Strategic Management on Honda Motor Company

This report discusses the strategic management of Honda Motor Company, including strengths, weaknesses, opportunities, threats, stakeholders, and corporate social responsibility. It analyzes the company's strategic capabilities, issues related to corporate social responsibility, and emergent and intended approaches to overcome them. The report also identifies the major stakeholders of Honda and the issues that affect them. Finally, it discusses the company's corporate social responsibility activities in the areas of environment, quality, safety, and social activity.

Running Head: Strategic Management on Honda 0
Strategic management on Honda Motor Company

Strategic Management on Honda 1
Introduction
Strategic Management is known as the implementation and formulation of companies’ major
initiatives and goals taken by the top management on the basis of environmental analysis.
Honda Motors Company is the first Japanese automobile Manufacturer in the world. This is
the public company, founded by Hamamatsu, incorporated on 24 September 1948 (Abdel-
Basset, Mohamed and Smarandache, 2018). In this, four tasks are explained. In the first task
the strategic capabilities are explained. This includes weakness, strengths, opportunities, and
threats of Honda Motor Company. The second task includes the detailed analysis of the
stakeholders of the company. Third task includes the issues related to the corporate social
responsibility of Honda Motor Company are highlighted. The fourth task includes the
emergent and intended approaches and their amendments to overcome that are also
considered. Lastly, the final part of the report consists of the results obtained from the whole
report.

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Task 1
Strengths and Weakness of Honda
Strengths
The strengths are as follows:
 High Brand Awareness: This is a very old and popular brand this means they had a
high brand awareness. This includes that they had a large customer base which also
creates a high brand value for the company.
 Dominance over other brands: Honda had a very high dominance over other brands
due to its high brand awareness and the loyalty of customers towards the brand. This
is the only brand which is constantly maintaining their quality of products.
 Excellent Research and development department: Honda has a good manpower
employment and their efficient and elegant designs that come from a good research
team that helps them in increasing their share in the market.
 High Technology: They had a latest technology that gives them the competitive
advantage. The product profile of the organization gives the detail description about
how efficient they are in their technological department.
 Marketing and Advertising Campaigns: Honda had a high quality of marketing
campaigns and a very efficient marketing strategy. Their advertisement campaigns
include third-party verification on cost per visit.
 Largest internal combustion manufacturers: They had a huge presence in the
market in jet skis, airplanes and all the heavy engine usage vehicles produced by the
Honda Motor Company (Safdie, 2018).
 Band equity for a long time: Honda had given high-quality products for a long time.
In the cars industry, their most selling cars are Honda CRV and Honda Accord. These
products made with high engineering. This gives them the boost in their brand equity
and helps them in sustaining in long run.
 Market Share: This happens because they had the largest manufacturing advantage.
This ensures that Honda had the major shareholding in the product manufacturing
market.
 Competency in the core product: Honda is one of the organizations that had
managed their expertise in their core business activity rather than focusing on other
marketing activities. This is also the competitive advantage given to Honda Motors.
 Excellent After-sale services: This happens because they had a low maintenance and
a longer life which lowers their maintenance cost per product. This happens because
the product had its units in many places (Annual Report, 2017).
Weakness
The weaknesses are as follows:

