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Strategic Management Assignment: Business Analysis Of Honda Motor Co.

Task: Through this strategic management assignment, you are required to address the following questions: 1. Honda Motor Co. has four business units. For these three - Motorcycles, Automobiles, and Aircrafts and Jet Engines - work on the tasks below: a. Analyze the three business units on the BCG matrix, that is where you think they should sit, and argue where you would put them. Assume that, globally, Honda Motor Co. has the number 1 position in motorcycles, the number 5 position in automobiles, and the number 8 position in the global business jet market. Analyze (take apart and examine in depth) each business unit (you can do it in bullet points) and explain why you have decided to put the business unit where you put it. Include and cite supporting data for your decision. b. Cite three (credible!) sources from where you have collected information. Follow the Harvard referencing guidelines.

2. Use the Ansoff matrix to create product development and market development strategies for Honda Motor Co. a. Product development: Write down ideas for new products in existing markets. What should Honda Motor Co. take into account when it develops new products b. Honda Motor Co. is present in all major countries in motorcycles and cars – therefore, developing new geographical markets is not an option for these two business units. However, what could be new markets for Honda in terms of target segments or consumer groups Think of current users and potential new users for existing Honda products. c. Give three (credible!) sources from where you have collected information. Follow the Harvard referencing guidelines.

Solution of Question 1: a) BCG matrix analysis The BCG matrix evaluated within this strategic management assignmenthelps businesses to predict growth opportunities by reviewing the market share and market growth of products. Additionally, it enables the businesses to decide effective areas to invest in, discontinue or develop products. The below BCG matrix analysis of Honda company will put each business unit in the four categories. The BCG matrix analysis is discussed below:

Stars: The Stars are considered as the leaders in the business. These products foster rapid growth and dominant market share. These products require heavy financial resources and investment in order to maintain their position and their market share. Additionally, Stars contribute to a vast number of cash generation and cash consumption. Thus, it is important to hold the market share and to support the business growth, otherwise, the Star product can become a cash cow. For instance, Honda Star product is its motorcycle business unit.


Figure 1: Honda Groups Motorcycle sales from FY2011-FY2021 Source:

As per the above figure, Globally Japan Honda sold about 4.5 million automobiles in FY2021. These sales figures are determined to be 244,000 below in comparison to FY 2020 (Statista.com, 2022). Apart from this, the company sold around 15 million motorcycles (Statista.com, 2021). The entity effectively sold more than 5.6 million other types of products in the same year. Vietnam, India, the United States, and Pakistan are indeed Honda's most profiting target markets.

In FY2020, Honda Scooters and Motorcycles obtained 27% of the motorcycle market within India. Further in the same year North American Honda sales obtained around 332,000 units, turning it the second leading regional market for Honda. The Honda company is determined as one of the leading motorcycle manufacturers in the United States and worldwide marketplace (Statista.com, 2021). According to the Forbes report, Honda motors are able to benefit by introducing innovation within the Motorcycle segment. The Motorcycles such as water motors and ATVs segment contributes for more than 15% of Honda company valuation, with its revenues accumulating 14% of the overall company revenues. The entity is offering self-stabilizing features that allow motorcycles to function without being controlled by the owner and still ensure the health and safety of the rider (Forbes.com, 2018). This type of technological advancement has made motorcycle riding safer and reduced the rate of accidents. It is the major reason Honda's market share within this segment is around 33% (Forbes.com, 2018). It is expected that these figures will stay stable for a longer period of time due to consideration of innovation and the health safety of riders.

Cash cow: The cash cows are the products that provide high market share but have low growth. In cash cows lose their demand and appeal and incur decline, a retrenchment policy must be followed. Honda's cash cow is indeed its automobile segment which accounts for the company's worldwide revenue. Honda currently has the largest passenger cars segment, small SUVs, which contributes to 51% of revenue in FY2020 (Statista.com, 2021). Honda's 2nd largest segment is considered as the Medium cars segment of automobiles. This segment provides around 14% of the market revenue in FY2020. In terms of market share considering the revenue category, Ford (7.3%), Toyota (10.6%), and Nissan (6.7%) take the dominating position within the worldwide marketplace. Honda currently has 6.41% of the market share within this segment (Statista.com, 2021). Honda is considered as one the largest conglomerates within the worldwide marketplace which generated around 13.2 trillion Japanese yen in revenue in FY2021. The company incurred 12% lesser revenue in comparison to prior years which reflects Automobile sales declined by 5% (Statista.com, 2022). The United States is considered the leading market for automobile sales. The United States automobile market was severely affected due to the COVID-19 outbreak. However, Honda managed to secure over 320,000 vehicles in the U.S. market in the Q4 of FY2020 (Statista.com, 2022). Honda is required to keep the sales high as this business unit is generating good revenue streams.

Question mark: These products lack an understanding of how to benefit from the existing opportunities. For Honda, the jet engines are indeed the products as the company lacks understanding of whether to increase the investment or not. Honda is lacking in obtaining profitability in this segment. Therefore, the product is losing its appeal (Bogaisky, 2018). Honda is required to rethink whether the products have any scope for making profits for the business to avoid any losses. Dog:

The dogs are considered the products that perform weakly in the products and make it strenuous to make a profit out of it. The aircraft segment of Honda has incurred a loss of $380 million annual loss in FY2018 (Bogaisky, 2018). According to the Forbes report, the Honda aircraft business is in question due to poor financial gains by the segment. The output in this segment is significantly lower in comparison to other segments. The analysts have highlighted that the organization's decision to sell aircraft through mere dealership networks in the United States was poor decision-making. The company avoided hiring its own sales team which contributed to such poor performance of sales of the product. The company has invested around $1.5 billion to $2 billion to remove HondaJet from the marketplace (Bogaisky, 2018). The parent company is no longer satisfied with the ways sales are going and the financial damage incurred to the company. The deliveries of these aircraft have reduced down to 30%. The entity is also incurring an operational loss of 41.8 billion yen. The deliveries have constantly slowed down due to backlog in orders as well. The dealership network is not of much success in ensuring the sales of the aircraft. The entity saved excess costs by avoiding the building up of sales teams however it backfired by increased operational losses (Bogaisky, 2018). Hence, from the analysis, it can be stated that these products can be improved by not solely depending on the dealership network to sell the aircraft. The quality of the aircraft is remarkable but the company is showing fewer efforts in pushing sales of the product. A professional sales team must be established to increase the sales of the product. The product is suffering due to ineffective sales management and decision-making.

