...Honda A and Honda B (2 cases) * Which of the two descriptions seem closer to reality of the Honda’s successful expansion in USA? 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 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. 2. 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. The BCG report states that Honda entered the US and identified small bikes as their target market, this account...
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...a race and the development of unique innovations such as the V-twin engine, Harley obtained a strong reputation of being the pioneer in the motorcycle industry. Further, a high investment in Research, Development and innovation, an adoption of an “image and lifestyle” marketing strategy, the “raw power” appearance of its products, and the powerful connection with the American national symbols, made Harley-Davidson very attractive for the society, and help the brand in gaining customer´s loyalty (especially the men). Through Porter´s 5 forces framework (see appendix 5.1), it can be noticed that by the moment Harley-Davidson entered to the industry, the market was plenty of business opportunities and this context allowed Harley-Davidson to obtain a strong position until 1960: low barriers to entry due to the technological investment required and the lack of tariff barriers imposed by the government, low rivalry, weak supplier´s and buyer´s power (not concentrated groups). The threat of substitutes was also low but increasing (low-medium). The industry type at that moment was considered an oligopolistic industry (just two competitors in the market: Harley and The Indian). Moreover, Harley-Davidson strategy (Porter´s Product...
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...Chapter 1 – Indented and Emergent Strategies We have 5Ps as Plan, Ploy, Pattern, Position (Michal Porter) and Perspective. But the most contended issue is the concept of Intended/ Emergent Strategy. According to the Mintzberg’s model, a company’s realized strategy is the product of any intended strategies (those that are planed) that are put into action and of any emergent strategies (those that are not planned). In Mintzberg’s view, emergent strategies are the unplanned response to unforeseen circumstances. They often arise from autonomous action by individual managers deep within the organization (such as Richard Drew at 3M) or from serendipitous event (such as those that led Nokia into mobile phones). They are not the product of format top-down planning mechanisms. Mintzberg maintains that emergent strategies are often successful and may be more appropriate than indented strategies. Pascale describes how this was the case for the entry of Honda Motor into the USM motorcycles market. When Honda executives arrived in Los Angeles from Japan in 1959 to establish a US subsidiary, their original aim (intended strategy) was to focus on selling 250-cc machines to confirmed motorcycle enthusiasts, rather than 50-cc Honda Cubs, which were a big hit in Japan. Their instincts told them that the Honda 50s were not suitable for the US markets, where everything was bigger and more luxurious than in Japan. Sales of the 250-cc bikes were sluggish, however, and the bikes were plagued by...
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...Soichiro Honda Background A japanese businessman who was born in November 17th, 1906 in the town of Komyo, Japan. He was the first son of blacksmith Gihei Honda and his wife Mika. In 1922 he graduated from the Futamata Senior Elementary School. Honda had little tolerance for formal education and jumped at every opportunity he had to work with his true love: motors. Throughout his life Honda never forgot the impression that was made on him when he sighted his first automobile.[1] Start of an empire “I could not understand how it could move under its own power. And when it had driven past me, without even thinking why I found myself chasing it down the road, as hard as I could run.”[6] Soichiro Honda, a Japanese autophile has loved cars since a very young age and from there, his passion just grew. At the tender age of fifteen, he started working as an auto repair technician, dreaming of becoming a famous motor racer. When he had free time, he would build race cars and work on his Harley Davidson. The talent of this entrepreneur was natural and this allowed him to start his own vehicle repair shop in the year 1928. He attended technical school to add new skills to his inborn knowledge. It was also in 1928 that he secured a patent on wheel spokes for automobiles. This was the first of many innovations.[2] Honda's business thrived during World War II, and after the war he tried to enter the personal motor business, a difficult task since the industry was virtually nonexistent...
