The Honda Effect Case Study
Introduction
Honda is a Japan based company and is the world’s largest manufacturer of motorcycles as well as the world’s manufacturer of motor vehicles, producing more than 14 million internal motor vehicles each year. The Honda Motor Company was founded by Soichiro Honda in 1948. In 1959, he opened the American Honda Motor Company, so he could fulfil his dream of building a high performance motorcycle and marketing it globally.
The discussion below briefly emphasises on the strategy used by Honda to gain entry into the US motorcycle market.
The key differences between the two accounts of Honda’s entry into the US motorcycle market
The two accounts of how Honda entered into US motorcycle market differ in numerous ways. There are two approaches to strategies were used by Honda to enter the US market, the Boston Consulting Group (BCG) report clearly shows a deliberate approach to Honda’s strategy in entering the US motorcycle market, while the report Documented by Richard Pascale shows a clearly defined emergent strategy (Mintzberg et al. 2003:152-165).
- The deliberate approach which was emphasised by BCG enabled the Japanese manufactures to succeed in many ways. The BCG report showed that the success of the Japanese manufactures began with the growth of their own domestic market. The high production for domestic demand led Honda to experience economies of scale proportion as the cost of producing motorcycles declined with the level of output. This allowed Honda to achieve a highly competitive cost position which they used to enter into the US market. The Japanese manufactures believed that high volumes per model provide the potential for high productivity. They also believe in putting capital back into production and making use of highly automated techniques.
Thus, their marketing strategies are directed towards developing these high volumes, hence the careful attention that we have observed them giving to growth and market share.
The BCG asserted that
Honda is a Japan based company and is the world’s largest manufacturer of motorcycles as well as the world’s manufacturer of motor vehicles, producing more than 14 million internal motor vehicles each year. The Honda Motor Company was founded by Soichiro Honda in 1948. In 1959, he opened the American Honda Motor Company, so he could fulfil his dream of building a high performance motorcycle and marketing it globally.
The discussion below briefly emphasises on the strategy used by Honda to gain entry into the US motorcycle market.
The key differences between the two accounts of Honda’s entry into the US motorcycle market
The two accounts of how Honda entered into US motorcycle market differ in numerous ways. There are two approaches to strategies were used by Honda to enter the US market, the Boston Consulting Group (BCG) report clearly shows a deliberate approach to Honda’s strategy in entering the US motorcycle market, while the report Documented by Richard Pascale shows a clearly defined emergent strategy (Mintzberg et al. 2003:152-165).
- The deliberate approach which was emphasised by BCG enabled the Japanese manufactures to succeed in many ways. The BCG report showed that the success of the Japanese manufactures began with the growth of their own domestic market. The high production for domestic demand led Honda to experience economies of scale proportion as the cost of producing motorcycles declined with the level of output. This allowed Honda to achieve a highly competitive cost position which they used to enter into the US market. The Japanese manufactures believed that high volumes per model provide the potential for high productivity. They also believe in putting capital back into production and making use of highly automated techniques.
Thus, their marketing strategies are directed towards developing these high volumes, hence the careful attention that we have observed them giving to growth and market share.
The BCG asserted that
Bibliography: Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring Corporate Strategy: Text & Cases. 8th edition. England: Pearson Education Limited. Mintzberg, H., & Quinn, J.B., (1991). The Strategy Process. New York: Prentice Hall. Pascale, Mintzberg, Lampel, Quinn, Ghoshal, (2003). The strategy Process: Concepts, Contexts, Case., 4th edition. Prentice Hall.