PEST and SWOT techniques on Honda

1 Introduction

Honda is the most successful company existing in the market now days with the latest technology in the auto industry with luxury vehicles to sports activities to family car they have a huge selection of automobiles and motorbikes. Honda, (2010) In Oct 1946, Soichiro Honda founded the Honda Technical Research Institute in Hamamatsu, Japan, to build up and produce small 2-pattern motorbike engines. 2 yrs later, Honda Motor Company, Ltd. was born, and in 1959 Honda opened its first storefront in Los Angeles with six industrious employees. Honda opened up there first U. S. flower in 1979 and also have evolved into a company that directly using more than 25, 000 Americans. A lot more than 100, 000 personnel are used at official Honda automobile, motor bike and power-equipment dealerships in the United States. Thousands of additional Americans have employment with more than practically 600 U. S. suppliers from which Honda expenses parts and materials.

Honda, (2010) In the recent years the automobile turmoil of 2008-2010 was the part of financial downturn, which affected automobile designers and suppliers round the world. The industry was weakened by the considerable increase in the prices of fuel linked to energy crisis of 2003-08 which discouraged purchases of cars with low energy economy. In the year 2008 there were fewer fuel efficient models to offer to the consumers, the larger automobiles including General Motors, Toyota, Ford, Chrysler, Nissan and Honda Motors experienced slipping sales.

Honda, (2010) Honda Motors in 2008 announced it would be down sizing anticipated to 2008 economical crisis and expected that there may be reductions in staff at all degrees of the management effective January 2009

2 Strategic Analyses, (2010). "The process of strategic analysis the process of conducting research on the business environment within which an organization manages and on the organization itself, in order to formulate strategy". "A number of tools are being used along the way of strategic evaluation, including Infestation, SWOT examination, and Michael Porter's five causes model".

Pest Evaluation, (2010) "Infestations analysis is perfect for Political, Economic, Social, and Technological analysis and helps to set a platform of macro-environmental factors used in environmentally friendly scanning element of strategic management".

Pest Research, (2010) Politics factors will be the level to what the federal government interferes in the economy. Specifically, politics factors areas such as taxes policy, labor rules, environmental legislations, trade restrictions, tariffs, and politics stability. Political factors include goods and service which the government wishes to provide or be provided Government performs an important role in the economy as well as in taxes to be billed to the company". These factors also play an important role in the occupation law, competition legislation as the company cannot make specific prices as they need to follow the competition regulations.

"Economic factors have economical growth, interest rates, exchange rates and the inflation rate". Pest Examination, (2010) these factors have major effects how business works and decision making, example, interest levels impact a firm's cost of capital and for that reason it affects the business enterprise and exactly how will develop and broaden. Exchange rates have an impact on the expenses of exporting goods and the source and price of brought in goods. Financial factors influence the purchasing electricity of potential customers as the energy to buy the product.

Social factors are the demographic and social areas of the external microenvironment. Pest Research, (2010) these factors have an effect on customer needs and the size of markets. Sociable factors have an impact on the demand for a company's products and how that company works. Companies may change various management ways of adjust to these social tendencies (such as recruiting old workers). Cultural factors affect the needs and desires of the client and the way they buy a specific product, as the demand may decline with the new product which offered to the wrong time sector.

Pest Evaluation, (2010) Technological factors can decrease the barriers to go into and reduce minimal efficient production levels, and play a major role outsourcing decisions. Scientific factors include technical aspects, automation, technology bonuses and the speed of scientific change. They can help determine obstacles to entry, minimum amount efficient creation level and influence outsourcing decisions. Technological factors help to technical shifts that make a difference costs, quality, and business lead to innovation.

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

It helps in specifying the objective of the business business or project and identifying the internal and exterior factors that are advantageous and unfavorable to that objective. SWOT analysis is an enterprise tool by which, a firm will be able to implement a tactical examination, analyzes and recognizes its corporate Talents and Weaknesses as well as the existed or forthcoming Opportunities and Threats from its external environment. Completing a SWOT analysis can help in figuring out and the ways to minimize the have an effect on of weaknesses in your business while making the most of your strengths only once these four critical information elements are well elaborated and known, the venture can formulate and implement the strategy resulting in its business seeks. SWOT analysis strategy is carried out in two phases as follows.

