- After World War 2, there was increased demand for transportation in Japan which Honda was able to capitalize on through simplified mass production methods, gaining a 15% market share by 1954. - By 1959, Honda's Supercub model had become hugely popular in Japan with 168,000 of the company's total 285,000 unit sales that year. - Honda then expanded to the US market in the 1960s with a range of small motorcycles and eventually came to dominate with over 50% market share by the mid-1960s due to the popularity of their Super Cub model.

1. HONDA CASE STUDY
SAMEER SHAIK
MBA IB A

2. SUMMARY:
• After world war II there has been an increased demand for effective transportation in Japan.
• Honda, used simplified mass production process and methods to become one of the industry
leaders with 15% market share-1954.
• By the end of 1959, out of the total sales of 285,000 units, 168,000 was Supercubs.
• Honda then entered U.S. with 25% each of 50cc, 125cc, 250cc and 305cc machines.
• A few of 250cc and 305cc began to sell but encountered problems with oil leaking and clutch
failure.
• By moving 50cc bikes, Honda hit a large market share in U.S. and out of every 2 motorcycles
sold, was a Honda.

3. FACTS AND FIGURES
1. 1958 - Supercub was launched in Japan.
2. 1959 -1973 British motorcycle share in U.S. dropped from 49-9%.
3. 1959 - Honda established American Honda Motor Company, entered Isle of Man racing and
also established manufacturing plant in Japan to produce 30,000 motorcycles per month.
Got permission to invest $250,000 in U.S market of which $110,000 was only in cash.
4. 1960 -1965 registrations for motorcycles increased from 575,000 to 1,382,000 in U.S.
5. 1960, April - Machines encountered oil leakage and clutch failure. Later in the same year
supercubs gained momentum.
6. 1963 - Adopted “Nicest People” campaign.
7. 1964 - Nearly 1 out of every 2 motorcycles sold was Honda.
8. 1965 – Sales reached $77million.
9. 1966 – Achieved a market share of 63%.

4. Honda
63%
Yamaha
11%
Suzuki
11%
Herley Davidson
11%
BSA/Triumph and others
4%
MARKET SHARE (%) IN U.S
Honda
Yamaha
Suzuki
Herley Davidson
BSA/Triumph and others

5. STRENGTHS WEAKNESSES OPPORTUNITIES THREATS
Diversified product
portfolio
Inability to understand the
U.S market
Untapped market segment British motorcycle
manufacturers
Economies of scale They were on cash basis
in U.S.
Growing Japanese
communities
People’s perspective on
motorcycles
Strong R&D and
marketing strategy
Their reputation was at
stake due to machine
failure
Need for motorcycles in
U.S
Government restriction
High net fixed asset
Investment
No initial strategy Financial support for
motorcycles.
Limited motorcycle
dealers.
SWOT ANALYSIS

6. Threat of new entrants Medium
Potential power of buyers Low – Medium
Potential power of suppliers Low or High
Competitive rivalry Medium
Threat of substitutes Low
PORTER’S FIVE FORCE ANALYSIS

7. 1. Capturing the untapped market.
2. Achieving Economies of scale.
3. The nicest people campaign.
4. Consumer credit/banks began financing motorcycles.
5. Shifting from consignment basis to cash on delivery.
SUCCESS FACTORS OF HONDA IN U.S

8. • They entered with no into market - mainly 250cc and 305cc machines, but failed.
• Then with an emergent strategy they captured 63% of market with Supercubs 50cc.
WAS THERE ANY STRATEGY BEHIND HONDA’S SUCCESS?
 Coming up with a policy of “selling not primarily to confirmed
motorcyclists, but to members of general public who had never before given
second thought to a motorcycle.”
 Redefining the leisure class segment (nicest people)
 Developing market region by region
 Exploiting competitive advantage via aggressive pricing and selling
 Contrast from other foreign producers through not relying on distributors
 Gaining more leverage through cash on delivery system

9. • Strategy alone doesn’t guarantee the high performance of firms but a lateral thinking on 6 factors
like strategy, structure, systems, style, staff and shared values is necessary.
• When deliberate strategy encounters uncertainties, emergent strategy works the best.
• Continues research and development has helped Honda move towards a better market share.
KEY TAKEAWAYS FROM THE CASE

10. THANK YOU