The document contains a detailed analysis of Company Honda. It explains the products, marketing strategy, demand forecasting, SWOT analysis and growth and future prospectus of the company.
Management 315: International Management, Professor In Hyeock Lee
Loyola University Chicago Spring 2013
This case study analyzes Honda's overall performance as a multinational enterprise using the company's revenue data, 4 distances, firm specific advantages, country specific advantages, foreign direct investment, and much more.
The document contains a detailed analysis of Company Honda. It explains the products, marketing strategy, demand forecasting, SWOT analysis and growth and future prospectus of the company.
Management 315: International Management, Professor In Hyeock Lee
Loyola University Chicago Spring 2013
This case study analyzes Honda's overall performance as a multinational enterprise using the company's revenue data, 4 distances, firm specific advantages, country specific advantages, foreign direct investment, and much more.
Motorcycle market analysis presentation submitted as part of group assignment on Marketing Basics by our SMP09 group. Presentation submitted to Prof. Ramanuj Majumdar, IIMC Kolkata.
Motorcycle market analysis presentation submitted as part of group assignment on Marketing Basics by our SMP09 group. Presentation submitted to Prof. Ramanuj Majumdar, IIMC Kolkata.
PAGE 2Running head SWOT Analysis Honda Motor CompanySW.docxalfred4lewis58146
PAGE
2
Running head: SWOT Analysis Honda Motor Company
SWOT Analysis Honda Motor Company
Davenport University
BUSN 520
March 22, 2015
Table of Content
Introduction and Overview…………………………………………………………….....……….3
Strengths……………………………………………………..………………………………..…..3
Weaknesses………………………………………………………………………………………..6
Opportunities…………………………………………………………………...….….……..…....7
Threats………………………………………………………………………………………..……8
External Factors Impacting Decisions…………………………………...…………………..……9
Recommendations for Changes in Leadership and Structure……………………………………10
Possible Future Scenarios…………………………………………………………………..……11
Conclusion…………………………………………………………....……………………....….12
Appendix……………………………………………………….…...……………………...…….12
References……………………………………………………….……...…………...…..……….14
Introduction and Overview
“’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.
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 SWOT analysis is therefore needed to establish its weak points and to highlight its strong areas, which should determine better results for productive outcome.
Strengths
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 techno.
Starting the StrategyCatherine OlszanowskiArgosy.docxdessiechisomjj4
Starting the Strategy
Catherine Olszanowski
Argosy University
Capstone Experience in Integration and Strategy B6028
Dr. Thomas Kemp
November 27, 2013
Running Head: STARTING THE STRATEGY 1
STARTING THE STRATEGY 14
Abstract
Honda Motor Corporation was established in 1946 by Soichiro Honda. Honda is an international corporation that manufactures a varied range of motor products, from fuel efficient cars, mopeds, engines, motorcycles, to exclusive sports cars. This audit assesses Honda’s market position, value proposition and competitive advantage at the same time evaluates the existing atmosphere Honda functions in. This paper will also perform a preliminary assessment of external factors that comprise the Porters five forces. Lastly, this paper will focus on Honda’s strategic issues and provide proposals that will assist the company in determining problems while providing results and recommendations.
Running head: PRELIMINARY STRATEGY AUDIT 2
Table of Contents
Abstract2
Introduction………………………………………………………………………………………………………… 3
Market Position……………………………………………………………………………………………. 4
Value Proposition…………………………………………………………………………………………… 5
Competitive Advantage…………………………………………………………………………………… 5
External Environment………………………………………………………………………………………………… 6
Current Environment……………………………………………………………………………………… 6
Assessment of External Factors…………………………………………………………………………….. 7
Porters Five Forces………………………………………………………………………………………….. 8
Strategic Issues……………………………………………………………………………………………………… 10
Economic Health………………………………………………………………………………………....... 10
Aging Riders………………………………………………………………………………………………. 11
Diversifying……………………………………………………………………………………………… 11
Summary of Key Findings and Recommendations…………………………………………………………………. 12
Conclusion………………………………………………………………………………………………………… 13
References14
Starting the Strategy
Introduction
In today’s market few companies know that being able to sustain a competitive advantage is crucial to the longevity of a company. Honda has been in business since 1903 which is celebrating their 110th anniversary and within that time Honda has become a global icon that has been at the forefront of the motorcycle industry.
Market Position:
According to Honda’s website it has stated that Honda’s target consumers are: “In 2012, U.S. sales of new Honda motorcycles to our “outreach” customers -- young adults 18-34, women, African-Americans and Hispanics – grew overall at more than twice the rate as sales to our traditional U.S. customer base of Caucasian men, ages 35-plus” (Honda, 2013, p. 3). Honda has a healthy product line that caters to every price point and also has a parts and service and clothing departments that further facilitate the Honda experience. Honda’s marketing strategy is about American made motorcycles and freedom of the road. Each Honda store is franchised out and has at least one dealership in each major city so that they can integrate themselves in the local communities that t.
