A Strategic Analysis Of Honda Motors Company

Strengths and Weakness of Honda

Strategic Management is known as the implementation and formulation of companies’ major initiatives and goals taken by the top management on the basis of environmental analysis. Honda Motors Company is the first Japanese automobile Manufacturer in the world. This is the public company, founded by Hamamatsu, incorporated on 24 September 1948 (Abdel-Basset, Mohamed and Smarandache, 2018). In this, four tasks are explained. In the first task the strategic capabilities are explained. This includes weakness, strengths, opportunities, and threats of Honda Motor Company. The second task includes the detailed analysis of the stakeholders of the company. Third task includes the issues related to the corporate social responsibility of Honda Motor Company are highlighted. The fourth task includes the emergent and intended approaches and their amendments to overcome that are also considered. Lastly, the final part of the report consists of the results obtained from the whole report.    

High Brand Awareness: This is a very old and popular brand this means they had a high brand awareness. This includes that they had a large customer base which also creates a high brand value for the company.

Dominance over other brands: Honda had a very high dominance over other brands due to its high brand awareness and the loyalty of customers towards the brand. This is the only brand which is constantly maintaining their quality of products.

Excellent Research and development department: Honda has a good manpower employment and their efficient and elegant designs that come from a good research team that helps them in increasing their share in the market.

High Technology:They had a latest technology that gives them the competitive advantage. The product profile of the organization gives the detail description about how efficient they are in their technological department.

Marketing and Advertising Campaigns:Honda had a high quality of marketing campaigns and a very efficient marketing strategy. Their advertisement campaigns include third-party verification on cost per visit.

Largest internal combustion manufacturers:They had a huge presence in the market in jet skis, airplanes and all the heavy engine usage vehicles produced by the Honda Motor Company (Safdie, 2018).

Band equity for a long time:Honda had given high-quality products for a long time. In the cars industry, their most selling cars are Honda CRV and Honda Accord. These products made with high engineering. This gives them the boost in their brand equity and helps them in sustaining in long run. 

Opportunities

Market Share:This happens because they had the largest manufacturing advantage. This ensures that Honda had the major shareholding in the product manufacturing market.

Competency in the core product:Honda is one of the organizations that had managed their expertise in their core business activity rather than focusing on other marketing activities. This is also the competitive advantage given to Honda Motors.   

Excellent After-sale services:This happens because they had a low maintenance and a longer life which lowers their maintenance cost per product. This happens because the product had its units in many places (Annual Report, 2017).

The weaknesses are as follows:

Increased Competition-The competition is one of the major weaknesses of Honda Motors. This had made difficult for the Honda Motors to restrain their position and brand value in the market.    

High Costs and Prices-Due to the huge investment in research and development department the manufacturing cost per product had also increased. This also impacts the cost price of the actual product as well, which means that the price is to beared by the actual consumers (Tran, 2018).

Product for the masses- Honda had a high brand equity which makes the consumers think that this product is only for the upper middle class and upper-class citizens in the country.

Dependence on North America-Honda Motor Company is highly dependent on North America as this brand is highly popular in that country and they generating the highest amount of revenue from that country.    

Low Investments-This is also one of the biggest weakness for Honda Motors Company as from the above it is clear that they had a huge investment in Research and Development department and low investment in other departments.

Recall of some of the models for corrective measures-In some of the cases Honda needs to recall their products back due to change in technology or faulty system of approving the product before the delivery to the actual consumers. This creates a huge loss to the company. The company is very much concerned with the Research and development and are less focused on the other operations of the company (Cascio, 2018).   

Government Regulations-The change in the policies of the government regulations can create a huge impact on the price of the product. The taxes and subsidies are the major reasons for the improvement in the product.

• Improvement of the economy-The improvement in economy cause due to the technological changes. This had created a huge impact on the thinking of the citizens which leads to the growth of all the sectors of the economy.
• Alternative fuel Vehicles-Now a day’s people started demanding the alternative and electric fuel vehicles which created the need for these kinds of vehicles. This is also the clean energy as the fuels like Diesel, Petrol and CNG has its own limitations as per the cost (Honda, 2017).
• Product Expansion-Adding more and more products in the product line can cause a great opportunity for Honda to make more profit and create new customers. This leads to expansion of business and also creates more profit.
• The frequency of release of the new model- If the product is releasing at the time when no competition of that kind of product is available then the profit will be more and if the competitive product is available with the fewer prices then the consumer will switch to that product.
• Building of Global Brand-This means they need to increase the value of the products to maintain the brand value. This will result in loss of customers which pursue a tendency to buy the products as per the price; this will make them purchase the substitute product which is offered at low price.    
• Low fuel Prices-The prices of the fuel also play a very crucial role in the purchase decision of a particular product because if the prices of petrol are in favour of middle class they will purchase more vehicles as they are able to afford the complementary product (Comte and Pendleton, 2018).

