1. Diversified product portfolio. Honda unlike many other automotive companies does not focus only on selling vehicles. It is the largest producer of the engines and motorcycles as well. Therefore, the company is not as susceptible as its competitors are to market cycles or technology disruptions. 2. Huge investments in R&D. Honda’s investments in R&D reach as much as 5% of revenue. The business relies on these investments to achieve competitive advantage through various technologies, such as improved vehicle painting process, new hydrogen and hybrid engines or new welding technologies. In 2012, the company owned 42,000 patents and had pending applications for 29,000 more patents. 3. Strong brand image. Honda has a reputation for producing the best quality engines around the world. The company’s brand was the 21st most valuable brand in the world valued at $17 billion and was only behind Toyota, Mercedes-Benz and BMW, according to Interbrand. 4. Motorcycle market share in Asia. In 2012, Honda sold 80.5% of its motorcycles in Asia, the market that has greatest growth potential. Having the largest motorcycle market share, Honda is well positioned to compete with other companies for the sales and profits. Weaknesses
1. Product recalls. Over 2011 and 2012, Honda recalled more than 1,000,000 vehicles to fix various faulty parts and manufacturing defects. Car recalls severely damages firms brand reputation and future sales. 2. Weak position in Europe automotive market. Honda holds a very weak position in the Europe’s automotive market and has maintained only 1.1% market share in 2012. Although, Europe’s market share is declining at the moment and many companies experience losses, the market is huge and firms can benefit from the economies of scale. 3. Decreasing sales. In 2012, Honda’s revenue hit the lowest point in 4 years to ¥7.948 trillion. Honda sales were down by 11.2% in North America, which represents more than 40% of...
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