Business and Corporate Level Strategies for Honda Motors Company - Assignment Example

Honda Motors Company. Hondas Motor Company is a Japanese multinational popular for the manufacture of automobiles, power equipments and motorcycles. Honda is the major motorcycle manufacturer since 1959 (Berger, 2011). The company also is the biggest manufacturer of internal combustion engines with an annual production of over million of them. Besides their core automobile and motorcycle businesses, Honda manufactures marine engines, water craft and power generators, and garden equipments among other things. 1. Analyze the business-level strategies for the corporation you chose. Honda started looking for new markets outside of Japan only a few years after it was founded. The founder believed that the company should always maintain an international view point, looking at the rest of the world as potential market base and factory foot print. As such, Honda unlike its competitors looks to localize rather than globalizing. This means that it allows its subsidiaries all over the globe to function as autonomous companies that design and produce vehicles and motorcycles according to local conditions and consumer needs. Honda is not a top down organization that is controlled by the headquarters (Berger, 2011). Honda combines engineering, design and manufacturing in each large company in the countries with its subsidiaries whereas other companies tend to keep research and design close to home where they are managed by executives who do not understand local circumstances and preferences. Honda has embraced the idea of paradox as a means of promoting critical thinking and re-assessing common wisdom and to shape new responses to ingrained expectations. The company prides itself as a knowledge rich organization and putting demand on its workers at all levels to engage in strategic thinking which is crucial towards its success. Honda hold daily meeting with the employees, Waigaya, as the meetings are referred as to where decisions either large or small are re-evaluated and re-assessed to find the best tactical solutions to challenges both present and imminent. Honda unlike other companies does not rely on using robots and alternative automation as a means of retaining productivity and minimizing costs. The company only engages robots in areas that are considered dangerous and unsafe for human beings. The presence of machines de-motivates the workers and therefore disengages their enthusiasm for the job. Innovation according to Honda also is reduced when robots and machines are engaged rather than human involvement. That level of technology is set to a limit that the machines can achieve as compared to human creativity that is not limited like that of the machines. This is a good enough reason to appreciate that the capability of the mind of humans supersedes that of the machines especially in creativity and improvement (Hitt et al, 2007). Honda defies the norm that the Chief Executive Officers in the multinationals are experts in sales, marketing or a related field. All of the CEO’s of Honda have always been engineers. The research and design unit also comprises of engineers who understand the needs of consumers. Having heads who are not experts in the field calls for centralization such that close lieutenants close to the headquarters oversee the operations. This is rather different in Honda as research and design is de-centralized with real experts heading the subsidiaries. The strength of Hondas executives lies in product and process innovation and especially designing new motor vehicle features and models and in coming up with new techniques for building them better and faster. As such their success as managers is determined by how best they develop individual creativity in the organization and how well they produce Honda’s corporate culture in to the decentralized subsidiaries to further develop continued innovation (Berger, 2011). Honda is able to seamlessly produce multiple automobiles on a solo assembly line and also the capability to switch a line over to the a new design vehicle in a few hours as compared to their competitors who take a long time to re-tool the factory for a new vehicle. The company achieves this through in-house engineering located at every main production facility which serves as an independent operation focused on local needs exclusively. In case of a problem, it is addressed immediately by therefore ensuring a steady production of the automobiles. The flexible factory serves as a competitive advantage to Honda. 2. Determine the business- level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Justify your opinion. The best business strategy for Honda that will ensure its long term success is decentralization. The subsidiaries are allowed to operate independently therefore they are best suited to understand the consumer needs. By understanding consumer needs, they will always fully satisfy their consumers, therefore retaining a competitive advantage that will ensure their long term success. 3. Analyze the corporate-level strategies for the corporation you chose. Corporate strategy can be defined as a set of decisions that determine and reveal an organizations objectives, purposes and goals both short and long term. Corporate strategies are focused on mission, vision and structure and value creation throughout the organization (Hitt et al, 2007). The key corporate strategy at Honda is enhancing corporate value by a way of expanding sales within each of its three product lines which is dependent on accelerated innovation in the company; and especially research and design as well as manufacturing. When a company achieves its business strategies, it therefore means that it is in the process of achieving corporate strategy success as well as evident in Honda. Honda introduces their products by consideration of geographical differences and variations in culture. This has produced good results in their business line. The company integrates product related core competencies with core competencies related to the process as a means of gaining competitive advantage. Honda’s internal combustion engines are popular for they reduce pollution and their newly introduced technology of CVCC (Compound Vortex Controlled Combustion). They specialize in low pollution and less fuel consuming autos and engines. This is by far the most significant corporate strategy. The quality of Honda’s product also serves as a competitive advantage. Honda uses innovative technology in all of their three product lines and as such they have an un-matched research and design efficiency. They constantly transfer their technology from power trains and engines to their automobiles, generators and marine engines. Honda focuses on the first time right principle which stipulates that the product outcome the first time is the right one and devoid of errors. As such, the company is keen on minimizing time wastage through trial and error and resolving errors in production if they