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...Honda in Europe( INTRODUCTION The Honda Motor Company first entered the European market in the early 1960s through the sale of its motorcycles. The company’s motor vehicles were introduced into Europe at a much later date. Honda’s motor vehicle sales in Europe have been relatively poor, especially in the previous five years. Despite its huge success in the North American market, Honda is struggling to gain a significant foothold in the European market. Honda executives wonder why their global strategy is sputtering. Is global strategy just a pipedream, or is something wrong with Honda's European strategy? History of Honda In 1946 Souichiro Honda founded the Honda Technology Institute. The company started as a motorcycle producer and by the 1950s had become extremely successful in Japan. In 1956, Honda entered the US market and was able to position itself effectively, selling small sized motorcycles. In the early 1960s, the company commenced automobile manufacturing and participated in Formula-1 racing (F-1) to assist its technology development. Thanks mainly to its F-1 efforts, Honda became recognized, not only in Japan but in the rest of the world as well, as a technological savvy company. Up to the early 1990s the company had experienced serious organizational mismanagement resulting from tension between the technology side and the marketing-sales side. The situation became so dire, that the technology biased president and founder, Souichiro Honda, was...
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...contribution of pent-up demand, the 2W industry growth over the last two years has been supported strongly by various underlying factors including India’s rising per capita GDP, increasing rural demand, growing urbanization, swelling replacement demand, increasing proportion of cash sales and the less measurable metric of improved consumer sentiment. Going forward, ICRA expects the 2W industry to report a volume CAGR of 10-12% over the next five years to reach a size of ~21-23 million units by 2015-16 as it views the fundamental growth drivers comprising of expected steady GDP growth, moderate 2W penetration levels, favourable demographic profile, under developed public transport system and utility quotient of a 2W - to be intact. Additionally, the entry of new players in the industry, multitude of new model/ variant launches, growing distribution reach, cheaper ownership costs on a relative basis are expected to be some of the other prime movers for industry growth over the medium term. In ICRA’s view, while the trend in rising commodity prices, hardening interest rates and increasing fuel costs may lead to some moderation in industry...
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...5 FORCES ANALYSIS The economic structure of an industry is not an accident. Its complexities are the result of long-term social trends and economic forces. But its effects on you as a business manager are immediate because it determines the competitive rules and strategies you are likely to use. Learning about that structure will provide essential insight for your business strategy. Michael Porter has identified five forces that are widely used to assess the structure of any industry. Porter’s five forces are the: In a simple word, we can define that the Threat of new competition is a profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. Unless the entry of new firms can be blocked by incumbents, the abnormal profit rate will tend towards zero (perfect competition). Threat of substitute products or services is the existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives. Note that this should not be confused with competitors' similar products but entirely different ones instead. Bargaining power of customers (buyers) is the bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure, which also affects the customer's sensitivity to price changes. Bargaining power of suppliers is the bargaining power...
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...Describe Honda’s strategy in the Japanese market from its founding until 1959. Describe Honda’s strategy in the US market starting with its entry to the market in 1959. After world war 2, the motorcycle industry in japan was delivering technically inferior products that were unreliable and were not addressing the consumer needs. Honda’s strategy was to supply technically superior products that provided cheap means of transportation. while the competition was risk averse, Honda’s focused on innovation to achieve technical superiority and use price as a competitive edge. This allowed them to not only provide a better product in the current market segment but also enabled them to identify and capture new market segments. Their focus on innovation and utilization of economies of scales allowed them to attain a sustainable growth and realize significant market share. Huge volumes gave them a competitive cost position and they were able to leverage this position to enter the US market with a differentiated product i.e. light weight motorcycles. They leveraged the scale economies to establish a competitive edge in distribution, technology and advertising. To gain a large market share Why was Honda successful in Japan? Why was Honda successful in the US? Were there any differences in the factors which made Honda successful in these two markets? - bold move to depart from the risk averse strategy of investing in one winning design - invested in innovation and identified...
