Use of PEST and SWOT techniques on Honda Essay Example

enhancement policy, labour jurisprudence, environmental jurisprudence, trade limitations, duties, and political stability in countries. The government plays a crucial role in the economy and determines the goods and services it wants to provide or be supplied. It also affects taxation and employment laws, as well as competition regulations that prevent companies from setting specific prices. Economic factors encompass economic growth, interest rates, exchange rates, and inflation rate.

According to Pest Analysis (2010), various factors have significant impacts on business operations and decision-making. For instance, interest rates can affect a company's cost of capital and ultimately its growth and expansion. Exchange rates play a role in the costs of exporting goods and the availability and price of imported goods. Economic factors, such as purchasing power, influence customer demand and their ability to buy products. Additionally, social factors encompass demographic and cultural aspects of the external microenvironment, which further impact customer demands and market size.

Social factors have an impact on the demand for a company's products and its operations. To adapt to these social trends, companies may need to modify various management strategies, such as hiring older workers. These social factors also influence the needs and preferences of customers, including their buying behavior for specific products. For example, introducing a new product that caters to the wrong age group can result in a decline in demand. According to Pest Analysis (2010), technological factors can help lower entry barriers and reduce minimum production levels for efficiency. Additionally, technological factors encompass aspects like automation, technology incentives, and the pace of technological advancements.

The text explains that they can assist in identifying barriers to entry, determining the minimal efficient production degree, and

influencing outsourcing decisions. Technological factors lead to technological displacements that can impact costs, quality, and drive innovation. It helps in defining the goal of a business venture or project and identifying the internal and external factors that are favorable or unfavorable to that goal. SWOT analysis is a business tool that allows a company to conduct a strategic analysis by identifying and analyzing its corporate strengths and weaknesses, as well as the existing or potential opportunities and threats from its external environment.

The completion of a SWOT analysis helps identify and minimize weaknesses in a business while maximizing strengths. This analysis is effective when the four critical information elements are thoroughly detailed and known. By doing so, the business can devise and implement a strategy that aligns with its objectives. The SWOT analysis methodology consists of two stages. Honda Motors is a highly successful car company globally. They have been able to reach this level of success by conducting PEST and SWOT analyses, which help them understand political, economic, societal, and technological factors that affect their car production. Additionally, they must also understand customer needs and desires, as well as the economic conditions and government's role in the respective locations where they operate.Understanding the engineering necessary for vehicles is essential for Honda to improve their market and attract customers. Conducting a SWOT analysis is important for Honda to identify their strengths, weaknesses, opportunities, and threats in order to succeed. Both PEST and SWOT analyses are crucial for Honda to sustain their presence in the market and understand their customers' needs. Productivity is related to competitiveness, as a company with higher productivity can charge lower prices and

gain a larger market share.

The organizational process capabilities are crucial for Honda as they involve transforming something from one form to another, whether it be in manufacturing or administrative processes. These capabilities are closely tied to product development and play a vital role in generating new and innovative ideas. (Process Capabilities, 2010)

In the manufacturing industry, process capability is utilized to measure how well product specifications align with the performance of corresponding processes. Various ratios and indices have been developed to describe this relationship.

On the other hand, international trade refers to the exchange of capital, goods, and services across international borders. (International Trade, 2010) Over time, international trade has flourished due to its ability to offer numerous advantages to different countries worldwide.

International trade involves the exchange of services, goods, and capital between countries and regions without significant barriers. It plays a vital role in a country's gross domestic product and serves as an important source of income for developing nations. The international trade system is expanding rapidly thanks to advancements in production methods, transportation systems, multinational companies, outsourcing of manufacturing and services, and swift industrialization. Additionally, international trade provides consumers with a diverse selection of products from various locations, thereby improving both individual well-being and national economic advancement.

Efficient allocation and utilization of resources are crucial for states to excel in producing goods and gain a competitive advantage over their rivals. By implementing efficient production methods, states can reduce costs and increase competitiveness. States that offer products at lower prices will capture a larger market share, motivating them to further improve product standards and provide consumers with high-quality products.

The car industry in 2010 is facing a global

price war due to trade restrictions. This industry is characterized by global mergers and the relocation of production centers to developing economies. It is currently experiencing imperfect competition, as there is an excess of capacity, rivals, redundancy, and convergence. The industry focuses on meeting consumer demands for styling, safety, and comfort, as well as managing labor relations and improving manufacturing efficiency. The industry must work diligently to meet the evolving demands of consumers in terms of the types of cars they desire.

The specialization in the car sector, specifically within the Honda brand, is gradually becoming more specific to each state. China specializes in car components, India focuses on two-wheelers and small vehicles, Thailand specializes in pick-up trucks and passenger cars, and Indonesia focuses on utility vehicles. As Honda adjusts its market presence in these countries and other parts of the world, they are catering to the specific wants of their customers. This is because they have limitations in providing different types of cars that are not necessary in certain states. The car industry is a testament to human technical ingenuity and is one of the fastest-growing sectors globally. Its dynamic growth can be attributed to competition, product life cycle, and consumer demand. In today's global car industry, the emphasis is on meeting consumer needs for style, safety, and comfort, as well as maintaining good labor relations and manufacturing efficiency.

The text discusses Whittington's Evolutional and Systemic schools of ideas and their relevance to developing a scheme for Honda motors. The Evolutional school focuses on the evolutionary position of selling or divesting. This is part of the Strategy (2010) concept.