Name: Shaikh Fahad Saeed

Internship Final Report

Name: Shaikh Fahad Saeed

ID: 200800652

Major: Finance

Internship program Start from 16 June 2012 till 16 August 2012

This is not my end of university because coming semester is going to be my last and final semester after that I will be graduated from Prince Muhammad University. The policy of my university is that every student needs to do internship and this program is for two months. During these two month program student will be test it what he learn from university or gain knowledge is it helping him on training or not. This training will help students what he learn from university and student will be facing how the real life and how the working environment will be.

It was the really interesting working in KIA motors and I working in finance department which is related to my major finance. Finance teaches me how auditing and analysis goes in KIA motors. After I graduate from university I will be ready to face any kind of problem which is related to major finance.

In this report it will be summarize if six weeks of training KIA motors in Saudi Arabia. KIA motor in few month it’s going to be largest selling car in history because in current report from web KIA become the bestselling car. KIA motor making the care what customers need KIA cars are cheap in price, less interest, less down payment and it luxury. my training at the KIA motors provided me with the desired information and experience.

After finishing 4 years in Prince Muhammad University and remaining one semester. The day I join university till now I meet many students. In Prince Muhammad University there many other national also but most of the students are Saudi. I had group project with Saudi student the experience with them is different in group I know them very well they are very helpful to me and whenever I faced any problem in university they always beside me. My journey in this university it is memorable and hard to forget how I had fun with them because in high school I remember most of the work I got for school which done at home or in school but working in groups it is help me to make confidence level up and how to work in group.

My best thanks to instructor’s who is always there for me and shared experience with during my time at the university. Everybody I met during that time was part of my achievement and success.

Soon I am graduating and my new career is going to begin in few months but I really thanks from my bottom heart to my friends in university, faculty and staff at PMU

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  Abstract
  
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  Introduction
  
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  Analysis of the KIA automobile industry product diversification
  
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  Marketing strategies
  
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  Competitive strategies
  
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  Job History
  
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  SWOT analysis
  
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  Strength
  
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  Weakness
  
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  Opportunities
  
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  Threats
  
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  Technical parts
  
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  Evaluation of the internship experience
  
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  Summary of findings and recommendations
  
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  Conclusion
  
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  Reference
  

The KIA automobile industry is one of the largest in the world and is quickly becoming the fastest growing one in the global markets especially after the recent global financial crisis in 2008. It has grown from a small government-controlled industry to large multinational enterprises for the last three decades. This paper will talk about how the KIA automobile industry has risen so quickly in such a short time period. It will discuss how the KIA automobile industry has made huge impact on the global market by analyzing key areas of its operations, such as product diversification, new car development, and manufacturing process, marketing strategies, economic and social significance, in addition to SWOT analysis for the comprehensive strategic assessment of the overall conditions around the industry. The competitive analysis of the KIA auto parts industry will be added by using the Porter’s Five Forces model. Finally, some suggestions will be made for its continuous growth in the global markets.

The KIA automobile industry has produced many different types of motor vehicles with high quality at reasonable costs. Most companies have competitive resources, technical, and managerial skills in this manufacturing industry. They have consistently produced them and tried to diversify their products with strong support and collaboration from their suppliers. The existence of all those reliable, dedicated suppliers is one of main reasons why KIA automobile companies could produced various types of automobiles efficiently and effectively in short lead times. But the Korean automobile industry has the best operations in manufacturing automobiles at reasonable costs. There have been many predominant automobile companies in the world which diversified their products, but could not succeed all the way in the global markets. For example, Ford Motors once manufactured tractors and General Motors (GM) manufactured appliances for home and diesel powered locomotives. By the end of the 20th century, however, Ford and GM had divested themselves of most of their nonautomotive operations and had spun off most of their automotive components - making divisions into separate stock companies - Delphi Automotive Systems in the case of General Motors and Visteon Automotive in the case of Ford. During 1990s, when Korea was growing at a slower pace, it forced most Korean automobile companies to begin divesting themselves from other products they produced and components in which they had long held interests. As a result, by the late 1990s they could enter into international markets and started expanding their business globally with its competitiveness created from such changes. Then, with successful operations in the major global markets, especially in the US markets, after several years, they could introduce various types of products to the global markets.

