The Boston Consulting Group ( BCG ) report was initiated by the British government to study the decline in British motorcycle companies around the world, especially in the USA where sales had dropped from 49 0n 1959 to 9 0n 1973. The two key factors the report identified was the market share loss and profitability declines an the scale economy disadvantages in technology, distribution, and manufacturing. The BCG report showed that success of the Japanese manufacturers started with the growth of their own domestic markets. The high production for domestic demand led to Honda experiencing economies of scale as the cost of producing motorbikes declined with the level of output. This provided Honda to achieve a highly competitive cost position which they used to penetrate into the US market. " The basic philosophy of the Japanese manufacture is that high volumes per model provide the potential for high productivity as a result of using capital intensive and highly automated techniques. Their marketing strategies are therefore directed towards developing these high model volumes, hence the careful attention that we have observed them giving to growth and market share." (BCG p.59 ).
The report goes on to show how Honda built up engineering competencies through the innovation of Mr... [continues]
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