Honda Entry Into Us Market
A. What role did economies of scale and experience curve play in Honda’s successful enrty into US market / motorcycle market?
In the late 1950’s Honda contemplated a bold move: entering the motorbike market in the United States. Today, Honda is a dominant player in the US, selling a wide range of models in large numbers. But its start could not have been more improbable or less likely to succeed. It was only by staying flexible to an emerging understanding of what the problem and the opportunities were, that Honda succeeded in its long shot.
Honda’s Native Success
Honda had done well in its native Japan, leaping in a short amount of time to the number one position largely on the strength of its Super Cub model, which was based around a new lightweight, 50cc engine that Honda had developed. The engine was inexpensive which allowed the bike to be sold for a low price, an important factor in Japan’s struggling post-war economy. The Super Cub had also been designed with close attention to customers’ needs such as the ability to drive it one-handed to facilitate carrying a package in the other arm.
The US Motorcycle Market in the 60’s
The American Honda Motor Company was established as a subsidiary by Honda in 1959. During the 1960 's the type of motorcycles brought by Americans underwent a major change. Motorcycle registrations increased by over 800,000 in five years from 1960. In the early 60 's the major Competitors were Harley - Davidson of U.S.A, BSA, Triumph and Norton of the UK and Motto - Guzzi of Italy. Harley-Davidson had the largest market share with sales in 1959 totaling a 6.6 million dollars. Many of the motorcycles produced were large and bulky and this led to the image of the motorcycle rider as being one who wore a leather jacket and went out to cause trouble.
The BCG Report findings
The Boston Consulting Group (BCG) report was initiated by the British government to study the decline in British motorcycle companies around the world,
In the late 1950’s Honda contemplated a bold move: entering the motorbike market in the United States. Today, Honda is a dominant player in the US, selling a wide range of models in large numbers. But its start could not have been more improbable or less likely to succeed. It was only by staying flexible to an emerging understanding of what the problem and the opportunities were, that Honda succeeded in its long shot.
Honda’s Native Success
Honda had done well in its native Japan, leaping in a short amount of time to the number one position largely on the strength of its Super Cub model, which was based around a new lightweight, 50cc engine that Honda had developed. The engine was inexpensive which allowed the bike to be sold for a low price, an important factor in Japan’s struggling post-war economy. The Super Cub had also been designed with close attention to customers’ needs such as the ability to drive it one-handed to facilitate carrying a package in the other arm.
The US Motorcycle Market in the 60’s
The American Honda Motor Company was established as a subsidiary by Honda in 1959. During the 1960 's the type of motorcycles brought by Americans underwent a major change. Motorcycle registrations increased by over 800,000 in five years from 1960. In the early 60 's the major Competitors were Harley - Davidson of U.S.A, BSA, Triumph and Norton of the UK and Motto - Guzzi of Italy. Harley-Davidson had the largest market share with sales in 1959 totaling a 6.6 million dollars. Many of the motorcycles produced were large and bulky and this led to the image of the motorcycle rider as being one who wore a leather jacket and went out to cause trouble.
The BCG Report findings
The Boston Consulting Group (BCG) report was initiated by the British government to study the decline in British motorcycle companies around the world,