PAGE 32Running Head Honda Motor Company Comprehensive Over.docx

Running Head: Honda Motor Company Comprehensive
Overview
Honda Motor Company Comprehensive Overview
Eric Christopher Tingson Garcia
BUSN 520 Marketing and Management
Professor Phil Shaps
April 12, 2015
Table of Content
Introduction…………………………………………………………
…………………………..…3
Description of the organization history, all subsidiaries and
score of services provided…………4
Scope of market distribution – are they global or regional
etc…………………………………....6
Overview of the leadership and management structure and
individuals………………………….7
Current issues that may affect the future of the
organization…………………………………..…8
Strengths and
Weaknesses…………………………………………………………
…………...…9
Opportunities and
Threats………………………………………………………………
……..…12
External factors impacting

decisions………………………………………………………….....1
4
Possible future
scenarios………………………………………………………………
…………15
Primary and Secondary
Market…………………………………………………………………
.15
Target
Market…………………………………………………………………
…………………19
Market
Position………………………………………………………………
………………..…20
Recommendations for
Leadership……………………………………………….……………
…21
Recommendations for
Promotions………………………………………………………..…..
…23
Conclusions…………………………………………………………
……………………………25
References……………………………………………………………
………………………..…27
Appendix
…………………………………………………………………………
…………...…28
Introduction
“’Respect for the Individual’ and ‘The Three Joys’-expressed as
‘The Joy of Buying,’ ‘The Joy of Selling’ and ‘The Joy of
Creating’” are the four basic principles Honda Motors Company
is embodied with, that influences its decision on its journey to
continuous growth (Honda Worldwide, 2011). Respecting
individuality base on their own customers’ unique characters,
while providing direct enjoyment through their product has been
the concept that Honda has expressed their belief in. In line

with these principles ever since its establishment in 1948,
Honda has remained a leading company in the market, through
creation of new innovative technologies, products of higher
quality at reasonable prices, world wide customer satisfaction,
and commitment to environment protection and enhancement of
safety in a mobile society.
Honda Motors Company being the third largest automaker in
Japan is perhaps known best as an automaker giant in the
industry. Although the company has had its roots in
motorcycles, and is even currently the world’s top motorcycle
manufacturer, Honda’s automobile product line still accounts
for approximately 90 percents of its sales, especially in the
United States where the majority of its sales are generated.
Honda has manufactured and sold many top-sellers, such as
Accord, Civic, Prelude as well as its luxury line within Acura.
Such popularity having positive effect on the success of the
company has also generated negative publicity, with the Civic
having rank first in the United States’ list of most stolen, and
thus “in demand”, vehicles. Other products within the Honda’s
vast divisions include other times that bolster annual sale, such
as agricultural and industrial use machinery, generators,
engines, and all terrain vehicles (Minami & Minato, 2009).
As with any other companies, Honda has its shares of internal
and external factors, dictating its success and growth. Where
strengths and opportunities is a favorable outcome for the
company, it is also shadowed with internal weakness and threats
from external sources and competitors. In order to determine
Honda’s future growth and its susceptibilities, a company
analysis is therefore needed to establish its weak points, to
highlight its strong areas, and to determine possible
recommendations for future success of the company.
Description of the organization history, all subsidiaries and
score of services provided

The Honda Motor Company is a multinational based company in
Japan that deals with manufacturing power equipments,
automobiles and motorcycles. The company has been the
biggest seller of motorcycles for years and has also been the
biggest manufacturer of internal combustion engines in the
world, selling more than 14 million engines per year. Today the
company is among the 8 biggest manufacturers of automobiles
in the world. Although the aforementioned items are amongst its
biggest offerings, they are not the only ones. The company also
manufactures and sells marine engines, garden equipments,
generators and watercrafts. Furthermore, there have also been
steps in commercializing artificial intelligence, robotics,
aerospace technology and aero engines, an interest which the
company has been having recently. “Honda also has an excellent
record of financial health, never once falling into the red since
its inception” (Mie, 2015).
In the automobile market, the company has had tremendous
success thanks to the different customer oriented vehicles they
have come up with. The automobiles are also manufactured with
consideration to the different regions that forms their market.
For instance, a car in North America might not look like the
international car of the same model. Motorcycles are also
among the company’s highest revenue earners. Although the
company reduced its production from 3 million every year to
just over 500000 every year from 2006, it is still among the
highest manufacturers of these vehicles. From there the
company is again interested in engines in general, robots,
aircraft solar cells, mountain bikes and ATV in that order.
Honda happens to have a number of subsidiaries that are
responsible for the different interests that the company has in
new fields. One of the first subsidiaries from the company was
its dedicated luxury brand which was known as Acura. This
brand was released in the year 1986 and as the first of its kind
in Japanese automobiles. Another subsidiary of the company is
known as the Honda Aircraft Company which is concerned with

