Corporate Assignment

Table of Contents1.0 Introduction....................................................21.1 Background of company...........................................2

2.0 Business Overview...............................................32.1 Case study......................................................3

3.0 Strategy Analysis...............................................43.1 Strategy Positioning (SWOT Analysis and PESTLE Analysis)........4

3.1.1 Honda’s SWOT Analysis.........................................43.1.2 PESTLE Analysis...............................................6

3.2 Strategy Option (Generic Strategy and Strategy Clock)...........93.2.1 Porter’s Generic Strategy.....................................9

3.2.2 Bowman’s Strategic Clock.....................................114.0 Functional Strategy............................................12

4.1 Leadership.....................................................124.2 Manufacturing..................................................13

5.0 Recommendation.................................................146.0 Conclusion.....................................................15

7.0 Appendix.......................................................168.0 Reference......................................................17

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1.0 IntroductionThe purpose to write on this assignment is to mention the

leadership and manufacture problem of Honda according the

article, strategy positioning and option of Honda in industry.

This assignment will show how Honda get effect from the problem

and what is the competitive advantage of Honda in the market.

1.1 Background of companyHonda is a popular brand in industry of automobile and

motorcycles in Japan and the company well known as Japanese

public Multinational Corporation. The current president, CEO &

representative director of Honda are Mr. Takanobu Ito.

Honda was established in September 24, 1948 but it already become

the world’s largest motorcycle manufacturer since 1959 as well as

the world's largest manufacturer of internal combustion engines

which produce more than 14 million internal combustion engines

each year. It also becomes the ranking of 45th in the Global Top

500 Brand Company in 2013.

(World.honda.com, 2013)

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2.0 Business Overview

2.1 Case studyAt 2nd November 2013, Honda is recalling 344,000 Odyssey minivans

from model of 2007 and 2008 years because of the brake problem

and influence the performance of car’s safety system. This is

because a malfunctioning computer could cause “heavy and

unexpected braking without the driver pressing on the brake pedal

and without illumination of the brake lamps,” automaker informed

the National Highway Traffic Safety Administration.

After the first recall about 183,000 vehicles in March, this is

already the Honda’s second recall this year for same unintended

braking problems with the first recall. There is also a report

posted by Honda on Saturday which is another complaint from

safety agency’s website. They are complaint about the problem of

Honda’s electronic stability control system for purpose of

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Vehicle Stability Assist which is the assist system of Honda

vehicles.

(Nytimes.com, 2013)

These cases is showing that the leadership and manufacture

control of Honda are really weak performance and cause huge

profit lost for Honda’s company.

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3.0 Strategy Analysis

3.1 Strategy Positioning (SWOT Analysis and PESTLE Analysis)Strategy Positioning is a key element of any marketing activity.

It infiltrates the entire marketing mix to be at the forefront of

a business' mind as it tries to increase company’s market share

in competitive from others competitor company. (Myers, 2013)

3.1.1 Honda’s SWOT AnalysisThe SWOT analysis is a great tool for understanding and decision-

making for all kinds of situations in business and organizations.

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and

Threats. The SWOT analysis will be a good reference for studying

strategy, position and direction of a company or business

proposition, or any other idea. (Businessballs.com, 2013)

STRENGTH

The strength of Honda is they fully promoting eco-friendly

technology cars in the market according the market trend. Honda

is following the current “saving cost” market trend to introduce

more save fuel car to change customers’ beliefs. There are two

hot model of eco-friendly technology car which is Honda Hybrid

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and Honda Crz. Honda Crz is helping Honda to win the best car of

the year in Japan and Honda company reputation is getting up

through this news. (HybridCars.com, 2010)

WEAKNESSES

High maintenance fee for Japan car is always the weakness of

Honda. This will influence those consumers to take more

consideration and compare to others brands of car. Second, Honda

has the problem of recall number of cars for brake problem and

this already influence their reputation. It also affect Honda’s

sales drop and increase the manufacture cost when recall the car.