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 Increased Competition- The competition is one of the major weaknesses of Honda
Motors. This had made difficult for the Honda Motors to restrain their position and
brand value in the market.
 High Costs and Prices- Due to the huge investment in research and development
department the manufacturing cost per product had also increased. This also impacts
the cost price of the actual product as well, which means that the price is to beared by
the actual consumers (Tran, 2018).
 Product for the masses- Honda had a high brand equity which makes the consumers
think that this product is only for the upper middle class and upper-class citizens in
the country.
 Dependence on North America- Honda Motor Company is highly dependent on
North America as this brand is highly popular in that country and they generating the
highest amount of revenue from that country.
 Low Investments- This is also one of the biggest weakness for Honda Motors
Company as from the above it is clear that they had a huge investment in Research
and Development department and low investment in other departments.
 Recall of some of the models for corrective measures- In some of the cases Honda
needs to recall their products back due to change in technology or faulty system of
approving the product before the delivery to the actual consumers. This creates a huge
loss to the company. The company is very much concerned with the Research and
development and are less focused on the other operations of the company (Cascio,
2018).
Opportunities and threats
Opportunities
 Government Regulations- The change in the policies of the government regulations
can create a huge impact on the price of the product. The taxes and subsidies are the
major reasons for the improvement in the product.
 Improvement of the economy- The improvement in economy cause due to the
technological changes. This had created a huge impact on the thinking of the citizens
which leads to the growth of all the sectors of the economy.
 Alternative fuel Vehicles- Now a day’s people started demanding the alternative and
electric fuel vehicles which created the need for these kinds of vehicles. This is also
the clean energy as the fuels like Diesel, Petrol and CNG has its own limitations as
per the cost (Honda, 2017).
 Product Expansion- Adding more and more products in the product line can cause a
great opportunity for Honda to make more profit and create new customers. This leads
to expansion of business and also creates more profit.
 The frequency of release of the new model- If the product is releasing at the time
when no competition of that kind of product is available then the profit will be more

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and if the competitive product is available with the fewer prices then the consumer
will switch to that product.
 Building of Global Brand- This means they need to increase the value of the
products to maintain the brand value. This will result in loss of customers which
pursue a tendency to buy the products as per the price; this will make them purchase
the substitute product which is offered at low price.
 Low fuel Prices- The prices of the fuel also play a very crucial role in the purchase
decision of a particular product because if the prices of petrol are in favour of middle
class they will purchase more vehicles as they are able to afford the complementary
product (Comte and Pendleton, 2018).
Threats
 Government Policies- The policies of the government play a very important role in
the Honda Motor Corporation. If the policies are not in favour of the company then
this can lead to increase in the cost of the product.
 Availability of Substitutes- The price of the available substitute products also affects
the price of the products. This means, if the price of substitute product is less than the
product then consumers will purchase the other brands.
 Rise in transport prices- The continuous rise in fuel prices can cause the rise in the
transport prices which can make difficult for the people to buy a product. This
happens because as a rational consumer people will always try to make the transport
in as much less price as possible.
 Natural Disasters- Natural Disasters can lead to decrease in the income of consumers
which will make the citizens incapable of purchasing the products as per their
conveyance as they don’t have the purchasing power (Eaton, 2013).
Task 2
Stakeholders of Honda
The major stakeholders include the customers, Shareholders, investors, policy makers,
research institutes, experts and local governments, media, NGO, suppliers, local community
and associates of the organization. They are:
 The Shareholder and investors include the activities in general shareholders meetings,
IR meetings, new model or new technology and the launch of new events.
 Policymakers include the participation of the council members of industrial bodies
like participation in international initiatives and Japan Automobiles Manufacturers.
 Research Institutes will include collaborations with the specialized universities,
special lectures, verification of the products, support for the academic meetings and
co-development of technology (Williams, Agle and Gates, 2018).
 Experts and local government include the feasibility studies, technology, and dialogs
concerning policies. Media includes new model or new technology launch events,

