Challenges Experienced by Honda

1 Introduction

Honda is the most successful company existing on the market now days with the most advanced technology in the automobile industry with luxury vehicles to sports activities to family car they have a huge selection of autos and motorbikes. Honda, (2010) In Oct 1946, Soichiro Honda proven the Honda Technical Research Institute in Hamamatsu, Japan, to develop and produce small 2-routine motorbike engines. 2 yrs later, Honda Engine Company, Ltd. was created, and in 1959 Honda exposed its first storefront in LA with six industrious employees. Honda exposed there first U. S. flower in 1979 and also have evolved into a corporation that directly using more than 25, 000 People in the usa. A lot more than 100, 000 employees are used at approved Honda automobile, bike and power-equipment dealerships in the United States. Tens of thousands of additional Americans are employed by more than nearly 600 U. S. suppliers from which Honda buys parts and materials.

Honda, (2010) Within the recent years the auto crisis of 2008-2010 was the part of financial downturn, which affected automobile creators and suppliers across the world. The industry was weakened by the significant increase in the costs of fuel associated with energy crisis of 2003-08 which discouraged buys of cars with low gasoline economy. In the entire year 2008 there have been fewer energy efficient models to offer to the consumers, the bigger automobiles including Standard Motors, Toyota, Ford, Chrysler, Nissan and Honda Motors experienced sliding sales.

Honda, (2010) Honda Motors in 2008 declared it might be down sizing due to 2008 economic crisis and predicted that there could be reductions in personnel at all degrees of the management effective January 2009

2 Strategic Analyses, (2010). "The procedure of strategic evaluation the process of conducting research on the business environment within which a business works and on the organization itself, to be able to formulate strategy". "A number of tools are being used along the way of strategic research, including Infestations, SWOT research, and Michael Porter's five forces model".

Pest Evaluation, (2010) "Pest analysis is designed for Political, Economic, Public, and Technological examination and really helps to set a platform of macro-environmental factors used in the environmental scanning component of proper management".

Williams and Curtis (2007) that political factors include federal government regulations and legalities and identify both formal and casual rules under which the company must operate. Specifically, political factors areas such as duty policy, labor regulation, advertising legislation, environmental legislation, trade restrictions, tariffs, and political stability Government takes on an important role in the economy as well as in fees to be priced to the business". These factors also play an important role in the work law, competition regulations as the company can not make specific prices as they have to follow the competition regulations.

"Financial factors have economic growth, interest levels, exchange rates and the inflation rate". Pest Evaluation, (2010) the factors have major impacts on how business works and decision making, example, interest rates affect a firm's cost of capital and for that reason it affects the business and how will expand and broaden. Exchange rates affect the costs of exporting goods and the resource and price of brought in goods". Financial factors impact the purchasing electricity of prospective customers as the energy to buy the product.

Social factors are the demographic and ethnical areas of the exterior microenvironment. Pest Research, (2010) public factors affect customer needs and how big is market as well on the demand for a company's products and how that company will perform. Companies change various management strategies to adjust to these social developments (such as recruiting aged workers). Communal factors affect the needs and would like of the client and just how they buy a specific product, as the demand may decrease with the new product which offered to the wrong years sector.

Pest Analysis, (2010) Technological factors can reduce the barriers to enter in and reduce bare minimum efficient creation levels, and play a huge role outsourcing decisions. They are able to help determine barriers to entry, minimum efficient creation level and effect outsourcing decisions. Technological factors help technological shifts that can affect costs, quality, and lead to invention.

SWOT research, (2010) SWOT analysis is a strategic planning method used to judge the Strengths, Weaknesses, Opportunities, and Threats involved with a task or in a business.

SWOT examination is an enterprise tool by which, a firm will be able to implement a tactical analysis, analyzes and recognizes its corporate Advantages and Weaknesses as well as the existed or forthcoming Opportunities and Threats from its external environment. Doing a SWOT evaluation can help in identifying and the ways to minimize the influence of weaknesses in your business while maximizing your strengths only when these four critical information elements are well elaborated and known.

SWOT examination compiles of, SWOT research, (2010)

  • Strengths: "attributes of the individual or company that is effective to achieving the target"
  • Weaknesses: "characteristics of the individual or company that is harmful to achieving the objective"
  • Opportunities: "alternative conditions that is effective to achieving the target"
  • Threats: "alternative conditions that could do harm to the target"

Honda Motors is one of the most successful cars company on earth and by using PEST evaluation and SWOT analysis they attended so far as they are able to understand what are the political factors, economical, social and scientific factors they need to understand when they are producing the cars as well have to understand the needs and needs of the client as well as the market of the area as the government plays an important role. They have to understand the technology they need to provide within automobiles because the most advanced technology will be able to attract people better plus they would be able to reach the marketplace better and the relevance of SWOT examination in running the business is very important as Honda must understand what are there advantages, weakness, opportunity, risks to become successful on the market as they need Infestation and SWOT analysis together to have the ability to survive in the market for long run these two examination helps Honda to be a better company and also understand its customers and their needs.