(Usnews.rankingsandreviews.com, 2013)

OPPORTUNITIES

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After Honda build up their reputation in Asian market, now they

are fully invest in western countries such as UK, UK and other

Europe countries. Honda is invested around 267 million pounds in

Swindon and it's the biggest investment at the site for more than

a decade. (ITV News, 2012)

Honda also develops an Asimo (intelligence robot) in their R&D

department due to technology advance in Japan. Asimo is created

for encourage and inspire young students to study the sciences.

And in the future, ASIMO might help with important tasks like

assisting the old person confined to a bed or a wheelchair. ASIMO

might also save human life when happen dangerous cases like

fighting fires or cleaning up toxic spills. (Asimo.honda.com,

2013)

THREATS

In western country, consumers might feel hard to change their

beliefs from their country brand switch to Japanese brand because

of the exterior and interior design. There is also a lot of

competitors invest hybrid car for current market trend like

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Toyota Hybrid, Kia Hybrid and etc.

(Usnews.rankingsandreviews.com, 2013)

3.1.2 PESTLE AnalysisPESTLE analysis is the tools used to figure out and relate the

current status and position of an organization to their external

environment and current role. This analysis can be used as a

basis for future planning and strategic management. PESTLE

analysis can be used to provide a context for organization in

future planning and strategic management because the analysis

covers Political, Economic, Social, Technological, Legal and

Environmental factors. (Jiscinfonet.ac.uk, 2013)

POLITICAL FACTORS

The biggest market of Honda in Asian Country, Beijing (China) is

planning to limit the number of car in capital city. This

political issue may influence Honda sales drop because they

couldn’t manufacture more number of cars compare to previously.

(Monitor.co.ug, 2013)

In Malaysia, most of the consumers pay higher pre-tax prices for

cars than anyone else in the world because Malaysia is the second

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high import car tax country in the world and government is still

not plan to decrease the tax. (Straitstimes.com, 2013)

ECONOMIC FACTORS

The exchange rate of Yen to other currency is not stable always

and it may affect Honda’s marketing plan when set the vehicle’s

price in different country. The economic crisis in 2010 was

brought economic damage to the consumer’s income and this might

decrease their purchase power.

Honda has kept up with this by introducing more eco-friendly

technology cars due to global cost of petrol keep on rising.

These cars will help customer to save money from petrol cost.

SOCIAL FACTORS

Social factors always affect consumer’s need and potential of the

market because social factor include the demographic and cultural

aspects of the external microenvironment.

In some countries, consumers have a strong belief in their local

brand instead of other country brand such as Japanese brand

Honda, Toyota and etc. So, Honda is introducing a sporty eco-

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friendly technology car which is Honda Crz to switch their

beliefs from local brand to Honda.

In western country, cars product are not too expensive as in

other high tax country. And because of this, consumers are rather

to buy high quality vehicles especially Europe brands like BMW,

BENZ, BENTLY and etc.

Technological factors

Nowadays, most of the drivers are too rely on GPS (Global

Positioning System) to search a location they want to go because

it is more accuracy. Therefore, Honda cars have had to include

Satellite Navigation System in their latest model vehicles.

Honda develop i-vtec engine into their all eco-friendly car

model. The i-vtec engine is one of the Honda’s famous engines

which provide fuel economy, ample torque and clean emissions.

The cost of petrol price is keep increasing in global according

economic factors at above. Therefore, Honda has been engaged in

eco-friendly technology for a better, more sustainable future.

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LEGAL FACTORS

Due to environment protection law in Europe, every car must meet

the new Euro-V emissions standards which apply throughout the

European Union. If not, no any automobile company can sell their

product in any Europe country. Honda’s sport car, Civic Euro Type

R was failed in Euro-V emissions standards and couldn’t get the

permission to sell in any Europe country. (Autoblog, 2010).

Due to employment laws in UK, UK government has required all the

company working environment must in safe situation. They cover

issues such as training, reporting accidents and the appropriate

of safety equipment to confirm employee are working in safety

environment.