aerospace and the related aircraft technologies. The subsidiary
is responsible for the new technology in aero-dynamics and fuel
efficiency. In the solar cells market the company has a
subsidiary known as Honda Soltec which was the first to sell the
thin-film solar cells for both industrial and public use. Honda
also has a Brazilian subsidiary known as “Moto Honda da
amaonia” which is responsible of launching versions of Honda
brands that are fuel-flexible. There are also a number of other
subsidiaries which are grouped in accordance to what a
particular purpose (Sakiya, 1982).
The company came to be as a result of the founder, Soichiro
Honda who supplied Toyota with Piston Rings, and learnt about
engines under a company known as Tokai Seiki. Following
World War two, the company was bought by Toyota, and
Soichiro Honda went on to open the Honda Research Center.
From this point, they started researching and developing
engines that could be attached to bicycles and motorcycles. In
1949, the company produced a full motorcycle that was known
as Model D. This led to the success of the company and within
the year 1964, it became the biggest seller of motorcycles in the
world. However, they did not indulge in the development of
automobiles until 1963 when they put up the T360 mini pick-up
truck for both public and industrial use. Its s500 sports car was
then developed and had a chain linking the vehicle’s engine and
its back wheels. This is the possible origin of the design that
motorcycles went on to acquire. The company then went on to
expand and sell the two developed vehicles to different markets
for the next decade. It is during this time that the company
opened a subsidiary in America that was known as the Honda of
America.
Due to the design of the vehicles, the company became
successful as it opened branches throughout the entire world.
The company went on to unveil their Acura brand which was
successfully launched as a luxury brand in the American market.

The sports utility vehicle and truck boom that took place in the
globe, as well as the death of Honda’s founder, led Honda to
become outpaced by other Japanese automakers. At this time,
the company had a lot of financial woes and was on the brink of
a hostile takeover by Mitsubishi Motors. However, the former
CEO of the company back then, decided to change their working
culture so as to meet the requirements of the buyers, instead of
making vehicles that only the engineers will love to see. This
gave birth to recreational vehicles such as the CR-V and the
odyssey (Kato, Omae, & Nagao, 2005). Also, in the year 1995
the company officially birthed the Honda Aircraft Company
which had the aim of producing aircraft bearing Honda’s name.
Scope of market distribution – are they global or regional etc
The company is an international company and has its market
spread across different countries. The company has divided its
market segments into three main ones; Japan, international
market and sports. The Japanese market was the first one for the
company and was competitive between Nissan and Toyota. As a
matter of fact it is as a result from the competition between
these two that Honda was forced to spread into an international
market. Apart from Japan the company has also advertised and
opened a number of stores and manufacturing plants all over the
world. The UK, New Zealand and Argentina were the first
countries where the vehicle company first advertised their
products. In the year 2007 the company was a significant
sponsor in the ITV’s coverage of the Formula one race in the
UK.
Furthermore the company specifies some of their vehicles to
ensure that they fit the particular segment of the market. This
and the numerous stores the company has strategically show the
attention the company is giving its international market.
Another market segmentation that the company has is related to
sports. This is one of the most important marketing segments to
the company as it forms a significant target of the clientele.

Ever since its initial years the company has took part in racing
activities such as the Indy racing league where it was directly
involved and also in other events that it sponsors in one way or
another.
Overview of the leadership and management structure and
individuals
The company was founded by one Soichiro Honda and is today
being headed by Takahiro Hachigo. In the philosophy that
guided the company was ideas that were not only innovative but
also imaginative; this is the condition that the top management
strived to create in the organization. The combination of both
innovation and imagination ensured that the company
experienced a number of benefits such as being able to analyze
things from more than one perspective. This helps one look at
the problem from multiple dimensions that give the individual
the best strategy to approach the issue at hand. This strategy
also puts into essential consideration the horizontal decision
making mechanism in the organizations which are also
important. It was also able to operate in a flexible state since
the task forces and the teams can be put to different tasks
regardless to serve the needs. Lastly, the structure of the
company is optimized in such a way that both the individual and
the organizational freedoms are in coherence. The top
executives of the company form a matrix that promote
complimentary relationships and promote both individual
initiative and team strategy (Mito, 2012).
Current issues that may affect the future of the organization
There are a number of things that are currently happening in the
news today that might affect the future of the company. One
major situation is that Honda Motor Company is planning to
manufacture and export more than 100000 motorbikes
manufactured in Vietnam by this year of 2015. The company is
trying to double its current Vietnamese export in an ambitious
plan that seeks to become the biggest shareholder of motorbike

in Asian countries. Furthermore, the company is also seeking to
revamp its customer offerings, by introducing high end bikes
where the old ones were purchased before. This will increase
the number of sales than the company would have expected in
such a short amount of time. The company is expected to push
for and find new clients, informing them of new available
motorbikes. If there are no clients, the company will be forced
into a loss considering their input in the different strategy that
has been used.
Perhaps the biggest issue right now for Honda is its recent bouts
of recalls, most notably due to faulty airbags, made by its
Japanese supplier Takata. These recalls have forced the
company to replace its president. “Mr. Ito will be replaced by
Takahiro Hachigo, 55, whose recent duties have included
overseeing the automaker’s European and Chinese operations.
The change will take effect after Honda’s annual shareholders
meeting in June, Honda said. Mr. Ito will remain on the board,
with the title of senior adviser” (Soble 2015). Although little is
known about Mr. Hachigo outside of the company, many
deemed him as similar to previous presidents that Honda have
had, which is a complete opposite of Mr. Ito. How would he
lead in the face quality problems Honda has been having in the
following years, will dictate the direction the company is
heading into.
Strengths and Weaknesses
In order to be able to portray the strengths of the company,
while avoiding redundancy or turning into a disorganize mess,
one must categories the company’s shining moments through its
portfolio, success, and popularity. The portfolio of the company
encompasses it’s the strength of its diversified products, as well
as its strong brand image that it portrays around the world.
First of all, having the 21st most valuable brand in the world,
valued at $17 million dollars, Honda is one of the very well
known companies which thrives on its dependability and best
quality made engines in the automotive industry (Honda

