Honda Motor Company Ltd Commerce Essay

Honda Motor Company Ltd. which has been in the market for a long clip and really few people in modernA societyA are unfamiliar with the trade name. Today, Honda has given society everything fromA autos, trucks, generators and bikes. Honda is a Nipponese based company which is good known for its autos and bikes. It is the 2nd largest car manufacturer in Japan and the 5th largest car manufacturer in the universe. Honda is universe renowned for advanced thoughts and technology excellence. Its most good known autos are the Civic and Accord. In the West, Honda presently stands as one of the taking car manufacturers. It has repute and manner. Companies like Honda purpose to supply luxury and public presentation above everything. However, there are assorted internal and external factors that have a important influence on how the company does business.A

Company Background

Honda Motor Company, Ltd. ( ??¬c”°?Sˆc ”a·???­? ?a??a?sc¤? ) is a Nipponese multinational which has all the piece been classified as an car and constituents maker. It was founded by a Nipponese mechanic Soichiro Honda in the twelvemonth of 1948 after which the company was named after him. After a few old ages of being recognized, Honda Company started to distribute to other states such as Europe, United States and Asia.

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Honda has been the planetary car maker since the twelvemonth 1959, every bit good as one of the largest maker of car engines which are calculated by measure, bring forthing more than 14 million internal car engines each twelvemonth in front. ( Wikipedia )

Honda was the first Asiatic Nipponese car maker to come out with a dedicated luxury trade name, named Acura, in 1986. This was specifically chosen for the American car market. Besides from their indispensable car and bike industry, Honda Co. besides do green goodss garden equipment, Marine engines, personal watercraft and power generators, every bit good as many others. From the twelvemonth 1986, Honda has been engage with unreal intelligence robotics research after which they released their ASIMO automaton in 2000. They have since endeavored into aerospace with the formation of GE Honda Aero Engines in 2004 and the Honda HA-420 HondaJet, which is to be unclassified in 2012.


Fiscal Information on Honda Motor

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Popular Car Models

Hatchback: Honda Jazz, Honda Airwave, Honda CRZ ( Hybrid market )

Sports: Honda Civic Type R ( Nipponese Market ) , Honda Euro FN2R ( Euro Market ) , Honda Integra, Honda NSX.

Sedans: Honda City, Honda Civic or the Hybrid version, Honda Accord

Sport utility: Honda CR-V

MPV: Honda Odyssey


Looks and Design:

The mentality of Honda vehicles looks glorious which has a dramatic design compared among their rivals.


Insides are excellently structured and Multidimensional splashboard, Steering wheel which has audio control system, new theoretical accounts with I pod connective music system, comfy leather seats, every bit good as airbags for safety, etc.

Engine and Gearbox

VTEC engine, proficient engine which are loosely separated pitching ratios, Paddle shifting, Ride and handling, liberated suspension on the front terminal, Wheel base, ABS and EBD.

Strategic Analysis

Market analysis tool is a critical tool for accepting the puffiness and turn down status of markets. In a concern construction, market analysis helps both in now and the clip to come for concern rating of a market construction by covering with the chances and menaces which narrates to the strength and failing to shorten a justifiable stance in the market.

External Analysis

PEST plays a important place in the of import formation chances in a scheme. On the other manus, they are usually outside the limitation of the house and typically be measured as menaces or chances.

In item the PEST is a helpful tool for accepting hazards related with market development or impairment, which the place, ability and control for a house. The PEST method is at times supplemented by the legal and environmental factors.

Political Tendency

1. Government proposition to restricting the sum of autos being offered in the UK. This would act upon the concern of Honda as they will non be able to piece at the degree which they once could.

2. The UK Government was eager to convey together foreign companies to capitalise into UK Honda investing in England ( Swindon in add-on to primary portion in wanderer ) .

