Running Head: HONDA MOTORS 1
HONDA MOTORS 9
Honda Motor Company Analysis
Dr. Garnie McCormick
1.0 Honda Motor Company’s products and major subsidiaries 3
2.0 History of the Honda Motor Company 4
3.0 Challenges faced by the Honda Company 5
4.0 The market of the Honda Company 6
5.0 Emerging Issues that may affect the predictions of the performance of the organization 6
6.0 Conclusion 8
Honda Company is an international company that is involved in the production of power equipment, motorcycles, and various automobiles. Most recently, they also have expanded to the production of corporate jet aircrafts. The company is the best supplier of the combustion engines, motorcycles and motorcycle spare parts across the entire world. In the automobile industry, Honda is among the best companies. Apart from the automobiles, the company also engages in the production of generators, marine engines, mountain bikes, robots, garden equipment, solar aircraft cells, watercrafts and other engines (Springer, 2013).
Honda automobile has also engaged in multiple productions hence diversifying in various risks in the global market. Diversification has also enhanced it to be strongly founded in the financial sector even in times of crisis (Horaguchi & Shimokawa, 2013).
Honda’s success in the business is attributed to the fact that it produces its products based on the requirements and specifications of the consumers. The company engages in research on the consumer needs and then they design the vehicles and motorcycles to meet their expectations. Such action encourages the consumers always to buy the company’s products hence increasing Honda’s sales and profits (Sperling & Cannon, 2009). Since the consumers are located in different areas, the products supplied to the regions differ from the consumers needs and preferences are also different. The motorcycles and their products are the core productions from the company because they were the initial startup project (Springer, 2013).
Honda Company has opened many branches in the market to deal with the various needs of various markets in the world. The branches help the head company to manage the other geographical areas without many difficulties. The challenges at the regional levels are handled at the branch level, and when they become difficult, they are pushed to the head office to be handled. Each branch is endowed with the task to handle the new interests that arise in the market. For instance, the Acura subsidiary was put in place to take care of the luxurious individuals in the market and hence was in charge of production and modification of the cars to meet their needs (Horaguchi & Shimokawa, 2013). Honda Aircraft subsidiary took care of the all the aerospace products and their technologies. Honda soltec subsidiary is responsible for the production of solar cells for both the public and private use. Moto Honda da Ammonia subsidiary is responsible for the production of the fuel-supple products to supplement the other Honda products (Springer, 2013).
The idea of the Honda company was brought into place by Soichiro Honda hence the names Honda company. Its initial plan was to operate as a research company after which the knowledge about engines was brought forth by the Toyota Company to the research center. The company embraced the idea then after that it came up with the first motorcycle in the global industry (Springer, 2013). After the first production, the company gained confidence in its product since the consumers received it positively and hence they engaged in a massive production of the motorcycles. As time went by, other competitors engaged in the same production but they never beat the Honda Company as it remained the best producer of the motorcycles in the global market. The company had gained much fame in the global market as it had been established earlier. Due to proper market research, it was able to modify and distribute its products in the most appealing way to the final consumers hence dominating the market (Horaguchi & Shimokawa, 2013).
Once the company reported great success in the motorcycle industry, it decided to take part in the manufacture of vehicles in the market. The company commenced by manufacturing a mini pickup for both private and public use. The sports car that applied the chain connection to the back wheels was then developed. Later the motorcycles adopted the design of the chain connection to the wheels. The new products were received well in the market, and this led to the incorporation of a branch in America known as Honda America. The company sought to maximize the profits through the incorporation of the new designs (Springer, 2013).
The company faced some difficulties when the company they had merged with cut off its links with the Honda Company hence reducing the number of sales. The synergetic effects that were enjoyed by the companies were no longer there. The reduced economies that were enjoyed ceased to exist after the merging came to a halt (Sperling & Cannon, 2009).
The company faced a challenge when its founder died because its competitors took advantage of the situation and engaged in the production of the same products. The competitor’s action led to losses in the company because it took time for the company to adapt to a new leadership style by a new leader. The company also faced the challenge of the daring competitors who attacked them at their weakest point. When both challenges were combined, the company became weak to the point of being taken over by its competitors that were still steady in their performance. Luckily the new leader was chosen, and he took part in the strengthening of the company. The new leader adopted a new strategy to lead the company to retrace to its initial profits. The company started producing vehicles for commercial use unlike there before when it engaged in the production of vehicles to be used by only engineers. The move enabled the company to regain its initial financial gains (Springer, 2013).