Ducati has built its brand image as the sports bike manufacturer. Ducati has captured a huge portion of the market in all four categories of the sports bike. They concentrate on dominating a niche Performance-driven motorcycles, lighter frame, forward-leaning eat position, significant handling capabilities, on the other hand, luxury of comfort is sacrificed. However, in the current business situation, Ducati is facing a high competition from its rival bike manufacturers in heavy and cursing bike categories. Customer’s perception regarding repeat acquiring a bike from the same manufacturer has changed since 2000. “Exhibit 16” shows that customers of Harley-Davidson and BMW are more interested in buying bikes from them repeatedly, which is increasing the competition for Ducati to retain its current customers. Ducati is showing a steady growth and profits in its relevant market, but it is not enough to sustain in the industry for a longer period. Hence, the main issues are potential stagnant growth for the company. Should Ducati enter the cruiser market? Will entering the cruiser segment, and broadening Ducati's traditional niche, help them sustain the profitable growth of the organization?
Running head HONDA AUTO COMPANY MARKET RESEARCH PROPOSAL .docxcharisellington63520
Running head: HONDA AUTO COMPANY MARKET RESEARCH PROPOSAL 1
HONDA AUTO COMPANY MARKET RESEARCH PROPOSAL 19
Honda Auto Company Market Research Proposal
Student’s name
University affiliation
Table of Contents
Executive summary……………………………………………………… 3
Introduction……………………………………………………………… 5
Background………………………………………………………. 5
Objective of the study……………………………………………. 6
Statement of the problem…………………………………………. 8
Approach to the problem ………………………………………… 9
Cost and Time analyses……………………………………………11
Methodology……………………………………………………………… 12
Research design…………………………………………………………… 13
Results of the research..................................................................................15
Reporting…………………………………………………………………. 18
Limitations………………………………………………………………… 19
Conclusion………………………………………………………………… 20
References………………………………………………………………… 22
Executive summary
In order for any business or corporation to prosper, it must conduct thorough market research for its product and services. The main purpose of conducting a market research is to provide company’s management with valid, reliable, accurate, and current market information (McKinley, 2005). Due to the competitive business landscape and the ever-changing business trends attributed to deprived decision making, the research ought to provide sound data. Moreover, as company’s marketers, it is of great significance to knot how consumers’ make decisions pertaining purchase. In addition, it is important to identify the target market in order to choose appropriate products, and promotion technique.
In the case of competitors, a business generates the ability to challenge their market supremacy and the research offers insight to understanding their marketing approach. In any corporation, marketing managers generates various tactical and strategic decisions during the process of satisfying and identifying customer needs. Some of the decisions they make in a company include prospective opportunities, market segmentation, target market assortment, market performance, and implementation of marketing programs. The above decisions shape marketing products variables such as pricing, distribution, and promotion. Consequently, the above variables help marketers in any business to associate consumers with its products (McKinley, 2005).
Furthermore, carrying out a market research helps an organization to understand consumers’ complexity. It assists a business in getting rid of any uncertainty that a consumer has concerning its products and services, and marketing variables. It is hard to predict the reliability and accuracy of marketing programs, in the absence of appropriate data. Marketing research conducted by any organization, generates adequate information on convenient and non-convenient aspects and consumers; in addition, information obtained enhances the effectualness of verdicts marketing managers tend to market. The.
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5. Arena:
Honda has been continuously pursuing since the establishment of the company the
advancement of environmental technologies. In 2009, Honda GX will be the first and
only natural gas vehicle to be mass produced (at Indiana plant).
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8. Vehicles:
Honda has reached its current leading position in the industry through internal
development and JVs.
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9. Differentiator:
Honda has such manufacturing differentiator as just-in-time parts delivery, quick die
changes in metal stamping, rolling model changes to launch new vehicles without
stopping production and a high level of flexible model production. Besides, most of
our suppliers and customers are close to the plants.
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10. Staging:
A new auto plant in Indiana, in the U.S., a new engine plant in Canada, and a second
auto plant in Thailand has begun operation in the second half of 2008.
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11. Economic Logic:
Business diversification will bring Honda to success. Other businesses, such as
Motorcycles, will support Honda in the difficult business environment. History shows
that motorcycles remain strong in a difficult market environment and have always
supported Honda in difficult times.
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15. Honda has chosen to focus on the car and motorcycle segments with a recent entry
into the light SUV category.
The motorcycle business has traditionally been strong but sales have begun to taper
off.
Obvious business risk associated with having 50%+ revenue coming from North
American market.
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17. Well-positioned to take advantage of the future demand for fuel-efficient vehicles.