Corporate, 2011). Furthermore, Honda, unlike many other
automotive companies, has a multi-focal approach. It does not
only focus on selling of automotive vehicles alone, but has
various sectors and departments which focus on technological
advancements as well. It is the largest producer of engines and
motorcycles as well as multitude of equipments ranging from
garden equipments, scooters, ATVs, generators, robotics, jets
and solar cells (Honda Corporate, 2011). The company thrives
with this dual form of decentralize and divisional organization.
Wherein lower management focuses on their specific areas of
expertise, with the development of the various examples
aforementioned above, Honda also follows
“Departmentalization that groups units around products,
customers, or geographic regions” which is made evident by
various factories in different part of worlds, selling region-
specific goods (Bateman & Snell, 2013). Therefore, this form of
organization structure that Honda follows protects the company
against susceptibility to market cycles and technological
disruptions. Since the company has multiple investments in
different sectors, a disruption in the automotive field for
example, will not debilitate the company as strongly as others
(Honda Corporate, 2011).
The success of the company also portrays the over all strength
of the company. Honda is one of the largest vehicle
manufacturer in the world, encompassing cars, trucks, and
motorcycles. Although there are stiff competitions in the
automotive industry, its motorcycle market share in Asia, as of
2012 has dominated compared to other companies. In fact,
Honda has sold 80.5 percent of its motorcycle in the Asian
market, which presumably has the greatest growth potential for
any company. Having the largest motorcycle market share,
Honda has one of the best positions to compete with other
companies for overall shares and profits. Furthermore, Honda’s
success is evident also due to its advancements in technology
through means of research and development. Their involvement

and success in motorsport program, has proven their capabilities
to compete with other automotive companies, in the further
advancement of engine function and fuel utilization. Although
labeled as sports, the importance of these event aids in the
development of new powerful engines and technology, which
often finds its way into the mass produce cars sold in the future.
Honda’s investments in research and development has gained
them 5% in revenue, and lead to improved vehicle paintings,
hydrogen hybrid engines, and new welding technologies capable
of strengthening vehicles and its safety. In fact, the company
owns over 42,000 patents with another 29,000 pending (Honda
Corporate, 2011).
Last but not least, the strength of a company is highly dictated
based on its popularity. There are a lot of different factors that
determines the overall reputation of the company and its
product. The main factor is the quality of customer experience,
which is often dependent on the reliability and durability of the
goods. Consumers of Honda products, being one myself, have
enjoyed the experience with Honda goods, often being durable
and reliable for a lengthy period of time. Having appreciated the
longevity of Honda products; the company has won numerous
awards for quality and customer satisfaction. With a strong
distribution network and continuous refining of its production
system over the years, have yield more innovative and fuel
efficient, low emission products for Honda. Saving the planet
and keeping the cash inside the wallet has yield Honda with
greater popularity in recent years (Honda Worldwide, 2011).
No company is devoid of or immune to any weaknesses. Some
of Honda’s strength is also its weakness. Having branched out
into different sectors such ATV, generators, garden equipments,
and with a fairly strong automotive production line and a
complete dominance over motorcycles sales, Honda is still
particularly weak in the truck industry compared to other
manufacturers. This sole factor inhibits their full grasp within
automotive industry. Furthermore, as of late, the modern style

of their car line has been deemed “boring and bland” compared
to its predecessors in the past. Although each new vehicle
acquired new technologies, this in turn drove up the price and
drove away new consumers. The availability of these
technologies has been questioned by consumers whether
Honda’s vehicles are worth the steeper price. Furthermore, their
popularity amongst young adults has dwindled ever since
companies such as Nissan have release far more powerful and
exotic looking cars such as the Nissan GT-R. Honda, on the
other hand, continues to suffer from underpowered products,
less roomy, and often annoyingly loud engine sounds during
operation. This is quite disturbing considering this goes against
their basic principles, aforementioned in the introduction
(Honda Corporate, 2011).
Honda Motor Company is also suffering from recent bouts of
recalls which is now beginning to take a toll on their brand
reputation and future sales. Honda has recalled more than
1,000,00 vehicles to fix various faulty parts and manufacturing
defects. Although, in Honda’s defense, it is their company’s
affiliates that and manufactured and provided the faulty parts.
However, as a decentralize organization, a fault of one branch
or affiliates will always lead back to the head branch in times of
mistakes. Always will and always has been. Speaking of
branches, Honda’s weak position in Europe automotive market
has cost the company to lose valuable profits and decreased
sales. Honda has maintained only 1.1 percent market shares in
Europe since 2012. Although, European market share is in
decline at the moment, it does not justify Honda’s extremely
low share on the continent, especially since Honda deems itself
as a global automotive manufacturer (Car Complaints, 2011).
The accumulation of all these problems has lead to greatest
weakness for the company; decrease sales and profit. With the
rising price of raw materials, and demand for lower cost
vehicles, Honda’s revenue has hit the lowest point in 4 years, to
7.948 trillion yen. Sales were down by up to 11.2% in North

