Running head: HONDA MOTORS 1 Honda Motor Company Analysis Ivy Nimley BUSN 520 Marketing and Management Davenport University – School of Business July 14, 2015 Professor Phil Shaps Running head: HONDA MOTORS 2 Table of Content Honda Motor Company, scope of its current business, current products and subsidiaries……….3 Historical Perspective on Honda Motor Company………………………………………………..4 Scope of Honda Motor Company’s market distribution – are they global or regional etc………..5 Overview of the Honda’s leadership and management structure and individuals ………………..6 Current Issues that may affect the future of the Honda Motor Company…………………………7 References……………………………………………………………...………………………….8 Running head: HONDA MOTORS 3 Honda Motor Company, scope of its current business, current products and subsidiaries The Honda Motor Company is a global based corporation in Japan that is involved with manufacturing automobiles, motorcycles and power equipment. The corporation has been accredited as the largest supplier of motorcycles for several years, it is also the largest producer of interior combustion engines globally, selling of fourteen million engines annually. Presently the Honda Motor Company is rated among the eight largest manufacturers of automobiles internationally. Automobiles, power equipment’s and motorcycles are not the only products the company has to offer. The company is also involved in manufacturing garden equipment, watercrafts, marine engines, and generators. In addition the company has had its eye on taking steps in commercializing artificial intelligence, aero engines, robotics and aerospace technology. “Honda has a very healthy financial record, it has never fallen into the danger zone since its inception” (Mie, 2015). The Honda Chas been very successful in the automobile market, this success is attributed to the various customer focused vehicles they provide. The vehicles are not only customer oriented they are also manufactured putting in mind the various regions that influence their market. For example a vehicles in North America may not be similar to vehicles of the same model in the international market. The highest revenues earner for the Honda Company is the motorcycle. Though the company had to reduce its motorcycle manufacturing from 3 million to 500,000 annually since 2006, it still remains the largest motorcycle manufacturer. Honda also has other interests like building robots, aircraft solar cells, engines, and ATV and mountain bikes. Running head: HONDA MOTORS 4 Honda occurs to have several branches that are liable for the diverse interests the company is pursuing in fresh fields. The first subsidiary was the luxury brand known as the Acura. This brand was launched in the year 1986 as a pioneer of its kind among Japanese automobiles. The second subsidiary is the Honda aircraft company whose main focus is the aircraft technologies and aerospace. The second subsidiary is in charge of fresh machinery in fuel efficiency and aero-dynamics. The other is the solar cells subsidiary known as the Honda Soltec, which was the pioneer in providing the thin-film solar cells for manufacturing and communal use. Last but not least is the Brazilian subsidiary referred to as the “Moto Honda da Amaonia”, that is in charge of introducing varieties of Honda products that are known to fuelsupple. The other subsidiaries are assembled in accord with whatever purpose they are intended (Sakiya, 1982). Historical Perspective on Honda Motor Company Soichiro Honda founded the company, however he did not start by building vehicles. Soichiro started by supplying Toyota with piston rings, he learnt about engines form a company known as Tokai Seiki. After the world war two, Toyota bought Tokai Seiki, and it was during that time that Soichiro opened the Honda Research Centre. The two began studying and mounting engines that could be attached to bicycles and motorcycles. 1949 was the year that the Honda Company manufactured its first complete motorcycle referred to as the Model That development elevated the company to greater heights and by 1964 it was already the largest supplier of motorcycles globally. Nevertheless they did not get into the manufacturing of vehicles until 1963, when they introduced the mini pick-up truck for both communal and industrial use. The sports car s500 was Running head: HONDA MOTORS 5 created where its main feature was the chain connecting the vehicles engine with its back wheels. This design was adopted for most of the motorcycles that were developed later on. For the next ten years the company expanded and sold the two automobiles it had developed. During that decade the company had grown and it went ahead and opened a branch in America known as the Honda of America. The company had very unique vehicle designs that made it famous and very successful, this success was celebrated by opening branches all over the world. The Acura brand was introduced as a luxury brand into the American marketplace. The trucks and sports utility cars created a market boom boosting the company further. However when the founder passed on its Japanese competitors took advantage to try and penetrate the market causing a decrease in Hondas popularity. The competition caused the company lost of sales it was almost collapsing financially, it was at the verge of a hostile takeover but the CEO came up with a plan in time. The company changed its strategy and started making cars for buyers instead engineers. That move led to the development of the CV-R and Odyssey (Kato, Omae& Nagao, 2005). The Honda aircraft company was launched in 1995 whose