Demand is increasing in underserved, developing areas of the world.
While a Big 3 collapse could hurt in some ways, it would also present a market share
opportunity.
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18. Phase Two:
• Innovative Research: This includes the work that Honda is doing in fuel cell
technology, hybrids, CVT transmissions
• Superior Engineering Design: This includes the process engineering (in terms of
designing the process concurrently with the product. Superior design enables Honda
to build first-rate products more efficiently than other manufacturers.
• Price at High Consumer Value: While some Honda products are priced at a premium
over their competition, this is due primarily to the high resale value of Hondas.
Taking this into account, Honda small cars are still priced to create consumer surplus.
Phase 3:
• Efficient Processes: These allow Honda to manufacture complex designs (which
often lead to better durability) at low cost, allowing for value creation later in the
chain.
Phase 4:
• These are activities which we feel synergize with Honda’s Tier One and Two
activities, reinforcing their key competencies.
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19. We have identified 3 areas that we feel best represent Honda’s Competitive
Advantage:
Engineering Design
Research and Development
And
The Honda Brand
The question then becomes: “Are these advantages sustainable?” To answer that, we
will consider the Value, Rarity, Difficulty of Imitation, and Organization of these three
areas: VRIO Analysis.
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20. Starting with Engineering Design,
We know that Honda excels at using their engineering prowess and design skills to
build reliable cars.
However, some other car manufacturers excel in this area as well.
For manufacturers who are not already competitive with Honda in this area, it would
be difficult to bridge the gap to competitiveness by imitating Honda’s success.
Finally, Honda’s business units are aligned to take advantage of design breakthroughs.
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21. For Research and Development,
Honda’s focus on R&D has placed them at the forefront of technology, allowing them
to use their advances in their automobiles.
In addition, Honda has a strong level of investment in R&D for a company their size,
and will continue to invest heavily in this area, which is not common in the auto
industry.
Because of the advanced nature of their research, Honda has a strong first-mover
advantage over some competitors in this area, and it will be difficult for those not
actively pursuing their own research to catch up to Honda.
And
By keeping the R&D group autonomous from divisions within the company, Honda’s
team has the freedom to develop new technologies for the company across the
board.
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22. Finally, we look at Honda’s brand equity.
Consumers are willing to pay more for Honda’s cars because of the power of its brand
and its association with quality and value. As a result, Honda has best-in-class repeat
purchase rates.
However, Toyota, who is a key competitor, also has strength in this area.
Because Honda’s brand equity has been built over a long period of time, it would be
difficult for competitors to imitate. Honda’s reputation for reliable cars was not
earned overnight.
Honda takes advantage of the benefits given by their strong brand by using it as the
flagship brand for the company, and by supporting it with strong engineering, design,
and R&D.
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23. So, looking at the combined analysis of these three advantages, we can see that
Honda is in a good position to move forward with a strong competitive advantage
that should be sustainable over the long term.
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24. After we defined our strategy and our sustainable competitive advantage, we
assessed our current strategy by looking at a variety of qualitative and quantitative
factors. We wanted to understand how our current strategy is working and what we
should do moving forward.
First, we took a look at our financials over the past 5 years. As you can see here,
revenues are continuing to grow. In 2008, revenues surpassed $105 billion USD. This
suggests that our steady growth strategy through global expansion and broadening
our product offering is working.
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25. We also took a look at our net income over time. Net income grew in 2008 relative to
2007. While 2008 net income is still not at 2006 levels, Honda is faring well relative to
industry given economic conditions.
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26. We also took a look at our profit margins and compared them to some industry
benchmarks. Honda’s net profit margin is among the best in the industry. This
demonstrates that our strategy of implementing efficient production processes is
working. The efficient production helps us keep our costs down so we can continue to
offer high-value cars to our customers.
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27. Honda has very strong brand loyalty as evidenced by the strong repurchase rate for
Honda automobiles relative to the industry norms. 65% of Honda customers
purchase another Honda automobile vs. the norm of only 48%. This supports how
we’ve successfully built strong equity around the Honda brand and the consumers
continue to reinvest in our products as a result.
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28. Honda again wins the best brand resale value award from Kelley Blue Book. This also
reinforces the strength of the Honda brand. Consumers recognize that Honda is
producing reliable, dependable automobiles. They are willing to pay more for a
Honda car because they know it will hold its value over time better than other cars.
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29. Looking forward, given the political and economic uncertainty, fluctuations in oil and
raw material prices, and fluctuations in currency exchange rates that we discussed
earlier, we expect the operating environment to remain difficult.
However, we’re continuing to invest in the future.
Our R&D investment has grown in each of the last 5 years. We are going to continue
to fund R&D to develop innovative new products. Our focus on innovation as well as
engineering design excellence and strength of the Honda brand position us to
continue to compete in this market in the future.
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