Honda’s US market Essay
The question asked on this case study is whether prescriptive strategy is to be modified or whether as Pascale suggests, redefine the strategic process completely.
In some cases the prescriptive strategy works adequately, but in the case of Honda, they had to change their approach due to the unsuccessful launch of the program in the US market to sell motor vehicles. Due to this, Honda entered the market a second time, selling their small scooters in the US market. It could be construed to say that Honda’s first strategy failed and only by chance did they break into the US market with sales of motor vehicles which reinforced Honda as a brand which would start to erode other US motor vehicle manufacturer’s market share. Therefore, as this was found to be successful, Honda developed a strategy which would allow them to build upon their previous sales of the small motor vehicles. However, adjustments would need to be made in order to launch the larger motor vehicles ‘cashing in’ on their previous success.
From first using an emergent strategy the next phase in Honda’s US market breakthrough would be to follow the use of a modified prescriptive strategy. Honda’s strategy developed as an emerging process. Through trial and error with the first strategy, the company evolved from an experimental process to utilise a ‘learning’ based strategy. This resulted in Honda finding an effective strategy that could be used within the US market.
When the prescriptive strategy was set to be used it was not that it was wrong. It was not suitable for the US market, therefore careful consideration needed to be taken to adapt to the US market.
It could be considered that Honda whilst trying to enter into the USA market for motorcycles followed learning based route through an emergent strategy. As first entering the market showed that they were against established companies through failing to obtain a slice of the market share.
Honda’s game theory first time around centred on entering the market place in the UK and USA on terms of a non established brand name. Even though the product from Honda was vastly superior to that of the home market’s it essentially followed the following:
* entering the market the first time was unsuccessful as their approach failed through using an emergent approach
* Second time entering the US and USA markets led Honda to enter an emerging marketplace with a small scooter which established them as a provider of safe scooter’s.
* Name expanded through following learning based prescriptive strategy which chanced upon entering the marketplace and establishing the name Honda as a safe manufacturer.
* It would be best to redefine the strategic process following successful strategies already proven by Japanese companies by researching the marketplace better first time around and following a learning strategy already followed in the Japanese home market.
If we are looking at purely whether the prescriptive strategy is to be redefined in a global context then the answer is no. However, if we are looking at whether Honda used a prescriptive strategy that can be given another description then the answer is probably yes. The first time that Honda entered the US motor cycle market was head on with the likes of Harley Davidson, who had a well established reputation. However, Honda had no such reputation and as such was not well received by a naturally sceptical and generally insular nation. One has to wonder if they actually carried out any prescriptive strategic analysis. The suggestion in the case study is probably not and that this was an opportunistic strategic move on the US market which failed.
The second attack on the market was definitely an attack strategy that followed an opportunistic approach. This was by way of the fact that they tried to establish a market that was not in America before to any large scale but was an established home market in Japan. Indeed, the approach was a Generic Focused Strategy, establishing a niche market for them selves. Honda’s approach, according to Porter (Competitive Strategy, 1998 (reissue), 289 redefined the motor cycle as a product; he claims this to be product redefinition and part of the Strategic Innovation process.
Honda, by the nature of their approach as Lynch (2nd Edition, 2000) states this approach is emergent in tactical approach and uses three strategic factors:
Content – was the way Honda used small motor cycles to establish their market and reputation before attacking the established US giants head on.
Process – was the way Honda came upon this strategy by way of luck, learning and product performance.
Context – was the way that Honda took advantage of a niche that was perceived by them for smaller vehicles that carried a different public perception of the motor cyclist. Honda changed the perception that a motor cyclist was a Hell’s Angel to that of a clean living, everyday, normal person.
Whilst this approach seems to be very methodical in approach if carried out successfully at the first attempt the reality of the Honda situation was that they saw an opportunity and developed it to such an extent that they became market leaders globally as suppliers of all types of motor cycles.