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Honda Honda Presentation Transcript

    • Payam Ansari
    • Liew Soo Ting,Christie
    • Khor Siu Gek
    • Mohammad Gholamzade
    Multimedia University, Malaysia
  • A Brief History
    • Founded : September 24, 1948
    • Headquarters : Tokyo, Japan
    • Key people :Soichiro Honda, Founder Takeo Fukui, CEO
    • Industry : Automobile & Truck manufacturer & Motorcycle
    • Revenue : $94.24 billion USD (2007)
    • Net income : $5.0 billion USD (2006)
    • Employees :167,231 (2007)
  • Environmental Analysis
      • Legislation
        • Environment
        • Company Cars
      • Taxes and Duty
      • Subsidies
    • Legislation
    • - 1966 : The first safety act (The National Traffic and Motor Vehicle Safety Act)
    • - 1970 : Clean Air Act that demanded a 90% decrease in automobile emission within the next six years.
    • - 1975 : all automobiles had to meet a standard of fuel consumption.
    • - 1992 : installation of front airbags. (Motor Vehicles and Passenger Car Bodies, 2004)
    • - …
    Environmental Analysis - Political
    • Taxes & Duties
    • ( Road tax to be directly linked to amount of emissions.)
    • Subsidies
    • (e.g. Government protection for Renault,
    • Peugeot and Fiat)
    Environmental Analysis - Political
    • E conomic
    • - The automobile industry has a huge impact on the countries’ economy.
    • The study conducted by The University of Michigan and the Center for Automotive Research shows:
    • - This industry is the major user of computer chips, textiles, aluminum, copper, steel, iron, lead, plastics, vinyl, and rubber.
    • - For every autoworker there are seven other jobs created in other industries.
    • - In 2001, the total sales of automobiles were 3.7% of the nation’s GDP.
    Environmental Analysis
  • On the other hand - Excess supply (due to foreign imports) has led to spending heavily on marketing and new product design. - Oil crisis & economic situation of some European countries have made a new increasing market for small and fuel-efficient cars. Environmental Analysis- Economic
  • Environmental Analysis
    • S ociocultural
    • - Today’s society judges people on the type of car you drive!
    • e.g. :
    • A mini van driver is perceived as a soccer mom! Or a Lexus driver is thought to be wealthy.
    • - Another aspect is the environmental concerns for the need of fuel-efficient vehicles.
  • Environmental Analysis
    • T echnology
    • - The most important technology affected auto industry is the Internet.
    • A study showed that 60% of the buyers referred to the internet before making their purchases and out of that 60%, 88% went to the auto websites before going and taking a test drive.
    • - Business-to-business marketplaces opportunities ( more efficiency & lower costs)
    • - Increasing concerns for the economy & global warming with the help of modern technologies resulted to the invention of Hybrid vehicles.
  • Environmental Analysis
    • G lobal
    • - New trade association that created The Alliance of Automobile Manufacturers ( created by GM, Ford , D.Chrysler, BMW, VW, Volvo, Toyota, Mazda & Nissan)
    • - M&As started in the late 1990s. E.g. :
      • Daimler-Benz merged with Chrysler.
      • Daimlerchrysler acquired major share of Mitsubishi.
      • GM became the controlling shareholder of Fiat & Saab.
      • Ford acquired Volvo, Jaguar & major share of Mazda.
      • Renault became the controlling shareholder of Nissan.
  • Industry Analysis
    • Threat of New Entrants : LOW
    • Barriers to entry:
    • - The industry is very mature & has successfully reached economies of scale.
    • - It needs an incredible amount of capital. (either for manufacturing or R&D)
    • - Difficult to access to distribution channels.
    • - Difficult to exit (ESCAPE)!
  • Industry Analysis
    • Bargaining Power of Supplier : LOW
    • - Large number of suppliers
    • - Low switching cost
    • - No threat of forward integration
  • Industry Analysis
    • Bargaining Power of Buyers :
    • Moderately High
    • - Low switching cost
    • - Large number of buyers & concentrated sellers
    • But
    • - The buyers aren’t large & few in number.
  • Industry Analysis
    • Threat of Substitute Product : LOW
    • - There are not many substitute products for automobiles.
    • - Substitutes products all depend on the geographic location of the consumer.
    • E.g. in New York a car isn’t necessary but in Cyberjaya it is!
  • Industry Analysis
    • Intensity of rivalry among the Competition :
    • Very High
    • - For an industry like automobile industry this amount of companies is high.
    • - Degree of differentiation is not very high. ( comparing all companies together)
    • - The level of fixed-cost is very high
  • Marketing Strategy Products Automobiles, trucks, motorcycles, scooters, ATVs, electrical generators, robotics, marine equipment, jets and jet engines, and lawn and garden equipment.
  • European Market Four large European markets : 1. UK ( 20 models) 2. Germany (16 models) 3. Italy (11 models) 4. France (9 models)
  • Global Supply Network of Autos
  • Pricing Strategy
    • Honda is attempting to price its products at similar level to that of the competition.
  • Distribution Channels
    • Image of Honda’s vehicles & motorcycles in Europe is aligned together.
    • Honda’s vehicles are distributed at the same locations that their motorcycles are.
  • Promotion Mix
    • The promotion of Honda’s products is
    • essentially the same throughout Europe ( whether in France, Italy, Germany or UK )
    • The company spends very little time & Money in promotion.
    • Relied on word of mouth & its websites.
  • Organizational Analysis
  • Organizational Analysis
  • Organizational Analysis
  • Major Problems
    • Failed to understand European culture
    • Automobile industry in the mature stage of life cycle
      • Oversupply of motor vehicles
      • Fierce competition from foreign and local manufacturers
      • Result: Poor market share and decline in sales
    • Weak brand image in European market
      • Difficulty in penetrating in luxury markets
  • Brand Image in Europe Honda Daewoo Hyundai Toyota Audi Volvo Peugeot BMW DMC Fiat GM, Ford VW Renault Low High High Brand Image Breadth of product
    • Treated Europe as one single market
      • Failed to truly understand the culture of Europe
    • Italy and France
    • Slow to adopt Internet
    • Germany & Scandinavian
    High Context Low Context
  • Low context High context Contextual Background of Various Countries Japanese Arabian Latin American Spanish Italian English (UK) French English (US) Scandinavian German Swiss EXPLICIT IMPLICIT
  • Marketing Mix Problems
    • Ineffective advertising strategies / tactics:
      • Standardized advertising campaign
      • Minimal attention on marketing & promotion
        • Solely depends on the success of F1 racing and word-of-mouth
        • Insufficient in Europe market
      • Universal website (informative)
        • Honda Jazz’s website
  • Marketing Mix Problems
    • Standardized distribution
    • Narrow product line
      • Lack of market sensitivity (diesel cars)
    • Late-mover expansion in European market
  • Recommendation
    • Varies marketing mix strategies across national borders due to differences in buying behaviour and habits
    • Marketing strategy plan should be revised
      • Develop according to the nation’s culture
      • Market segmentation according to high or low context culture
  • Recommendation
    • Expand its sales and production in order
    • to survive in global scale competition
      • Fully utilize the technologies capabilities (core competency)
    • Tackle market by manufacturing more low-emission CO2 vehicles and offering more motor vehicle models (diesel cars)
  • Recommendation
    • Allocate more resources to change brand perception (enhance brand awareness)
    • Customize advertising based on style and image
    • Employ PR campaign, road shows, printed and broadcast media
    • Informative advertising
    High Context Low Context