Evaluating Yamaha's International Business Strategy & Future

This report provides a comprehensive analysis of Yamaha's international business strategy, employing frameworks such as SWOT, PEST, and Porter’s Five Forces to evaluate the internal and external factors influencing the company's performance. It delves into Yamaha's strengths, weaknesses, opportunities, and threats, alongside political, economic, social, and technological impacts on its operations. The report also utilizes the Ansoff matrix to explore potential strategies for market penetration, product development, market development, and diversification. Furthermore, it addresses challenges Yamaha faces, including decreasing sales and increasing competition, and offers recommendations for strategic improvements, highlighting the importance of adapting to technological advancements and expanding into emerging markets. This detailed assessment aims to provide insights into Yamaha's strategic positioning and future growth prospects.

Running head: INTERNATIONAL BUSINESS STRATEGY
INTERNATIONAL BUSINESS STRATEGY
Name of the Student
Name of the University
Author’s Note

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Executive Summary
This report will discuss about the business strategy of Yamaha. Yamaha is a Japanese
multinational company, which has a huge product range. SWOT, PEST and Porter’s five
forces theory will be conducted to understand the factors that affect Yamaha. Ansoff matric
will also be used to help Yamaha find out how they can diversify their product, develop their
products, expand their market and how they can penetrate the market. Strategic plan will also
be discussed to know the problems that the organisation is facing and how it can be solved.

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Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................4
Company Overview...............................................................................................................4
Key products:.....................................................................................................................5
SWOT analysis of Yamaha................................................................................................5
PEST analysis:...................................................................................................................8
Porter’s five forces theory:.................................................................................................9
Ansoff model:.......................................................................................................................11
Communicating with the stakeholders.............................................................................13
Resources:........................................................................................................................13
Strategic Plan Development.................................................................................................14
Yamaha’s excellence............................................................................................................15
Conclusion:..............................................................................................................................16
References:...............................................................................................................................17

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Introduction:
This assignment will discuss about the SAFe criteria. SAFe is the acronym for
Suitability, Acceptability and Feasibility. Under suitability SWOT, PEST and Porter’s five
forces theory will be conducted to understand the key external and internal factor that affects
the organisation. Yamaha has been selected as the organisation to understand its key external
and internal factors, Strengths and weaknesses that the organisation is having and the
opportunities and threats that the organisation may face or is facing recently. Ansoff matrix
has also been discussed in this report to provide some strategy how it can help Yamaha in
expanding the business. The Ansoff model will discuss about product development, market
penetration, market development and product diversification. Yamaha is a reputed company
with a huge market share and is loved by all for its excellent quality and service they provide.
Yamaha has a number of products starting from musical instrument to electronics but the
most profitable sector of Yamaha is the motorcycle division. They have a huge brand
goodwill in the market and a good customer base but in recent years, they have suffered
reduced sales and many other issues, which are discussed in this assignment. This report will
discuss about the problems and will provide some recommendation how the problems can be
minimised (Yamaha.com, 2018).

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Discussion:
SAFe is the acronym for Suitability, Acceptability and Feasibility. Jerry Johnson
developed this model to analyse the business strategy and the organisation. Under suitability
SWOT analysis, PEST analysis, Porter’s five forces theory and the value chain analysis are
conducted to understand the internal and the external factors that affect the working of the
organisation. The acceptability factor examines whether the strategy meets the stakeholders
expectations, the risk level, which the organisation is taking, is acceptable, the return on
investment is suitable for the organisation or not. Feasibility helps to understand whether the
organisation will work in the environment, how the organisation can be financed, availability
of skilled labours or how the skilled labour can be achieved and how the resources can be
obtained for the organisation. In the assignment, we will use PESTEL, Porter’s 5 forces
theory, value chain analysis and the SWOT analysis for examining the suitability of the
organisation (Johnson 2016). Ansoff model will examine the acceptability of the current
strategy by the stakeholders. In the assignment, Yamaha is chosen to understand to examine
their business strategy (Team 2013).
Company Overview
Yamaha is a Japanese conglomerate and multinational company, which deals with a
various range of products starting from musical instrument to electronics (Khan, Jain and
Sharma 2013). Yamaha is also a largest producer of consumer vehicles like superbikes but
the motorcycle division got separated from the main company in 1955 and formed Yamaha
Motors. Torakusu Yamaha founded Yamaha Corporation in October 12, 1887. The
headquarters of Yamaha is located in Shizuoka, Japan. The organisation earned revenue of
408.2 billion JPY in the year 2017. The operation income of the company is accounted 44.3
billion JPY at the end of 2017. Yamaha had a net income of 46.7 billion JPY in 2017. The