3. Demanded to fabricate autos with cleaner emanations. Besides this shows Honda has to capitalise to a great extent in Research & A ; Development to fabricate autos with cleaner engines. One such illustration is i-vtec

Economic Tendency

1. Investing and merchandising in Europe. Production inside of Europe has meant that they would non hold to add the disbursal of excess duty to their vehicles.

2. Exchange rate – From ? to Yen. The disadvantage of hankering compels Honda vehicles to be expensive in the UK.

3. Higher income means that citizens of the state will hold more to pass ; and Honda has been maintaining up with this by establishing newer auto theoretical accounts, peculiarly the new coevals Honda Civic which will be presenting this twelvemonth.

4. Increasing cost of gasoline which Honda will necessitate to suit for the market by conveying in more economical and efficient autos such as the Honda Jazz 1.3/1.5.

Social and Demographic Trend

1. Because of the linguistic communication barriers, Honda has decided to setup in Swindon because they would usually prefer to transact in English Language.

2. Increasing desire of customize autos. Honda is a outstanding industrialist of autos that can be merely modified, sophisticated and public presentation. And this is practicably their USP.

3. Because of the petition for metropolis drive autos, Honda had to set up smaller and economic autos like the Honda Jazz 1.3 and Honda Airwave.

4. Recent tendency of the Formula One, Speed! And this is a characteristic of Honda which is largely discerning with show-boating instead than gross. Honda is one of the primary car makers which has a huge Research and Development budget dedicated to that footing.

Technological Tendency

1. Honda will necessitate machines that specialize at a individual undertaking guaranting that the merchandise is done much quicker and of a higher category merchandise.

2. Safety Requirements. Because of legal and the consumer tenseness, car makers have to progress autos with significant safety characteristics that Honda will necessitate to analyze and prove. This would be at the outgo of their Research and Development Department. This is extensively distinguishable from a decennary ago when clang silent persons were used earlier.

3. Intelligent autos. Most autos have added in Satellite Navigation systems ( GPS ) as a standard addition, Honda has to catch up with this in their newer auto theoretical accounts.

4. Environmental friendly autos. Honda had invented I-VTEC engines, which is a follow on from their disreputable older coevalss ‘ vtec engines. I-VTEC engines deliver better fuel economic system, greater torsion and cleansing agent emanations.

Porter ‘s Five Forces

Dickering Power of Suppliers:

The motor supply concerns have unequal bargaining power. There are a batch of supply houses and there are legion parts that are necessary to fabricate a auto, demanding for many providers, one would so believe that car makers would ever be at the provider ‘s clemency. But nevertheless, the providers truly do non hold power. The providers would probably necessitate to depend on likely one or two car makers to get the bulk of their ware. If the car maker decides to replace providers, the things happen to the provider would so be damaging. With the Just in Time ( JIT ) fabrication attack Honda applies, there will be a push and draw mechanism. These warrant a good built relationship between the car maker and providers. This besides can be rather good for both concerns. A A

Dickering Power of Buyers:

The car industry is highly competitory ; accordingly purchasers have certain grade of control because there are legion cars to take from. Customers have the extreme power in connexion for comparatively standardised nature of the automotive merchandise and the low shift costs related with choice from viing car trade names. Honda has a record of emancipating high quality and fuel efficient autos. With the lifting cost in fuel and the state of the economic system, the clients are looking for the best merchandise for a good value. Honda has ever been a taking visible radiation in making fuel efficient and low emanation autos. As the universe continue to hold a better acknowledgment of the demand to look after the environment and traveling green, Honda remains to amend the vehicles industry with this focal point. In the twelvemonth of 1977 and 1983, Honda Civic was classified as first in the United States fuel economic system trials. Honda had so launched intercrossed autos such as the Insight, Civic 1.3 Hybrid and Accord theoretical account. During 2006, Honda Insight was recorded as the best fuel efficiency auto. These are merely a few of the illustrations on how Honda performs to run into the demands of the customers.A