b) Credible sources Bogaisky, J., 2018. Honda's Jet Business Clears The Trees, But Flight Path Is In Question. [online] Forbes. Available at: [Accessed 19 March 2022]. Forbes.com. 2018.Honda Motors Should Benefit From Innovating In the Motorcycle Segment. [online] Available at: [Accessed 19 March 2022]. Statista.com. 2021.Honda Report 2021 | Statista. [online] Available at: [Accessed 19 March 2022]. Statista.com. 2021.Worldwide motorcycle sales of Honda 2021 | Statista. [online] Available at: [Accessed 19 March 2022]. Statista.com. 2022.Honda global automobile sales 2021 | Statista. [online] Available at: [Accessed 19 March 2022].

Solution of Question 2: a) Product development While the company aims to expand the growth of the business in existing markets the launching of a new product strategy is being used. From the analysis, it is clear that Honda makes a profit margin through its motorcycle segment. According to the Forbes report findings, the demand for motorcycles is now expected to grow by around 5.4% annually through 2024. It can occur especially due to electric motorcycles and e-bikes' growing demand in the marketplace. The customers are attracted to sustainable products which address the planet's concerns. As per the Safety Administration (NHTSA the number of bike fatalities has increased (Tengler, 2021). The growing motorcycle accidents have even led to product recalls. For instance, Yamaha incurred 32% of MY20 recalls in the past decade. This data reflects that factors such as safety notions, design, requirements, and quality factors must be checked to avoid product recall (Tengler, 2021). Honda uses Functional safety and automotive spice practices within its existing supply base and has controlled recall rates. This way the company has earned recognition for being a reliable brand. It reflects that the most trusted brand in the motorcycle segment is indeed Honda which has met performance standards for passengers to ensure warning. A developed stability control system, for on-road motorcycles. Thus, the entity is highly reliable and stable within this segment (Tengler, 2021). Honda can introduce new e-bikes efficiently to target middle and low-income groups. The company is required to produce e-bikes with less investment involved. This way the risk involved will be lower. The higher investment amid business uncertainty and volatility is not often appreciated. This way the brand can offer e-bikes at competitive pricing and leverage profit in the business. It will allow the company to target higher-income groups with the desire of running a superbike. Honda can foster product development in varying ways:

Modification of existing product line The existing product's efficiency can be increased by modifying the existing features. For instance, Honda utilized innovation to enhance the operational performance of motorcycles and improved the overall health and safety features. These developments and modifications effectively forced sales by improved product offerings. The market analysis and customer database can be used to detect the customer's needs and wants. This way the products can be manufactured having customer demand. This way the sales can be forced by meeting customer needs and wants (Garinaet al. 2018). Through this way, Honda can forecast the demand for new product development to avoid any losses by ineffective product development initiations.

Launching new products The consideration of R&D activities is important to effectively understand the factors which overall shape the customer demand within the marketplace. After the detection of points of consumer demand, the NPD processes are facilitated. These processes are developed which ensures the successful; launching of new products within the market for consumers. Through this strategy, the brand breadth can be increased to reach wider customer segments. It will allow Honda to strategically penetrate new market segments. Focus on Research and Development The Honda companytimely invests in R&D activities-especially in order to understand dominating consumer trends, market trends, and consumer behavior. The analysis of these factors allows effectively producing products that the majority of consumers desire (Garinaet al. 2018). The strategic investment within R&D fosters Honda to sustain its competitive edge by ensuring creativity and innovation. It will facilitate efficient product launch, functional areas such as marketing, finances, and operations management. The efficient R&D can allow Honda to become more effective in routine and operational types of activities.

Use of strategic partnership The use of partnership can be used to get access to quality suppliers. In this way, the entity can lower the operational costs by using the supplier networks strategically and exploring new options for product development. The brand through strategic partnership can access new product development possibilities and processes with fewer financial investments-and thus the risk degree can get lower automatically. It is a highly significant food Honda-to effectively understand the growing customer needs, effective development procedure, and possible market reaction towards new launches. This way the entity can accept the after-effects and engage in processes that allows full-fledged production of its own.

Confirming product quality Honda strictly follows quality standards, policies, procedures, rules, and regulations to avoid quality compromise in any manner. The entity will be required to consider different quality standards due to the suggested e-bikes' new products (Garinaet al. 2018). Effective quality management will enable the company to penetrate new markets and target audiences, as well as target new customer segments without failure.

b) Target segment Currently, Honda targets the middle-income groups as they have expertise in the motorcycle segment. This suits the target consumer group's budget and allows fosters value for money services. The entity will use a mix of demographic and behavioral segmentation strategies. The demographic will focus on age, income, gender, and preferences. On the other hand, behavioral segmentation will stress purchasing behaviors, buyer user journey, customer loyalty, benefits, and user status. The demographic segmentation will focus on targeting Millennials that are considered as the national biggest spenders according to the Forbes report (Costin, 2019). The report findings reflect that millennials are currently dominating the worldwide market due to their drive to buy. Millennials are impressed by brands that are socially responsible and ensure products with the lesser environmental game. Hence, the brand face and image highly matters for millennial. It impacts the purchase intentions and motivations to buy. Millennials while shopping highly value discounts and consider price over any recommendations or even product quality (Costin, 2019). Thus, Honda can acquire this segment by stressing price determinants to induce the right consumer behavior, attitude, and mindset in the marketplace. The entity will offer e-bikes at competitive pricing to ensure that Millennial prefer their offerings. Further, the message of eco-friendly practices marketing will be leveraged on social media sites to grab this segment's attention. This way the chances to acquire this segment can get higher. Honda will target this specific segment to force sales and an effective profitability ratio. The effective segmentation will allow a good sales rate and will ensure that profit margins are maintained within the motorcycle segment.

c) Credible sources Costin, G., 2019. Author Post: Millennial Spending Habits and Why They Buy. [online] Forbes. Available at: [Accessed 19 March 2022]. Garina, E.P., Kuznetsov, V.P., Romanovskaya, E.V., Andryashina, N.S. and Efremova, A.D., 2018.Strategic management assignment RESEARCH AND GENERALIZATION OF DESIGN PRACTICE OF INDUSTRIAL PRODUCT DEVELOPMENT (BY THE EXAMPLE OF DOMESTIC AUTOMOTIVE INDUSTRY).Quality-access to success, 19.

