Internal and External Strategy Analysis of Honda Motors Ltd.

Internal and external strategy analysis of

Honda Motors Ltd.

Word count: 2, 350 words

Internal and external strategy analysis of Honda Motors Ltd.

The global car manufacturing industry is nowadays one of the world's biggest business and like many other industries is full of competition on all fronts which makes it even more interesting to observe. Over the years the big competition among biggest motor companies, the hard work of all the managers and engineers from the different departments of the firms helped for reaching high level of production and innovation.

Honda Motors is well known as one of the leading automobile companies in the world that spreads its operations all over the world and is best known among the customers for the quality of the products they make. Honda Motors Company, Ltd. is a public company established on 24 September 1948 with headquarters in Tokyo - Japan. The company manufactures automobiles, trucks, motorcycles, ATVs, scooters and also private jet.

The company operates under the basic principles of "Respect for the Individual" and "The Three Joys" - "The Joy of Buying," "The Joy of Selling" and "The Joy Of Creating". The first principal stands for respecting the unique character and ability of each person, trusting each other as equal partner in order to be successful. The second principal reveals that not only all customers who come into contact with the company but also people working in it should feel a sense of joy through that experience (Honda Annual Report, 2012).Following this basic principles the company has been creating a new value along with providing high quality products maintaining a reasonable price. Developing, producing and marketing a wide variety of products, worldwide customer satisfaction - these are just small part of the things that earned Honda Motors an outstanding reputation as one of the leading automakers.

Looking at the company's slogan ( Honda - "The power of dreams") and the strategy that the company advocates - "The three Joys" we can notice that the main goal of the company is not only satisfying and providing excellent service for its customers but also creating a strong connection with its consumers. In other words their main goal is to provide Joy for those who purchase their products and produce their products. In that regard, the company's main concern is about people.

The first step of the company's strategy is "The Joy of buying" for every person who purchases a Honda product. This Joy is a step that exceeds customer satisfaction and as Honda managers define it, there are four steps that lead to it. The consumer must mainly understand the fundamental concept of the product and then he should accept the product and make a decision to buy it. And finally, after the customer is completely satisfied with the product he can experience "The Joy of Buying".

There is also "The Joy of Selling" and the most important thing for achieving this Joy is the strong relationship between customers and their products. Honda products seek to respond genuinely to customers' needs and desires. When the company provides excellent quality and high performance the distributors and dealers of Honda fell "The Joy of Selling".

And finally, there is "The joy of creating". At Honda the production engineering, research and development, manufacturing are at a higher level which allows the company to maintain the high quality of the products and even exceed customers' expectations (Honda Annual Report 2012).

A closer look to Honda Motors' management departments can reveal the links of collaboration between the managers. Already performing the strategy "The three Joys" has helped the company to move in a positive direction.

For instance dealing with reconciling dichotomies approach. Basically dichotomy stands for an argument between two or more competing interests, for example conflict between cost and quality or supplier buyer relations. Companies in the West handle with such situations simply by sacrificing the interests of one or more side in the name of a greater or lesser extent for the good of the company (De Wit & Meyer 2004). On the other side is Honda Motors who have adopted a different approach which observes both sides of the conflict and finds a way for an overall improvement in the operation, quality and results for all parties involved in the dichotomy. The company manages to deal with something that was seen as relationship with a constant loser to a relationship between two winners. Honda adopted a different approach reconciling the cost quality dichotomy simply buy performing building- in quality in the manufacturing process. This way the company cuts its expenses for testing the quality of each product and also reduces the costs from wastage.

Car manufacturing business has changed over the years which lead to a goal that every company tries to reach - coming up with a new model of the product every year. One other example of the way Honda handles with dichotomies is the way in which Honda chooses to replace its models. In Western firms the policy is that he old model either receive a facelift or is completely replaced with a new better model. (De Wit & Meyer 2004). As a result the customer receives a new product but with easy to notice improvements and on the other side is Honda who developed a program in which every four years a model is given a change. First two years the vehicle is refreshed with a new exterior design and two years later all the parts that are vital as for engine, transmission etc. This way the company resolved the facelift and new model conflict and also achieved faster lead time of the process of bringing new models and lower levels of pressure upon organizational resources.

With the examples given a statement could be made - Honda Motors are successfully performing the built-in-quality and right-first time. This way the company satisfies its valuable customers by cutting the delivery time and presenting them quality products.

Honda Motors operates not only in automobile industry but also in motorcycle industry, in fact the company was founded as a motorcycle company. Such companies that enter a new market industry adopt diversification strategy. Competing in the motorcycle business the company develops a unique ability to produce high quality and reliable small engines. The success of Honda in automobile industry relies on their experience in motorcycles. The company has also diversified in the boat motor industry.

One of the main benefits