Competitive strategies for Kia Motors in the Turkish automobile market

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

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.

Suggested Competitive Strategy

The strategies that are required to be considered for the growth prospect of Kia-Motors are discussed below:

There exist quality concerns about the Dacia-Automobiles due to the massive recall by the company. Therefore, Kia-Motors can make its attempt to promote its quality products in order to capture the market in the new and existing regions. The cars that are produced by Dacia-Automobiles are not reliable and are found to be destructible when they are encountered in the road accidents and increases the cost of repair for the customer due to increased breakage. Moreover, the fragility of these cars indicates the reduced barriers towards the safeguard of driver and makes the vehicle less secure. However, the card produced by Kia-Motors are considered to be strong and heavy duty and do not possess mass destruction when they are encountered in the road accidents ensuring the safety of the passengers. Therefore, the company should promote its product line by means of safety and security of passengers in order to attract the customers.

The Dacia-Automobiles certainly possess the production capacity due to its acquisition with Renault and compliance with Nissan, however; the company lacks the quality standard due to the installation of cheap spare parts and tends to generate profit by the massive sales rather than per unit. Therefore, the Kia-Motors can use the differentiation strategy in the market by means of product quality with competitive or slightly high price to indicate the quality assurance provided by the company and the increased prices with respect to quality can be profitable due to the increased per capita income of the country and the company can easily generate profits without having to increase the production capacity and can sustain long-term profits generated by per unit sale.

The Dacia-Automobiles specifically targets the executives and families and designs its products accordingly, however, the Kia-Motors has the opportunity to improve its products' design with respect to the consumer demands and can enhance its features by means of technological advancements. The company can specifically target the consumers who want specified enhancements in their cars and can address these requirements at the price and quality that generates profit and makes the product reliable and sustainable for the long period so that the company can gain market share.

The Kia-Motors can utilize its flow of information with its partnership with Hyundai and can utilize its research and development infrastructure on the production of environment friendly cars so that the company's image with respect to the climate change can be guaranteed and customers can be provided with the variety in energy resources in accordance to their preferences.

Conclusion

It has been observed that Kia-Motors cannot meet the large scale production but the company can gain its competitive edge due to the decreasing brand image of its competitors by means of quality. The competitors seem to produce their products on a large scale and generate their profits with the massive sales however, the Kia-Motors can provide the enhanced and customized features to the customers in order to meet their demands and meet the quality standard. In this way, the company will be able to generate profits with the per-unit sale and the increase in the production capacity will not be required. The company can also utilize the flow of information from Hyundai by means of producing heavy duty cars that are competent enough to eradicate the travelling safeguard that has been provided by its competitors and thus, the company will be able to achieve a sustainable and competitive advantage in the long run by ensuring the positive prospects for growth and profitability in the selected region.