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organisation employs 28,112 employees worldwide, which includes temporary employees
(Yamaha.com, 2018). Yamaha is the largest manufacturing brand of piano in the world.
Key products:
Yamaha has a wide range of products and some of its key products are listed below:
 Musical instruments such as piano, guitars
 Audio equipment’s such as speakers, music systems
 Electronics product
Under its subsidiary company, Yamaha Motor Co. Ltd produces the following
products:
 Motorcycles
 All-terrain vehicles
 Marine engines
 Wheelchairs
 Personal Watercraft
SWOT analysis of Yamaha
SWOT analysis will help us to understand the strength, weakness, opportunities and
threats that the organisation is facing or might face in the future. SWOT analysis examines
the internal and the external factors (Wang and Ge 2013).
Strengths:
 Yamaha Corporation has excellent brand value. The advertising of the Yamaha
products is one of the key factors, which led them to huge popularity and brand
awareness among the customer (Iglesias, Ind and Alfaro 2013). The distribution
channel of Yamaha is better than many of his rivals, which has let them to expand
their business worldwide and maintain a good customer base.

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 The organisation has employed over 25000 employees who are trained and skilled in
their field. Most of the products of Yamaha Motors are made in Japan and India
where skilled labours are available in huge numbers.
 Yamaha is the largest manufacturer of pianos (Immawan and Kurniawan 2016).
Yamaha is also a major brand in the motorsport like World superbike, MotoGP etc.
Yamaha Motors Co. Ltd. has a huge market share and the most profitable among all
other Yamaha motors product.
 Yamaha’s industrial infrastructure is huge and equipped with high-end technology,
which helps them errorless manufacturing and help them to manufacture in a huge
quantity in a less amount of time.
 Yamaha has a huge product range, which starts from musical instruments to Motor
division. Product diversification helped Yamaha in increasing the brand awareness
among the people. Wide product range helped in reaching to different types of
customers (Hutzschenreuter and Horstkotte 2013).
 Yamaha products are well known for its rigid built and excellent quality. Yamaha is a
reputed company and they are highly focused on making products of higher quality
(Ebaid, Ammoura and Al-khishali 2016).
Weaknesses:
 Yamaha has an excellent advertising strategy but still it has some weaknesses in their
advertising and marketing. Yamaha is at the top of the BCG matrix; therefore, it needs
a huge expenditure in the Advertising (Mooradian, Matzler and Ring, 2013).
Compared to its rivals like Hero motors or Hyundai, Yamaha used the television
marketing ineffectively. However, newspaper advertisement and magazine
advertisement can be seen regularly but a brand like Yamaha should use the television
more effectively.

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 Yamaha has a huge weakness, which comes in the form of poor after sales service.
Yamaha’s service counters are very less and it is very inconvenient for the customer
to service their vehicle (Parts, 2015).
 As per reports, the sales of Yamaha products are decreasing specially the motor
divisions sales have decreased in recent years (Fyhri and Fearnley 2015).
Source: Statista.com
Opportunities:
 With the advancement of technology and increasing price of the fuel, consumers are
switching from fuel consuming vehicles to electric bikes. Electric bikes are relatively
cheaper and are eco-friendly consumer will prefer electric bikes to regular bikes (Bai
et al., 2013)

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 Yamaha’s most of the products are high-tier segment motorcycles, which are of
premium quality and are expensive. Yamaha should look on the low-tier and mid-tier
products also, which will help them in boosting their sales.
 Yamaha should expand their business in the developing nations as well. The
developing nations can provide them huge revenue. This expansion of products is not
limited to the motor division it can also be applied to other products of Yamaha as
well (Beamish, 2013).
Threats:
 Yamaha is facing a tough competition in the market from the Indian brands as well as
from many international brands. Indian brand Bajaj has taken a huge customer base
from Yamaha with the help of brilliant brand positioning in the market (Pochet et al.,
2017).
 Rising fuel prices and changes in government policy is responsible for the decrease in
sales of the motorbikes.
 Yamaha is also facing indirect competition. It has been observed that consumers are
preferring scooters over motorcycles nowadays. Many consumers do not prefer bikes
and they have purchased cars instead of bikes or scooters.
PEST analysis:
PEST analysis will help us to understand the Political, Economic, Social and
Technological factors that affect Yamaha.
Political factors:
 Political factors include the political influence over the motorcycle industry. Change
in political leaders brings many changes in policies of the government. For example,
present India government has raised the prices of fuel, which resulted in the decrease
in sales of Yamaha.

