CASE STUDY ON:-

SUBMITTED BY ROLL NUMBER SECTION COURSE CODE COURSE REGISTRATION NO SUBJECT STRATEGIC PLANNING

: SARJODH : A04 : D1211 : CAP556

SINGH

: M.Sc. (CS) : 11206887 : ENTREPRENEUREIAL BASED ON IPR

SUBMITTED TO

: RAJ

SINGH

INTRODUCTION
Honda Motor Company, Limited is a Japanese public multinational corporation primarily kno n as a manu!acturer o! automobiles an" motorcycles# $on"a %as been t%e orl"&s lar'est motorcycle manu!acturer since 1()(* as ell as t%e orl"&s lar'est manu!acturer o! internal combustion en'ines measure" by +olume* pro"ucin' more t%an 1, million internal combustion en'ines eac% year# -$on"a became t%e secon"lar'est Japanese automobile manu!acturer in .//1# -$on"a as t%e ei'%t% lar'est automobile manu!acturer in t%e orl" be%in" 0eneral 1otors* 2olks a'en 0roup* Toyota* $yun"ai 1otor 0roup* 3or"* Nissan* an" 4SA in ./11# $on"a 1otors is t%e lea"in' automobile company %ic% sprea"s its operations all o+er t%e or" an" best kno n !or t%e 5uality o! pro"ucts t%ey make# A $on"a motor !ollo s an e6cellent approac% in t%eir marketin' in international business by reconcilin' bot% cost an" "i!!erentiation# $on"a as t%e !irst Japanese automobile manu!acturer to release a "e"icate" lu6ury bran"* Acura* in 1(78# Asi"e !rom t%eir core automobile an" motorcycle businesses* $on"a also manu!actures 'ar"en e5uipment* marine en'ines* personal atercra!t an" po er 'enerators* amon'st ot%ers#

FACTS OF HONDA
1# $on"a is t%e orl"&s lar'est manu!acturer o! motorcycles as ell as t%e orl"&s lar'est manu!acturer o! internal combustion en'ines measure" by +olume* pro"ucin' more t%an 1, million internal combustion en'ines eac% year# .# $on"a surpasse" Nissan in .//1 to become t%e secon"-lar'est Japanese automobile 1anu!acturer# As o! Au'ust .//7* $on"a surpasse" C%rysler as t%e !ourt% lar'est automobile manu!acturer in t%e Unite" States# $on"a is t%e si6t% lar'est automobile manu!acturer in t%e orl"# 9# $on"a %ea"5uarters: 1inato* Tokyo# ,# Tra"es in: Tokyo Stock E6c%an'e an" t%e Ne York Stock E6c%an'e* as ell as e6c%an'es in Osaka* Na'oya* Sapporo* :yoto* 3ukuoka* ;on"on* 4aris an" S it<erlan"#
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)# ;ea"ers%ip 1(,7=1(>9 ? Soic%iro $on"a 1(>9=1(79 ? :iyos%i :a as%ima 1(79=1((/ ? Ta"as%i :ume 1((/=1((7 ? Nobu%iko :a amoto 1((7=.//, ? $iroyuki Yos%ino .//,=.//( ? Takeo 3ukui Since .//( ? Takanobu @to 8# Analysts %a+e attribute" t%is to t o main !actors# @# @@# 3irst* $on"a&s pro"uct lineup consists o! mostly small to mi"-si<e* %i'%ly !uel-e!!icient +e%icles# Secon"ly* o+er t%e last ten years* $on"a %as "esi'ne" its !actories to be !le6ible* in t%at t%ey can be easily retoole" to pro"uce any $on"a mo"el t%at may be in-"eman" at t%e moment#

>#

T%e company %as assembly plants aroun" t%e 'lobe locate" at C%ina* USA* 4akistan* Cana"a* En'lan"* Japan* Ael'ium* Ara<il* Ne Bealan"* @n"onesia* @n"ia* T%ailan"* an" Turkey#