In the old history of car concern, the car makers truly went unrestrained, peculiarly in the United States. They have a inclination to hold extra bargaining power. Customers had become increasingly disenchanted with the autos that were manufactured. This is when the imported car concerns increased and Honda was a important portion of it. A A

Menace of new entrants:

In the automotive industry barriers to entry are habitually high due to the capital costs required in machine-controlled fabrication, design, location, stuffs costs, selling disbursals, and so many other factors that are excessively legion to document. A Although the menace of entry of new makers is low, in the 1980s the United States auto makers were faced with legion new entries when the consumers were highly frustrated with the cars that were produced at the clip. A This is one of the grounds Honda became such a rival in the American market.


As the worldwide fuel beginnings continue to be depleted, the demand for new engineering and new or different energy beginnings is more than apparent. A This will let for new entrants in the close hereafter. A Honda will necessitate to go on to be a leader in the market for run intoing these demands. A A

Another factor to see is with the challenges confronting America and the current province of the economic system. A Numerous American automotive makers are registering bankruptcy, shuting their fabrication workss, and basically traveling under.This could be an alternate chance for new entries in the car industry. A A

Menace of Substitutes:

The menace for of replacements to the car commercialism as a whole is relatively mild. A There are legion signifiers of transit, nevertheless none as convenient or valued as having a vehicle. A The usage of other signifiers of transit such as trains, coachs, or bikes is an option and even saves the proprietor cost such as gas, insurance, revenue enhancements. However, this does non present a immense hazard of being a replacement. A Consumers enjoy the easiness of having an car for things such as transporting baggage and food markets which would non be about every bit easy to transport on the motorcycle, train, or a coach. A The exclusion to this is in urban countries where walking, mass theodolite, siting a bike is preferred by some. A A

Degree of Rivalry:

Honda, Toyota, Nissan, and Hyundai have similar vehicles and are routinely compared to each other. A Honda makes the Accord, Toyota has the Camry,

Nissan has the Maxima, and Hyundai produces the Sonata. A All are considered in the same category. A Selling of the companies themselves, all indicate they are comparable. A The grade of competition continues to increase as new engineering develops, environmental concerns rise, and the economic system challenges the market. A The car industry is measured to be an oligopoly, which supports to cut down the effects based on monetary value competition. A The competition between the companies continues to escalate due to the alterations in the economic system. A The companies use discounts, funding, long-run guarantees, and late the warrant to do payment or return the vehicle should the consumer lose their occupation. A This is decidedly a mark of the times. A The automotive companies compare themselves to each other. A In their advertisement runs, the companies point out the failing of the other company and emphasizing their strength compared to the other companies. A A

The American market is Honda ‘s largest subscriber. A As the economic system continues to be in convulsion, Americans are turning to Honda for their little, low-maintenance and more fuel efficient vehicles. A The company has embracing on intercrossed and fuel cell vehicles, such as the Honda Civic and Accord Hybrid theoretical accounts. Honda has a restricted merchandise line, stressing on low powered vehicles. A They focus on their limited merchandises and concentrate on being the best in the market with these theoretical accounts. A A

S.W.O.T Analysis

The SWOT analysis for Honda Motor Co. is done and the findings are listed below:


1. Honda has a alone and advanced engineering that makes them leaders in the automotive industry

2. Honda utilizes the Just in Time production attack

3. The theoretical accounts that Honda green goodss are some of the best in the market with respects to fuel efficiency and low emanations.

4. Several of Honda ‘s theoretical accounts are rated best in the industry for safety.


1. Honda has a comparatively little graduated table production

2. Honda has limited theoretical accounts.

3. Honda merely focuses on the economic system category vehicles.4. Weakening financials, Poor presence in pick-ups, Non-core activities


1. Design and spread out production line.

2. Honda needs to look at some of the new planetary markets.

3. Continue to better engineering.

4. Continue to concentrate on safety criterions.

5. Continue to take the industry in environmentally sound merchandises.

6. Continue to take the industry in fuel-efficient merchandises.


1. Global economic downswings

2. Upcoming engineerings in other company.

3. Global car fabrication confederations.

Porter ‘s Value Chain

Value Chain techniques aims at adding value into merchandises or service so as to heighten the comparative advantage of house. The value concatenation would be divided into steadfast degree and industry degree.