ENVIRONMENT FACTORS

Nowadays, most of the countries are facing global warming of less

petroleum. Those countries of produce petroleum are decrease

their export petroleum to global market and this already affect

the petrol price are keep on raising. Due to this high petrol

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cost problem, Honda is introducing eco-friendly technology cars

such as Honda Hybrid and Honda Crz to protect global warming.

In some countries, they have different weather and climate in a

year. The change in temperature and weather can cause damage on

cars engine because engine will difficult to start when weather

is cold and engine easy to overheat when weather is hot. So,

Honda had developed different model of engine in different

country according the weather problem.

3.2 Strategy Option (Generic Strategy and Strategy Clock)The purpose of strategy option is to providing clarity and common

understanding of the range of option and the reason to choose a

strategic option based on strategic response. (Mchannigan, 2013)

3.2.1 Porter’s Generic StrategyMichael Porter’s Generic Strategy Model (1980) was created to

show how industries use ‘generic’ business strategies, to gain a

competitive advantage over their competitors. This strategic can

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be applied to products or services in all organization and

industries. There are three approaches in this strategic which is

"Cost Leadership" (no frills), "Differentiation" (creating

uniquely desirable products and services) and "Focus" (offering a

specialized service in a niche market). (Mindtools.com, 2013)

Cost Leadership Strategy

This approach is used to be the low cost producer in an industry

and provide a level of quality. Company will approach this

strategic when they plan to sell product in average industry

prices to earn higher profit than a competitor or below average

industry prices to gain high market share for long term.

(Mindtools.com, 2013)

Honda already approach this strategic when they launching their

sport design eco-friendly car, Honda Crz. Honda Crz is the first

eco-friendly car in Malaysia which is free charge of car tax.

That is mean the capital of Honda Crz is lower and the price can

be set in cheap if compare to other brand car in same segment. If

compare to Toyota Hybrid, the price of Honda Crz is RM123, 330

but Toyota Hybrid is RM168, 000 since the years of 2010. The

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features of these 2 car are almost same but the price is already

become the win tool for Honda in industry.

Differentiation Strategy

Companies always use differentiation strategy to make their

product or services become more different and more attractive

than competitors. (Mindtools.com, 2013)

Honda Crz is the first eco-friendly car which is design in sport

coupe (two doors) exterior style. Most of the eco-friendly car

models are design in wide and big square size but low horse power

because the limitation of engine’s technology. These car models

will not attract teenagers because of the low purchase value.

Honda Crz is break the traditional of eco-friendly car which is

provide sport coupe deign, S+ sport driving mode (power up

button), save fuel technology but high horse power. Honda Crz

also wins the 2010 Japan Car of the Year. This will help Honda to

build up their reputation and attract more customers for high

purchase value of Honda Crz.

Focus Strategy

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Company will use focus strategy when they are trying to decide

develop uniquely low cost or well-specified products for the

market. (Mindtools.com, 2013)

Honda is still concentrated on develop well-specific product for

market according the development of 2009 to 2013 Honda Crz model.

Honda Japan will provide their original car model to Japan car

body-kit company, Murgen Motorsport Company to development new

edition Honda Crz Murgen Edition for sale in higher price but

higher car performance than original model. (FreshnessMag, 2010)

Honda always launching new model or new edition for Honda Crz is

really attractive to teenager market and it will help Honda to

defeat its entire competitor because none of competitor has the

good competitive advantage like Honda used to.

3.2.2 Bowman’s Strategic ClockIf compare to Porter’s Generic Strategies, Bowman strategic clock

is more concentrate competitive advantage in relation to cost

advantage or differentiation advantage. (Marketingteacher.com,

2013)

Differentiation

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In this situation, Honda Crz is the best car model to represent

its value to customer. Honda Crz had just win 2010 Japan Car of

the Year because of the unique sport coupe car design in eco-

friendly car model and high car performance. Compare to others

competitor eco-friendly car model based on Honda Crz reputation

and car features, Honda Crz is cheaper than the others and it is

more valuable. Cheap price but higher performance than same range

of car models is the winning tool for Honda to gain high market

share in automobile industry.