2. 1 Honda: Reconciling dichotomies (Product related key competencies versus process related main capabilities. Constructing dichotomies is best avenue for new ideas in the field of cars industry.

Productivity, (2010) Product related primary competencies are measurement of the effective use of the resources, portrayed as the ratio of result and input. Production as the proportion of outcome and input. Productivity us very important to business because they can gain market share and make great income. For example, when productivity boosts, product costs decline and product price can be reduced.

Productivity relates to competitiveness in the manner that if two organizations have the same level of productivity but one requires less suggestions because of higher output, that one will be able to charge less price and therefore increase its shares of the market.

Process related central capabilities typically talking about the take action of taking something via an establishment and usually set of types of procedures to convert it from one form to another, as a creation or administrative method. The process primary functions at Honda is participating in an important role as it is assisting in having new and expanding ground breaking ideas for the company and participating in an important role in product related main competencies.

Process Functions, (2010) The concept of process capabilities has been employed by the making industry to quantify the relationship between product specifications and the assessed process performance. Various ratios and indices have been developed to spell it out this connection.

2. 2 International trade is exchange of capital, goods, and services across international edges or territories. International Trade, (2010) international trade area has flourished through the years due to the many benefits, as it offers offered services to numerous countries around the world. International trade is the exchange of goods and services for an amount of capital. It is also one of important resources of money making for developing country, by making use of modern processing techniques, advanced travelling, transnational businesses, outsourcing of manufacturing and services, and rapid industrialization, the international trade system is growing and growing fast.

International trade, (2010) Great variety of goods available for ingestion and international trade brings in various varieties of goods from different locations. This gives consumers a variety of choice to choose from and that will not only improve their quality but also the whole country. Better allocation and better utilization of resources, since countries tend to produce goods and goods that they are good at and have a comparative edge towards its opponents.

Efficient production will help countries and they will have the ability to adopt better methods of producing goods which will keep the cost down to be able to stay competitive. Countries that can create a product at the low price can capture a more substantial market share in the market. Therefore an incentive to produce proficiently arises. This can help standards of the product to increase and consumers will have a good quality product to consume.

Automobile industry, (2010) Restricting trade in the context of global car industry, the global automotive industry, quickly changing with global mergers and relocating its production centers towards appearing and growing economies. The industry is subject to imperfect competition which has resulted in an excessive amount of capacity, way too many rivals and too much redundancy and overlap.

The industry is worried about the demands and desires of consumers about product styling, security, comfort and processing efficiency. The industry have to essentially work hard to meet up with the demands of the consumers and what exactly are the new desires as what forms of cars they want in the automobile industry. Expertise in car (Honda) sector is becoming increasingly segment specific as each one of these countries is finding its niche market. China is focusing on components, India in two wheelers and small vehicles, Thailand in pick-up trucks and passenger autos and Indonesia in electricity vehicles. As Honda is understating its market in these areas and the areas of the world as they are providing according to their customers needs as they have got limitation in providing different kinds of automobiles which is not needed in this country.

Automobile industry is symbolic of technological marvel by human kind. Being one of the speediest growing sectors on the globe with its powerful growth phases are explained by nature of competition, product life routine and consumer demand.

3 Whittington's Evolutional and Systemic schools of thoughts. Making use of the two colleges of thought in producing strategy to Honda motors. Evolutionary process in which the Evolutional is way in which the evolutionary perspective: sell or expire. Strategy, (2010)

Marketing marketing communications decisions are for short-term survival

In the long-term we would be deceased!

Intense focus on short-run sales, not long-term brand-building

Whittington's four classes of thought

The development strategy of Honda Motors have used the Whittington evolutional and Systemic school of thought within process and the way to understand the market better and its competition. Not only maximizing the income but also professional satisfaction and culture as defined under in the figure

Evolutionary and Systemic schools of thought




Opportunities to make decision and competition

Unexpected swings in future

Competition does not imply efficiency: markets can be manipulated; world has other conditions s for organizations than just income maximization

Finding possible causes of action and objective

Trial and mistake forced choices

Local approved

Selecting course of action and growing strategy

Improving functions management

Strategic goals depends

on the specific social system in

which the strategy is created


Strategy = daily management for surviving and competitive nature

Other than earnings maximizing is professional pleasure, influence, religion and culture

The two classes of thought which are being employed by Honda Motors in order to build up their strategies are Evolutional and Systemic and Honda are using these tools in a proper manner in the same way in

Evolutional approach utilized by Honda in

Marketing communications decisions are for short-term survival

Communication decisions are for short-term in the evolution process

Intense focus on short-run sales, not long-term brand-building.