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 Tax policies of different countries influence the buying habit of the consumer.
 Trade regulations are one of the important factors that the organisation look into while
exporting their vehicles.
Economic factors:
 Economic growth of the company influences the growth of the organisation in a
particular country. A developed country will also give more revenue than the
underdeveloped country. A country with lower economic growth will results in lower
sales of their product.
 Inflation in a country will hamper the sales of the motorcycle in a particular country.
Inflation rate highly influence the sales of the product.
 Availability of low cost labour and raw materials also attracts the motor industries.
Social factors: One of the most aspects is popularity of the transportation mode. In many countries,
people prefer bikes and in many countries, people like to travel by car. This buying
habit according to their preference of the mode of transportation influences the sales. People in the developed economy prefers safety as a result, they choose cars over
bikes as cars are safer than the bikes. This affects the sales of the motorbikes.
Technological factors:
 Technological factors such as fuel efficiency highly influence the buying habit of the
consumer. With rise in fuel prices customers are becoming more budget concerned.
They are preferring bikes with high fuel efficiency.
 Advancement in technology has brought electronic scooters in the market, which is
economical and cuts down the prices. Yamaha should bring out their own electric
vehicle, as the consumers prefer electric vehicles to the fuel consuming vehicles.

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Porter’s five forces theory:
Porter’s five forces theory helps to understand the eternal factor that affects an
organisation.
Bargaining power of suppliers (Low)
The bargaining power of supplier for Yamaha has reduced over the years. The reason
for their reduced bargaining power is high number, the want for quality and geographical
presence. The important factors for determining the power of the supplier is brand name and
quality. Nowadays brand wants their suppliers to have a great brand image, good quality and
they should follow the right regulations. The suppliers for the motorcycle industry is spread
all over the world. Yamaha has its suppliers spread out all over the world, this are the reasons
why the bargaining power of the supplier is low.
Bargaining power of the buyers (Moderately high)
Bargaining power of the buyers is dependent on many factors, which includes
marketing, prices, market size and so on. The most important factors is size of the
competition. The size of competition in the motorcycle industry is very high and which has
led to price competitiveness between the rival brands. This has led to the rise in the
bargaining power of the buyers. Customers have a lots of option from which they can choose
and this has increased the rise in the bargaining power of the buyers.
Threat of substitute (Low)
The two factors that have increased the threat of substitute product is competition and
brands making small cars. In recent years, the threat for substitutes have grown for the
motorcycle sectors. However,motorcycle sector have a wide customer segments and Yamaha
has a good brand loyalty for its excellent efficiency and technology. However, the threat of
substitute product may increase with the rise in fuel prices. Customers are looking for fuel-

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efficient bikes and Yamaha has realised this and launched many new bikes recently, which
are fuel-efficient, and this has decreased the risk of being substituted.
Threat of new entrants (Low)
New entrants or new organisation does not pose much threat to the existing brands.
The important factors that influence this threats are marketing, high level of investment and
expenses by HR. New entrants need a high level of monetary investment to establish a new
brand in the competitive market. Marketing of products and skilled HR have led to increase
in the costs of the motorcycle industry. Any new competitor who wants to enter into the
market have to face many barriers. One of the barrier is laws. Law is the most vital barrier,
which can decrease the pace of the growth and can became a roadblock for the growth of the
brand.
Threats for competition (High)
The threat for competition between the brands is high in the 21st century. This has
happened due to the increased number of brands in the market and each of the brand are
focused on quality, customer convenience, technology and pricing. These factors are
necessary for increasing the customer loyalty. Yamaha is facing a huge competition from
different competitors in the every price range. Yamaha is facing competition from Ducati to
Honda and many more. To a quite extent, Yamaha has been successful to overcome this
threat because of its brand image, customer service and excellent technology. However, the
availability of brands with excellent technology quality and efficiency has overall made the
competition high.