Focus Differentiation

Honda is coming out for a Honda Civic Euro Type R which is a

sport car version and the main market for this model will be set

in high premium of customer because the price is more than RM250,

000 before tax in Malaysia. This model is very hot sales item at

western country because of its car performance and Japan style

exterior car design.

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4.0 Functional Strategy

4.1 LeadershipThe recall problem is already show weak leadership system in

Honda Company because it happens twice in same year. Based on the

case study at above, first case is happen in March and second

case is happen November with different problem for vehicle.

The first case is already bring a huge unpredicted damage to

Honda Company’s finance and business reputation but Honda still

let the second case happen in same years. This already affect

Honda drop market share industry and it also show the weak

leadership system in Honda. Obviously, Honda didn’t learn the

lesson since first case happen.

Honda is also not taking serious on 22 customer’s complaint about

their Honda Odyssey minivan brake system problem. Honda should

solve the problem as soon as possible when they get the first

information but they didn’t and let second case happen in same

year. Most of the automobile websites had shared this news on

their website and let it become global bad news for Honda

Company. (Nytimes.com, 2013)

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This global bad news will affect Honda Company reputation to

become worse in western country. Low reputation will influence to

Honda‘s investment in western country especially Honda just

invest about 267million pounds in Swindon and this is the biggest

investment plan of Honda to attack western market. (ITV News,

2012)

4.2 ManufacturingThe manufacture problem is caused by the leadership of Honda

because they not guide the final test for vehicles as well, so

the problem had been happen and it became worse. But the lucky

part is not aware of any accidents or injuries related to the

problem that prompted the current recall. The responsibility of

manufacture department is to make sure every vehicle function

well before it go to market but they didn’t make it.

The first case and second case of recall Honda problematic

vehicles is already prove the manufacture department is not

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fulfill their duty and most of these model are from the batch of

2007 to 2008 but Honda just realize the problem after a few

years. (Usnews.rankingsandreviews.com, 2013)

Based on figure 1 in appendix, there is a lot of problematic

Honda vehicle in the market. This research has already proved the

quality of manufacture factory and no safety guarantee for

drivers. Honda should refer this to their manufacture department

and find out the main problem in manufacture system like machine

program, technology of machine or human factors. The manufacture

problem will make customer feel no more confidence on Honda and

cost huge profit lost when Honda recall number of cars from

market.

(Hondaproblems.com, 2013)

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5.0 RecommendationHonda should change their leadership system and take reference on

Volkswagen Group because Volkswagen is already become the leader

of global automobile industry and its reputation in really famous

in any country. Now Volkswagen is become the top car brand in

Asian and Western market. Honda can learn their successful

experience and put into practice to get improvement for their

company performance.

Honda must do a serious investigation to find out the main

problem of the manufacture department. If they found out the

problem, they should solve it as soon as possible and prepare a

good explanation for those car dealer or the drivers.

Honda may build up a new department that concentrates on final

test of product to make sure every last vehicles function well

before it go to market. This will guarantee the quality of the

product and avoid the recall cases are happened again. Honda need

to provide training to managers and technician to keep upgrading

their knowledge so they might working in high working performance

and less mistake.

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6.0 ConclusionBased on the case study above, Honda is facing a serious problem

that will influence their market share in western country. The

manufacture problem is always the main issue that will affect to

customer consideration on purchase vehicles. Honda must implement

some perfect solution in company to solve this problem as soon as

possible before the issue become irreversible. If Honda follow

the recommendation at above, they will get improvement in

industry and perform well in western country again.

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7.0 AppendixFigure 1

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(Hondaproblems.com, 2013)

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8.0 Reference1. Asimo.honda.com. 2013. History of ASIMO Robotics | ASIMO

Innovations by Honda. [online] Available at:

http://asimo.honda.com/asimo-history/ [Accessed: 13 Dec

2013].

2. Autoblog. 2010. Emissions regs to kill Honda Civic Type-R in

most of Europe at end of 2010. [online] Available at:

http://www.autoblog.com/2010/08/10/emissions-regs-to-kill-

honda-civic-type-r-in-most-of-europe-at-e/ [Accessed: 13 Dec

2013].