They have to consider intense focus on the market

The approach who's better is Systemic school of thought because of plenty of reason Systemic school of thought have

Systemic School of thought employed by Honda

Consumer attitudes and habit are confined to public systems with given norms, principles, roles, culture, and ethics. Honda knows all these action and attitude of the client in order to develop a better strategy in future.

Limitations to what marketing and sales communications can do in terms of market show - the consumer culture guidelines, Honda need to have a good knowledge about the marketing communication and know its limits

Other "rational" known reasons for marketing and sales communications than pure revenue maximization, such as religious beliefs, culture and professional pride.

This school of thought is better and more best suited towards Honda as it continues an attention on the consumer demand needs and wishes as well understand its customer action. They have good understanding of the marketing process. Honda believes in professional delight, culture and religious beliefs understanding of individuals and exactly how people respond to these norms as Honda is the leading Vehicle industry as it suites into the Systemic approach in order into the tactical development.

Proper justification of Systemic in body below

4 Processual colleges of thought is about understanding the brand and influencing the brand with some risk taking in decision making and Processual strategy helps firm to maintain its goal of a straightforward strategy based on four loop. The loops make a difference but should not change the proper management of the company which is about

Consumer attitudes and behaviors can be influenced

Continuous improvement of brand, Creative ways of reaching customer

Advertising management

Certain amount of risk-taking in decision-making permits innovative and

The Processual School of Thought is about making the Honda adopt the strategy and develop a brand by understanding its customers and their need and wants. At exactly the same time understand its prices. The implications of tactical management on the four loops.

The logical loop helps in making sure that proper management would be predicated on rational thoughts and ideas. Processual approach helps in focusing on the utilization of rational decision making when making decisions and controlling the use of strategies. It can help and makes certain that all the implications of any decisions or strategies would be carefully examined under Processual School of Thought. Therefore Processual Approach is making the tactical management of the logical loop more though full and packed with new ideas.

The overt politics loop by making use of Processual School of Thought helps to create a far more open influence on strategic management. Politics are being used by some to include their suggestions to strategic management without having to be discreet about any of it. Overt politics targets the utilization of influence and connections to assert strategic ideas with the help of Processual School of Thought and that is most beneficial thing for the company

The Culture and cognition loop performs an important role when assessed by the Processual School of Thought as it creates use of culture and traditions to influence proper management decision and also to make the strategies predicated on the culture of the place and country. Honda Motors uses culture and cognition as important factor in strategic development. The culture and cognition loop makes use of suggestions to change proper management decision so that the firm will take action according to the needs and desires of the surroundings. In this loop Processual School of Thought would serve an important part in making decisions that will influence the company and Processual way helps the firm maintain its goal of a simple strategy based on the four loops.

The covert politics loop by making use of Processual approach really helps to create a far more secretive means to influence proper management; this calls for an associate of the Honda Motors secretively influencing strategic management decisions in his favour. Covert politics loop is a far more secretive way to effect decisions and strategies which usually creates decisions which may be beneficial to the business.

5 Conclusions

Honda Motors is one of the leading automobiles industries and in year or two they have been facing problems as the industry was weakened by the rapid upsurge in the fuel prices as well as to energy crisis of 2003-08, which made people to buy less of automobiles with low gasoline economy. In the year 2008 there were some models released by Honda with energy efficient models to provide to the consumers, the bigger automobiles including Basic Motors, Toyota, Ford, Chrysler, Nissan and Honda Motors experienced slipping sales.

Honda has used PEST and SWOT evaluation to work harder to attain the goal to make their sales go high, and have done the weakness in the market as well. Honda has examined there PEST evaluation and the factors that are influencing their company. Honda being the primary automobile industry has to know its strengths and weakness, when dealing with their customer. They have to know their needs desires and needs.

Whittington's Evolutional and Systemic schools of thoughts are being applied by Honda Motors to the better development of their strategy and which helps them to learn where these are standing in the market and by using the four loops Honda can know its company better way as they'll be in a position to understand its culture, faith and this will make better proper decisions for the business.

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)