America, which is troubling considering the continent
represents more than 40% of total Honda revenues.
Furthermore, revenues from Asia, has also declined by 21.3
percent, signaling a poor global performance (Honda Corporate,
2011).
Opportunities and Threats
With increasing fuel prices, a wonderful opportunity for growth
can be found within the hybrid models and emphasis on
engineering fuel-efficient vehicles. The decline of levels of
fossil fuel sources and the rising emissions of C02 has lead to
change of perspective towards vehicles, and a major concern
from people and many governments. As such, ecological cars,
powered by hybrid systems of gas and electricity, hydrogen or
flexible fuel engines have become extremely popular, a shadow
of the past of what once was; where gas guzzlers were highly
sought after. Having a new demand for these types of vehicles
is a 33 billion dollar market and a great opportunity for Honda
to capture (Honda Engines, 2011).
Furthermore, Honda has an ability to develop more aviation
products as well as expands its grasp in the automotive industry
by furthering and developing their truck line to compete with
the other larger automotive manufacturers.
Honda can even capitalize on a couple of its strength already
and make it even stronger. The motorcycle industry has grown
by 4.2 percent from 2011 to 2012 and is expected to grow by at
least 6 percent by 2016. Being one of the world’s leading
producer and seller of motorcycles in Asia, the company can
further expand its global market share and sales by targeting
other continents. Honda can also grow through acquisitions of
smaller competitors and benefit from strategic partnerships,
especially in the motorcycle industry. New brands will be added
to Honda’s portfolio, and achieve greater economic scale
between the synergies of the two companies. There is extreme

need for cheap dependable transportations, as within Honda’s
grasp to take the opportunity for further growth a return to
profitable stature (Honda Corporate, 2011).
The life of a company is of course never without threats as it
can be seen from every angle and perspective. The fickle
economy can change ever so slightly, causing death to or
success for a company. The rising raw material prices for
instance are a huge threat for Honda. Metals which are the main
raw materials used for automotive manufacturing as well as
research and development has raised the overall production cost
for the company. The depreciating dollar and appreciating Yen
alongside with higher cause of raw materials is a massive threat.
On top of that, the much recent drop in fuel prices due to
extraction of shale gas, evident of recent times, will have
negative influence on Honda’s share. Considering that the
company has invested immense amount of money into research
and development on hydrogen fuel, hybrid and flexible fuel
engine cars, will lose its demand since the fuel prices are low.
Furthermore, natural disasters which, occurs yearly, are always
looming around every corner. Honda manufacturing factories in
Japan, Thailand and Malaysia are subject to natural disasters
that disrupt manufacturing productions, thereby decreasing
production volumes (Honda Worldwide, 2011).
Perhaps the biggest threat for a company, especially Honda is
its competitions. Now for consumers, competition is a
wonderful thing, since it avoids monopoly, and forces the
company to decrease prices and increase quality of goods to
“one-up” the other competitors. However in a business
perspective, this is a huge threat for growth, success, and profit.
In fact Honda is facing more intense competition as of late,
especially since small new entrants are disputing the market
having capabilities of producing electric vehicles and
alternative fuels. Furthermore, big companies are restructuring
themselves to become more efficient, and targeting a variety of
areas that consumers are in demand of. Honda is taking hits in

both small and big players (Honda Corporate, 2011).
External factors impacting decisions
Without becoming redundant, the positive and negative external
factors for Honda, were aforementioned earlier, as opportunities
and threats as part of the SWOT analysis. These two external
factors have the greatest impact in the direction of Honda Motor
Company’s path to success and reaffirmation as a global
automotive power. However, it is the negative external factor of
threat that may very well have the greatest impact on the
decision and direction of where the company is going. The
economic slowdown, competition in global automotive market,
tightening emission standards, the bouts of recall and
appreciating Yen against US Dollar had lead a to sudden
restructuring of the Honda’s leaders and overall business
approach.
One can infer that they have lost their way from their original
basic principles of quality, individuality, and joy; and much
more similar to survivability instead. Perhaps Honda may have
notice this recently since, much of the surprise by company
insiders, have suddenly replace its current CEO Takanobou with
Takahiro Hachigo as well as other senior management with an
entirely new, younger group of people. With poor global profits,
bouts of recall, and bland styling, the company is trying to
redirect its path into a much fresher direction (Levin, 2015).
Possible future scenarios
The reconstruction of Honda’s leaders will definitely have a
drastic change in the direction of the company and its products.
More of its vehicles will probably be updated, especially in
aesthetics to combat the bland styling that everyone associated
Honda recently with. This is evident with the new release of the
Acura NSX, an enthusiast’s exotic car which was once retired
by Honda due to increasing price of fuel. The reintroduction of
this vehicle should pave a way for new exciting looking cars in
the future, capable of bringing joy their consumers. Combined
with new technologies, from their research and development

department, Honda will once again have products desired by
young adults.
Furthermore, by hiring leaders, especially a CEO with global-
based experience, the company will be able to expand its growth
and grasp as made evident with opportunities that Honda has on
its plate. With China’s booming population, a massive market
share in motorcycle in the country will bolster the company’s
success and alleviate many of the threats the company has had
for the past decade (Levin, 2015).
Primary and Secondary Market
Perhaps, Honda Motor Corporation is much more complicated
than just assigning one main primary target group. Since Honda
has multiple product types, their primary targets are usually of
greater criteria. Product Segmentation usually narrows the
target market based on the product type. This approach is rather
tough because of its inability to satisfy each customer due to
unique differences and exposure. In order to generate higher
sales record, Honda Motor utilizes target markets that have been
clustered precisely which groups customers that are similar on
their segmenting dimensions into a homogeneous segments.
Honda’s approach with their products, are usually geared
towards the economic standing of their customers and their age,
which both have the highest tendency for behavioral influences.
Geographic locations also place a part, but not as specific as the
other two groups aforementioned above (Minami & Minato,
2009).
First of all, geographic influence on Honda’s product, simply
defers on their products’ accessories, safety requirements, and
aesthetic looks, preferred by that area served. Certain countries
may have specific requirements for safety, as well cultural
preferences and or necessities. For example, cars sold in the US
are usually required to undergo a specific amount of crash

