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Case Study Presentation
Group Members
Harshad Hegiste (F 08)
Hussain Tinwala (F 09)
Vijay D'souza (F 25)
Kevin Pinto (M
04)Glen Pinto (F 06)
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Issues / Scenario:
Downslide in the economy
Automobile segment most effected
Domestic sales down by 55%
Exports crashed by 74%
200 billion won loss
Operating at only 40% of the entire capacity
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Year - 1998
Solutions opted by Hyundai
Layoff 27% of 46,000 workforce
Cut pay bonus and benefits to employees
Repercussions
Massive agitations not only in Hyundai but also in
other companies
Rallies & participation of 125 other companies in
demonstration
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Suggestions to Hyundai Management
Management to discuss with union representatives on the current
scenario.
Work out ways in which to cut on costs by improvement in
productivity &
reduction in expenses.
Suggest to unions, reduced / no increments, bonus & benefits
until situation
improves & compensate for the same during subsequent
profitable years.
Management & unions to jointly address the workforce &
allay the fears of
insecurity of job.
Use this period for technical skill enhancement, Research &
Development and
wider range of products.
Strategic tie-ups with automobile companies in Europe.
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Year - 2000
Steps taken by Hyundai
Hyundai cut ties with Parent Group
Formed independent automotive business group
Entered overseas market such as US & Europe
Repositioned themselves as technologically advanced, stylish and
reliable
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Year - 2001
Results
Hyundai forecasted profits of $900 billion
23% growth in unit sales
74% improvement in net income
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Year - 2001
Issues Faced
Workers demanded 30% share in the profit
as performance bonus
Hyundai Stand
Cannot accept offer to give away 30% due to
Reason: Influx of imported cars into South Korea would hurt the
market share
Other Reasons
General Motors purchased Daewoo resulting in stiffer competition
& reduced future sales
Appreciation of Korean currency resulting in Hyundai cars
becoming less competitive
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