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press releases and Journalist meetings. The NGO includes regular communication,
questionnaires, regular communication and collaborative projects.
 The suppliers include Green Network meetings, suppliers risk assessments, briefings
or Suppliers networking events.
 Associates include satisfaction surveys, education training by internet and intranet,
direct communication from senior associates and executives.
 Local communities include plant tours, social activities by the associates and
networking events of local residents and events for the students and for the children’s.
The local customers will include activities in the motor shows, customer satisfaction
surveys and safe driving activities (Engström et al., 2018).
Issues that affect the shareholders
The major issues that affect the stakeholders of Honda that will need to reflect the future
strategy are:
 Safety and development issues in the products- Honda is constantly engaged in the
safety issues and delay in the developments. Some of the major problems include the
problem of faulty airbags. Due to this problem the manufacturer had to recall many of
its sold products. To avoid this kind of problem in future, they need to improve the
management of the company so that they improve the strategy by organizing surprise
visits to find out the quality measurements of all the manufacturing units.
 Global Competition- This means that Honda is a global organization they need to
take care of the competition as well. They need to set their price of the product taking
in consideration about the income earned by the people of the country in which they
are selling that particular product (Köseoglu, Yildiz and Ciftci, 2018).
 Expansions of the production Capacity- They need to expand the production
capacity and improve the efficiency of the additional operations. The expansion of
production capacity leads to decrease in the coordination in all the units of the
organizations. These need to be settled because this can become the competitive
advantage for other organizations to earn more profit over this company.
 Recall of Millions of Cars- This had caused huge loss to the company as the defect in
the product is the cause for recalling the millions of the cars. This can be solved by
appropriate tests for the quality control, surprise visits in various manufacturing units
to check the quality control in the organization. There is a need to increase more
security in the operations. This is a very important as this is a major problem which
gives the competitive advantage to other organizations which can eventually lead to
loss of customers (Ginter, Duncan and Swayne, 2018).

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Task 3
The major Corporate Social Responsibility and ethical issues faced by Honda Motor
Company are:
 Environment Protection- Organisation had the biggest use of technology as they had
a huge responsibility of environment protection. This means the need to introduce that
kind of technology which not only makes profit for them but also protect the
environment for them. Honda had an advantage of gasoline engines which helps them
in protecting the environment and contributing to the corporate social responsibility.
The problem is that they need to constantly produce the environmental friendly
products on a regular basis (Mittal, Diallo and Tolk, 2018).
 Hybrids- They had a biggest problem of improvement in cleanliness and efficiency of
the engine combustion. They need to do that before their competitors and that too
with the minimum investment and need to give that on the minimum price as possible.
 Environment Vehicles- In order to protect the environment they need to produce the
vehicles that cause the minimum amount damage to the environment. This will take
large amount of investment. The slight increase in the investment can cause the huge
impact on the price of the product. This can eventually lead them to losing the
customers for them (Ladkin, 2018).
 Reputation- They needs to maintain their reputation as they need to maintain a
balance between fulfilling the social responsibility and earning profit which is their
primary motive. An increase in the unethical practices can cause an impact in the
brand value of the product. This can lead to decreasing the profit of the firm as well.
Honda is a global organisation and they need to maintain their brand value in order to
ensure that their profit will increase.
 Fuel economy- Honda had a problem that they produce those products which had a
lot of fuel consumption in them. The problem is that they need to produce the
products which will consume a limited amount of fuel and they are not expensive as
well (Gowdey-Backus, 2016).
Corporate Social Responsibility (CSR) in Honda Motor Company
They had divided their CSR Activities are divided into following areas:
 Environment: They have always believed the freedom and joy of the mobility and
sustainability of the society where the people can always enjoy the life.
 Quality: The aim of quality is to bring the reassurance and the satisfaction in the lives
of the consumers. This includes offering a new level of the outstanding quality.
 Safety: This means that Honda had dreams of a collision- free society where the
customers and everyone who is sharing the road can confidently and safely enjoy that
freedom of mobility (Husted, Henriques, and Crane, 2018).
 Social Activity: Honda is involved in the Social Activities. In North America, they
had developed positive youth development, in Canada and Mexico a whole week of
coordinated social activities. They are always concerned about developing the next
generation, prevention of global environment and providing traffic safety.