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...1 a) How did Harley dominate the US industry historically Historically, Harley-Davidson managed to dominate the US market by correctly identifying its strengths, weaknesses, opportunities and threats and understanding the environmental factors that influenced the industry that it operates in (Figure 1 and Figure 2). By utilising its strengths to maximise the opportunities presented to the company, Harley-Davidson was able to implement a succession of affective strategies, allowing it to capture 60% of the motorcycle market and subsequently became the market leader in the late 1950s. In the early years, the company attracted customers and established brand credibility by utilising the ‘victorious’ and ‘sporting’ brand image of one of its founders, Walter Davidson. The company understood its customers need for a product that can be fixed at home and therefore, was able to fulfil this need with its pioneered V-twin engine innovation. In addition, Harley-Davidson invested in R&D, focusing on improving the quality and reliability of its machines, building on its strengths and therefore was able to charge a premium for its motorbikes. This, in turn assists Harley-Davidson to acquire its prestigious, luxury brand image and achieved a cult following. In doing so, Harley Davidson was able to increase its market share, despite a sagging economic environment of the 1920s. When sales declined in the 1950s, the company relied on its innovations as a point of differentiation and built...
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...Honda workshop handout (Honda B) Extract taken from pages 84 – 89 of The Honda Effect. By: Pascale, Richard T. California Management Review. Summer96, Vol. 38 Issue 4, p80-91. 12p. Abstract: The article presents an excerpt of "Perspectives on Strategy: The Real Story Behind Honda's Success," by Richard T. Pascale, originally published in the Spring 1984 issue of "California Management Review". Copied under the terms of the Copyright Licensing Agency's (CLA) Higher Education licence, for students registered on UMSD7T-15-3 - Strategic management (business, international and management); UMSD7U-15-3 - Strategic management (accounting, economics and finance); and UMSDDJ-15-3 - Strategic management (marketing, events and tourism). Any account of Honda's successes must grasp at the outset the unusual character of its founder, Sochiro Honda, and his partner, Takeo Fujisawa. Honda was an inventive genius with a large ego and mercurial temperament, given to bouts of "philandering" (to use his expression).[ 8] Postwar Japan was in desperate need of transportation. Motorcycle manufacturers proliferated, producing clip-on engines that converted bicycles into make-shift "mopeds." Honda was among these, but it was not until he teamed up with Fujisawa in 1949 that the elements of a successful enterprise began to take shape. Fujisawa provided money as well as financial and marketing strengths. In 1950, their first D-type motorcycle was introduced. They were, at that juncture, participating...
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...MFARIDABAD Submitted toController of ExaminationMaharishi Dayanand University, Rohtak PREFACE Marketing should not be looked upon in a vacuum or in isolation. It is an essence taking aview of the whole business organization and its ultimate objective concern for marketingmust penetrate all areas of the enterprise. Market survey in today’s competitive world is amust for every organization.This project is a study of marketing strategy of Hero Honda. The rational behind this particular study is to find out the present market scenario of various brands & to find outthe corporate need and perception. It was a pleasurable experience to conduct a researchon behalf of Hero Honda pertaining to the study of the Automobile Sector.Conclusion and there by recommendation has been arrived at by proper and justifiedinterpretation of the result derived from the above said analytical tools and techniques. DECLARATION I Rahul Gandhi, Class MBA –IV Semester of B.S.A.I.T.M Faridabad hereby declarethat the project entitled “ MARKETING STRATEGY ” HERO HONDA PVT. 2 [pic] [pic][pic]LTD . is an original work and the same has not been submitted to any other institutions for the award of any other degree. The feasible suggestion has been dulyincorporated in consultation with the supervisor. Rahul GandhiACKNOWLEDGEMENT I would like to thank Mr. Narender Tanwar assigning me a project to work on and for thehelp and guidance offered by them during my project work. Working...
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...example Indian automobile industry is the largest customer of Steel industry in India), the industry has a strong and positive multiplier effect and thus propels progress of a nation. The automotive industry comprises of the automobile and the auto component sectors. It includes passenger cars; light, medium and heavy commercial vehicles; multi‐utility vehicles such as jeeps; scooters, motorcycles,three wheelers, tractors, etc; and auto components like engine parts, drive and transmission parts, suspension and braking parts, electrical, body and chassis parts; etc. Indian automotive Industry * The Indian automotive industry has made rapid strides since de‐licensing and opening up of the sector in 1991. * It has witnessed the entry of several new manufacturers with the state‐of‐art technology, thus replacing the monopoly of few manufacturers. * The norms for foreign investment and import of technology have also been liberalized over the years for manufacture of vehicles. At present, 100% foreign direct investment (FDI) is permissible under the automatic route in this sector, including passenger car segment. * Based on the overall production of cars in the country the Indian automotive industry is now the 6th largest in the world * The Indian automotive market is one of the most competitive markets with low costs, which make it an attractive assembly base for foreign automotive manufacturers. Refer T1 * India comprises of approximately 20 percent of...