HONDA BUSINESS GOAL

4ositione" itsel! as a company t%at "e+elops inno+ati+e pro"ucts# 4ositione" t%em as number one company post Japan success# 4ositione" itsel! as a company it% 5uality pro"ucts it% lo price# 4ositione" in terms o! +alue !or money# 4ositione" itsel! as a customer !rien"ly company it% pro"ucts !or common man#

Strategie to a!"ie#e t"eir $% ine

1

goa&

Or'ani<ation %as to a"apt t o le+els o! strate'ies to compete it% ot%er or'ani<ations to sur+i+e in t%eir business sector an" t%ose t o le+els o! strate'ies are business le+el strate'y an" corporate le+el strate'y#

B% ine

&e#e& trategy

Ausiness le+el strate'y is %o t%e or'ani<ation is inte'ratin' an" coor"inatin' t%eir commitments an" actions to 'ain t%e competiti+e a"+anta'e by usin' t%eir core competencies# @t is "e+elope" to increase t%e competiti+e a"+anta'e o! or'ani<ationCs pro"ucts an" ser+ices# $on"a a"opts +arious business strate'ies on "i!!erent locations by consi"erin' t%e 'eo'rap%ical "i!!erences an" t%us business le+el strate'ies are in a ay to support t%e corporate le+el strate'y# Ot%er automobile companies suc% as 01 1otors an" Toyota too are usin' market oriente" business strate'ies to e6plore t%e markets an" t%ey are usin' core competencies in t%eir business le+el strate'ies# T%ose core competencies in t%eir business strate'ies make t%em uni5ue an" "istin'uis% t%em !rom ot%ers#

Corporate &e#e& trategy

Corporate le+el strate'y is t%e o+erall strate'y o! t%e or'ani<ation %ere +ision* mission an" ot%er obDecti+es o! t%e or'ani<ations are inte'rate" in a lon' term perspecti+e# T%e type o! business an" t%e met%o"s o! "oin' business alon' t%e met%o"s to impro+e t%eir operations are "ealt in t%e corporate le+el strate'y# @t can be consi"ere" as t%e bi' picture +ie o! t%e or'ani<ation %ereas business le+el strate'y is only a part o! it E0rant* .//)F# Corporate le+el strate'y is base" on t%e 'reat scope o! t%e or'ani<ation in a lon' term to sustain in t%e in"ustry an" or'ani<ation is creatin' +alues t%rou'% t%eir corporate le+el strate'y by or'ani<in' t%eir business port!olios# T%ey can increase t%eir +alues by important "ecisions !or mer'ers* ac5uisitions an" e5ual "istribution o! resources to t%eir business sectors# Corporate le+el strate'y o! $on"a is G to enhance corporate value through a major expansion of sales within each of its three product lines -based on accelerated innovation throughout the company, including manufacturing and research and development H E$on"a* .///F# Once t%e company is success!ul in ac%ie+in' its business le+el strate'y* it means t%at t%ey are steppin' to ar"s to ac%ie+e t%eir corporate strate'y#