exist. Honda tries to avoid errors in production as it is time consuming and expensive. Errors delay the release of the product and therefore the consumers may be forced to shift from this brand to a new one if they do not get their products in time. It is for this reason that Honda invests heavily in research and designs to ensure that their products are accurate, therefore saving on time and the cost of production (Mikler, 2009). They constantly test their products to ensure they are error free and this ensures there are no late deliveries. Honda’s other competency is the built-in-quality gained through several sub-transformational tasks in their production. Viability of the product is analyzed by how satisfied the customer is by the product. The company analyses its production standards by evaluating customer satisfaction therefore they are always in tandem with the needs of the customers. Honda has adopted both manual and automated operations in their production. These two methods are combined to ensure premium produced products and improve on the time the products are delivered. This entails following the advanced process where it integrates push and pull system, reconciling western means of production and the traditional Japanese methods as well. These are among the corporate strategies that Honda has incorporated in their production to ensure long time success. Quality and Time are among the key features which are highly regarded by the company (Mikler, 2009). 4. Determine the corporate level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Justify your opinion. Ensuring superior quality production is the best corporate strategy for Honda. High quality product will always keep the customers coming back. This also reduces the cost of production that would otherwise be incurred in if the product was to be re-called due to errors. This therefore keeps the customers satisfied, ensures a good reputation and maximizing on profits. This is crucial for the long term success of the company. 5. Analyze the competitive environment to determine the corporation as most significant competitor. Honda is faced with three major competitors these being Toyota Motors Corporation, Ford Motor Corporation, and General Motors. Toyota however offers the most significant competition to Honda since it’s also an Asian company that focuses on the production of low fuel consumption automobiles. The companies share similarities as well as differences in their strategies in an effort to maintain sustainability and viability in the competitive industry. 6. Compare their strategies at each level and evaluate which company you think is most likely to be successful in the long term. Justify your choice. Toyota uses low cost and differentiation as a strategy for gaining competitive advantage over their competitors. Toyota manages to attain cost leadership strategy by embracing lean production, carefully choosing and controlling suppliers, distributing efficiently, and maintaining low service costs from a quality product. Toyota uses a market scope that touches on almost every customer needs. With Toyota, there is something for everyone. Their products range from Sports utility vehicles to trucks and hybrid models that are eco-friendly and also standard cars that are for everyday use. Just like Honda, Toyota has invested in research and design to develop products that they think would be loved most and appreciated by the customers. They produce cars that are low in price and consume less fuel as compared to brands such as ford and general motors. Toyota has gained the ropes in the production of superior designs and quality therefore having the advantage of brand image. Having a strong brand image has contributed significantly to the success of the company (More, 2013).Toyota also was the first to successfully introduce a hybrid in to the market and as such gained advantage over other companies producing hybrids. Toyota has also adopted a global strategy just like Honda while at the same time considering the features of the market in which it is in. Toyota just like Honda owes its success to production of high quality automobiles which go for a reasonable price in the industry, perfecting and innovating automotive technologies, and creation of new models, focusing on consumer needs and the environment. The rivalry between the two companies has spawned growth and better quality of automobiles for the customers as they try to outdo each other. It is rather difficult to determine which company between Honda and Toyota is likely to be more successful in the future using their business and corporate strategies since both companies are almost similar in their productions and marketing strategies. Toyota focuses more on satisfying all types of customer as they produce automobiles that have several models and varieties such as luxury vehicles to trucks and hybrids. Honda focuses more on research and design therefore producing automobiles that are environmental friendly therefore less likely to cause pollution. Both companies invest in low cost vehicles that are of high quality. In my opinion however, Honda is more likely to be successful in the long term as the decisions of the organization are decentralized to meet the local needs in their subsidiaries as compared to the competition. Honda has also invested in Research and Design more than any other automobile company ever since it was founded. This therefore gives it an edge over the competition; this has enabled it to produce comfortable and most friendly cars to the environment. Honda also produces motorbikes and other products as well. 7. Determine whether your choice from Question 3 would differ in slow-cycle and fast-cycle markets. Honda would be able to survive a slow market cycle since it would be able to retain its competitive advantage overtime. Returns from competitive action go up during the launching of the strategy and when the returns level out, the company is able to exploit its position (More, 2013).Competitors will launch strategies to erode the competitive advantage but Honda continually evolves in terms of superior products and a reputable brand name.In a fast market cycle, Honda would still come on top of the game. It would be able to retain competitive advantage based on the resources and competencies it holds. The key to success in such a cycle would be to counter attack in small steps before erosion of the advantage. Honda performs well in both the fast and slow market cycle. The end results would therefore be the same in slow cycle and fast cycle markets. References Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2007). Strategic management: Competitiveness and globalization: concepts. Mason, OH [etc.: South-Western. More, R. (2013). Marketing high profit product/service solutions. Farnham, Surrey: Gower. Mikler, J. (2009). Greening the car industry: Varieties of capitalism and climate change. Berger, A. (2011). Global Corporate Strategy - Honda Case Study. München: GRIN Verlag GmbH. Read More