Tengler, S., 2021.Motorcycle Sales, Deaths And Questions Increase. [online] Forbes. Available at: [Accessed 19 March 2022].


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Honda Motor Company: Impacts of Globalisation Essay

Introduction, handling environmental issues, globalization effects on health, conclusion and recommendations, reference list.

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In an era prevalent with global competition, it is widely recognized that the rapid changes in technology and competition has transformed numerous traditional rules that orient economic activities towards economic accessibility to enable firms compete from anywhere across the globe (OECD, 2007). The term globalization has increasingly become loaded with some people associating it with almost every contemporary change evident in the world today that spells out progress and prosperity while others associate it with deprivation and disasters (Scholte 2000). Globalization in this context concentrates on the integration of the world’s economy. This generally means that the world economies are integrated into one market which constitutes interdependent means of production, consumption of relatively similar goods and unified responses to similar impulses (Williamson 1998).

Globalization is represented by the movement of goods and services, capital, and labour across the globe in managed and coordinated institutionalized networks, which involve establishment of global associations that ensure efficient utilization of the scarce resources at the disposal of mankind (Milward 2003). In the modern society, the term is commonly used to refer to the process of expanding the world’s markets of consumption, investments, and production on a global scale as well as expansion of social relations and social activities across different nations of the world (Milward 2003).

Globalization is evidenced by the remarkable growth achieved in the world trade as a proportion of the world output where the gross world product grew from 7% in 1938, 10% in 1970 and above 18% in 1996 (Williamson 1998). These trends have remarkably escalated ever since. Further, the foreign direct investments in developing countries have increased from 2.2 billion in 1970 to $154 billion dollars in 1997 (Williamson 1998). Globalization has further resulted in integration of the national capital and financial markets and the amount of foreign exchange taking place on daily basis has reached remarkable heights.

Clearly, the availability of cheap and reliable means of communication is the key driving force for globalization efforts which not only facilitates the integration of international capital markets but also promoting growth in multinational corporations (Williamson, 1998). Good communication and means of travel facilitates exchange of goods and services as well as promoting labour mobility across the globe. In addition, stable political condition is a necessary determinant for effectiveness of globalization.

International cohesiveness induces economic agents to exploit the opportunities presented by globalization while political instabilities and regional disagreements discourage such efforts. International integration efforts have therefore played an important role in promoting globalization. Further, trade liberalization programmes exposes domestic consumers producers to foreign competition and may force them to expand output consequently reaping benefits from economies of scale (Greenaway 2008).

Globalization enables companies to avail their goods on almost every region of the world while standardizing the manufacturing technology across all locations of production. In various regions of the world, the automotive sector has been a key source of employment as well as a major source of linkage between other sectors in the global economy (Organization for economic cooperation and development 2007). Policy makers in this industry are aware of the current changes that have taken place in the automotive value chain.

These changes constitutes considerable shifts in the production and consumption cycle whereby a higher value added is increasingly placed on the components of the automobile design and innovations in engineering and less of the actual manufacturing of automobiles (Organization for economic cooperation and development 2007). The changes have prompted regional authorities to formulate strategies through which they assist the process of restructuring and adjusting the automotive sector as well as the global economy as a whole with major focus on labour market policies and extensive training in leading technologies (Organization for economic cooperation and development 2007).

Honda motor company has developed a multinational organization strategy which stems from globalization efforts (Schick & Book 1997) and the company is the leading global automobile manufacturer dealing with development, manufacturing and marketing general purpose engines, motorcycles and sports cars among other automobile products (Infogrok automotive 2010). The company has a decentralization organizational structure and develops its products in all the regional markets in which it operates (Herbert 2009).

Honda Company has over 500 subsidiaries across the globe and is headed by an executive council based in Japan (Herbert 2009). Its operations are divided across six regions which facilitate the company to sell products most suited to the preferences of each region. In addition, manufacturing vehicles in various regions by the company increases the local consumer confidence on the products hence increasing sales and profitability of the company due to existence of a large consumer base (Herbert 2009)

The structures of international systems have significantly changed with the onset of the process of globalization leading in changes in production and finance (Kutting 2004). The world is constantly interacting at various levels resulting in negative effects associated with such interactions. Although the point of interaction between the environment, trade and economics is not clearly defined, the relationship between the two remains a major contentious issue facing both economists and environmentalists (Lofdahi, 2002).

Some of them have argued that if a country makes the choice to proceed with manufacturing processes that promote environmental damage, then that should be treated as its prerogative. On the other hand, economists argue that such countries should be penalized for engaging in such activities while the environmentalists totally disagree with such reasoning and advocate for complete conservation of the environment (Lofdahi 2002).

Spread of environmental risks across the globe and the consequent migration of environmental policy is a key aspect of globalization (Speth 2003). Globalization in its economic understanding has considerable effect on the environment whereby the interactions between different regions of the world may cause harm to the environment as well as hindering sustainable development (Speth 2003). Environmental degradation is likely to occur as a result of widely shared resources and ecosystems and since the atmosphere and climatic system are essential for ecosystem survival there is increased need for preservation of environment from pollution (Held & McGrew 2002).

Automotive companies often receive criticisms as a result of environmental degradation that emanate from the automobiles they produce as well as the manufacturing processes of these products (Anonymous 2010). Increased criticisms have prompted the companies to take responsibility by formulating and implementing strategies that are aimed at improving the global environment. The automotive companies such as Honda motors and General Motors are now aiming at producing vehicles that utilize fuel more efficiently such as ethanol and hybrid versions (Anonymous 2010). The companies are also shifting to greener power supplies such as solar energy in attempt to conserve energy.