Integrate $ot" prod%!t and pro!e

re&ated !ompeten!y

Or'ani<ation s%oul" inte'rate bot% pro"uct relate" core competency an" process relate" core competency to 'ain competiti+e a"+anta'e in t%eir business sector# 4ro"uct relate" core competency is mainly base" on t%eir pro"uct en'ineerin'# $on"a is ell kno n !or t%eir internal combustion en'ines an" it in a ay re"uces pollution an" t%e latest tec%nolo'y# E+en t%ou'% $on"a intro"uces less ne mo"els compare" to 01 an" 3or"* Iuality o! $on"aCs pro"ucts is one o! t%eir competiti+e a"+anta'es# $on"a reuses t%eir inno+ate tec%nolo'y in all t%eir pro"uct lines Emotorcycles* automobiles an" ot%er po er pro"uctsF an" t%us t%ey are %a+in' an G unmatched R and D efficiencyH T%ey %a+e trans!erre" t%eir tec%nolo'y !rom en'ines an" po er trains to t%eir ot%er pro"ucts suc% as cars* tractors an" 'enerators en'ines# 4rocess relate" core competencies o! an or'ani<ation "enote t%e capability o! t%eir pro"uction# Normally pro"uct relate" core competency represents t%e 5uality an" process relate" core competency represents t%e 5uantity# $on"a can intro"uce t%eir pro"uct in a lar'e scale# T%ey are speciali<e" in lo pollute" an" less !uel consumption auto an" po er en'ines# $on"a belie+es t%e ri'%t-!irst time principle an" t%us t%e outcome oul" be t%e ri'%t one it%out it% errors# T%us t%ey are +ery muc% keen to a+oi" astin' time to resol+e t%e errors i! t%ere are any in t%eir pro"ucts# Suppose i! t%ere are any !aults or errors* it ill automatically result in t%e increasin' o! operational cost an" t%ey coul" not release t%e pro"ucts on time# T%is ill !orce t%e customers to s%i!t !rom t%is bran" to anot%er one# T%us t%e pro"uct cost "epen"s on t%e e!!ecti+eness o! operations# $on"a in+ests more on J an" D to make t%eir in+entions accurate an" it ill sa+e t%eir time an" money# T%ey are !re5uently testin' t%eir pro"ucts to make it error !ree an" to re"uce t%e time o! "eli+ery as ell# T%us $on"a a"apte" t%e process relate" competency o! ri'%t-!irst time#

B%i&t'in'(%a&ity !ompeten!y
Anot%er competency o! $on"a is t%at o! built-in-5uality an" t%is is 'aine" t%rou'% +arious sub trans!ormational tasks in operations# E!!ecti+eness o! t%e pro"uct is analyses by t%e "e'ree o! customer satis!action on t%at particular pro"uct# $on"a analyses t%eir per!ormance stan"ar"s into +arious parts to e+aluate to kno t%e customer satis!action an" t%us e+ery parts o! t%eir pro"uct is teste" an" 5uality ensure"# T%ereby t%ey are makin' sure t%at 5uality pro"ucts are reac%in' at t%e %an"s o! t%eir customers# T%is is one o! t%e pro"uct relate" core competencies o! $on"a#
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$on"a is success!ully inte'ratin' t%eir core competencies in pro"uct an" process# $on"a perspecti+e is "i!!erent !rom estern mana'ement %ere t%ey look at t%eir business an" operations !rom manu!acturesC point o! +ie # $o e+er $on"a a"apts "ual perspecti+e o! bot% customer an" manu!acturer# As t%ey are releasin' t%eir pro"uct ri'%t-!irst time* it enables t%em to sa+e t%e cost o! operation an" re ork# T%us t%ey are 'ettin' %i'%er pro!it out o! less operational cost an" t%ey can sell t%e pro"ucts !or a!!or"able prices to t%eir customers# T%ey are not only maintainin' t%e 5uality o! pro"uct* but also keepin' t%eir promise to "eli+er t%e pro"uct on time# Competiti+e a"+anta'e o! t%e or'ani<ation is t%us "epen"e" on 5uality o! bot% pro"uct an" process# Suppose t%e pro"uct is o! %i'% 5uality an" it is a!!or"able* %o e+er i! it is not "eli+ere" on time or it takes lon'er time to reac% at t%e %an"s o! t%e customers* it oul" "e!initely create a ba" customer e6perience# $on"a t%rou'% t%eir ri'%t-!irst-time an" buil"-in5uality is tryin' t%eir best to "eli+er t%e 5uality pro"uct on time to t%eir customers# $on"a success!ully inte'rate" bot% t%ese !eatures in t%eir operations an" strate'y# $on"a is 'i+in' more priority to assembly line o! pro"uction# T%ey are a"aptin' bot% manual an" automatic operations in t%eir assembly line o! pro"uction# T%ey %a" "esi'ne" ne er "e+elopin' met%o" Gmass size productionH an" Gone piece flow systemH# T%us t%ey are combinin' bot% t%ese met%o"s to impro+e t%eir 5uality in pro"ucts by "eli+erin' t%e pro"ucts on time# $on"a is !ollo in' t%e a"+ance" process %ere it is t%e inte'rate" bot% pus% an" pull system an" t%ey are reconcilin' bot% estern met%o"s in pro"uction alon' it% tra"itional Japanese pro"uction process as ell#