3. Businessballs.com. 2013. free SWOT analysis template and

method, free swot analysis examples. [online] Available

at:

http://www.businessballs.com/swotanalysisfreetemplate.htm

[Accessed: 13 Dec 2013].

4. FreshnessMag. 2010. MUGEN - 2010 Honda CR-Z at SEMA 2010 -

FreshnessMag.com. [online] Available at:

http://www.freshnessmag.com/2010/11/04/mugen-2010-honda-cr-

z-at-sema-2010/ [Accessed: 13 Dec 2013].

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5. Hondaproblems.com. 2013. Honda Complaints, Recall

Information and Pending Investigations. [online] Available

at: http://www.hondaproblems.com/ [Accessed: 13 Dec 2013].

6. HybridCars.com. 2010. Honda CR-Z Is Award-Winner in Japan,

Dissed in U.S. - HybridCars.com. [online] Available at:

http://www.hybridcars.com/honda-cr-z-award-winner-japan-

dissed-us-28888/ [Accessed: 13 Dec 2013].

7. ITV News. 2012. £267m investment could be confidence boost

for Honda. [online] Available at:

http://www.itv.com/news/west/2012-09-06/267m-investment-

could-be-confidence-boost-for-honda/ [Accessed: 13 Dec

2013].

8. Jiscinfonet.ac.uk. 2013. PESTLE and SWOT analyses - Jisc

infoNet. [online] Available at:

http://www.jiscinfonet.ac.uk/tools/pestle-swot/ [Accessed:

13 Dec 2013].

9. Marketingteacher.com. 2013. Bowman's Strategy Clock.

[online] Available at:

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http://www.marketingteacher.com/lesson-store/lesson-

bowman.html [Accessed: 14 Dec 2013].

10. Mchannigan, P. 2013. Strategic Options Analysis - an

Overview. [online] Available at:

http://mchannigan.com/strategic-options-analysis-overview/


11. Mindtools.com. 2013. Porter's Generic Strategies -

Strategy Skills Training from MindTools.com. [online]

Available at:

http://www.mindtools.com/pages/article/newSTR_82.htm


12. Monitor.co.ug. 2013. Beijing to limit number of new

cars in the capital city. [online] Available at:

http://www.monitor.co.ug/Business/Auto/Beijing-to-limit-

number-of-new-cars-in-the-capital-city/-/688614/2098496/-/

wa4afbz/-/index.html [Accessed: 13 Dec 2013].

13. Myers, J. 2013. The Definition of "Positioning

Strategy" in Marketing | eHow. [online] Available at:

http://www.ehow.com/info_8273086_definition-positioning-

strategy-marketing.html [Accessed: 13 Dec 2013].

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14. Nytimes.com. 2013. Log In - The New York Times.

[online] Available at:

http://www.nytimes.com/2013/11/03/automobiles/344000-

minivans-recalled-by-honda-for-brake-problem.html?_r=1&


15. Straitstimes.com. 2013. Malaysia minister rules out cut

to tax on new cars. [online] Available at:

http://www.straitstimes.com/breaking-news/se-asia/story/mala

ysia-minister-rules-out-cut-tax-new-cars-20130624 [Accessed:

13 Dec 2013].

16. Usnews.rankingsandreviews.com. 2013. Honda Recalls

344,000 Odyssey Minivans for Brake Issues | U.S. News Best

Cars. [online] Available at:

http://usnews.rankingsandreviews.com/cars-trucks/best-cars-

blog/2013/11/

Honda_Recalls_344000_Odyssey_Minivans_for_Brake_Issues/


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17. Usnews.rankingsandreviews.com. 2013. Best Hybrid Cars

Rankings | U.S. News Best Cars. [online] Available at:

http://usnews.rankingsandreviews.com/cars-trucks/rankings/Hy

brid-Cars/ [Accessed: 13 Dec 2013].

18. World.honda.com. 2013. Honda Worldwide | Corporate

Profile | Company Overview. [online] Available at:

http://world.honda.com/profile/overview/ [Accessed: 13 Dec

2013].

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Documents

Corporate Assignment