Firm Degree

At steadfast degree, it is a concatenation of activities of a house operating in the peculiar industry. The concatenation of activities could be primary activities and back uping activities.

Primary activities are inward logistics, operations ( production ) , outbound logistics, selling and gross revenues ( demand ) , and services ( care ) .

Supporting activities are administrative substructure direction, human resource

direction, engineering ( R & A ; D ) , and procurance.

The industry degree value concatenation is about how the house work out the assorted procedures which gazing signifier natural stuffs to presenting the finished goods to clients. By puting up the effectual concatenation or adding value from each concatenation, a house can minimise the cost and maximise the value of the green goods.

Using to instance of Honda, value concatenation direction helps to increase the efficiency of internal and external web. Honda ‘s planetary web comprises 434 subordinates and affiliates which including 118 production installations in 33 states. In the fact that Honda needs the value concatenation direction to heighten its comparative advantages.

Strategic Formulation

Boston Cow Group Matrix

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For a concern to turn increasingly and strategically, it must foremost separate itself to be either a leader ( Star and Strength ) or a follower ( Question Mark and Weakness ) . Laminitis of Honda Motor Corporation, Saichiro Honda started in a little bike fix store after which his startup concern expanded into an car company. During the growing stage, the concern did non modulate itself merely to cars and robotics. Their most current venture in jet engine production is taking baby stairss to adulthood. Honda is a mobility concern that handles in the transit of valuable human lading. The Power of Dreams which is their tag line has without a uncertainty interprets the company ‘s confidence to new technological development ( ) . Honda ne’er projected itself as an car maker, which is it core Strength ( Star ) , but as a people driving force. The company ‘s prima foundation of profitableness ( Opportunities and Cash Cows ) is their pattern of engineering, invention and creativeness in diagnostic new tendencies for its assortment of merchandises.

Corporate Scheme

Honda ‘s portfolio embracings of three concerns which are Automobiles, Motorcycles and Power concern. Although stepping into car concern was well tardily at 1963, Honda quickly maintains the concern with characteristics like exceeding fuel economic system, optimal safety and impulsive leisure. Honda ‘s turnovers and creative activity in the car industry demonstrate positive steadily non merely in United States but every bit good in many states globally.

Ansoff Matrix

This tool is developed by the Igor Ansoff the male parent of strategic direction. Here Ansoff Matrix tells about what will be proper marketing scheme of Honda motors to increase the market portion with their scope of merchandises.

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Market Development ( Existing Product )

Harmonizing to Nikkei Tokyo, Honda is of all time altering its development of its following coevals Honda Civic and Accord theoretical accounts to the United States to hasten the bringing of vehicles which are suited to local gustatory sensations. ( Nikkei reported in its Nov. 26 edition ) .

Honda will to boot reenforce the merchandise lines through the debut of six latest auto theoretical accounts in Japan by the twelvemonth terminal of 2015, introductory with the “ N-ONE ” theoretical account in November 2012 and the 3rd theoretical account for the N series. In the little auto group categorization, the all new Fit Series will be launched to the market. With the enormous merchandise strong point, Honda will vividly heighten its manifestation in mature markets.

New Product ( Existing Market )

In the extent of in-between sized vehicles, ensuing in the market debut of the all new Accord loanblend theoretical account in the United States in early 2013 which is a intercrossed theoretical account fitted with two motor intercrossed systems will be added to the listing. Subsequently after the United States debut, these autos will so be launched in Japan every bit good as other parts. The intercrossed theoretical account which will go on to be on sale in Japan will be fitted with an efficient inverter competent of external power supply and was established by using Honda ‘s new generator engineerings.

