Study on the FDI Strategies of Korean Automobile Industry: Success Case of Hyundai Motor Company

Abstract

Since the 1980s, Hyundai Motor Company (HMC) has gained successful achievements in the foreign investment. While several researches have attempted to analyze the strategies behind the successful stories of the HMC in the Foreign Direct Investment (FDI) by focusing on specific countries or cases, there has been no a comprehensive study that investigates the firms entire picture of success in relation to its FDI strategies from a broader point of view. In order to comprehensively address the HMCs entire successful story, this dissertation conduct the HMCs empirical analyses from the beginning to the most recent period at a firm level by linking existing business frameworks with FDI theories. More specifically, this research divides the HMCs entire successful story into four developmental stages based upon Moons extended model of Porters generic strategies, and explain each stages by applying two FDI theories, Dunnings Eclectic Paradigm and Moons Imbalance theory. The four developmental stages of the HMCs success in FDI based on Moons model are following: first stage as the preparation level, second stage as the cost focus strategy, third stage as the cost leadership strategy and the last stage as the broad differentiation strategy. Since the first stage is the preparation stage in domestic market, no FDI theories can be applied. However, the second and third stage can be effectively explained by Moons Imbalance theory and Dunnings Eclectic Paradigm, respectively, and the last stage can be supported by both Dunnings and Moons. While all stages are necessary for the HMCs success, this research argues that the second stage is the most critical stage.