G&o$a& Merger and A!(%i ition

Or'ani<ations are a"aptin' net ork le+el strate'y to impro+e an" 'ain competiti+e a"+anta'e in t%eir business sector# Or'ani<ations !in"s +ery "i!!icult to compete it% t%eir competitors by t%emsel+es an" t%us t%ey 'o !or mer'ers an" coalitions to better an" 'ain more a"+anta'es in t%eir respecti+e businesses# Some o! t%e mer'ers an" ac5uisitions are success!ul an" stren't%en t%e or'ani<ations# $o e+er some are utter !ailures "ue to improper e+aluations an" analysis an" t%ese !ailures result in t%e collapse o! t%e or'ani<ations as ell# Some or'ani<ations are !aile" to reco'ni<e t%e "ept% an" impact o! "ebt be!ore mer'ers an" ac5uisitions# T%ey ne+er e+aluate t%e !inancial stability be!ore makin' proper "ecision to %a+e a coalition or ac5uisition o! anot%er company to 'ain more competiti+e a"+anta'e# $ero $on"a 1otors ;t" is one o! t%e lea"in' companies in t%e t o- %eeler in"ustry# At present* it is t%e market lea"er
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in t%e motorcycle se'ment it% aroun" ,>K t%e market s%are "urin' 3Y .///-/1# Durin' t%e year* t%e company poste" a ,1#/)K yoy rise in turno+er to Js#91* 878#)mn in motorcycles %ic% as "ri+en by a 9)#1>K yoy rise in motorcycle sales +olumes# T%e company %as emer'e" as one o! t%e most success!ul players* muc% a%ea" o! its competitors an account o! its superior an" reliable pro"uct 5uality complemente" it% e6cellent marketin' tec%ni5ues# T%e company %as been consistently a""ressin' t%e 'ro in' "eman" !or motorcycles an" %as a cumulati+e customer base o! o+er , million customers %ic% is e6pecte" to reac% )mln mark it% t%e rural an" semi-urban se'ment bein' t%e ne class o! consumers# @n t%e process t%e s%are o! motorcycle se'ment %as 'ro n !rom ,7K to )7K* t%e s%are o! scooters "ecline" "rastically !rom 99K to .)K* %ile t%at o! mope"s "ecline" by .K !rom 1(K to 1>K "urin' t%e year .///-/1# All t%e ne mo"els are no bein' replace" by ,-stroke motorcycles# E6cise "uty on motorcycles %as been re"uce" !rom 9.K to .,K* resultin' in price re"uction* %ic% %as ai"e" in propellin' t%e "eman" !or motorcycles# Joint 2enture bet een $ero 0roup* t%e orl"&s lar'est bicycle manu!acturers an" t%e $on"a 1otor Company o! Japan* %as to"ay become t%e Lorl"&s sin'le lar'est t o %eeler Company# Comin' into e6istence on January 1(* 1(7,* $ero $on"a 1otors ;imite" 'a+e @n"ia not%in' less t%an a re+olution on t o- %eels ma"e e+en more !amous by t%e &3ill it - S%ut it 3or'et it & campai'n# A"" to t%at tec%nolo'ical e6cellence* an e6pansi+e "ealer net ork* an" reliable a!ter sales ser+ice* an" you %a+e one o! t%e most customer!rien"ly companies# T%is is pro+e" by t%e company&s sales o+er t%e years: 1(7)-78 1(7(-(/ 1((7-(( 1(((-// .///-/1 .//1-/. ,9*/// units (8*.// units )* 9/*8// units >* 81*.1/ units 1/* .(*))) units 1,* .)*1() units

