Competitor analysis and competitive strategy: Toyota and Dacia in Turkey

Competitor Analysis and Competitive Strategy

The competitor analysis for the Kia-Motors has been conducted in order to analyze and identify the key factors related to the strengths and weaknesses of its competitors i.e. Toyota and Dacia Automobiles. The competitive strategies are being suggested for Kia-Motors in order to grow its business in Turkey and attract customers and carry out production processes in ways that ensures the profitability and competitive advantage in the long run.

Kia Motors

Analysis of Competitors

Toyota

Suggested Competitive Strategy

Automobile Dacia

Suggested Competitive Strategy

Kia Motors

Kia-Motors with the sales of 2.75 million in the year 2013 is 33.88% owned by the Hyundai Motors and is known widely for its product Kia-Optima and Cadenza. The company possesses strong market position with respect to the quality that it has been providing to its customers. The company has followed the competitive strategy for pricing at which product quality is ensured with the competitive price and the company has been able to sustain its brand image for good quality, which has also provided the company with advantage over its competitors (Sloane, 2009).

The company is considered to be unique by means of the product design that is being provided to the consumers with the competitive price that makes its one level above the low-cost products and one level below from the differentiated products. The company follows the Korean manufacturing system that is found to be renowned for its quality and possesses skilled labor force and large distribution network which has made the accessibility towards the company's products even in the countries where it is not marketing in the way it ought to be. However, the company has been focusing on increasing its sales by means of heavy sponsorships and promotions and has been striving to create its brand image for youth and adventurism by means of its promotional campaigns with sports facilities. The company targets the upper and upper-middle class from the society by means of its pricing and it also aims to target youth aged between 20 -- 30 years with its product design (Kim, 2011).

The company's partnership with Hyundai indicates that there has been a flow of knowledge between the intra-companies which makes the company viable to sustain in the competitive environment. However, the small scale production and low production capacity has made the production process of the company expensive and there exists need to make the company's production process efficient in order to ensure its price competitiveness in the future and meet the ever-increasing demand as a result of its heavy promotions. The company possesses research and development facility to ensure the continuous development and quality improvement of the product. The company has been striving to grow and compete against the large competitors and by means of product development and promotions, the company aims to achieve its targeted market share and sales (Kim & Han, 2008).

Analysis of Competitors

Toyota

Toyota Motor-Corporation, being the largest manufacturer of transportation vehicle in the year 2012 is a Japanese manufacturing company with a market share of 11.8%. Due to its large production capacity; Toyota has been producing 10-million vehicles annually and the company has been using strategies with respect to differentiation and low cost for its target market in order to gain competitive edge. Furthermore, the company has been able to provide a variety in vehicles in order to attract the large number of consumers with various prices that meets the affordability and requirement of the targeted consumers. The company has been captured by the market as being environment friendly and providing low priced product line of cars i.e. Corolla; and product line for the luxurious cars i.e. Lexus. The company has been targeting the consumers by means of demographic segmentation in which high income group is targeted for its product line of Land-Cruiser, Camry etc. however, the company has been targeting the upper-middle income group in which the low priced Corolla are being promoted. The company also targets the adventurists by means of sports cars like Altis and Fortuner (Drummond & Ensor, 2005).

There exists variation in the way the company has been competing in the market with respect to its generic strategies. The company has been found to be successful in accordance with its differentiation strategy by means of its design and quality of the product and hence, the company has developed an image for its ever-improving and reliable quality. The company's recent performance with respect to its sales indicates its capacity for the production in order to meet the consumer demand. Moreover, the company has been found to be equipped with the advanced technology which has made the company to introduce the first hybrid car i.e. Prius and generated a new market for its growth which resulted in the early acquirement of market share and depicted its responsiveness towards the ever-increasing market demands. The company's low cost strategy in which quality vehicles are being provided to its target market has resulted in the increased market acquirement of the company which is irrespective of the luxurious cars. The company's ability to carry out its production process at large scale in order to meet the demand has reduced the fixed cost of the company which has also resulted in the low cost. The company has been able to formulate the idea of Lean Production in which the business process of the company is backed by the idea of reduction of waste during its production and being able to produce cars efficiently by the effective selection of its suppliers and distributors (Coman & Ronen, 2009).

According to D'Silva and Patil (2008), Toyota has been able to become and sustain its position for the low-cost market leader by being able to produce at low cost and acquiring market share and the company has been continuously developing its existing products by means of upgraded design and quality. The company has successfully offended its competitors with the launch of its upgraded product every year that provides enhanced features, improved quality and new design which also makes the target market to consider the company as a notion for continuous improvement and development, however, the same notion creates a threat for its competitors due to the lack of competitor's ability to introduce upgraded existing products every year.

According to Coman and Ronen (2009), the company has been innovative since its existence in 1930s where the company was accounted for innovation by means of its product variety i.e. different colors and efficient means of production and the company's innovative nature has remained the same and the continuous product development has made the company to introduce electric cars in order to reduce the dependence on traditional fuel, provide safeguard to the oil reservoirs and reduce the emission of carbon-dioxide from the combustion of fuel. This attempt towards future has ensured the future prospects of profitability for the company and has made its attempt to retain its market share in the future. The company's extreme focus on low cost has been undermining its brand image and that is known for differentiation for the products line of Lexus and due to its cost-leadership, the idea for differentiation is fading away and the company seems to be more persistent towards the cost reduction rather than quality differentiation (Drummond & Ensor, 2005).

Heller and Darling (2011) infer that the current recall for certain cars of the company due to their safety measures has threatened the market share, brand image and quality of its products. The safety issues that are adhered to the customers by the use of their cars have questioned the quality of the company and have imposed negative effects on the brand image of the company and tagged the company with the provision of low quality for low price.