While the mass production is still a common practice by the automobile industry in the world, the demand of motor vehicles also increased steadily all over the world. This makes automobile manufacturers concentrate more on the services needed for their products. This is a major factor in instilling confidence to the customers, and it is very much required in order to survive in today’s tense competition from all over the world. Since distribution and sales networks are generally very complex and complicated, there is a need of well organized and better equipped after-sales service department. The automobile companies should provide the highest level of services to their customers to win competition against other competitors no matter where they do their business and no matter what products they carry to the markets. The typical KIA automobile company has a unique system of franchise dealership whereas the manufacturer decides on models and makes that can be sold and serviced by the dealers. Even the quota of cars for sales is also decided by the manufacturer. This helps them in control of services and guarantees proper after-sales service to the customers. In return, the dealers are given a particular region where no other dealers can sell the cars produced by the same company. This approach helps them to enhance their sales without any additional costs of sales. Also manufacturers are responsible for all kinds of promotion and advertisement and help dealers concentrate just on their service facilities. It is a very standardized system practiced in Korea. This unique system helps all the dealers to be united and concentrated on services more than anything else. Also the prices, services, and facilities are all uniform all over the country. This is a healthy competition against rival companies which also follow a similar practice.

KIA motors having had hard time with other competing with other motor companies around the world because of very large numbers motor companies all over the world.

The KIA motors main aim is that to make his or other customers to happy because KIA motors have the low interest rate and low down payments because other motors companies have the high interest rates. Most important KIA motors thinks that for customers its safety.

Advertising is moreover one of the most clearly discriminating strategies in the keeping Kia engines in the business in general. Each branch has its particular burden in setting showcasing objects.

Analysis is a tool of strategic planning which is used to evaluate the strength, weakness, opportunities, and threats involved in a business or project venture. SWOT analysis involves specifying the goals and objective of the business venture and also identifying the external and internal factors which are either unfavorable or favorable for the company to achieve its objectives. So, the SWOT analysis aims to identify both the external and internal factors which are the essential and critical to the company’s operations and practices in achieving its objectives. Therefore, the two main categories in a SWOT analysis are; internal and external factors. The first category, which is the internal factors, comprises of weakness and strength found in an organization. The second one is the external factors, which are threats and opportunities found from the external environment. Conducting a SWOT analysis for the KIA automobile industry will identify those four dimensions strength, weakness, opportunities and threats – faced by the KIA automobile industry. It will help in strategic planning and decision-making process based on the weakness and strength of the industry. It can be used to do a comprehensive strategic assessment for the industry. The evaluation and responsiveness will also be assessed by examining the external environment around the industry. So, the opportunities an organization has will be identified and capitalized upon. The potential threats will also be identified which pose future challenges to the industry. Through the analysis, identification and highlighting of the major areas of strengths, weakness, opportunities and threats will make be useful for making adjustments, realignments, and changes in its business strategies. The analysis will be of vital importance for those interested in learning about the KIA automobile industry and especially for the top management of those Korean companies in making decisions. Other parties who will get benefits from the SWAT analysis include those parts suppliers, potential and current investors, vendors, the individual company’s analyst group, and those associated with the KIA automobile industry.

The KIA automobile industry’s major strengths are its efficient R&D process, strong global networks, and the wide range of products covering the major niches in the global markets. Most of Korean automobile companies are now producing various types of reliable and reasonable automobiles in the low price range and is trying to compete against the world’s best companies even in the high end luxury markets based on its fast development of luxury cars from strong R&D as a fast follower. We could see them as a major player in the global markets especially after the merger of Hyundai and Kia in 1998, and we can recognize them as a global force now and even a global leader in the future. It is one of the biggest strengths they possess. They are producing high quality cars at a very reasonable price which makes exceptionally competitive in the global markets. They used to be known just for their price competitiveness based on cheap labor, raw materials, and low cost parts. However, now their competitive edges include not only reasonable costs, but also much improved quality as well as advanced technologies producing fuel-efficient automobiles. Korean companies basically try to carry their vendors, subcontractors wherever they go. This enables them to show how they value their importance in every small thing they do. Now Korea is planning to sign a FTA (free trade agreement) with the US government which would allow them sell their products more in the US markets. The KIA automobile industry expects their sales to increase to about $1 billion in three years once the FTA is signed. The FTA with the US should provide a great opportunity for KIA automobile companies to move to the next level of their business operations. It will open up the US markets more freely to them. These are some strength the Korean automobile industry possesses.