As respects to the involvement of driving public presentation, a highly efficient and higher end product which has a three motor intercrossed system, the Sport Hybrid ( Super Handling All Wheel Drive ) which comprises of each high degree of balanced handling and better fuel economic system, will be installed to the Honda NSX, Acura RLX Sport Hybrid and the replacement of Honda Legend which is suppose to be launched in Japan 2014. Honda will present to the premises of clients who are excited waiting for these theoretical accounts by reenforcing the presence of these intercrossed autos with extraordinary driving public presentation and first-class fuel economic system.

For fuel cell electric vehicles, Honda deems to be the best ecologically responsible vehicle, therefore has been prominent in the industry for Research and Development and gross revenues, Honda will uncover an all new fuel cell electric auto chronologically in Japan, the United States and Europe in 2015.This advanced fuel cell theoretical account will expose extra technological promotion and significant decline that Honda has accomplished.


Honda Motor delivers a respectable illustration of leveraging an indispensable capableness through correlated variegation. Even though Honda is celebrated for its autos and trucks, the concern really started out in the bike industry. Through postulating in this concern, Honda established an sole capableness to build little and dependable engines. When direction was determined to diversify into the car concern, Honda was dining because it influenced this capableness inside its new concern. Honda was besides matter-of-fact for its engine edifice expertness in the all land vehicle, lawn mower and powerboat industries.

Business Scheme

Research and Development had improved the concern benefits of Honda, composed with the ferocious competition between Honda and their rivals. With the organized manner of being possible, stressing on lastingness, consistence and basic public presentation to make a productive and advanced proficient substance. With the providentially method to the hereafter, Honda merchandises are concern about the economical, environmental and societal issues.

This commands a steady addition in the United States and Europe for the clip being while the whole industry is declined due to some external facets such as American Dollars depreciation, monetary value of oil addition, political nonacceptance. Honda has systematically been involved in research and development that will assist people in the close hereafter through taking advantageous engineering and dedication to invention which will so spread out new possibilities in success.

The premises of Honda are besides one of its strong points. Throughout contriving merchandises and services that endow the nucleus values which compels Honda singularity, Honda ‘s direction around the universe keeps supplying such inspirational experience for its clients. Honda put echt attempts into services, responding to changing values and increasingly complex demands ofA clients worldwide. So its services dressed ore on polishing client dealingss, with antiphonal and duteous gross revenues, receptive client support, care and fixs.

Life with a Honda

Honda began uniting its multiple franchise channels into a individual Honda gross revenues channel, seeking to beef up the Honda trade name, heighten client satisfaction, and helpA guarantee lifetime client trueness. The fabrication and administering system of Honda are besides beginnings for the sequence ofA

Honda. With the planetary web, Honda ‘s planetary schemes somehow include the globalizationA

characteristic. Honda has established independent local operation around the universe and pushed local liberty and proactive attempts to place the demands regional with common apprehension. The competition between Honda and others speed up twelvemonth by twelvemonth. This is someway carry the win/lose feature.

Honda ‘s greatest rival of all clip Worldwide is Toyota Motor, but the competition around the universe involve Hyundai, Volkswagen, Nissan, General Motor, Ford, Kia, Mazda. The competition against these top auto makers in the universe has created a work moral principle that is unmatched in the American car scene. With their changeless betterment on their autos, the healthy competition that largely in Japan – leads the manner for the production ofA vehicles that gets more and more stat mis per gallon.

Car Industry Life Cycle

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Image from OpenLearn


In the introductory stage, car companies promote the merchandise ‘s offerings and what makes it stand out in the market. For case, the company may tout the auto ‘s voice acknowledgment package, fuel efficiency, compact size, parking facilitation engineering or velocity. In this phase, auto companies bank on wealthier consumers purchasing the auto at its most expensive point in exchange for purchasing the “ latest and greatest ” merchandise. When the car industry unveiled the first intercrossed autos, selling tactics included showcasing the vehicle ‘s fuel efficiency and complimenting the consumer for her willingness to be a innovator of the environmental motion. The success of these tactics enables auto companies to bear down a high monetary value, which subsidizes the engineering for the new merchandise.