Honda Company was recently named the United States ‘Greenest automaker’ by the union of concerned scientists making it a five consecutive holder of the award (Honda 2010). This award is clear evidence that the company has achieved the lowest combined scores of smog forming and green house gas emissions in its US automobile fleet relative to other automotive companies in the country. The company constant efforts to improve fuel efficiency on its automobile products has seen the company gain 1 mpg in US corporate average fuel economy in 2009 (Honda 2010).

In order to achieve fuel economies, the company has introduced the insight as the world most cost reduced and affordable hybrid car and the CR-Z which is an electric automobile as the world’s first production sports hybrid coupe. Honda received remarkable increases in sales as a result of its adoption of environmental friendly policies since the policies were efficient and attracted public interests (Honda 2010). In the United States, the sales in hybrid cars has been increasing over time and in April 2008, the market share reached 25% which was the highest level that the company had attained since 2004 (Anonymous 2009). Further, by the end of 2008 fiscal year, the number of hybrid cars sold all over the world exceeded 250000 units (Takeo 2008).

Honda Company continues to produce alternative fuel vehicles. The Civic GX Sedan which utilizes natural gas had its retail sales expanded to various regions around the world such as Utah and Oklahoma (Honda 2010). The company also manufactures the FCX Clarity fuel cell electric vehicles. These models are among the world’s most advanced zero emissions vehicles as they have zero tail pipe emissions and fuel efficiency that is three times that of a gasoline powered automobile (Honda, 2010).

Earlier this year, the company unveiled a plan to introduce a battery electric car commuter sized vehicles and plug in hybrid technology for mid sized vehicles and larger vehicles in the country (Honda 2010). In addition, the company is developing its own infrastructure to the alternative vehicle equations. In early 2010, the company began operating the next generation solar powered hydrogen production and refuelling station in California. The station utilizes power derived from Honda developed and manufactured thin film solar cells to provide fuel for daily commuting in a carbon free energy cycle (Honda 2010).

Through the green factory initiative, the company aims at reducing the impact on environment by improving its manufacturing processes. The company has put on measures to reduce energy and water use, generation of waste materials, carbon dioxide and air emissions (Anonymous 2010). The company also encourages its suppliers to adopt the same mechanisms. Further more, the company is continuously looking for ways to make positive contributions to the communities where its consumer base lies. The company engages in community based environmental education as well as preservation and restoration efforts in form of corporate charitable foundation giving, in kind donations and company support of volunteer efforts by its employees (Anonymous 2010).

At the annual Earth Angel award ceremony which honours automotive companies that have well established environmental initiatives, Honda Company was honoured with the award of the most environmentally progressive automaker in terms of environmental initiatives in 1999 (Anonymous 2010). The American Honda Company motors Inc CEO, Testuo Iwamura confirmed that the company is working towards reduction of environmental footprint on their operations with the same passion as the one the company demonstrated in its efforts to develop new technologies that reduce environmental footprints of their products (Anonymous 2010).

The Kyoto protocol which is a United Nations protocol focusing on the convention on climate aims at global minimization of green house gas emissions in order to prevent global warming. The protocol aimed at minimizing the levels of green house gas emissions from by 5.2% from the levels that were prevailing in 1991. In 2009, one of the directors revealed that Honda had managed to reduce its motor vehicle emissions by 6% since 2000 through its adoption of green factory strategies (Honda 2010)

The most fundamental resources for human survival and health comprises of the constituents of the ecosystem such as air, water land etc (Yach & Bettcher 1998). Rapid industrialization and increased connectivity through globalization has amounted to exploitation and destruction of resources such as energy resources and other non renewable resources towards their extinction. Through the waste products emitted during the industrialization process, human health as well as the life of other living organisms in the planet is adversely affected.

The entire domain of globalization includes numerous interrelated phenomena and risk factors that affect the well being and health sustainability of the populations in both developing and developed countries (Yach & Bettcher 1998). However, we should not completely dismiss globalization as negatively impacting on the health of society. If the continent would address the risks and negative aspects associated with globalization, it is possible to sustain the process of economic globalization by turning the risks into opportunities hence improving future health prospects (Yach and Bettcher 1998).

Energy is the most essential component for powering automobiles and most of this energy is derived from burning of fossil fuels in the automobile’s engine. (Pollution probe 2009). The waste products from the combustion process pollute the air and have devastating effects on human health. Scientists have argued that the green house gas emissions pose considerable threat to future generations (Kao 2009). Green house gases are composed of carbon dioxide which is generated vehicles, power plants, oil, and gas etc, carbon monoxide, and oxides of nitrogen among others.

These gases have the effect of warming the atmosphere which leads to the major problem of global warming (Kao 2009). Carbon dioxide is released from the combustion process and persists in the environment for more than 100 years. The process further releases volatile organic compounds that are also harmful to human health which include Oxides of nitrogen which when produced pose danger to human health by impairing lung functioning and lowering resistance to respiratory infections.

Inhaling nitrogen dioxide may result in coughing, shortness of breath and wheezing (Pollution probe 2009). Carbon monoxide on the other hand is released as a result of incomplete combustion and it inhibits the body’s ability to transport oxygen from the lungs consequently adversely affects people with heart diseases. The gas can cause immediate death and people with anaemia, pregnant women and children are highly vulnerable to its effects (Pollution probe 2009)

The federal clean air act which was passed in 1970 in the State of California in the United States to regulate national air pollution and control effects requires automotive companies to produce cars that emit one tenth the level of carbon monoxide and hydrocarbons as the existing cars by 1975 (George n. d). Honda was the first company to build a car model whose engine met the federal standards without using a catalyst converter.

The Honda civic 1500 was the first car to utilize the compound vortex controlled combustion engine that used two combustion chambers hence significantly reducing the amount of emission (George n. d). The companies further dedication to ‘commitment to the future’ is displayed in its announcement in 2003 annual report that it would make every effort to contribute to preservation of human health through development of safety technology that aimed at reducing emission and developing alternative forms of energy (Honda motors Co 2003).

Honda Company is also taking the necessary measures to ensure that its vehicles are safe for human utilization. Some people are under the implication that increased weight and size of a vehicle increase its safety but this is not true (Anonymous 2003). While large cars prevent people from being crashed in cases of accidents, they are more likely to loose control at high speed and may roll over more easily compared to small cars.

