In 1984, Richard Pascale published a paper which described the extraordinary success Honda had experienced with the launch of their motorcycles in the US market in the early 1960s. It was an article that has generated discussion about strategic development processes ever since. Extracts from his article follow.
The US market had been served by Harley-Davidson of the USA, BSA, Triumph and Norton of the UK and Moto-Guzzi of Italy. In 1959 Harley was the market leader with total sales of $16.6 million. But the total British share of the US industry was 49 percent at that time. By 1973, however, the British share had dropped to only 9 percent. This was largely the result of the incursions of Honda in the 1960s, following the setting up in 1959 of the American Honda Motor Company (other foreign producers usually relied on distributors). Honda sales rose from $500,000 in 1960 to $77 million in 1965.
The Boston Consulting Group’s and Harvard Business School’s accounts of the success. Following the dramatic decline in the British share of the US motorcycle industry from 1959 to 1973, in 1975 the Boston Consulting Group (BCG) issued a report to the British Government summarising their findings of their study into Honda’s strategy in the motorcycle industry. The success of the Japanese manufacturers originated with the growth of their domestic market during the 1950s. This resulted in a highly competitive cost position which the Japanese used as a springboard for penetration of world markets with small motorcycles in the early 1960s. (BCG) Other studies, for example by the Harvard Business School, explained Honda’s success in the USA: After the Second World War, motorcycles in the USA attracted a very limited group of people other than police and army personnel who used motorcycles on the job. While most motorcyclists were no doubt decent people, groups of rowdies who went around on motorcycles and called themselves by...