Understanding Strategic

Management
SM Class 2, 17 December 2021
Dr C Shambu Prasad
 Contents
1. Honda A case
2. Understanding Komatsu
3. Purpose at the core of strategy

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 Honda Case

a. Did it have a strategy?

b. Was Honda a fully integrated producer in 50s?
c. Why Honda pushed for integrated R&D and multiple
product offerings
d. Strength of H’s beginning
e. Impetus to target local delivery as niche and supercub –
f. Significance of ad campaign –

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 Where do good strategies come from?
• Why successful – market share and
Maximum learning curve economics
• Market share – combination of product
features (full line), price (relatively low),
S&D system (high quality and no of
dealers)
• Learning curve led to low cost
production and high productivity
• Origins of strategy?
• Strategy identification

• Mintzberg on Honda case

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 Some lessons from Honda A&B
• BCG in 1975 “Note on Motorcycle industry’
1. Intricate strategy can emerge from emergent process
2. Emergent processes too have a structure, linked to personal values
of management team, shapes operational choices feedback from
the market, reshapes values etc.
• "I didn't even have money to conduct market research," Honda continues. "I had to rely on intuition,
believing that what I like must be liked by other people." And Honda's intuition told him that humans
have a "natural desire" to get to remote places quickly, where fish are biting or the wildlife is plentiful --
and it told him that this was especially true of Americans, whose country is so spacious and whose
national identity is so caught up with the idea of the wilderness.
3. Even in hard to predict or control, managers have levers to operate
4. Logical analysis possible even when there is luck, hone skills for competitive advantage

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 Honda Summary

Emphasis on share and sales volume, not short-run profitability

Firm Infra

Relativity high labor costs

HRM

Honda technical research institute Many product upgrades M

Tech Dev Design superiority Design for production A
Product innovation leadership Cold storage of designs R
Procure G
Fully integrated producer of engines, frames, chains, sprockets etc.
ment Product innovation leadership Cold storage of designs I
N
• Highly automated • U.S. subsidiary rather • Extensive
advertising
plants than distributor
• Nicest people
• Capacity added • Largest dealer network campaign
before demand • Active competition • Low price
• Advanced manu between dealers • Promotional prices
techniques • Extensive dealer support on new models

Operations Dealer Relations Marketing & Sales

Source: Jan Rivkin (2006) British industry at crossroads, Honda A&B

 2. Komatsu case
• What is the setting for the case?
• What do we know about the EME industry then?
• Why has Komatsu been successful?
• What is unique about Komatsu that others cannot copy?
• Did the early years of Komatsu shape its future? Is company history
important?
• What is Kawai doing to achieve his policies and programmes?
• How secure is Komatsu? Any organisational vulnerability?

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 Komatsu’s Success
Corporate Goal/Vision Competitive Target
User and Consistency Urgency
Overseas “Maru C”
Orientation
Strategic
“PDCA Objective
“Management by
Cycle”
Policy”

Organization Commitment
Employee
Satisfaction
• Achievement
• Approval
• Participation
Industry structure and dynamism
• Struggling firms can become stars, while high
flyers can become earthbound very rapidly.

• Of the 500 companies in first list in 1955, only

62, ranked by revenue, have appeared on the
list every year since.

• Between 2009 and 2013, admittedly more

volatile years than most, over one hundred
companies

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 4. Put Purpose at the Core of Your Strategy
Thomas W. Malnight , Ivy Buche and Charles Dhanaraj (2019)
• Thomas Walnight on the core idea
• Global study of high growth companies - creating new markets,
serving broader stakeholder needs, and changing the rules of the
game….
• 4th Purpose…
• Two Critical Roles
• Redefining the playing field
• Reshaping the value proposition

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Developing a Purpose

• Where have we
come from?
What makes us
unique?
• Unifying the
“Creating responsible choices every day.”
organization
“contributing to a safer society” Responding to trends • Motivating
stakeholders
• Broadening
“Rise.” Building on trust
impact
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