The Honda engineers have therefore designed car bodies that shaped and formed to be stronger and more stable without necessarily increasing their weight (Anonymous 2003). In addition, the company’s engineers biologically treat its industrial wastewaters and sludge to ensure efficient utilization of water resource (Honda annual report 2009). Honda Company cut its total water consumption in its manufacturing process by 12.2% in 2010 from its previous year while the average water utilization per unit of automobile production was reduced by 2.5% (Environmental leader 2010)

Further, Honda Company actively participates in community support programs hence promoting improved living conditions and health. In Australia, the company supports the light house foundation, an organization that provides stable family environment to the less fortunate youths (Honda n. d). In addition, the company also makes considerable donations towards disaster management such as the monetary assistance to the government to provide relief to the affected population (Honda n. d).

The company produces diesel powered vehicles. France and Austria have had a high preference of diesel powered vehicles due to their efficient fuel consumption. The diesel engines have lower fuel consumption costs and lower raw emissions relative to spark ignition engines (Anonymous, The hybrid catalyst, a new catalyst concept to improve utilization of exhaust gas energy and increase the efficiency of diesel catalyst system, n. d).

However, treatment of diesel engine emissions is made difficult by the existence of very low temperature resulting from large amounts of air and additional energy from exhaust gas extracted by the exhaust gas turbo charger (Anonymous, The hybrid catalyst, a new catalyst concept to improve utilization of exhaust gas energy and increase the efficiency of diesel catalyst systems, n. d). Diesel powered automobiles are popular in Europe and the trend has been increasing over the years (Honda annual report 2007). ). In 2000, high powered diesel cars accounted for 49.1 % of the company’s market share in France and 33.3 % Belgium’s market share and the trend has continued to increase over time (Anonymous , Honda in Europe, n d). This substantially promotes environmental conservation which is necessary for persistent of good health among the population.

The increasing need to protect the environment from the negative impacts of globalization has prompted Honda Company to develop environmental strategies aimed at conserving the environment. This positively impacts on the overall performance of the company since a lot of consumers in the modern world prefer to utilize products from companies taking up corporate responsibilities to protect and conserve the environment.

Further, the company has achieved remarkable efficiency in production through utilization of energy and water conservation methods as well as other environmental management efforts that have considerably cut costs in the company’s automobile production. As clearly established in our study, the company has gained considerable sales through its production and sale of automobiles that use alternative sources of fuel and utilization of green factory manufacturing process. The popularity of products has further been intensified by the numerous environmental awards that the company has received which has served to increase consumer confidence and loyalty.

Honda Company sets an example for other automotive companies by demonstrating corporate responsibility in environment conservation as well as promotion of human life. This is important because the automotive industry is one of the major industries believed to cause widespread environmental damage. Through its numerous efforts to conserve the environment, the company has not only gained increased recognition by various environmental groups but has also achieved remarkable heights in overall company’s performance.

In addition, the company has renewed consumers confidence and has significantly influenced their attitudes towards the automotive industry. Further, the company’s environmental strategies such as production of automobiles that are fuel efficient as well as its efficient water policies have significantly promoted the performance in the global market making it the leading automotive company.

I recommend other corporations in the automotive industry to learn from the efforts of Honda Company in conserving the environment. These companies should take responsibility of preserving the environment by ensuring that their manufacturing processes as well as the products they are selling to consumers are safe and cause minimal (if any) pollution to the environment.

Companies should adopt Green strategies which would help them in cost cutting especially in the hard economic times. Since the modern economy is characterized by widespread globalization which serves to expand and diversify company’s markets, these corporations should take the necessary measures to contain the environmental problems associated with globalization in order to conserve the environment for todays and future generations. In addition, Honda Company should continue implementing the strategies for environmental conservation in order to maintain its good performance.

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ASSIGNMENT ON Operations Strategy of Manufacturing Firms: Toyota and Honda

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Christian Berggren

Incremental improvement of a deeply embedded technology system has been a hallmark of the automotive industry for a very long time. Efforts to develop alternatives have repeatedly failed. This paper analyses how Toyota started to challenge this pattern in the late 1990s, by the architectural innovation embodied in Prius, the first mass-produced hybrid-electric car.

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Global Corporate Strategy - Honda Case Study

Research paper (undergraduate), 2011, 55 pages, grade: 70, alexander berger (author), table of content, 1 executive summary, 2 introduction.

3 Situational Analysis 3.1 Company Profile 3.2 Growth and profitability 3.3 Philosophy 3.4 Goals 3.5 Competitors 3.6 SWOT-analysis of the company 3.7 PEST-analysis of the company

4 Reconciling Dichotomies 4.1 Planning vs. Learning 4.2 Positioning vs. Developing internal resources 4.3 Product-related core competencies vs. Process related core capabilities

5 Japanese management model vs. Western management model

6 Corporate Governance and CSR

7 Conclusion

List of references

The report is divided into four parts. The first part will analyse the current situation of Honda, which gives the reader insight in the current state of Honda's business. The second part will presented different dichotomies and analyse how Honda has dealt with them in the past. In the third part, the differences between the western management model and the Japanese management will be analysed and then related to Honda’s management concept. In addition, cultural influences based on Hofstede will be presented. The last part deals with corporate social responsibility and Corporate Governance focussing on Honda, Nissan, and Chrysler.

Within the automobile industry, there exists a high intensity of rivalry. Automobile manufacturers are seeking for innovative strategies in order to be successful in the long-term. In addition, the highly debate topic “global warming” also puts pressure on the automobile manufacturers forcing them to develop new low emission cars and be more responsible for the society. The Honda Motor Company is a shining example for setting up flexible innovative strategies, which fit into a fast changing environment.

3 Situational Analysis

The situational analysis attempts to address the question „where is the organization now? " The situational analysis contains a vast amount of information and, as the term indicates, is “an analysis of the situation that you are facing with the proposed product or service” (Hollensen, 2003, pp. 652).