SWOT analysis compiles of, SWOT evaluation, (2010)

Strengths: "capabilities of the person or company that is helpful to achieving the target"

Weaknesses: "qualities of the person or company that is harmful to achieving the objective"

Opportunities: "alternative conditions that is helpful to achieving the target"

Threats: "exterior conditions which could do harm to the target"

Honda Motors is one of the most successful cars company on earth and by using PEST analysis and SWOT examination they attended as far as they could understand what are the political factors, economical, social and technological factors they need to understand when they are producing the cars as well have to understand the needs and desires of the customer as well as the market of the area as the government plays an important role. They need to understand the technology they need to provide in there cars because the latest technology can attract the folks better and they can reach the marketplace better and the relevance of SWOT analysis in running the business enterprise is very important as Honda has to understand what is there talents, weakness, opportunity, risks in order to be successful in the market as they want Infestation and SWOT examination together to have the ability to survive in the market for long run both of these examination helps Honda to be a better company and be able to understand its customers and their needs.

2. 1 Honda: Reconciling dichotomies (Product related primary competencies versus process related central capabilities. Constructing dichotomies is the greatest avenue for new ideas in the field of automobiles industry.

Productivity, (2010) Product related primary competencies are dimension of the effective use of the resources, indicated as the percentage of end result and input. Productivity as the ratio

of result and input. Output us very important to business because they can gain market show and make great income. For example, when productivity raises, product costs drop and product price can be reduced.

Productivity pertains to competitiveness in the manner that if two businesses have the same degree of end result but one requires less type because of higher productivity, that one will be able to charge a lesser price and therefore increase its shares of the marketplace.

Process related central capabilities typically explaining the take action of taking something via an establishment and usually group of techniques to convert it in one form to some other, as a creation or administrative technique. The process main functions at Honda is participating in an important role as it is supporting in having new and expanding progressive ideas for the company and playing an important role in product related core competencies.

Process Functions, (2010) The concept of process potential has been utilized by the developing industry to quantify the connection between product technical specs and the measured 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) the main features of international trade are International trade has flourished over time because of the many benefits it offers offered to different countries across the globe. International trade is the exchange of services, goods, and capital among various countries and parts, without much hindrance. The international trade accounts for a good part of a country's gross domestic product. Additionally it is one of important resources of earnings for a expanding country. By using modern creation techniques, highly advanced transportation systems, transnational businesses, outsourcing of manufacturing and services, and swift industrialization, the international trade system keeps growing and spreading very fast.

International trade, (2010) Great variety of goods available for usage and international trade brings in different kinds of goods from different spots. Thus giving consumers a number of choice to choose from and which 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 items which they are good at and also have a comparative benefits towards its challengers.

Efficient in development can help countries and they'll adopt better methods of producing goods which will keep the price down to be able to remain competitive. Countries that can produce a product at the lower price possible can gain the bigger market share in the market. Therefore an incentive to produce proficiently arises. This will help standards of the merchandise 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 motor vehicle industry, increasingly seen as a global mergers and relocation of production centers to growing producing economies, is in the grips of a global price-war. The industry is subject to imperfect competition which has resulted in too much of everything too much capacity, too many rivals and too much redundancy and overlap. The industry can be involved with consumer demands for styling, safeness, and comfort; and with labor relationships and making efficiency. The industry have to essentially work hard to meet up with the requirements of the consumers and what are the new needs as what forms of cars they want in the auto industry. Specialization in auto (Honda) sector is increasingly becoming section specific as each one of these countries is finding its area of interest. 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 would like as they have restriction in providing different types of automobiles which is not required in the particular country.

Automobile industry is a symbol of technological marvel by real human kind. Being one of the quickest growing sectors on the globe its dynamic growth phases are described by nature of competition, product life cycle and consumer demand. Today, the global auto industry is concerned with consumer needs for styling, protection, and comfort; and with labor relations and developing efficiency.