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...Submitted By: PGP/14/260 NITESH KUMAR GUPTA PGP/14/280 MAHTAAB KAJLA PGP/14/287 PRACHI CHAWLA PGP/14/290 RAHUL MITTAL PGP/14/313 VINNY ARYA PGP/14/315 VISHAD DUBEY India Yamaha Motors Limited Table of Contents EXECUTIVE SUMMARY .......................................................................................................................... 2 INTRODUCTION ........................................................................................................................................ 3 OUR FOCUS ................................................................................................................................................ 3 YAMAHA INDIA- A BACKGROUND AND NEED FOR CHANGE IN STRATEGY ....................... 3 YAMAHA‟S CHANGING STRATEGY ..................................................................................................... 4 EXTERNAL ENVIRONMENTAL ANALYSIS ......................................................................................... 5 INDUSTRY ANALYSIS - Two Wheeler Geared Bikes .............................................................................. 8 INDUSTRY ATTRACTIVENESS......................................................................................................... 10 COMPETITIOR‟S ANALYSIS ................................................................................................................. 11 INTERNAL ENVIRONMENT ANALYSIS ..................................................................
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...Actes du GERPISA n° 34 89 THE IMPACT OF GLOBALISATION ON THE CHINESE AUTOMOBILE INDUSTRY: POLICY ASSESSMENTS AND TYPOLOGY OF STRATEGIE Chunli Lee Takahiro Fujimoto, Jin Chen During the 1990's foreign enterprises from Japan, the U.S. and Europe were entering the Chinese market, and in due course they began to take an interest in China’s automobile industry. These foreign makers competed with each other to explore the promising auto market in China. But academic research has been mainly concerned with the quantity of the investments. An analysis of the change in the competitive infrastructure within the Chinese auto industry has seldom been undertaken. This paper will focus on the impact which globalization has had on the Chinese auto industry. We will evaluate Chinese auto industry policy and foreign investment policy first. Then we will have a look at the change in the investment pattern of foreign makers between the 1980's and the 1990's. We will also distinguish between the competition structures in the commercial vehicles market and passenger cars market. Finally we will classify the types of foreign enterprises that have advanced into the Chinese market. Through all the above analyses we will keep in mind the competition situation facing foreign enterprises in China. This paper is mainly based on the field research undertaken by the authors. POLICY ASSESSMENTS: CHINESE AUTO INDUSTRY POLICY AND THE NINTH FIVE YEAR PLAN The purpose of the Open Door Policy and China's...
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...down prices; the marketing aspect of company can be affected through the customer’s sensitivity of the price changes on a product Threat of Substitutes – Number of substitute products available in the market; customers can threat companies to go for an alternative product (i.e. cornflakes or frost flakes) Rivalry among existing competitors – A company who constantly innovate their own product, which holds a competitive advantage within the market; such as Samsung or Apple innovate to keep competition to a minimal and themselves pursue higher in the market Describe Honda’s strategy in the Japanese market from its founding until 1959. Describe Honda’s strategy in the US market starting with its entry to the market in 1959. After world war 2, the motorcycle industry in japan was delivering technically inferior products that were unreliable and were not addressing the consumer needs. Honda’s strategy was to supply technically superior products that provided cheap means of transportation. while the competition was risk averse, Honda’s focused on innovation to achieve technical superiority and use price as a competitive edge. This allowed them to not only provide a better product in the current market segment but also enabled them to identify and capture new market segments. Their focus on innovation and utilization of economies of scales allowed them to attain a sustainable growth and realize significant market share. Huge volumes gave them a competitive cost position and...
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