3.1 Company Profile

In 1946, the Honda Technical Research Institute, a company focused on the manufacturing of motors for motorized bicycles, became the Honda Motor Company. During the 1950s, the company grew to one of the leading motorcycle manufacturers in the world expanding its business in 1967 by producing automobiles. In 1980, Honda established a manufacturing plant in the United States extending its business on a global scale (Copinath & Siciliano, 2009). Today, with a global network of 492 subsidiaries and affiliates, developing, manufacturing and marketing a wide range of products, Honda became the largest motorcycle manufactures and one of the leading automakers in the world (Honda Annual Report, 2010).

3.2 Growth andprofitability

Global sales as reported were $ 92.21 billion for the financial year ended March 31, 2010, a decrease of 14.3 % from the fiscal year ended March 31, 2009. The main reasons for the decrease were negative foreign currency translation effects and decreased net sales in automobile business. The operating profit was $3.91 billion during 2010, an increase of 91.8 % from the previous year. This was due to decreased selling general, administration, and R&D expenses and continuing cost reduction (Honda Annual Report, 2010). Furthermore, Honda is mainly presence in North America, Japan, Europe, Asia, as well as in other regions such as Brazil or Australia. Please see appendix to find further financial information on Honda.

3.3 Philosophy

Honda’s success is linked to its philosophy, which is based under the basic principles “Respect for the Individual” and “The Three Joys” -expressed as “The Joy of Buying,” “the Joy of Selling” and “The Joy of Creating.” The first principal emphasized on respecting the unique character and ability of each person, trusting each other as equal partner in order to be successful. The second principal expresses that all customers who come into contact with the company should feel a sense ofjoy through that experience (Honda Annual Report, 2010).

The main goal of Honda is maintaining a global viewpoint by supplying products of the highest quality, at a reasonable price for worldwide customer satisfaction. In addition, there are management objectives such as it follows:

- Proceed always with ambition and youthfulness. - Respect sound theory, develop fresh ideas, and make the most effective use of time. - Enjoy work and encourage open communication. - Strive constantly for a harmonious flow of work. - Be ever mindful of the value of research and endeavor.

(Honda Philosophy, 2011)

3.5 Competitors

Honda is competing in many different industries such as in the automobile manufacturing, the motorcycle manufacturing, the hand tools, power tools, the lawn & garden equipment, and the sporting goods & equipment industry.

Abbildung in dieser Leseprobe nicht enthalten

Source: Authors' design; databased on annual reports (see appendix). Alexander Berger - Global Corporate Strategy -

Due to this, Honda is facing a lot of competition in those industries. Within the auto manufacturing industry, Honda's main competitors are Toyota, VW, Daimler Group, BMW, Ford, Chrysler and Nissan.

3.6 SWOT-analysis of the company

A SWOT analysis is a technique specially designed to help identify suitable marketing strategies for a company to follow. It encompasses both the internal and external environments of the firm (Hollensen, 2003).

Source: Authors' design

3.7 PEST-analysis of the company

A company exists within an external environment consisting of the actions of other players such as the government and competitors who are outside the business. A PEST analysis is a useful tool for understanding the ‘big picture’ of the environment in which an organization is operating.

Source: Authors’ design

4 Reconciling Dichotomies

Nowadays global markets are characterized by increasing competition and a fast pace of technological change. This has led to an increasing demand for business improvement philosophies and methodologies in literature. Literature about strategic management often deals with key dichotomies such as planning vs. learning, positioning vs. developing internal resources, and product-related core competencies vs. process related core capabilities. In context to this, literature emphasized that a company has to follow one pole to the exclusion of the other in order to order to be successful (De Wit & Meyer, 2004). Nevertheless, Honda tried to find ways in order to reconcile such dichotomies, which in fact gave Honda a competitive advantage as explained in the next sections.

4.1 Planning vs. Learning

Mintzberg (1978) first made a distinction between planning and learning. In his article “Patterns in Strategy Formation”, he identified two kinds of strategies: intended and realized. These can be combined in three ways as shown in the graphic below.

Firstly, intended strategies that get realized are called deliberate strategies. Secondly, intended strategies that do not get realized, due to e.g. unrealistic objective setting, wrong judgment about the markets, etc. are called unrealized strategies. Last but not least, realized strategies, which were never intended, perhaps because of unexpected changes in the environment, are calledemergent(Mintzberg, 1978). Alexander Berger - Global Corporate Strategy In this context, De Wit & Meyer (2004) emphasized that deliberateness refers to the quality to act intentionally. It refers to the motto “Think before you act”. Managers are first setting up a goal and then choosing a strategy to get there. The strategy is formulated in a plan, which contains all actions in order to reach the goal. Formulating a plan requires a lot of time including an extensive analysis of the situation. After the plan has been formulated, tasks are assigned, responsibilities are divided, budgets are allotted and targets are set up. A control system also allows to measure results in comparison to a plan, which gives a company a higher degree of control (De Wit & Meyer, 2004). In addition, strategic planning encourages long-term thinking and commitment.

In contrast, a realized strategy, which was never intended, is a result of an iterative process of “thinking” and “doing” (De Wit & Meyer, 2004). It is a pattern of actions developed in a company in the absence of a specific goal, plan, etc. It involves recognizing an opportunity and reacting quickly (Harrison, 2009). Furthermore, an emergent strategy implies that a company is learning what works in practice. Therefore, learning is an essential part in the strategy formation.

There has been many discussions about which approach is more successful. Andrews (1987) argues that that strategic analysis and formulation should be conducted consciously, explicitly and rationally. In addition, he argues that strategic reasoning is a logical activity (De wit & Meyer, 2004). In contrast, Ohmae (1982) argued that the mind of the strategist is not dominated by linear logical thoughts, but by creative and intuitive thinking. Furthermore, he stresses out that logic is insufficient for arriving at innovative strategies (De wit & Meyer, 2004).

Both argument clearly show the paradox of a deliberate and emergent strategy which has led to dichotomies of strategies. Nevertheless, Mintzberg & Waters (1985) created the term “deliberately emergent” in the sense “that the central leadership intentionally creates the Alexander Berger - Global Corporate Strategy - - 7 - conditions under which strategies can emerge” (Mintzberg & Waters, 1985, p. 263) (Please refer to appendix). In addition, Whittington as shown below has classified a deliberate strategy under the classical school of thought and an emergent strategy under the evolutionary school of thought, which share both the same outcome profit maximization.