testing in order to be sold in the entire 50 states. As such, cars
sold in the US may be end up being bigger, heavier and a lot
less powerful than their Asian counterparts in order to meet the
demands for safety. Although important for advertising and
rapport, geographic criteria alone is not enough to determine its
target market since automobile market is too broad and
encompasses all population. However, this statement should not
take geographic location lightly as it has a huge determining
potential for profit, sales, and the direction of where the
company is heading (Bateman & Snell, 2013).
Honda as previously mentioned, manufactures a form of
transportation, whether it’s a car or a motorcycle, and as such,
age and economic standing is a huge determinant for its target
market. Age and socioeconomic level are both intertwined and
have linear relationships. The greater the age of the customer,
the higher spending power he or she may have and on the other
hand, the lesser the age, the weaker the spending power.
However, younger group tends to have higher spending
tendencies than that of their elder counterparts.
Honda Motor has dramatically changed its approach over the
years and is more evident with this era. Although the company
started with a much younger target group in the past, especially
since the company originally began as a motorcycle
manufacturer, they have gradually evolved and their vehicles
are a great example of that. During the 90’s era, Honda created
cars that were light, powerful, and fast which had tendency to
sell pretty well with the younger crowd. However, overtime,
also due to the increasing gas prices and safety concerns, Honda
become primarily focus on a more refined age group of around
30 to 50 years old. Factoring age as well as gender, Honda sells
vehicles that are more luxurious than before, providing
increased convenience, above average fuel efficiency, a good

and comfortable ride, and an image booster. It also provided
advance safety technologies at an affordable price, for that age
group. This primary target group has determined the recent line
up of all vehicles Honda is producing. Many of the population
within the age group, are considered financially stable, and are
looking for a vehicle that satisfies their needs to protect their
family. Even, if the price of Honda vehicles are a bit higher
than the other competitors, their vehicles are made specifically
for that age group, and with consideration of their
socioeconomic standing at the time of a person’s age,
affordability is never an issue. However, their secondary target
group, the younger crowd, have taken a slight hit considering,
they are beginning to deem Honda as a boring vehicle
manufacturer (Ibarra, 2010).
Honda Motors decision to focus primarily on customers with the
age group of 30 years old and older has hurt the image of the
company, especially since the company advertises that they
manufacturer and sell vehicles for “respect for individuality and
the joy driving”. They are anything but their former glory,
considering many people have perceived their vehicles to be
boring and generic. They are no longer selling vehicles for joy,
but rather to satisfy a target group that would make the best
profit. It is understandable considering, this age group, is no
longer Honda’s primary customer base, and may have less
money and fewer demands for their product. Since it is a
business after all, the direction of the company is often
determined where their products will most likely sell. However,
secondary target audiences are still just as important (Honda
Worldwide, 2011).
With the abysmal global profits that Honda suffered in recent
years, the company has decided to shuffle and replace it’s head
executives to change its approach. In fact, in recent declaration
of lineups and concept cars during the 2015 auto conventions,
the company seems to have developed and financed, new

powerful vehicles, with exotic looks, worthy of gear heads, and
rich men suffering mid-life crisis. These new vehicles such as
the new Acura NSX, has capabilities, equivalent to the likes of
Ferraris, Lotus and Lamborghinis. Furthermore, new models of
their current line up were unmasked recently and featured, an
edgier style, faster engine, whilst retaining the previous quality,
safety and comfort of the older models. Honda also will also
introduce more model varieties to accommodate the levels of
different customer economic status. For example, Civic will be
sold in different trims, with the base model being the cheapest,
and the SI and Mugen, being more powerful and aggressive, at
the cost of an increased price. Honda Motors has taken steps to
accommodate both its primary target group and the secondary
target group, taking into perspective the customers age and
economic status in their product. This change of approach is
creating new opportunities by capitalizing, on a much younger
and growing secondary target group, whilst maintaining the
habitual decision making in the much older primary group. A
success that Honda has established where “consumers engage
little conscious effort” when deciding in the purchase of their
product (Bateman & Snell, 2013).
Target Market
Regardless of the change of direction for such company like
Honda, or any other company regarding this matter, one will
never let go of their most established and most profitable group
of customers. In this case, North American baby boomers, a
suitable name for a target group, are of the greatest profitable
group for Honda Motor Company. Although it is not limited to
North America alone, but with 90% Honda vehicular purchases
are transacted in this continent, it is no wonder that the
company has spent millions of dollars for advertisement and
development of vehicles, made for American specificity and of
that primary target age group.