SWOT analysis of Honda

$on"a is success!ully inte'ratin' bot% t%eir ri'%t-!irst time !eature an" buil"-in 5uality !eatures in t%eir pro"uction an" processes# T%ey are combinin' bot% t%ese !eatures to pro+i"e ma6imum satis!action to t%eir customers# $o e+er t%is analysis s%o s t%at
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$on"a success!ully inte'rate" 5uality to spee" up t%eir "eli+ery o! pro"ucts to t%eir +aluable customers# T%ey belie+e in bot% 5uality an" timely "eli+ery o! pro"ucts

Strengths
1# Di#er i)ied prod%!t port)o&io* $on"a unlike many ot%er automoti+e companies "oes not !ocus only on sellin' +e%icles# @t is t%e lar'est pro"ucer o! t%e en'ines an" motorcycles as ell# T%ere!ore* t%e company is not as susceptible as its competitors are to market cycles or tec%nolo'y "isruptions# .# H%ge in#e tment in R+D* $on"aCs in+estments in JMD reac% as muc% as )K o! re+enue# T%e business relies on t%ese in+estments to ac%ie+e competiti+e a"+anta'e t%rou'% +arious tec%nolo'ies* suc% as impro+e" +e%icle paintin' process* ne %y"ro'en an" %ybri" en'ines or ne el"in' tec%nolo'ies# @n ./1.* t%e company o ne" ,.*/// patents an" %a" pen"in' applications !or .(*/// more patents# 9# Strong $rand image* $on"a %as a reputation !or pro"ucin' t%e best 5uality en'ines aroun" t%e orl"# T%e companyCs bran" as t%e .1st most +aluable bran" in t%e orl" +alue" at N1> billion an" as only be%in" Toyota* 1erce"esAen< an" A1L* accor"in' to @nterbran"# ,# Motor!y!&e mar,et "are in A ia* @n ./1.* $on"a sol" 7/#)K o! its motorcycles in Asia* t%e market t%at %as 'reatest 'ro t% potential# $a+in' t%e lar'est motorcycle market s%are* $on"a is ell positione" to compete it% ot%er companies !or t%e sales an" pro!its#

-ea,ne

1# .rod%!t re!a&& * O+er ./11 an" ./1.* $on"a recalle" more t%an 1*///*/// +e%icles to !i6 +arious !aulty parts an" manu!acturin' "e!ects# Car recalls se+erely "ama'es !irms bran" reputation an" !uture sales# .# -ea, po ition in E%rope a%tomoti#e mar,et* $on"a %ol"s a +ery eak position in t%e EuropeCs automoti+e market an" %as maintaine" only 1#1K market s%are in ./1.# Alt%ou'%* EuropeCs market s%are is "eclinin' at t%e moment an" many companies e6perience losses* t%e market is %u'e an" !irms can bene!it !rom t%e economies o! scale# 9# De!rea ing a&e * @n ./1.* $on"aCs re+enue %it t%e lo est point in , years to O>#(,7 trillion# $on"a sales ere "o n by 11#.K in Nort% America* %ic% represents more t%an ,/K o! total $on"a re+enues# Je+enue !rom Asia an" Europe also "ecline" by .1#9K* 1)#)K respecti+ely* si'nalin' poor !irmCs per!ormance 'lobally#