If you take a closer look at Honda, you can see that Honda successfully reconciled both dichotomies. Honda has for instance developed an innovative strategy for the planning of production. The automobile industry is often characterized by a large-lot mass production in which cost reduction is the main goal. However, the rigidity of mass production systems is a disadvantage, which makes any production change costly. Furthermore, the variety of the products that can be produced on the same system is limited comparing to batch production (Dolgui & Proth, 2010, pp. 197). Here, Honda combined the advantages of both (cost reduction and product variety) in developing a “small batch” production system. Through this system, Honda could reduce the production cost but also was able to offer a wide range of products and act flexible. Honda intentionally creates the conditions under which strategies can emerge. The deliberately planned “small batch” production system allows Honda to be flexible in the production forecast. Due to this, Honda can learn from the markets how it should forecast its production. In addition, Honda can react quickly to unforeseen difficulties Alexander Berger - Global Corporate Strategy - - 8 - in the production schedule. Here, strategy is partly deliberate, partly emergent (deliberately emergent).

In addition, on the one hand Honda's collective decision-making processes with a few clear responsibilities reflect a deliberate strategy. Here plans will be formulated. On the other hand, at the beginning Honda penetrated new markets such as the US with an emergent strategy. In context to this Mintzberg argued “if Honda had been in fact rational in its planning it would not have attempted to sell the small motorcycles in the US at all.” Further, he states that “the Honda case thus reveals the necessity of emergent learning alongside deliberate planning”.

4.2 Positioning vs. Developing internal resources

Companies that align their strategies based on the external environment are market-based orientated (outside-in). Market-based research focus on the understanding how the external content of a company relates to strategic decisions (Rasche, A., 2007, pp. 54). In addition, Porter suggest five competitive forces -threats of new entrants, bargaining power of suppliers, bargaining power of customers, rivalry among current competitors, and threat of substitute products and services- which must be analyzed to formulate a strategy on a market-based research focus. The strength of each of the five competitive forces is a function of industry structure or the underlying economic and technical characteristics of an industry (De wit, B. & Meyer, R., 2004, pp. 259). In the contrary, resourced based (inside-out) research focus on the internal capabilities that influence strategic decisions. A common model to identify the internal capabilities is the SWOT analysis. The SWOT analysis determines the current state of the market and outlines the strengths, weaknesses, opportunities, and threats a company faces within its environment. In context to this, a company must ask itself four general questions: What do we have that gives us a competitive advantage? Where can we be attacked and what do not we have? Where are the best markets to generate successful results? What do we need to look out for that would have negative impact on results? (Kern, R., 2001, pp. 3).

In general, not all decisions can be made based on only internal or external influences. Some strategic decisions are influenced by both factors. For instance, a resourced-based company has still to follow government regulations, which might be able to affect the company's capabilities to provide a good or service negatively (Rasche, A., 2007, pp. 54). In the past, literature has provided different views about if a strategy should be based on-either market- based or resourced-based. Drucker (1987), for instance, claimed that “it is more important to do the right things than to do things right”. “What sense would it make to serve a market with a product that is not needed?” He tends more to an outside-in approach which focuses on effectiveness “doing of the right things” rather than efficiency (Rasche, A., 2007, pp. 55). By contrast, the inside-out perspective is more concerned with the allocation of the company's capabilities to achieve efficiency. Miles and Snow (1978) argued that over time an outside-in company might do things right effectively but has lacks of capabilities in other areas such as developing new products. They argue that to strengthen a company's capabilities and being efficient is a precondition for market effectiveness in the long-term. Especially in times of a fast changing environment due to the economic recession, the increase number of competitors, and due to the globalization, managers are challenged to find the right approach to formulate the right strategy.

In this context, Honda tries to reconcile this dichotomy in order to be efficient as well as effective. Honda's core competence is the ability to produce some of the world's best engines and powertrains (Hamel, 1994). Although Honda is nowadays the world’s biggest motorcycle producer and a lead supplier of cars, it has never defined itself either as a motorcycle company or as a car company. Since the very beginning of the company, Honda's strategy has been built around its expertise in the development and manufacture of engines. As you can see from the graphic, this capability has successfully been transferred offering a wide range of products (Grant, 2005). This is considered as an inside out approach first looking at the internal resources and then offering the product to the market.

Source: (Grant, R. M, 2005, p. 134)

Nevertheless, Honda also put emphasize on doing the right things. The company designed its products and processes according to the need of the markets. Here, it is important not just to be efficient in producing engine but also to meet the market needs in terms of design, safety, price etc. and to position the product effectively which Honda does. Furthermore, in developing new low-pollution power sources for vehicles Honda follows an outside in approach looking at the market needs and then building the capabilities to do it. Following both approaches has led to a competitive advantage for Honda.

4.3 Product-related core competencies vs. Process related core capabilities

In general, according to Day capabilities are “complex bundles of skills and collective learning, exercised through organizational processes that ensure superior coordination of function activities.” Furthermore, Hamel (1994) has identified process related core capabilities as competencies such as quality, just-in-time management, cycle time management, etc. These capabilities allow companies to do things more quickly and flexibly than their competitors do (Birchall & Tovstiga, 2005).

Moreover, according to Hamel a core competence can be identified under the following three questions:

1. Is ita significant source of competitive differentiation? 2. Does it transcend a single business? 3. Is it hard for competitors to intimidate?

(Drejer, 2002, p. 97)

Furthermore, the tangible link between identified core competencies and end products is the core product. In this context, core products are the components that actually contribute to the value of the end product (Prahalad & Hamel, 1990). Please see appendix.

Referring to Honda this dichotomy seems to be false. Honda is focusing on both resources because both matters to Honda's customer in different ways (DeWit & Meyer, 2004). Honda's engines are the core products, which provide high values to its customers in terms of product performance, etc. Nevertheless, Honda's small batch production system, dealer network management system, free flow assembly line, etc. allows Honda to do things more quickly and flexibly than their competitors do.

Title: Global Corporate Strategy - Honda Case Study

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Title: Global Corporate Strategy - Honda Case Study

In The (Red)

The Business Bankruptcy Blog

Assignments For The Benefit Of Creditors: Simple As ABC?

