Case study: How focus on quality improves brand value

Do you know which mass market auto company tops the ‘initial quality’ as per J D Power?

Next question- which auto company comes just behind Jaguar, ranked #4 in quality?

A hint – Toyota? Volkswagen? Ford? Sorry to disappoint you. But it is none of these esteemed companies. The mass auto brand which is beating these illustrious companies in ‘quality’ none other than, Hyundai, the South Korean mass auto manufacturer. Surprised? Even the world is because till recently Hyundai was renowned for its poor quality & ‘fast following’ the better known Japanese auto companies.

What factors catapulted Hyundai to pole position in ‘quality’? Simply put – It’s 3 factors.

1. Leadership: Hyundai was lucky to have Mr. Chung Moong-koo as its CEO. He provided leadership & ruled Hyundai with an iron fist. He demanded that his decisions be implemented expeditiously, flawlessly & without too much of debate! But he took decisions which were in company’s interest. He believed that there are two components which are ‘must’ for building a world class admired auto company -quality & design. And he took decisions to embed these into Hyundai.

2. Quality: Hyundai focused on creating an insanely great & flawless product. And it was the responsibility of everybody in the company to make it happen. Take Sonata. It competes with Toyota Camry & Ford Fusion. The engineers after making it perfect took it apart repeatedly to make sure that they had eliminated every error that could creep in. Result: Sonata is an insanely great & flawless car on the road.

3. Design (Aesthetics): Hyundai reasoned that it is no use having a great quality product which lies hidden under the ‘skin’ of the car. What customers notice is ‘aesthetics’. And customers were describing the Hyundai look as ‘weird’. To get over this problem they hired Peter Schreyer, an Audi designer who had received acclaim for designing Audi TT. He set out to transform the aesthetics such that it appealed to the emotions of auto buyers & set their heart fluttering when they saw a ‘Hyundai’! Result: Hyundai by pursuing these basic strategies has catapulted itself into being rated as the 5th largest auto company in the world and ever rising. In ‘quality’ it is scoring over its competitor.

Business lesson for us: The foundation for building a world class company is simple – focus on building an insanely great product – (quality) & ‘wrap’ it in a design that will make the hearts of your customers flutter when they see your brand. And then make sure you deliver on your promise!

By the way, the most popular taxi brand among taxi drivers in Mumbai is Hyundai. Why? Good resale value – that too after it has been tortured for years over Mumbai’s road it is still in fine fettle & ready to work for its  new owners – efficiently & effectively.

Rajesh Srivastava has 3 decades of corporate & academic experience.He is an alumnus of IIT Kanpur & IIM Bangalore. He is currently working on his first book

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