Honda Marketting Strategy Essay Example

of Mr. Honda, as well as their decision to establish headquarters in the western United States rather than relying on distributors. The BCG report also notes that before Honda's entry, motorcycles were primarily marketed towards niche groups such as law enforcement and military personnel. However, Honda's strategy focused on selling to the general public who may not have previously considered motorcycles. (SP p. 59)

Honda's Supercub, a compact and easy-to-carry motorcycle, was sold for less than $250. This was a significant difference compared to the hefty price tags of American and British motorcycles which were being sold for around $1000 to $1500. In 1960, Honda had a research team of approximately 700 designers and engineers, far surpassing the mere 100 staff employed by their competitors. This demonstrated the company's emphasis on innovation. In 1962, Honda's production efficiency was remarkable with 159 units per man-year, a feat that Harley-Davidson did not achieve until 1974.

Honda employed a region-focused strategy, gradually expanding from the west to east coast of America over a few years. Their advertising efforts showcased the phrase "you meet the nicest people on a Honda," which helped distance the brand from rough groups such as hell's angels. BCG's report portrays Honda as a company striving towards low-cost production. Their stronghold in Japan allowed for entry into the US market while redefining it with their friendly image. Aggressive pricing and advertising allowed Honda to exploit their comparative advantage effectively.

Pascale holds a different view on several aspects of the BCG report, particularly regarding Honda's entry into the U.S market. While the report suggests a seamless entry resulting in immediate success, Pascale argues that Honda's entry at the end

of the motorcycle trade season demonstrated their inability to conduct thorough research in the new market.

Despite entering the market at an inopportune time, sales were subpar and immediate success was unlikely. Pascale disputed the notion that Honda had superior productivity compared to other competitors. Although successful in Japan, circumstances suggest that the company was not exceptional. Tight budget restrictions resulted from a lack of funding from the ministry of finance and reinvesting profits into inventory. According to the BCG report, Honda implemented a gradual expansion policy, beginning in the west and progressing to the east.

Pascale acknowledges that while it is partly true that Honda had advertising in Los Angeles in 1963, four years after establishing their subsidiary, the British government's report showed that the company intentionally avoided associating with Hells Angels types by promoting only the nicest people in their advertisements. However, Pascale argues that this was not the company's intentional strategy as there were internal disputes on the matter, resulting in the sales director persuading management against their better judgement. The BCG report found that Honda was pushing into the US market.

Contrary to popular belief, Honda's strategy was not to dominate the small and lightweight motorbike market. Pascale refutes this and claims that the company's intention was actually to promote the larger 250cc and 350cc models.The reasoning behind this was that Honda believed the American market had a preference for larger products. Despite being unreliable, these larger bikes were initially heavily promoted until the introduction of the supercubs, which ultimately saved the company's reputation.

According to Pascale, Honda's triumph in the American market was not due to a brilliant concept but instead an urgent

measure brought about by a chain of lucky circumstances. However, they were able to establish themselves well by finding an unexplored consumer group while still keeping their current clientele. Analyzing Honda's capabilities can offer further insight into Pascale's evaluation.

The strengths of Honda originated from the founders' complementary roles. Honda was a creative mastermind with a strong personality and unpredictable nature. His focus was not on the company's profit or products, but rather on showcasing his innovative expertise by developing superior engines. On the other hand, Fujisawa was concerned with the financial aspect of the company and strategizing ways to promote their concepts. He frequently encouraged Honda to enhance the engines' quality. By specializing in their respective skillsets, the two founders joined forces and functioned effectively as a team.

One of the company's strengths was their effective utilization of their market position. By capitalizing on their strengths in design and production, they were able to increase sales in Japan despite the absence of a company organization. The Honda supercub was their main product contributing to sales growth, and once demand grew large enough, Honda shifted their sales approach from consignment to cash on delivery, a risky decision at the time. Within three years, this move changed the power dynamic within the motorcycle industry, transferring power from dealers to manufacturers. Mr. Honda instilled a "success against all odds" mentality into the company, which was put to the test when he sent two executives to U.

Selling something without a strategy can be a weak approach, but if there is strong leadership and strategy, weaknesses within the organization may become irrelevant. Honda's emerging strategy was aided by a bit of

luck, as the U.S. government's funding restrictions for their venture forced the company to take a different route.

If Honda had possessed sufficient funds, they would have chosen to follow the regular distribution channels. The company made its debut in the American motorcycle industry during the last phase of the trade season, resulting in oil leaks and clutch difficulties that did not impact Honda as severely as they would have if it had commenced business at the beginning of the season. Additionally, the Supercubs' popularity prompted Honda to manufacture a bike that was initially unsupported by top-level management. Notably, Honda's triumph was not solely due to senior management's solutions, since executives at most Japanese manufacturing firms do not regard their strategic positions as overly significant.

All workers, including salespeople, cleaners, and those on the manufacturing floor, play a role in the company's operations and impact its strategic position. The company values the ability to continuously exchange ideas between upper and lower levels of the organization. It is necessary to analyze Honda's strategy to determine if it follows a theoretical model, such as Andrew's two-stage model which involves formulating a corporate strategy based on market research, competitor analysis, and available resources, and implementing it throughout the organizational structure.

According to Porter, Honda was viewed by the BCG as a corporation that formulated and implemented deliberate plans and activities based on a strategy to handle market, environment, and competition pressures. On the other hand, Pascale's emergent strategy model portrayed Honda as one that had both intended and emergent strategies, where the emergent strategy would arise in response to environmental activities. Pascale believed that a significant portion of

Honda's corporate strategy was emergent rather than intended, but the actual approach is likely a combination of both models.

BIBLIOGRAPHY: Prentice Hall's The Strategy Process by Minzburg, H. and Quinn, J.B. (1991).