The KIA automobile industry’s most serious weakness is strong movements by hard labor unions in Korea. The labor union movements are generally very strong and hostile especially in the KIA automobile industry, which hurt not only those companies’ business, but also the Korean economy seriously. There has been no single year in the last eleven years without labor unions’ strikes in the KIA automobile industry. It looks like an annual event, shutting down many plants among all those large automobile companies in Korea for a long time every year. The next one is that there are highly unexpected fluctuations of the value of the Korean currency, which would affect their exports and imports. The uncertainty regarding the value of the Korean won makes Korean companies vulnerable in their international markets. Since most Korean companies rely heavily on foreign sales, their operations and production are affected significantly by the value of their currency. Another weakness is the lack of brand awareness worldwide. For example, customers in major international markets, especially in the US markets, see Hyundai, the largest Korean automobile manufacturer, still as a cheap automobile producer. They still have a perception that Korean made automobiles are cheap ones. In other words, Korean automobile companies are generally known as cheap producers. Even though they are transforming their companies to quality manufacturers, the brand awareness is not yet strong in the market. So, high brand awareness will be a key for the future, and it is one of the most serious problems Korean automobile companies must try to solve sooner for their long run benefits.

The opportunities available for the KIA automobile companies are the rising demands of Korean automobiles in many new markets which will help Korean companies improve their global market shares. More exactly, a promising opportunity for Korean companies exists in the Association of Southeast Asian Nations (ASEAN) markets as well as in India, Brazil and Russia with the increasing demand of especially small cars with excellent fuel efficiency. This will lead them to build products with high fuel efficiency. Even in the US market with high fuel costs now, the demands of those fuel-efficient small cars are significantly being increased. The Korean automobile companies are very strong especially in this market segment with all technical, economical advantages for producing such small cars. This is one of the reasons why Korean automobile companies’ sales are significantly increased while many rival companies’ sales are dropped recently in the global markets overall. Developing new technologies for fuel efficiency and green‖ cars and competing against the current global market leaders now shows the Korean companies’ resilience to be on top of its game through implementing a successful business strategy and to be capable of building a string of high class products which makes those companies compete against their rivals successfully in the global markets.

The Japanese automobile industry, one of the biggest rivals to the KIA industry, still remains as one of Korea’s prime threats. The technology gap in some core items especially for luxury cars between Korean and Japanese (as well as European) companies would be a main threat in the future. KIA auto manufacturers are still finding it hard to bring luxury cars to competition against those global leaders. Hyundai brought Genesis which offers more luxury for the price, but could not sell as many as they expected in those high end markets so far. The Japanese trio of luxury, Lexus, Infiniti, and Acura, are very strong in those global luxury car markets. The European trio, Mercedes, BMW, and Audi, are heavily demanded globally. This gives a big threat to Korean manufacturers in expanding their business to luxury product lines. Also as gas prices rise continuously with the exhaustion of fuel resources in the world, global leaders are spending more resources in their research for developing vehicles with other kind of fuels. So, Korean companies should do more research for bio-fuels or any alternatives with renewable sources of energy. Since the other global manufacturers have already introduced new vehicles for the next generation successfully, such as hybrid vehicles and electric cars, the Korean automobile industry should conduct more research for developing those types of new technologies and vehicles. This will be another threat to the Korean automobile industry. The following chart shows the SWOT analysis of the Korean automobile industry discussed above.

The auto parts industry is another important industry, which is critical in manufacturing quality automobiles. The growth of the automobile industry in a country depends largely on the quality of auto parts produced in the country. It is critical for a nation which would like to develop a strong automobile manufacturing industry to have a reliable auto parts industry. So, analyzing business climate of the auto parts industry is a key for understanding how to develop a world-class auto industry with sustainable growth in a country. As mentioned earlier in this paper, Korean automobile manufacturers usually take most of their major suppliers wherever they go in the world. It is very important for automobile manufacturers to have reliable suppliers nearby their plants for many competitive reasons. In the last two decades, Korean governments and large automobile companies, such as Hyundai and Kia, have invested a lots in developing reliable, high-quality auto parts and sub-assemblies with technical supports from many research institutions and academic organizations. Many of Korean auto suppliers are now producing high-quality parts not only for their domestic auto makers, but also other world-class makers in the world. Actually, according to the recent data, the Korean auto parts industry now outgrows the Korean automobile manufacturing industry. Especially after the global financial crisis in 2008, many auto parts producers in other countries, such as Japan and the USA, went bankrupt due to low demands of their products. However, Korean auto parts producers are enjoying great businesses as the Korean automobile companies are breaking their sales records every year. Furthermore, also those global leading auto makers, including Volkswagen, BMW, Mercedes, GM and Ford, have decided to buy more parts from Korea instead of China since they couldn’t trust the quality of Chinese made parts with some serious quality problems they had with those parts from China used in their products.