Honda’s specific target group’s demographic, putting
geographic locations aside, are usually people of age 30 years
old to 50 years old, married or single, with no gender
preferences, and at a mid to high middle class status. Although
there has been a change in the pricing of their vehicles to
accommodate all levels of socioeconomic background, the main
bulk of their target are still of those of the middle class. To
further expand on these criteria, aside from the demographics
and location, customer lifestyle is also greatly considered.
Honda’s primarily targets working class population with
established work and buying power, fairly successful, desires
value for money and prestige in what they drive in.
Furthermore, within this target group Honda also aims for
behavior patterns of customers who has a habit of replacing cars
every 5 to 7 years, a monthly amortization of 15 to 20 thousand
and has a desire for a good ride and efficient fuel consumption.
Combined all this, Honda is able to influence their customer’s
behavior following the Maslow’s theory of needs to their own
advantage and thus gaining profit. The North American Baby
Boomers target group is at an age, when the physiologic, safety,
social, esteem, and self actualization needs are of greatest
importance, and combined with an ability to purchase vehicles,
establish a profitable target group for Honda Motor Company
(Thompson, 2009).
Market Position
How strong is Honda Motor Corporation compared to its
competitions? Based in Figure 1, out of the big five automobile
market company share in U.S., Honda is in deed last, with an
exception of around 2009 when it took the fourth spot from
Toyota, then lost it again ever since. Currently as of March
2015, shown in Figure 4, Honda’s share percentage is at
constant 8.4%. Although Honda is not the main leading
automobile manufacturer in the states, evident with the fact that
it is still a foreign company in a domestic US market, it can be
seen that the company has been stable and maintained it shares

steadily. Where as the other big companies, have huge
fluctuation in their share percentage, Honda Motor Corporation
has maintained a consistent percentage since 2005.
Possible reasons for this pattern can be seen in how Honda has
played it safe ever since. Since their target group has always
been stable as aforementioned above, Honda maintained its
strategy and is quite evident as shown with their consistency.
To further this idea, considering that Honda is not solely an
automobile manufacturer, it is safe to assume that, all of its
profits are not entirely from vehicle industries and therefore,
the company does not seek glory of being number 1, but being
stable and consistent. However, this approach has made Honda
boring and with change in demands, due to gas prices
decreasing as shown in figure 2, it will be interesting as to what
the company will do in response to this sudden change.
Furthermore, Honda’s grasp in the motorcycle industry has been
threatened, especially after the termination of the partnership
between HeroMotoCorp took place, which resulted in the lost of
almost 40% of sales for the company (Cain, 2015).
Recommendations for Leadership
Honda Motor Company has a proper working organizational
structure, made evident by strong and successful varying
multiple sectors, functioning almost autonomously. Hondas’
subsidiaries are functioning on their own accord, and although
separate from the parent company’s main direct objectives, they
are still able to provide much needed profit, and success for its
main branch. The company’s diversified portfolio, ranging from
automobiles and motorcycles, to generators and engines, as well
as successful research program and brand name has proven time
and time again that Honda is well organized and its structures
working within the field. Therefore any recommendation to
change the company’s organizational structure is unnecessary,
as one should not change what has always worked in the first
place. However, in light of the recent events that has plague

Honda, a recommendation of change of leadership may be
necessary to redirect the company to a proper path.
It should be known that Honda Motor Company is well ahead of
any recommendation for change in leadership. In fact, just
recently this year on February of 2015, Honda without any
previous hints, surprised many with the news that it was
changing up its leadership ranks. The company’s chief
executive, Takanobu Ito, although shall remain on the board,
has decided to step down to become an adviser to the company
instead. A Honda insider and a much younger Takahiro Hachigo
will take his place at the top as the new CEO. Furthermore, as
previously mentioned, many of the upper administrative staffs
have chosen to retire and be replaced with a younger group. “In
a release statement by soon to be former CEO of Honda, Ito
Takanobou, ‘Honda is ready to make a new leap forward. To do
this, Honda needs to be led by a new, younger team’”
(McGregor, 2015). This approach is indeed a great example of
strategic planning, a change that would lead to “major targets or
end results that relate to the long-term survival, value, and
growth of the organization” (Bateman & Snell, 2013).
First of all, why a change of leadership? Honda Motor Corp’s
internal and external weaknesses made evident by the SWOT
analysis, has really hurt the company’s image. The shift and
change of leadership is definitely crucial, especially since
Honda is faltering in many fronts. It has failed to take
advantage of Toyota Motor Corp’s stumbles five years ago,
which allowed one of its competitors, Nissan Motor, to
challenge for its top five positions in the U.S., narrowing the
shares gap between the company by a critical 8.4%.
Furthermore, Honda has been hurt by stumbles in the U.S., and
Asia; Japan and China primarily. In fact, its recent and popular
Civic sedan, redesigned in 2013 has received poor reviews in
the U.S. for using cheap materials and a lack improved fuel
economy. In Japan, its sales of the newly launch Honda Fit

subcompact vehicle were hurt due to delays. In China, Honda
completely missed its sales forecast, gaining a meager sale
increase of 4.1% in a market that expanded by 7%. As a
company that relied heavily on safety, Honda was most affected
by the recall of millions of older vehicles equipped with the
airbags from Takata Corp., that have been linked to six deaths
around the world. Having account for more than half of the 25
million vehicles recalled for suspect airbags, it has been the
most expensive issue that Honda has had. With the recent bout
of costly recalls due to faulty airbags, a line up of boring and
under powered vehicles, rising raw material prices, and
economic downfall, Honda Motor Company requires a change of
direction in order to survive against its competitions.
Honda is definitely in need of a change in direction it is going.
Ito who was once a feisty former supercar engineer, shook up
Honda’s decades-old, tightly knit supply chain, often seeking to
trim cost and find more cutting technology. This approach made
him an ideal target and a scapegoat for the faulty airbags, and
overpriced tech-out boring vehicles. The 55 year old Hachigo,
described as a broadly experience executive has jumped several
levels in executive rank to his position. In a sense, Hachigo
does not really fit the pattern of a typical Honda leader, and yet
it’s the very same reason why he was chosen over other ideal
contenders to become president. With a diverse experience in
the major markets, the U.S., China and Europe, as well as a
background in developing some of Honda’s most popular
products, “Hachigo’s low profile could make the impression of
a new direction, a fresh start and a new leap forward” for Honda
Motor Company (McGregor, 2015). However, only time will
tell, if he could steer the company to its former glory.
Recommendations for Product
The 4P’s are the product itself, the place it is being sold into,
the price and its promotion. Marketing is the ability to make the
population aware of the product via promotion. It is also

