External Factors Affecting Honda’s Operations

Management

Executive summary
This report aims to reflect the effect of external environment on the operations of the
company. The external factors include political, social, economic, technological, legal, and
environmental influences on the business. This report brings out an analysis of these external
factors for Honda. Apart from this, the discussion also carries four important elements that
are important for the success of the organisation. The critical elements for success are
demand, market rival, trend and supply. Further this report also brings some suggestions for
Honda. The recommendation below establishes a relation and clarity between the threats and
their resolutions.

Contents
Executive summary...............................................................................................................................2
Introduction...........................................................................................................................................4
Introduction of the Honda.....................................................................................................................4
Evaluation of business model in the current environment....................................................................4
PESTEL Analysis......................................................................................................................................5
Critical success factors...........................................................................................................................8
Recommendation................................................................................................................................11
Conclusion...........................................................................................................................................12
References...........................................................................................................................................13

Introduction
This report brings out a discussion on the several external factors that affect the operations of
Honda. Initially, this report analyses the current business model of Honda. The model focuses
on innovation and creativity in the operation to make hybrid cars that can reduce the harmful
gas emissions to prevent the environment (Bohala, 2017). Further, this report uses a strategic
tool such as Pestle analysis to evaluate the how external environment affects the organisation.
PESTLE analysis is a method to monitor the macro environmental factors that affect the
organisational performance. Moreover, the analysis is limited to country`s conditions in
Pestle analysis but further the report evaluates the competitive position, demand of the
product, power of the suppliers, and also current trend of the company. At last, the report
brings out some resolutions in form recommendation to the issues and problems identified in
analysis (Bohala, 2017).
Introduction of the Honda
Honda Motor Company was incorporated in 1948 and it started producing motorcycles in
1949. The company was established in 1959 and it has its first subsidiary in US. It is a japan-
based automobile company. The company founded by Takeo Fujisawa. The model C-100 of
Honda is a small-engine motorcycle that was introduced in 1953 (Honda, 2019). By the end
of 1959, the company was largest motorcycle selling company in the world. Mainly, the
company deals with production and sales of automobiles, power products, and motorcycles.
As reported in 2018, the company has 440 affiliated companies in and outside Japan both
including 368 consolidated subsidiaries and remaining 72-affiliated accounting under an
equity method companies. From investor`s point of view, the company issues 1811428430
shares @ 100 yen till 2018 (Honda, 2019).
Evaluation of business model in the current environment