main task was manufacturing aircraft carrying the Honda name. Scope of market distribution – are they global or regional etc. The Honda motor company is a global corporation which has its customer base spread all over the globe. The organization has distributed its market into three sections; japan, global market and sports. The Japanese marketplace was the principal one for the corporation and it created a market for two automobiles the Toyota and Nissan. Japan was the main market place but due to the competition these brands brought the company was forced to spread and distribute Running head: HONDA MOTORS 6 its products internationally. Apart from distributing its products all over the world the company was forced to also open several stores and production plants to serve its diverse customer base. New Zealand, United Kingdom and Argentina were the first countries the company promoted it products. The company became a renowned sponsor in the ITV’s reporting of the formula one race in the United Kingdom. The company also creates vehicles that are only meant for certain markets. The fact that the company has stores all over the world plus manufacturing plants is a clear indication of how the company is concerned with the international market. This is because the international market is the main clientele base. The other major clientele is the sports segment. The company is either directly involved in sporting events like the Indy racing league or it sponsors events such as formula one races. Overview of the leadership and management structure and individuals Soichiro Honda founded the company and Takahiro Hachigo is heading the company now. The company has always been guided by the philosophy that all the ideas must be imaginative and innovative, this has been a company policy that even the management seek to instill in every member of the organization. This was because both imagination and innovation made sure the corporation took time to consider everything and approach every decision from different perspective. When that happens any individual is able to analyze an issue and come up with different ways to deal with it and get the best results. This method puts critical consideration into the horizontal mechanism of decision making which is important to an organization. This ensures the company operates in a bendable state because the task forces and the team members can be given different task depending on the need. Finally, the arrangement is enhanced in a way that both personal and organizational freedoms are in unity. T\he topmost Running head: HONDA MOTORS 7 managers of the company create a matrix that encourages free interactions and stimulate both individual initiative and team strategy (Mito, 2012). Current Issues that may affect the future of the organization A number of issues are currently being talked about in the news today are affecting the company. The first issue is on production, the Honda Company is planning to produce and sell across borders more than 100,000 motorbikes from Vietnam before the end of the year 2015. This is guided by an ambitious plan to increase its export to Vietnam by double and also become the largest supplier of motorbikes around Asia. In addition the company plans to revamp its customer offerings, through introducing high end motor bikes where they had previous purchases. This move is meant to boosts its sales in the short term. The company is also on a mission to attract new clientele, through introducing new improved motorbikes. If this does not happen the company will suffer a major loss considering all the investments they put in trying to get new clients. The major concern for Honda now is the recent increase in number of recalls from its products, the main problem for people has been the recent emergence of cars with faulty airbags, which are being manufactured by a Japanese supplier Takata. The recent complains led to the management taking action and replacing the current company president Mr. Ito with Takahiro who is 55. The president’s duties have been supervising the operations of its European and Chinese automakers. This change will be effective as soon as possible when the shareholders have their annual meeting. Honda said that is not off the company but will be the senior adviser to the company (Soble, 2015). Not much is known about Mr. Ito’s replacement but people think he is no different to all other presidents Honda has had over the years. Since the company is facing Running head: HONDA MOTORS several problems right now we can only hope the new president will provide a good direction to the company better than his predecessors’ have done in the recent past. The company’s progress is relying on his direction. 8 Running head: HONDA MOTORS 9 References Sakiya, T. (1982). Honda Motor: The Men, the Management, , the Machines . New York: Kodansha International. Kato, T., Omae, A., & Nagao, D. (2005). U.S. Patent No. D512,001. Washington. DC: U.S. Patent and Trademark Office. Mito, S. (2012). The Honda book of management: A leadership philosophy for high industrial success. Soble, J. (2015) Honda, Grappling With Quality Problems, Will Replace Its President. Retrieve on july 12, 2015 from website http://www.nytimes.com/2015/02/24/business/international/honda-replace-presidentchief-executive-takanobu-ito.html?ref=topics Mie, A. (2015) Behind the Wheel: Honda thinks outside the box. Retrieved on July 12, 2015 from website http://www.japantimes.co.jp/news/2015/01/03/business/behind-wheelhonda-thinks-outside-box/#.VP0P9uG89VY
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