Car companies advertise the growing stage of the auto by appealing to a wider audience. Alexander Hiam, writer of the book, “ Selling for Dummies, ” explains that in this stage consumers buy the merchandise in greater Numberss and rivals enter the market. In this stage, car manufacturers focus on trade name distinction and non merely the merchandise characteristics. Alternatively of seting consumers on the waiting list to purchase the vehicle ( as is the instance in the introductory stage ) , the auto is showcased in franchises as trendy and popular. If other autos offer similar characteristics, monetary value becomes a merchandising point and the car traders may offer discounts and cash-back inducements.


The adulthood stage brings slower growing and ruthless competition based on the figure of rivals saturating the market with similar merchandises. Harmonizing to Rajan Saxena, writer of the book, “ Marketing Management, ” companies undergo a competitory monetary value and publicity war in an attempt to derive gross revenues. Saxena besides explains market cleavage and trade name repositioning schemes are most critical during this clip. Therefore, the auto company may demo eternal commercials of its car portraying it as a family-friendly auto or a sleek vehicle for singles.


At the diminution stage of the growing rhythm, involvement in the vehicle begins to decline as other newer, more challenging merchandises take the limelight. During the phase, companies slash the monetary value of this line of vehicles to do manner for its newer-year theoretical accounts. Advertising offers steep price reductions and discounts for all prior-year theoretical accounts: This maneuver is partially because the traders wish to avoid paying year-end revenue enhancements for all their unsold autos.

Operational Scheme

Honda operates in the worldwide market with 134 production installations in 28 states and at31 R & A ; D installations in 15 states, approximately 167000 Honda employees and associates serve 23 million

clients worldwide yearly. Honda ‘s planetary operations are divided into 6 administrative parts

responsible for operating. Hiring and prosecuting the people and beneficent enterprises locally in the communities that Honda operates. Honda is forcing the independency of their local direction and gross revenues operations, at the same clip with incorporating and advanced program for each part. They operate under the behavior guidelines that help member companies and associates in measuring and pull offing hazards, following with Torahs and ordinances, maintaining a high degree of transparence in

operational degree, that ‘s all to maximise the worldwide client satisfaction.

A The single scheme of Honda is reflected through the Honda ‘s doctrine The Three Joy


The Joy of purchasing, the joy of merchandising, and the joy of bring forthing. With the joy of purchasing, the Honda ‘s associates must seek their best to transcend the clients ‘ outlook. Meanwhile, with the joy of merchandising,

which concern non merely about the relationship between the traders and their clients, but they besides feel the pride of holding a positive relationship with their clients. And the last one, the joy ofA bring forthing comes from fabricating, research and development by bring forthing quality merchandises that satisfy clients worldwide, the Honda ‘s employees can see pride in transcending the outlook of their clients. That all bring the schemes of Honda from their endeavor degree, through corporation, concern, operational degree, to single scheme degree, that spread the Honda ‘s strategic spirit throughout the company.


Honda Motor Co. , Ltd. is one of the “ Large Three ” automotive companies in Japan and continues to spread out its production across the universe. A Honda continues to be a leader in the production of economic, fuel-efficient, low emanations cars. A The company has received legion awards for the safety evaluation of the vehicles. A By reexamining Porter ‘s Five Forces Model and the S.W.O.T. methodological analysis, strategic planning for the Honda Company is formulated. A Although Honda has legion strengths, with the altering economic system and the competitory market, Honda will necessitate to spread out their merchandises, continue to make new engineering merchandises, continue to take in safety and environmentally sound merchandises, and eventually spread out their planetary market


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