• Government Policies- The policies of the government play a very important role in the Honda Motor Corporation. If the policies are not in favour of the company then this can lead to increase in the cost of the product.
• Availability of Substitutes- The price of the available substitute products also affects the price of the products. This means, if the price of substitute product is less than the product then consumers will purchase the other brands.  
• Rise in transport prices- The continuous rise in fuel prices can cause the rise in the transport prices which can make difficult for the people to buy a product. This happens because as a rational consumer people will always try to make the transport in as much less price as possible.  
• Natural Disasters-Natural Disasters can lead to decrease in the income of consumers which will make the citizens incapable of purchasing the products as per their conveyance as they don’t have the purchasing power (Eaton, 2013).

The major stakeholders include the customers, Shareholders, investors, policy makers, research institutes, experts and local governments, media, NGO, suppliers, local community and associates of the organization. They are:

• The Shareholder and investors include the activities in general shareholders meetings, IR meetings, new model or new technology and the launch of new events.
• Policymakers include the participation of the council members of industrial bodies like participation in international initiatives and Japan Automobiles Manufacturers.
• Research Institutes will include collaborations with the specialized universities, special lectures, verification of the products, support for the academic meetings and co-development of technology (Williams, Agle and Gates, 2018).
• Experts and local government include the feasibility studies, technology, and dialogs concerning policies. Media includes new model or new technology launch events, press releases and Journalist meetings. The NGO includes regular communication, questionnaires, regular communication and collaborative projects.
• The suppliers include Green Network meetings, suppliers risk assessments, briefings or Suppliers networking events.
• Associates include satisfaction surveys, education training by internet and intranet, direct communication from senior associates and executives.
• Local communities include plant tours, social activities by the associates and networking events of local residents and events for the students and for the children’s. The local customers will include activities in the motor shows, customer satisfaction surveys and safe driving activities (Engström et al., 2018).  

Threats

The major issues that affect the stakeholders of Honda that will need to reflect the future strategy are:

• Safety and development issues in the products-Honda is constantly engaged in the safety issues and delay in the developments. Some of the major problems include the problem of faulty airbags. Due to this problem the manufacturer had to recall many of its sold products. To avoid this kind of problem in future, they need to improve the management of the company so that they improve the strategy by organizing surprise visits to find out the quality measurements of all the manufacturing units.
• Global Competition-This means that Honda is a global organization they need to take care of the competition as well. They need to set their price of the product taking in consideration about the income earned by the people of the country in which they are selling that particular product (Köseoglu, Yildiz and Ciftci, 2018).
• Expansions of the production Capacity-They need to expand the production capacity and improve the efficiency of the additional operations. The expansion of production capacity leads to decrease in the coordination in all the units of the organizations. These need to be settled because this can become the competitive advantage for other organizations to earn more profit over this company.    
• Recall of Millions of Cars-This had caused huge loss to the company as the defect in the product is the cause for recalling the millions of the cars. This can be solved by appropriate tests for the quality control, surprise visits in various manufacturing units to check the quality control in the organization. There is a need to increase more security in the operations. This is a very important as this is a major problem which gives the competitive advantage to other organizations which can eventually lead to loss of customers (Ginter, Duncan and Swayne, 2018).

• Environment Protection- Organisation had the biggest use of technology as they had a huge responsibility of environment protection. This means the need to introduce that kind of technology which not only makes profit for them but also protect the environment for them. Honda had an advantage of gasoline engines which helps them in protecting the environment and contributing to the corporate social responsibility. The problem is that they need to constantly produce the environmental friendly products on a regular basis (Mittal, Diallo and Tolk, 2018).
• Hybrids- They had a biggest problem of improvement in cleanliness and efficiency of the engine combustion. They need to do that before their competitors and that too with the minimum investment and need to give that on the minimum price as possible.
• Environment Vehicles- In order to protect the environment they need to produce the vehicles that cause the minimum amount damage to the environment. This will take large amount of investment. The slight increase in the investment can cause the huge impact on the price of the product. This can eventually lead them to losing the customers for them (Ladkin, 2018).  
• Reputation- They needs to maintain their reputation as they need to maintain a balance between fulfilling the social responsibility and earning profit which is their primary motive. An increase in the unethical practices can cause an impact in the brand value of the product. This can lead to decreasing the profit of the firm as well. Honda is a global organisation and they need to maintain their brand value in order to ensure that their profit will increase.     
• Fuel economy- Honda had a problem that they produce those products which had a lot of fuel consumption in them. The problem is that they need to produce the products which will consume a limited amount of fuel and they are not expensive as well (Gowdey-Backus, 2016).