Moreover, the market share of the company is accounted for U.S., Asia and Japan only, however, the company lacks its market share in the world which proves the inefficiency of the company's accessibility considering that the company possesses the potential to increase its production capacity. The increased sales and continuous improvement in its cars also question whether the company has been able to address the consumer demands at once or not and sometimes it seems unsuitable for the company to launch its developed products with slight changes (Heller & Darling, 2011).

Suggested Competitive Strategy

The competitive strategies for Kia-Motors with respect to Toyota-Motors are discussed below:

The decreasing brand image of Toyota due to the low price and the recalls of its produced cars due to safety measures is the prospect for Kia-Motors to prove its competitiveness with the quality that it has been offering. The large number of Toyota recalls questions the quality of the company which can be addressed by Kia-Motors by means of its competitive quality.

The low-priced cars that are offered by Toyota-Motors has sufficiently reduced its brand image which prevails the provision of low quality for low priced product and hence, Kia-Motors can make an attempt for the right positioning of its products for the customers who want quality products and due to the quality breach in Toyota-Motors the customers will be willing to pay competitive price.

The aggressive promotion and sponsorship being carried out by Kia-Motors is the right offense for Toyota-Motors because it has lost its brand image and the re-positioning of Kia-Motors in the sports and luxurious cars and the increasing GDP and per capita income of Turkey, the Kia-Motors can easily target the customers who want these quality cars.

The product lines offered by the Kia-Motors can response towards the ever-increasing demand of the customers by developing such cars that address all the enhanced features that are required by the customers. In this way, the company does not need to upgrade its products periodically and can produce one moderate quality product that sustains in the market for long period.

It has been observed that Kia-Motors does not possess the production capacity like its competitors therefore, instead of producing large number of units, the company can produce customized cars for the customers which can specifically address the customer needs, can generate large profits per unit, can be affordable due to the increasing economy and GDP of the country and can ensure the quality of its products.

Automobile Dacia

Dacia came into existent as a Romanian-automobile company in the year 1966 and has currently been acquired by Renault-group in the year 1999 with the future prospects related to the business growth in Europe. The company has been immersed with the enormous growth in Europe and accounted sales of 511,465 units in the year 2014. The flow of knowledge from the Renault-group has taken place and the company has become more energy efficient in the production process and has also become environment friendly. Automobile-Dacia is the market leader in the Romanian-Economy and the company possesses the modern and efficient production plant which decreases the waste and proves to be efficient in the production processes by means of reducing the error in output (Hoovers, 2014).

The company possesses the resilient and trustworthy suppliers that are well integrated with the business processes and its strategy and suppliers are competent enough to meet the production demands of the company. The continuous improvement in the research and development department has resulted in the exalted quality and improved product designs and the company has been become more competitive due to the possession of high skilled technical staff. The cost of production of the company is considered to be low due to the utilization of inexpensive labor from the region. It has also been observed that the company possesses the competitive edge in its distribution channel due to its efficiency that has been obtained by the advanced supply-chain activities that are being carried by the organization (Russu, 2013).

Heneric et al., (2006) infers that the implementation and utilization of systems and processes for the efficient distribution system has made the distribution process cost effective because the cost of implementation is providing its profit in the long run. The company has been taking part in the aggressive marketing in order to retain and gain market share and the communication-mix followed by the company incorporates above-the-line and below-the-line marketing. The company has been actively participating in the advertisements, campaigns and personal advertisement in order to create and retain the exposure of customers towards its brand.

The company provides a number of various cars including SUV, hatch-backs and sedan and ensures the appealing design with contemporary and traditional variety in colors. The company has successfully targeted the young executives, businessmen, senior executives and families and, continues to update its exterior and interior in order to meet the ever-changing consumer demands. The company has widely attracted the adventurists and surfers by means of its global sponsorship in the car exhibition events and sports teams (Bondoc & Banuta, 2007).

According to MacNeill & Chanaron (2005), the company possesses the infrastructure to produce the quality products and thus possesses the ability to meet the increased demand of customers by the help of its compliance with Nissan and Renault-group. The company possesses good inter-relation with its distributors and indulges in the personal communication with the personnel who are working as show-room advisors and in this way the company has integrated its sales department with its business objectives. The company has been successful in attracting the large number of demographic segments by means of youth, executives and families and successfully addresses their needs in a specific manner (Bondoc&Banuta, 2007).

The acquisition and compliance with Renault and Nissan has created future growth prospects for the company and has provided with the accessibility to approach new regions and countries and address the target market pertaining in those regions. The global recognition of the company has been vitally earned by the continuous sponsorship in the sports even which also has provided the company with the sophisticated brand image in all over the world. However, the distribution system of Dacian-Automobiles is effective in Europe but it lacks the capability to expand its distribution which narrows the business prospects of the company. Moreover, the lack of distribution compliances results in the increased price by means of taxes and custom duty implied on these cars when they are exported outside the region ((Russu, 2013).

According to Heneric et al., (2006), the price offered by the company is considered to be low which targets the upper-middle class of the society and the reduced price questions the quality of the products. Moreover, the parts that are used in the assembly of the car are also low priced which reduces the quality and creates the issue related to the safeguard of the passengers. It has been observed that the cars produced by this company are more destructed in the accidents than the cars that are provided by its competitors at the competitive price. The issue related to the quality of Dacia cars was uplifted when the robust repair in the Dacia-Duster was operated and the company asked the recall for these cars in order to analyze the antecedents of the issue and eradicate them. The mass repair and inspection process resulted in the adverse effect on the company's brand and decreased its perception related to the quality that has been produced by the company.