Opport%nitie
1# In!rea ing )%e& pri!e * $on"aCs stron' emp%asis on en'ineerin' !uel-e!!icient +e%icles E$on"a @nsi'%t an" $on"a Ci+icF it% !le6ible !uel* %ybri" an" %y"ro'en en'ines ill pay o!! "ue to increasin' !uel prices# .# .o iti#e o%t&oo, )or g&o$a& motor!y!&e ind% try* 1otorcycle in"ustry 're by ,#.K !rom ./11 to ./1. an" is e6pecte" to 'ro by at least 8K to ./18# $on"a is t%e orl"Cs lea"in' pro"ucer an" seller o! t%e motorcycles %a+in' more t%an .(K o! t%e market s%are# 0ro in' "eman" !or t%e motorcycles is a 'reat opportunity !or t%e company to e6pan" its 'lobal market s%are an" 'ro sales# 9# Gro/ing g&o$a& demand )or en#ironment )riend&y #e"i!&e * T%e "eclinin' le+els o! !ossil !uel sources an" t%e risin' CO. emissions became a maDor concern !or many people an" many 'o+ernments# T%ere!ore* ecolo'ically !rien"ly cars* po ere" by %ybri"* %y"ro'en or !le6ible !uel en'ines became +ery popular# T%e market !or suc% cars as N99 billion in ./1/# $on"aCs !ocus on %ybri" an" %y"ro'en !uele" en'ines is a 'reat opportunity to capture t%e market s%are !or t%is ne "eman"# ,# Gro/t" t"ro%g" a!(%i ition * $on"a coul" 'reatly bene!it !rom strate'ic partners%ips or ac5uisitions o! smaller competitors# T%e business oul" a"" ne bran"s to its port!olio* ac%ie+e 'reater economies o! scale an" oul" bene!it !rom syner'ies bet een "i!!erent !irms#

T"reat
1# Inten e !ompetition* $on"a !aces more intense competition t%an e+er# Ne small entrants are "isruptin' t%e market it% t%eir capabilities in pro"ucin' electric +e%icles or alternati+e !uel en'ines# Ai' companies are restructurin' t%emsel+es to become more e!!icient# As a result* !irms like $on"a are su!!erin' !rom competition !rom bot% bi' an" small players# .# De!rea ing )%e& pri!e * Some analysts !orecast t%at !uture !uel prices ill "rop "ue to e6traction o! s%ale 'as# T%is oul" ne'ati+ely in!luence $on"a because t%e company is !ocusin' on %y"ro'en !uel* %ybri" an" !le6ible !uel en'ine cars* %ic% are not so attracti+e to consumers %en !uel prices are lo # 9# Ri ing ra/ materia& pri!e * 1etals are t%e main ra materials use" in +e%icle an" motorcycle manu!acturin' an" t%e risin' price o! t%e ra metals raises o+erall pro"uction costs !or $on"a# ,# Nat%ra& di a ter * $on"a %as manu!acturin' !acilities in Japan* T%ailan"* C%ina an" 1alaysia# T%ese countries* inclu"in' ot%ers* are o!ten subDect to natural "isasters t%at "isrupt manu!acturin' in t%e !acilities an" "ecrease $on"aCs pro"uction +olumes#
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)# Strong yen* $on"a earns most o! its pro!its outsi"e Japan an" appreciatin' yen poses a 'reat t%reat to $on"aCs pro!its#

Conclusion
T%is case stu"y clearly in"icates t%at $on"a success!ully mana'e" t%e t%eir business to bree" success# $on"a portrays itsel! as a !irm "e"icate" to bein' a lo cost pro"ucer* utili<in' its "ominant position in Japan to !orce entry into ot%er market* re"e!inin' t%at market by puttin' t%e nicest people ima'e an" e6ploitin' its comparati+e a"+anta'e +ia a''ressi+e a"+ertisin' an" pricin'# T%ey are 'i+en important to bot% Ji'%t-3irst-time an" Auilt-in-5uality# T%ey are 'eneratin' success in t%eir respecti+e business by mana'in' tra'ically# T%e success story o! $on"a continues as t%eir mana'ement strate'ies are success!ul in 'eneratin' t%em more income#

AC0NO-LEDGEMENT

FY13 "Financial Results: Honda Motor Company" (PDF). pril !"13. Retrie#ed !$ pril !"13. "FY!"1! FY1! Financial Results: Honda Motor Company". May !"11. Retrie#ed 1% &une !"11. Company Pro'ile 'or Honda Motor Co (td (HMC)". Retrie#ed !) *eptem+er !"",. -rant. Ro+ert M./ 0euter. 1ent 2. (!""3). Cases in contemporary strategy analysis (3rd 2d.). 3iley 4 5lac67ell. 8*50149"%1411,"41. Retrie#ed 1! 0o#em+er !"1" :ttp:;;rosestep:en.+lo<spot.in;!"11;"!;:ondas4case4study.:tml.