They had divided their CSR Activities are divided into following areas:

• Environment: They have always believed the freedom and joy of the mobility and sustainability of the society where the people can always enjoy the life.
• Quality: The aim of quality is to bring the reassurance and the satisfaction in the lives of the consumers. This includes offering a new level of the outstanding quality.
• Safety: This means that Honda had dreams of a collision- free society where the customers and everyone who is sharing the road can confidently and safely enjoy that freedom of mobility (Husted, Henriques, and Crane, 2018).
• Social Activity: Honda is involved in the Social Activities. In North America, they had developed positive youth development, in Canada and Mexico a whole week of coordinated social activities. They are always concerned about developing the next generation, prevention of global environment and providing traffic safety.
• Human Resources: In this part they have some environmental beliefs which include equality, trust and the initiatives. In the equality part they had three categories of the personnel management which includes ensuring fairness, respecting initiatives and encouraging Mutual trust.
• Supply Chain: In the supply chain management they had some of the procedures which includes the process of raw materials, then the components of the product, then purchasing of the product, then the production of the product, logistics of the product, actual sales of the product, the use of the product, disposal of the product and lastly the effective utilisation of all the resources (Jiang et al., 2018).

Intended Strategy is the strategy includes the strategies the organization actually wants to achieve. In this organization, it is designed to ensure that the basic objectives are achieved. Honda Motorcycles had started operations in the American market. They started their subsidiary in Los Angeles. The reason behind is the appropriate climate conditions and its emerging population. This kind of strategy is considered as an intended approach (Güler et al., 2018).

An emergent strategy is an unplanned strategy that arises from the challenges and the opportunities. Honda’s plan to sell the new technology of cc engines in the American Market with the motive of making the product luxurious. This strategy serves as the emergent strategy. They had started this strategy of developing the market penetration strategy by selling the motorcycles for under $250 and in the retail market around $1000-$1500. In America, both of the strategies are used (Hipólito, Boscolo and Viana, 2018).

Advantages of Intended Strategy in Honda:

• Product Development- This strategy states the technology offered in the marketplace. Honda has offered new technology in their engine which leads them to develop the intended strategy in the marketplace.
• Benefits- This strategy is also used to increase their share in the market. Honda had got its benefits as achievement of their pre-defined goals and objectives. This also helps them getting the maximum profits due to development of products and its services (Honda Motor Co, 2018).

 Disadvantages:

• Bad Planning- In this strategy the focus is always on doing as per the planning. The bad planning can lead to losses for the company. Honda had also faced this kind of disadvantage; this leads them to recalling many products due to their defects.
• Unexpected issues- This can become a very important thing as if any change takes place in the external environment can lead to changes in the outcomes. Honda had also faced the same issue as the competitors’ price had also affected the sales and panning of the Honda Motors (Honda Motor Company, 2018).

Advantages:

• Proper planning- This means that the proper planning can increase the possibilities of getting the correct results. Honda Motors had a very good planning this helps them to diversify the operations and making more profit.
• Unforseen Problems- This means that the problems can be forecasted and the solutions can be taken into consideration. Honda had the major problem with their airbags this problem is solved due to proper planning by them (Du, Cui and Su, 2018).
• Correct description of Strategic Plans- This means that it becomes very easy to evaluate the progress as it can be defined in terms of the goals and objectives and verified by the comparison of planned strategic plans with the actual strategic plans. Honda is a global organisation planned the goals of the organisation and had also compared actual performance with the standards (Hwang and Chung, 2018).

Disadvantages:

• Lack of Flexibility- All the working is as per the plan so the changes are not possible. Honda is also one of the organisations which lack the flexibility. This means they cannot change their policies as per the competitors’ policy.   
• Unplanned problems- This means due to more planning they lack in solving the unplanned problems. Honda had also followed the planned strategy which had not made them ready for the unplanned problems. This recalling of cars is the result of the same (Jamali and Karam, 2018).

Conclusion

This report consists of four tasks. Task one consists of two parts in which first part consists of strengths and weakness of Honda Motors. This explains the strategic capabilities of Honda Motor Company. The next part consists of analysis of the competitive environment including the major opportunities and threats of the Honda Motors that reflect the future strategy of the organisation. Task two consists of the major stakeholders of the organisations. It also explains the major activities of those stakeholders. In this task there is also an explanation of major issues that reflect the future strategy of Honda Motors. The Task three includes the major issues related to ethics of the Honda Motors. Next part includes the main ethics and corporate social responsibility of the organisation. The Task four explains the balance between the intended and emergent approaches used in the company and major discussion regarding the advantages and disadvantages of both of the approaches.     

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