accompanied, with the “ability to create product value, thereby
causing the need, or the desire for the product, often
determined, by the quality of the product itself, the price, as
well as its location and target population” (Bateman & Snell,
2013). Honda Motor Company vehicle promotion is perfect as
aforementioned above, and with manufacturing plants and
markets in various continents, placement is also within the ideal
objective. Therefore, would a price and product change be
recommended?
Honda vehicles prices has always been higher than any of the
competition and yet it has always worked and had benefited the
company ever since. In fact, a change in price is definitely not
recommended. It has always been part of their motto to create
vehicles of slightly higher price, but in turn, at a higher quality
and value. It’s even engraved well into their promotion and
Honda has accepted and embraced this weakness and turned it
into strength. Therefore, the issue lies not on the price, but the
product itself.
A product change or revamping is definitely recommended,
especially since Honda’s recent product line up as of late, does
not match the price point they are asking for. People would
often shell out more money, for a higher quality product, that
they will find exciting and be proud to use. However, the issues
with Honda are that most of their current products are
underpowered, of cheap interior quality, bland in design, and
are not worth the expensive price tag. Courtesy of Honda’s
successful research and development division, each vehicle that
Honda sells are equip with the latest advance vehicular
technology often found in luxury lines from other companies.
This may very well be the reason why the prices are so high.
Just like you cannot add pepper to make a failed recipe taste
any better, addition of advance technology into a boring cheap
looking vehicle will not justify the increase in price. What I
recommend for Honda to do, would be to change their vehicle

line up to make it more exciting by listening to what their
customers needs and wants. This will create further value to
their vehicle line up. Designing sexier cars, and sportier
aggressive look, will recreate their image. As it stands, the
creation of the Acura NSX, which is aggressive, beautifully
design, and overpowered is a great start for Honda this year.
Furthermore, having multiple class of the same vehicle will
target customers at multiple economic level. Multiple trims of
varying degrees of technology placement will make the vehicles
more affordable since, the customers has more options to choose
what accessories they would like to have in their vehicle,
thereby managing the direction of where they want their money
to go directly into, rather than being force to purchase a tech
out car. Honda’s product needs to change to accommodate its
customer’s wants, and return to its root and motto about selling
vehicles, for an individual, not for the profit of the company.
Conclusions
Honda Motor Company has always be an organization dedicated
to the advancement of mobility, targeting leading-edge
technologies in various sectors. From racing spirit, to their
dedication in environmental leadership, the company’s mission
has always been to develop forward thinking technologies that
anticipate and satisfy the needs of a future society. Honda
Motor is not solely an automotive company as everyone may
perceive it to be. Its many manufacturing and technological
fields make Honda amongst the few versatile companies
globally. Since self limitation will lead to inhibition of growth,
Honda has avoided that by procuring various sectors in different
fields. Market stability and continuation of technological
advancement is its main purpose as a company. Although
success and profit is definitely required to continue this goal
and objective, set forth by its original founder, Soichiro Honda,
it is still quite evident based on the charts and graphs that
Honda does not aim for the number one spot in the global auto
industry, but rather stability and consistency. Base on their

practices, Honda have maintained stability by aiming for stable
consumers and avoiding drastic financial risk by avoidance of
venturing into new territories. However, the change of economic
times will always dictate the direction the company is going,
and in business, there is no such thing as 100 percent safety net.
With the recent situations that’s been plaguing Honda such as
the recall, the company’s lost of self, and their lost of the hold
in the motorcycle industry, the company may very well venture
out of their comfort zone.
The troubled times that Honda is in right now is reflective of
their deviation to their original perspective and motto, and not
necessarily due the failures of their current CEO. Ito, was
appointed CEO during global recession, and as such, he started
at a financial disadvantage already. In fact, if one were to look
at his track record as a CEO Honda, he actually doubled the net
profit of Honda, and had a steady growth under his watch.
Furthermore, the company continued to lead development
projects toward commercialization, including business jet
aircraft Honda jet and Honda fuel cell vehicles. Nevertheless,
there were strains that appeared in Honda’s rapid globalization
and development structure reforms, which caused a lot of issues
for Ito as aforementioned above. However, with the upcoming
new CEO and refreshed administration, Honda is venturing back
to its root, to what made it once was. It will be interesting to
see how Honda’s new CEO will change the company’s
direction. Will he remove some threats? Take some
opportunities? Turn weaknesses into strengths or vice versa? So
far, only time will tell.
References
Kato, T., Omae, A., & Nagao, D. (2005). U.S. Patent No.
D512,001. Washington. DC:

U.S. Patent and Trademark Office.
Mie, A. (2015) Behind the Wheel: Honda thinks outside the
box. Retrieved on January , 2015
from website
http://www.japantimes.co.jp/news/2015/01/03/business/behind-
wheel-honda-thinks-outside-box/#.VP0P9uG89VY
Bateman, T. S., & Snell, S. A. (2013). M: Management. New
York, NY, USA: McGraw-Hill Higher Education.
Car Complaints (2011). Car Problems, Car Complaints, &
Repair/Recall Information. Retrieved on Nov 13, 2011, from
website http://www.carcomplaints.com/Honda/
Cain, Timothy (2015). Chart of the Day: Auto Brand Market
Share in America March 2015. Retrieved from
http://www.thetruthaboutcars.com/2015/04/chart-day-auto-
brand-market-share-america-march-2015/
Ibarra, Luis. (2010, February 23) 10 Step Marketing Plan Honda
Cars. Retrieved from
http://www.slideshare.net/luisangelo77/10-step-marketing-plan-
honda
Honda Worldwide (2011). Philosophy Honda Worldwide :
Honda Motor Co.,Ltd. Web. Retrieved on Nov 13, 2011, from
website http://world.honda.com/profile/philosophy/
Honda Corporate (2011). Historic Timeline Honda Corporate -
Vision, Offices, Headquarters, Corporate History. Web.
Retrieved on Nov. 13 2011.
http://corporate.honda.com/america/timeline.aspx
Honda Corporate (2011). Vision, Offices, Headquarters,
Corporate History. Web. Retrieved on Nov 13, 2011, from
website http://corporate.honda.com/
Honda Engines (2011). Why Choose a Honda Engine?" Honda
Engines - Small Engine Models, Manuals, Parts, & Resources.
Retrieved on Nov 15, 2011, from website
http://engines.honda.com/why/
Honda Worldwide (2011). Philosophy Honda Worldwide :

Honda Motor Co.,Ltd. Web. Retrieved on Nov 13, 2011, from
website http://world.honda.com/profile/philosophy/
Levin Doron, (2015). Honda: This will be our year. Retrieved
from http://fortune.com/2015/01/15/honda-2015/
McGregor, Jenna, (2015). Honda’s leader will be replaced by a
‘leapfrog’ CEO. Retrieved from
http://www.washingtonpost.com/blogs/on-
leadership/wp/2015/02/23/hondas-leader-will-be-replaced-by-a-
leapfrog-ceo/
Minami-Aoyama, & Minato, Ku (2000). Honda Motor Company
Limited. Retrieved from
http://www.encyclopedia.com/topic/Honda_Motor_Company_Li
mited.aspx
Mito, S. (2012). The Honda book of management: A leadership
philosophy for high
industrial success.
Sakiya, T. (1982). Honda Motor: The Men, the Management, ,
the Machines . New York:
Kodansha International.
Soble, J. (2015) Honda, Grappling With Quality Problems, Will
Replace Its President.
Retrieve on February 23, 2015 from website
http://www.nytimes.com/2015/02/24/business/international/hon
da-replace-president-chief-executive-takanobu-
ito.html?ref=topics
Thompson, Van. (2009) The Market Segment Strategy.
Retrieved from http://smallbusiness.chron.com/secondary-
target-audience-81046.html
Appendix
Valuable in Achieving Objectives
Detrimental to achieving Objectives
Internal Factors

Strengths
1. Diversified Product Portfolio
2. Strong Brand Images
3. Largest Vehicle Manufacturer
4. Successful Motorsport Program
5. Powerful Research & Development
6. Popular Company
7. Refined Production System
8. Innovation
9. Highly Experience
10. Well Known Reputation
11. Engines with high durability
12. HighCredibility
13. High Customer Satisfaction
Weakness
1. High End cost structure
2. Boring and Bland Style
3. Economic Down Fall
4. Underpowered Vehicle

5. Lack of strong truck line
6. Recent Bout of Recalls
External Factors
Opportunities
1. Increasing Fuel Prices
2. Positive Outlook for Global Motorcycle Industry
3. Growing Demand for environmental firnedly vehicles
4. Growth through acquisitions
5. Offering of low emission vehicles
Threats
1. Economic Slow Down
2. Intense Competition
3. Rising raw material prices
4. Natural disaster
5. Appreciation of Yen vs Depreciation of US Dollar
6. Decrease of fuel prices
Figure 1: U.S. Market Share The Big Five
http://online.wsj.com/mdc/public/page/2_3022-
autosales.html#autosalesE
Figure 2: Auto Sale vs Gas Prices
http://online.wsj.com/mdc/public/page/2_3022-

autosales.html#autosalesE
Figure 3: Motorcycle sales 2014 Domestic
http://bikeadvice.in/nov-2014-sales-report-2-wheelers-analysis/
Figure 4: Auto Manufacturer Market Share in America as of
march 2015
http://www.thetruthaboutcars.com/2015/04/chart-day-auto-
brand-market-share-america-march-2015/

PAGE 32Running Head Honda Motor Company Comprehensive Over.docx

Recommended

Recommended

More Related Content

Similar to PAGE 32Running Head Honda Motor Company Comprehensive Over.docx

Similar to PAGE 32Running Head Honda Motor Company Comprehensive Over.docx (19)

More from alfred4lewis58146

More from alfred4lewis58146 (20)

Recently uploaded

Recently uploaded (20)

PAGE 32Running Head Honda Motor Company Comprehensive Over.docx