five forces that shape the industrycompetition, we will start showing the current situation in the European market.
The current scenario in the European market is that Hyundai has increased their sales for the first six months of the year by10%, wining market to their direct competitors like Renault.
Trough the five forces graph it is revealing the roots of an industry’s profitability while providing a framework for anticipating andinfluencing competition (and profitability) over time.

Regarding to the threat of entry, the highest threat identified was the possible powerful of Dacia by Renault and the lost cost brand in asmuch as the main characteristics about Dacia cars are similar that cars sold by Hyundai.
The main barriers identified are supply-side economies of scale and demand-side benefits of scale.
The powerof suppliers. We are supposing that Renault and Hyundai share some suppliers, so these suppliers will have more negociating power over both companies.
The power of buyers. In this case the buyergroup is price sensitive because the product it purchases from the industry represents a significant fraction of its cost structure or procurement budget. Furthermore, the buyer group earns low profits,is strapped for cash or is otherwise under pressure to trim its purchasing costs. Moreover, the quality of buyers’ products or services is little affected by the industry’s product. The industry’sproduct has little effect on the buyer’s other costs. Here, buyers focus on price. Finally, consumers tend to be more price sensitive if they are purchasing products that are undifferentiated, expensiverelative to their incomes, and of a sort where product performance has limited consequences.
From the threat of substitutes point of view, it isn’t seen a threat because cars are still going to be...