My major is finance and all this details which I also mentions in my progress report, I started my training on 16^th June 2012 which I mention in my introduction and my 3^rd week of training is end. From first week till now I am learning basic things but not very deep because I am not the permanent employee and they are not allowing me in their main system. Reason they not allowing in the system most of the file are very confidential. The employee which I am working under his name is Mr. Mudaasir and he is from finance and account department. I learn many things one of work was got invoice statement report and in this report there was a cash invoice from 16/6/12 to 18/6/12 and then I have to analysis the invoice number, labor charges, spare parts, other expanses and at the end I have to take out the total amount.

Second thing which I learned in my internship was to check bank receipts and balance sheet. In this balance sheet it showed me how many people takes the loan from bank to buy the car and the statement of this loan was issued from the past one year.

Third thing which I learn it is a calculator and it is not the normal calculator. In this calculator you can find out if customers buy the new car in the installment how much he/she need to pay down payment and what will be the interest rate which customer buying car. Calculator consist of 5 objects cost of vehicle, down payment, interest rate, term (months) and payment. Below this you see one picture this is that calculator which is I am talking about but this calculator made for dollar currency. The calculator which Mr. Mudaasir showed me it is on Saudi currency. I wanted to put Saudi currency calculator picture but I cannot access on the system but this picture I take it from internet.

This calculator is very simply and it work automatically we need to set cost of vehicle, down payment and interest rate then calculator automatically shows how much customer need to pay money monthly.

Forth thing which I learn was about how code use in transaction to contact with other KIA branch.

Separated from this whole experienced in my internship, most significantly thing I got know was how they work in excel. There were putting formulas in excel so by that they gets correct answers on their finger tips. It was fast, accurate and easy to use by anyone who knows little about the finance and accounting. However I did not only learn the things which are related to my major, I also learned how to behave in the company. How to interact with different people and as well as also how to get in involve with the other employees in the company, where after that it really makes my job interesting and easy to do.

During my internship I had the best time in KIA motors and had a good knowledge how works goes in finance and account department. This internship training going to help me a lot in the future because right know I learn basics when I finish my university this training going to help me to find new jobs in other companies and the most important skills that each student needs to be successful, which is communication. Based on my learning at the university and this experience, I started to extremely believe that communication is one of the most important skills, and started trying to develop it better every day.

Following finishing the internship course, some student thinks that finance is the easy to understand but I say it is not easy because one mistake it can lead your company into wrong direction. Studying finance was very interesting but after experience in internship I can say that finance is where I belong to. During these two months working in finance and accounts department give me different views and potential about finance. What I learn from training it’s really going to help in future. I worked on reviewing invoice statement report, check bank receipts and balance sheet, financing calculator, how many money transaction done for KIA motors to SABB bank and last thing was how code used when money transfer one place to another. What I learn in university it’s really help me but working in reality for your career it is totally different. Working in reality I can get gain my confidence level and also gain my experience.

To sum it all up, it was a very good experience. I’m looking forward to someday using all of the knowledge I gained from this. As a general accountant, I learned bits and pieces of the various accounting processes in a company. I also will continue working there since it is a part time job for me, although after I graduate I will take this experience elsewhere. The KIA auto industry is one of the most flourishing industries in the world right now. It has been doing wary well with the steep competition against the global leaders from Germany, Japan, and USA. It has also reacted well to challenges from other new competitors from Asian countries, mainly from China. In spite of severe completion and tough challenges in the global markets, which gives serious threats to the Korean automobile companies, overall the Korea automobile companies have done outstanding jobs so far, and are taking a right direction to the future with ambitious but attainable goals based on well calculated aggressive strategies.

Kia Global | Kia Motors-KSA . (n.d.).Kia Motors-KSA . Retrieved August 25, 2012, from http://www.kia-sa.com/?q=about-kia/kia-global

1993, t. t., countries, i. w., 500, b. a., 650, l. K., 1994, 0. i., operations, U., et al. (n.d.). History of Kia Motors Corporation – FundingUniverse. Find Funding with Banks, Investors, and Other Funding Sources | FundingUniverse. Retrieved August 25, 2012, from http://www.fundinguniverse.com/company-histories/kia-motors-corporation-history/

Team, K. M. (n.d.). Designing the Future: History of Kia Motors. Kia BUZZ : Kia’s official corporate blog. Retrieved August 25, 2012, from http://kia-buzz.com/designing-the-future-history-of-kia-motors