Honda decided to change its strategy for marketing motorbikes in the United States. It chose to focus on small motorbikes like the Honda 50, targeting a broader audience beyond racing enthusiasts. Honda developed its own dealer network and distribution system. It also launched an advertising campaign promoting motorbikes as fun, affordable vehicles for everyone. This new approach was highly successful, allowing Honda to gain a 63% market share in the US by 1963.

1. Honda Decides to Market Small
Motorbikes in the United States
Decision Support System

2. Introduction
 The word “Decision” originally comes from the Latin “decider” which means determine.
 A choice made between alternative courses of action in a situation of uncertainty.
 The process of 4-step decision making :
Defining the problem
Constructing a model
Identifying possible solutions & Evaluating
Comparing, choosing, and recommending a potential solution

3. Introducing HONDA
 Honda Motor Co. Ltd. is a Japanese public multinational corporation
primarily known as a manufacturer of automobiles, motorcycles and power
equipment.
 Honda Motor Co. Ltd. Was founded by Soichiro Honda & Takeo Fujisawa
in September 24, 1948.
 The American Honda Motor Company, Inc. (sometimes abbreviated as
AHM) is a North American subsidiary of the Honda Motor Company, Ltd. It
was founded in 1959.
 Honda has been the world's largest motorcycle manufacturer since 1959.
 The 75 Greatest Management Decisions Ever Made: ...and 21 of the Worst
was described by Stuart Crainer.
 One of the 75 greatest management decisions is- “Honda decides to
market small motorbikes in the United States”

4. Soichiro Honda & Takeo Fujisawa

5. Background
 In 1950, Honda stunned the engineering world by doubling the horsepower
of the conventional four-stroke engine
 By 1956 Honda successfully dominated its local market (Japan) with three
distinctive products- the Dream, Benly and Honda 50 (Super Cub)
 Honda conducted market surveys in Europe and Southeast Asia from the end
of 1956 to early the next year
 Fujisawa found that the Southeast Asian market was indeed promising than
that of America
 "On second thought," Fujisawa said, "let's do America. After all, America is the
stronghold of capitalism, and the center of the world's economy. To succeed in
the U.S. is to succeed worldwide. On the other hand, if a product doesn't
become a hit in America, it'll never be a hit internationally.
 Honda's first overseas subsidiary was opened in Los Angeles on June 11,
1959with capital investment of $250,000 and three employees
 The American motorcycle industry was then selling 50,000 to 60,000 units
annually

6.  Honda thought they may have a shot at gaining ten percent of the import
bike market, but only with their larger 250cc and 305cc machines.
 In 1960, the first full year of operations, American Honda sold fewer than
2,000 motorcycles through three product lines: the Dream, Benly and
Honda 50 (Super Cub)
 Prior to 1960, the image of the motorcyclist in the United States was that of
an unsavory teenager who belonged to a group of unruly characters known
by names such as "Hell's Angels" and "Satan's Slaves." In general, the U.S.
public regarded motorcyclists as troublemakers who wore leather jackets.
 American Honda Motor Company, Inc.--an action was in sharp contrast to
other local (Harley-Davidson) & foreign manufacturers (Norton and BMW)
who relied on distributors.

7. What did Honda do…..?!!

8. Three Choices…..
Continue Current Strategy
Change the strategy & try a new one
Roll back the whole opration

9. Honda changed their strategy
 Honda changed their overall manufacturing, marketing, advertising &
distributing strategy.
 Honda decided to market small motorbikes (Super Cub) in the United
States
 Firstly they tried to change the negative image of motorcyclists
(Motorcycles were vehicles for outdoorsmen, racing enthusiasts and
hotrodders)
 Created a whole new market considering & focusing that “Anyone can
have a motorbike”
 Developed a new distribution network of itself (around 500 dealers)
 Honda followed a policy of developing the U.S. market one region at a
time. The company started on the West Coast and moved eastward over
a period of five years.

10. "Nicest People" campaign (1963)
 "You meet the nicest people on a Honda."

11. Honda 50 (Super Cub)
 The smallest, most lightweight motorcycles available
 Only 50 cc (Less oil consumption)
 A three speed transmission
 An automatic clutch
 Five horsepower (an American cycle had only two and a half)
 An electric starter, and a step-through frame for female riders
 Less costly ($250 )

12. Outcomes…….
 Honda went from no presence at all in the U.S. market in 1959 to 63% of the entire
market in 1963
 By the end of the year, Honda had sold more than 100,000 units in the U.S., more
than all other motorcycle manufacturers combined
 by 1964 nearly one out of every two motorcycles sold in the United States was a
Honda
 Its U.S. sales skyrocketed from $500,000 in 1960 to $77 million in 1965
 The success of the Super Cubs eventually translated into success with larger bikes

13. The Reasons Behind Honda’s Success
 Boston Consulting Groups ( BCG )
 Honda started with the growth of their
own domestic markets
 Irrational target market & Entry strategy
 Innovative production engineering
 Environmental Analysis
 Everything went according to how they
planned
 Clear strategy and goal
 A deliberate advertising campaign
 A deliberate approach on how to reach
to their market.
 Richard Pascale’s “Honda Effect”
 Low-cost high-quality product
 Emergent strategy
 Cutting out extra costs
 The 50cc success of Honda as a no other
option
 Detecting untapped market
 The result more of a series of
miscalculations, rapid readjustments and
chance
 No specific strategy

14. My findings…….
 Different Marketing & Distributing Strategy
 Willing to take risks
 Creative advertising campaign
 Faster Decision Making & readjustments
 Precognition
 Moving forward the organization as whole
 Providing Superior Service
 Respect for the Individual
 The Teamwork Factor
 Quality Efficiency and Productivity
 People Involvement
 Two-way communication
 Long-term Relationships
 The Honda Way