Honda A
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Honda (A ) Case study
What are the concepts of strategy illustrated in the case?
Honda strategy was strength on technology which based on Sochiro Honda a visionary inventor should be the newest one and always one step before competitors.
Generally Honda strategy was minded /focused in long term perspective:
Company was investing in productivity more then the actual needs just to be sure that They can /will grow faster than competition and that They can follow market potential if needed ( for example when Honda start selling 50 cc motorcycle in the same time invest as well in a highly automotive plant with a capacity 10 times in excess of demand)
They were investing in products and development- research program – based on that Honda establish Honda Technical Research Institute. One of the most important concept of R&D / development phase was establishment max. time between conception and production – it was establish on 18 months. Additionally Honda reported to have a ,, cold storage,, – storage of new products which could be implemented in production in any market needs occurred. Honda become the most innovative company in whole motorcycle industry -company which lead changes and create/ identify new untapped market segments.
Honda followed principle of developing market step by step. They didn’t want to growth rapidly in short term but prefer to take over control market region by region
More over above Honda Management new that even having the best product without selling and distribution network They will failed that is why Honda was ready to have short term losses in order to build up mention networks. Knowing clients needs Honda :
Offer a multiproduct line
Took leadership in product innovation
Exploit opportunities for economies of mass production
And focused on :
Distribution
growth step by step/ region by region ( with short term willingness in losses)
work on dealers number and different distribution channels
Advertising/Marketing
high expenditure level on advertising
address to selected class consumer
build new markets or identify untapped ones
Sales/Price