The Honda Effect
What are the key differences between these two accounts of Honda’s entry into the US motorcycle market? The two accounts of how Honda entered into the US market are very different, The Boston Consulting groups (BCG) report clearly shows a deliberate approach to Hondas strategy in penetrating the US motor cycle market. The report documented by Richard Pascale “an insider’s account of Honda’s entry into the US market” shows a clearly defined emergent strategy. The following study is to better understand the Key differences between these two accounts of Honda’s entry into the US motorcycle market.
The BCG report was requested by the British government to investigate why the UK motorcycle industry in the USA had declined since 1960. The report identified two main factors that led to the UK motorcycle industry dissolving in the US. 1.
Market share loss.
Poor Manufacturing, technological and distribution techniques. The BCG report states that Hondas success in the US market was because of a clearly defined deliberate strategy. Hondas great success in its home country (Japan) had given Honda a highly competitive cost position to peruse other international markets. The increasing demand of Honda products in Japan led Honda to decrease the cost of out-put while increasing the level of out-put, Honda used this competitive advantage it penetrate the US market and gain a relatively high market share. (Minzburg, H. & Quinn, J. 1991)
Honda identified its market Deliberate or accidental
The BCG report states that Honda entered the US and identified small bikes as their target market, this account is different according to Mr Pascale who stated the following “We still hesitated to push the 50cc bikes out of fear they might harm our image in a heavily macho market” this shows that Hondas intention was not to sell smaller bikes but rather to go with the rest of the industry by selling he bigger bikes. Another reason for selling the smaller bikes was...
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