For any business to be complete, there must be the target consumers to use its product as they are the ones who contribute to its success or failure. The final consumers are the ones that make the market for the products and hence there is a need for detailed research on their needs. The Honda Company has both regional and global market where the global one is divided into three parts that are; sports, Japan, and international markets. The main market was Japan, and the company thrived well in the market until its competitors introduced their products in the region. The competition enhanced the company to open more branches in the market to increase the number of target consumers (Sperling & Cannon, 2009).
Honda Company has diversified in the sports cars by even sponsoring races and designing various vehicles to meet the requirements of various races. These actions encourage the sale of sports cars hence improving its production, sales, and profits. The company also values the international clients by creating various stores and plants to distribute their products worldwide. These outlets serve to spread the company’s fame far and wide hence creating much awareness about it. The plants were also seen as information collection points from the consumers to the producers and back. These actions encouraged contact with the consumers hence increasing their loyalty to the product (Sperling & Cannon, 2009).
The expected performance of any company is determined by the current plans and decisions of the company. These aspects are the driving force of the company. The Honda Company is planning to increase the production of its motorcycles by more than a hundred thousand and supply them internationally. The move is aimed at increasing the amount of sales in Vietnam by doubling the current sales value. It also aims at being the leading motorcycle supplier in the Asian countries. The company is also aspiring to produce high-end motorcycles to boost the purchasing power of the consumers to increase the number of consumers and retain the existing ones. These changes are aimed at boosting the financial position of the entire company (Intarakumnerd & Lecler, 2010).
Recently the company’s products have been reported to be defective as they contain faulty airbags. The airbags were produced by Japanese, and since they proved defective, they made the company lose the trust from the existing consumers and hence reducing the sales. The reduction of the sales prompted the company to change its leader. The new leader who is Takahiro is young and vibrant and was forced to embrace new techniques to rectify the damage that had been caused in the market by the faulty production. He was required to work towards the improvement of the company’s image which would help in increasing the existing consumer trust hence increasing the level of the company’s sales. The consumer’s positive reaction has boosted the company’s profits to the manageable level (Jueterbock, 2013).
Mr. Ito is the chief advisor of the Honda Company and hence his contributions through advice will determine the financial standing of the company, the more effective the advice, the better the performance of the company and vice versa (Erjavec, 2012).
The new Chief Executive Officer is more experienced in the international field and has filled people with high expectations from his leadership. He is expected to feed the company with excellent ideas on how to run the errands in the entire production exercise. Since the company is at its worst financial crisis, the leader is expected to guide it to achieve its set viable objectives (Jueterbock, 2013).
Based on the above analysis, it’s clear that Honda Company is aiming to be the best manufacturer and is positioning itself to new markets through its new subsidiaries. Its emphasis is still directed towards markets it already controls but it is also making new grounds on catering to a new generation of consumers and markets. Honda capitalizes on this by implementing its proven history of innovation coupled with products that are known for reliability and great quality. To do this, the company has employed a single strategy in its operations. This way, the company avoids the financial and other risks associated with adopting several strategies at the same time. Since the company was facing various hazards and with increasing competition, it resolved to change its leadership role to keep watch on the entire company. The new management team helped the company to move strategically to its attractive performance. Therefore, the performance of the company is determined by the type of leader or leadership style employed. Thus, for the company to continue its successful run, a leader whose management style can overcome these new challenges should be chosen.
Erjavec, J. (2012). Hybrid, electric, and fuel-cell vehicles. Cengage Learning.
Horaguchi, H., & Shimokawa, K. (Eds.). (2013). Japanese foreign direct investment and the East Asian industrial system: case studies from the automobile and electronics industries. Springer Science & Business Media.
Intarakumnerd, P., & Lecler, Y. (Eds.). (2010). Sustainability of Thailand’s Competitiveness: The Policy Challenges. Institute of Southeast Asian.
Jueterbock, D. M. (2013). An Explanation on Why Training Is Important to an Organization. GRIN Verlag.
Sperling, D., & Cannon, J. S. (2009). Reducing climate impacts in the transportation sector. Springer.
Springer, P. J. (2013). Military Robots and Drones: A Reference Handbook. ABC-CLIO.
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