3 Whittington's Evolutional and Systemic schools of thoughts. Applying the two schools of thought in growing strategy to Honda motors. Evolutionary process in which the Evolutional is way in which the evolutionary point of view: sell or die. Strategy, (2010)

Marketing communications decisions are for short-term survival

In the long-term we would be useless!

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

Whittington's four academic institutions of thought

The development strategy of Honda Motors have used the Whittington evolutional and Systemic approach within process and the best way to understand the market better and its competition. Not merely maximizing the earnings but also professional pride and culture as detailed under in the figure

Evolutionary and Systemic institutions of thought




Opportunities to make decision and competition

Unexpected swings in future

Competition does not imply efficiency: marketplaces can be manipulated; modern culture has other requirements s for businesses than just earnings maximization

Finding possible factors behind action and objective

Trial and mistake forced choices

Local approved

Selecting plan of action and growing strategy

Improving operations management

Strategic targets depends

on the specific public system in

which the strategy is created


Strategy = daily management for making it through and competitive nature

Other than profit maximizing is professional pleasure, influence, faith and culture

The two universities of thought which can be being utilized by Honda Motors in order to build up their strategies are Evolutional and Systemic and Honda are employing these tools in an effective manner also in

Evolutional approach used by Honda in

Marketing communications decisions are for short-term survival

Communication decisions are for short-term in the development process

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

They have to consider intense concentrate on the market

The school of thought who is better is Systemic school of thought because of a lot of reason Systemic school of thought have

Systemic School of thought employed by Honda

Consumer behaviour and behavior are confined to public systems with given norms, values, tasks, culture, and ethics. Honda understands all these action and frame of mind of the customer in order to develop an improved strategy in future.

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

Other "rational" reasons for marketing and sales communications than pure profit maximization, such as religion, culture and professional pleasure.

This approach is better plus more matched towards Honda as it continues an eyesight on the consumer demand needs and would like as well understand its customer action. They have good knowledge of the marketing process. Honda thinks in professional take great pride in, culture and faith understanding of folks and exactly how people react to these norms as Honda is the leading Automobile industry as it suites on the Systemic approach in order into the proper development.

Proper explanation of Systemic in body below

4 Processual colleges of thought is approximately understanding the brand and influencing the brand with some risk taking in decision making and Processual approach helps firm to keep its goal of a simple strategy predicated on four loop. The loops can affect but should not change the proper management of the firm and it is about

Consumer behaviour and manners can be influenced

Continuous improvement of brand, Creative means of reaching customer

Advertising management

Certain amount of risk-taking in decision-making allows for innovative and

The Processual School of Thought is about making the Honda take up the strategy and create a brand by understanding its customers and their need and needs. At the same time understand its principles. The implications of proper management on the four loops.

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

The overt politics loop with the help of Processual School of Thought really helps to create a more open affect on strategic management. Politics are used by some to include their suggestions to strategic management without being discreet about it. Overt politics focuses on the use of impact and connections to assert strategic ideas by using Processual Approach and that is best thing for the company

The Culture and cognition loop plays an important role when assessed by the Processual Approach as it makes use of culture and custom to influence proper management decision also to make the strategies based 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 ideas to change strategic management decision so that the firm will work in line with the needs and needs of the environment. With this loop Processual School of Thought would provide an important part to make decisions that will have an impact on the firm and Processual strategy helps the firm maintain its goal of a straightforward strategy based on the four loops.

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

5 Conclusions

Honda Motors is one of the leading automobiles industries and in year or two they are facing problems as the industry was weakened by the speedy upsurge in the fuel costs as well as to energy turmoil of 2003-08, which made visitors to buy less of cars with low fuel current economic climate. In the year 2008 there have been some models released by Honda with fuel efficient models to offer to the consumers, the bigger automobiles including General 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 worked on the weakness in the market as well. Honda has researched there PEST analysis and the factors that are affecting their company. Honda being the primary automobile industry has to understand its advantages and weakness, when interacting using their customer. They have to know their needs wishes and demands.

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

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