Companies in financial trouble are often forced to liquidate their assets to pay creditors. While a Chapter 11 bankruptcy sometimes makes the most sense, other times a Chapter 7 bankruptcy is required, and in still other situations a corporate dissolution may be best. This post examines another of the options, the assignment for the benefit of creditors, commonly known as an "ABC."

A Few Caveats . It’s important to remember that determining which path an insolvent company should take depends on the specific facts and circumstances involved. As in many areas of the law, one size most definitely does not fit all for financially troubled companies. With those caveats in mind, let’s consider one scenario sometimes seen when a venture-backed or other investor-funded company runs out of money.

One Scenario . After a number of rounds of investment, the investors of a privately held corporation have decided not to put in more money to fund the company’s operations. The company will be out of cash within a few months and borrowing from the company’s lender is no longer an option. The accounts payable list is growing (and aging) and some creditors have started to demand payment. A sale of the business may be possible, however, and a term sheet from a potential buyer is anticipated soon. The company’s real property lease will expire in nine months, but it’s possible that a buyer might want to take over the lease.

The ABC Option . In many states, another option that may be available to companies in financial trouble is an assignment for the benefit of creditors (or "general assignment for the benefit of creditors" as it is sometimes called). The ABC is an insolvency proceeding governed by state law rather than federal bankruptcy law.

California ABCs . In California, where ABCs have been done for years, the primary governing law is found in California Code of Civil Procedure sections 493.010 to 493.060 and sections 1800 to 1802 , among other provisions of California law. California Code of Civil Procedure section 1802 sets forth, in remarkably brief terms, the main procedural requirements for a company (or individual) making, and an assignee accepting, a general assignment for the benefit of creditors:

1802.  (a) In any general assignment for the benefit of creditors, as defined in Section 493.010, the assignee shall, within 30 days after the assignment has been accepted in writing, give written notice of the assignment to the assignor’s creditors, equityholders, and other parties in interest as set forth on the list provided by the assignor pursuant to subdivision (c).    (b) In the notice given pursuant to subdivision (a), the assignee shall establish a date by which creditors must file their claims to be able to share in the distribution of proceeds of the liquidation of the assignor’s assets.  That date shall be not less than 150 days and not greater than 180 days after the date of the first giving of the written notice to creditors and parties in interest.    (c) The assignor shall provide to the assignee at the time of the making of the assignment a list of creditors, equityholders, and other parties in interest, signed under penalty of  perjury, which shall include the names, addresses, cities, states, and ZIP Codes for each person together with the amount of that person’s anticipated claim in the assignment proceedings.

In California, the company and the assignee enter into a formal "Assignment Agreement." The company must also provide the assignee with a list of creditors, equityholders, and other interested parties (names, addresses, and claim amounts). The assignee is required to give notice to creditors of the assignment, setting a bar date for filing claims with the assignee that is between five to six months later.

ABCs In Other States . Many other states have ABC statutes although in practice they have been used to varying degrees. For example, ABCs have been more common in California than in states on the East Coast, but important exceptions exist. Delaware corporations can generally avail themselves of Delaware’s voluntary assignment statutes , and its procedures have both similarities and important differences from the approach taken in California. Scott Riddle of the Georgia Bankruptcy Law Blog has an interesting post discussing ABC’s under Georgia law . Florida is another state in which ABCs are done under specific statutory procedures . For an excellent book that has information on how ABCs are conducted in various states, see Geoffrey Berman’s General Assignments for the Benefit of Creditors: The ABCs of ABCs , published by the American Bankruptcy Institute .

Important Features Of ABCs . A full analysis of how ABCs function in a particular state and how one might affect a specific company requires legal advice from insolvency counsel. The following highlights some (but by no means all) of the key features of ABCs:

The Scenario Revisited. With this overview in mind, let’s return to our company in distress.

Conclusion . When weighing all of the relevant issues, an insolvent company’s management and board would be well-served to seek the advice of counsel and other insolvency professionals as early as possible in the process. The old song may say that ABC is as "easy as 1-2-3," but assessing whether an assignment for the benefit of creditors is best for an insolvent company involves the analysis of a myriad of complex factors.


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In short, the firm must find a balance when planning the HR. It has to look at internal factors and projections such as future sales and costs which help them predict demand and consequently forecast the workforce needed. But at the same time it has to look at external factors to predict labor supply and the external factors are found in the environment around the company.

Human Resources Strategy : An Effective Human Resource Management Essay

An effective human resources (HR) strategy is the complete design, or strategic plan, that directs the engagement of specific HR functional areas. Subsequently, HR strategies will guide decisions about company personnel to make sure they are best suited for the company. For this to be successful, all of the functional areas of HR strategies must be directly compatible with the entire business strategy of the company (Wright, Snell, & Jacobsen, 2003). One such company that has been very successful in developing an HR strategy to support the overall business strategy, is the United Services Automobile Association, or more commonly known as USAA.

Human Resources Planning And Human Resource Planning

According to E.Geister (2006,P30) “Human resource planning is the process that includes forecasting, developing and controlling by which a firm ensures that it has proper number of employee and right kind people at right place and right time for which they are economically most useful”. R.K Sharma and S.K Gupta explains the various objectives of human resource planning. Some of them are Assessing skill requirement in future, Controlling the wages and salary, Cost ensuring higher labour productivity, Ensuring proper and efficient use of Human resources in an organisation.

Management by Objectives (Mbo) Method Involves Setting Specific Measurable Goals with Each Employee and Then Periodically Reviewing the Progress Made.

Planning means looking ahead and chalking out the future courses of actions to be followed. The ongoing process of systematic planning to achieve optimum use of an organization 's most valuable asset is human resources department. The objective of human resource (HR) planning is to ensure the best fit between employees and jobs, while avoiding manpower shortages or surpluses. The three key elements of the HR planning process are forecasting labor demand, analyzing present labor supply, and balancing projected labor demand and supply.

A Case Study: Enterprise Rent A Car

The case study is about Enterprise Rent a Car, which initiated its business in the year 1957 at USA. The company slowly expanded its business and now they have more than 65000 workforce presented. The company is highly depending upon their workforce and to retain them longer, they use to give them training and development with passage of time. Hence, the company also do workforce planning for fulfilling future needs of the workforce.

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