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 Human Resources: In this part they have some environmental beliefs which include
equality, trust and the initiatives. In the equality part they had three categories of the
personnel management which includes ensuring fairness, respecting initiatives and
encouraging Mutual trust.
 Supply Chain: In the supply chain management they had some of the procedures
which includes the process of raw materials, then the components of the product, then
purchasing of the product, then the production of the product, logistics of the product,
actual sales of the product, the use of the product, disposal of the product and lastly
the effective utilisation of all the resources (Jiang et al., 2018).
Task 4
Intended Strategy is the strategy includes the strategies the organization actually wants to
achieve. In this organization, it is designed to ensure that the basic objectives are achieved.
Honda Motorcycles had started operations in the American market. They started their
subsidiary in Los Angeles. The reason behind is the appropriate climate conditions and its
emerging population. This kind of strategy is considered as an intended approach (Güler et
al., 2018).
An emergent strategy is an unplanned strategy that arises from the challenges and the
opportunities. Honda’s plan to sell the new technology of cc engines in the American Market
with the motive of making the product luxurious. This strategy serves as the emergent
strategy. They had started this strategy of developing the market penetration strategy by
selling the motorcycles for under $250 and in the retail market around $1000-$1500. In
America, both of the strategies are used (Hipólito, Boscolo and Viana, 2018).
Advantages and Disadvantages of intended and emergent Approaches
Advantages of Intended Strategy in Honda:
 Product Development- This strategy states the technology offered in the marketplace.
Honda has offered new technology in their engine which leads them to develop the
intended strategy in the marketplace.
 Benefits- This strategy is also used to increase their share in the market. Honda had
got its benefits as achievement of their pre-defined goals and objectives. This also
helps them getting the maximum profits due to development of products and its
services (Honda Motor Co, 2018).
Disadvantages:
 Bad Planning- In this strategy the focus is always on doing as per the planning. The
bad planning can lead to losses for the company. Honda had also faced this kind of
disadvantage; this leads them to recalling many products due to their defects.
 Unexpected issues- This can become a very important thing as if any change takes
place in the external environment can lead to changes in the outcomes. Honda had

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also faced the same issue as the competitors’ price had also affected the sales and
panning of the Honda Motors (Honda Motor Company, 2018).
Advantages and Disadvantages of Intended Approaches:
Advantages:
 Proper planning- This means that the proper planning can increase the possibilities of
getting the correct results. Honda Motors had a very good planning this helps them to
diversify the operations and making more profit.
 Unforseen Problems- This means that the problems can be forecasted and the
solutions can be taken into consideration. Honda had the major problem with their
airbags this problem is solved due to proper planning by them (Du, Cui and Su, 2018).
 Correct description of Strategic Plans- This means that it becomes very easy to
evaluate the progress as it can be defined in terms of the goals and objectives and
verified by the comparison of planned strategic plans with the actual strategic plans.
Honda is a global organisation planned the goals of the organisation and had also
compared actual performance with the standards (Hwang and Chung, 2018).
Disadvantages:
 Lack of Flexibility- All the working is as per the plan so the changes are not possible.
Honda is also one of the organisations which lack the flexibility. This means they
cannot change their policies as per the competitors’ policy.
 Unplanned problems- This means due to more planning they lack in solving the
unplanned problems. Honda had also followed the planned strategy which had not
made them ready for the unplanned problems. This recalling of cars is the result of the
same (Jamali and Karam, 2018).
Conclusion
This report consists of four tasks. Task one consists of two parts in which first part consists of
strengths and weakness of Honda Motors. This explains the strategic capabilities of Honda
Motor Company. The next part consists of analysis of the competitive environment including
the major opportunities and threats of the Honda Motors that reflect the future strategy of the
organisation. Task two consists of the major stakeholders of the organisations. It also
explains the major activities of those stakeholders. In this task there is also an explanation of
major issues that reflect the future strategy of Honda Motors. The Task three includes the
major issues related to ethics of the Honda Motors. Next part includes the main ethics and
corporate social responsibility of the organisation. The Task four explains the balance
between the intended and emergent approaches used in the company and major discussion
regarding the advantages and disadvantages of both of the approaches.

Strategic Management on Honda 9
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