Honda Case Study

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Honda Motor Company Q1: Prepare a chronology for what you regard as the key events/concepts/decisions that characterize Honda’s “attack” on the North American motorcycle industry and help to explain its success. Year Key events/concepts/decisions 1946 The Honda Research Institute was established. This institute, dedicated to improvements in internal combustion engines, represented Honda’s opening move in the motorcycle field. 1947 Honda introduced its first A-type, 2-stroke engine 1948 Honda’s Japanese competition consisted of 247 Japanese participants in a loosely defined motorcycle industry. The fall of 1949 Honda expanded its presence and introduced a lightweight 50cc, 2-stroke, D-type motorcycle. Honda’s engine at 3hp was more reliable…show more content…
And, Honda was the world’s largest motorcycle producer with sales of $55 million in that year. In contrast to other foreign producers who relied on distributors, Honda decided to establish a U.S. subsidiary, American Honda Motor Company and began its push in the U.S. market by offering very small lightweight motorcycles. And, Honda machines sold less than $250 retail, compared with $1,000-$1,500 for the bigger American or British machines. Domestic sales were 98%. Production volume was 285,000 units. 1960 The U.S. sales were $500,000. Since 1960s Honda had consistently outspent its competitors in advertising. It established the largest dealership network in the U.S. 1961 Honda followed policy of developing the market region by region and lined up 125 dealers by spending $150,000 on regional advertising. Honda addressed own advertising to middle-class consumers 1965 The U.S. sales were $77 million and domestic sales represented only 59% of Honda’s total of $316 million with production volume 1.4 million…show more content…
That key philosophy is all about market share and sales volume. The whole goal of their program was on maintaining and improving market position and growing of sales volumes at least as fast as or faster than any of competitors. The below table shows the market share’s proportions of USA market. From that table we can clearly see that Japanese motorcycle producers were the leaders in that area. Manufacturers USA market share Honda 40-50% Yamaha 15-25% Kawasaki 10-15% Suzuki 9-12% Other manufacturers 5-10% The following table shows the growth of Japanese production. Manufacturer 1959 (000 units) 1974 (000 units) Average annual growth rate Honda 285 2 133 14 Yamaha 64 1 165 21 Kawasaki 10 355 27 Suzuki 96 840 16 All these results were achieved by establishing simple rules, like: 1. Products are updated or designed whenever a market threat or opportunity is perceived 2. Prices are set at levels designed to achieve market share market share targets and will be cut if necessary 3. Effective marketing systems are set up in all markets where serious competition is intended, regardless of short-term cost. 4. Plans and objectives look to long-term payoff. Implementation and following those simple rules and making some radical changes brought a success for Honda and helped to meet the challenges of the

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