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Kia is one of the most prominent Korean car companies, thanks to its recent commercial success. The beginning of this ascent to the top of the automotive market started with creating a unified design for all brand products, led by German designer Peter Schreyer. Qualitative changes in the appearance, making the cars more appealing, combined with a large-scale entry into new markets, such as the U.S., brought the company a significant income. The company’s current position is robust, and Kia itself reports near-term market share retention and sales growth (“Kia achieves a 4.9% market share,” 2022). When looking at the broader statistics, the favorable situation for the company becomes even more evident. The company’s stock has been rising steadily for the third year despite the coronavirus pandemic (“Kia motors,” n.d.). Finally, U.S. auto sales figures also confirm the company’s successful choice of strategy, as the number of sales has been increasing monthly since 2009 (Cain, n.d.). The company’s focus on easily accessible yet quality-looking cars was justified.
One can also conclude this by analyzing the company’s decisions through Porter’s Competitive Advantage framework. First of all, by entering the U.S. market and expanding sales, Kia was filling a niche with few competitors. Other car manufacturers, especially those from the U.S., provided a much more expensive product. On the other hand, Kia’s cars successfully combined the stylish look of European vehicles and the low cost of components. Secondly, the company had almost no barriers to occupying this niche, as new large-scale players in the automobile market are doubtful to appear because of the industry’s peculiarities.
In this case, the company’s strength may be determined by the already well-established production facilities and unique design, which is one of the brand’s key features. In this context, Kia had all the necessary suppliers for such a decision. On the other hand, people in America wanted cheap and beautiful cars, so Kia’s entry into the market was met with optimism, as can be seen in its increasing sales. Finally, due to the relatively large closedness of this industry, there were simply no similar manufacturers on the market, which allowed the company to set up favorable conditions for itself. Thus, it can be noted that in terms of the Competitive Advantage framework, Kia’s strategy was almost perfect, which allowed the automaker to explore new horizons successfully.
References
Cain, T. (n.d.). Kia sales figures – US market. GoodCarBadCar. Web.
Kia achieves a 4.9% market share in February. (2022). Kia Media. Web.
Kia motors. (n.d.). Google Finance. Web.
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