SIM336 (Off Campus)

Strategic Management

Case Study – Reconciling Managerial Dichotomies, Honda Motors in De Wit & Meyer

Company Overview: Honda Motor Company was established in 1948 in Japan, on the backdrop of 1 million (Yen) and 34 employees. Over the years the company has grown to become the world's largest engine, motorcycle and automobile manufacturers, with more than 178000 employees and stock holder equity of 4,544265 million Yen (Annual Report, 2008). Honda is the 5th largest automobile manufacturer in the world. Moreover, it recently surpassed Chrysler as the 4th largest automaker in the US. It is the 2nd largest Japanese automaker, behind Toyota and ahead of Nissan (Just Auto, 2008). In the early years, the Company was focused in manufacturing locally and serving its domestic market, after which it began exporting its products internationally. In 1982, it became the first Japanese automaker to setup a plant outside its domestic boundaries (Ohio, USA). Now it has established plants all over the world, covering bases such as North America, South America, Europe and Asia. In terms of Japanese automakers, it has the largest share of plants as a ratio of total business outside its domestic boundaries (Dicken, 2007). North America, with Unit Sales of 1850 (thousands) is the largest Market of the company, noted for the year ended 31 March 2008. In 1963, the company set up its first international motorcycles production plant, in Belgium. Honda currently produces motorcycles at 32 plants in 22 countries around the world. Honda established local motorcycle R&D operations in the U.S, Germany, Italy, Thailand, China, and India dedicating its effort to develop motorcycles that meet the needs of local customers (Honda, 2008). Asia is the largest market for the brand with a sales of 6633 (thousand) units for the year ended 31 March 2008 (Annual Report, 2008). In the following paragraphs, we will undertake a Porters 5 forces analyses.