GROUP MEMBERS

Batch A Aarya K Varma

Akhil B
Group 3 Akshaya N
Priya P N
Rahul R S
Shikha M Biju
 Introduction
In just 5 years, Honda rose to the top of
the motorbike market in both Japan and
the US.
Strategy: Everything required for an
organization to operate successfully as
an adaptive mechanism
Intentional planning and implementation
of strategy are not always possible.
The Honda Case is the ideal illustration
of how difficult it is for outsiders to
determine what the strategy of
successful corporations were or are
01
 Company Profile - HONDA

CEO - Toshihiro Mibe

Headquarters - Minato City
Manufacturer of automobile and motorcycles
World's largest manufacturer of IC Engines
World's largest manufacturer of motorcycles
Revenue - $129.51B
Net income - $6.29B
Numberof employees - 211374

02
US motorcycle market before the

entry of Honda
Production of large, heavy, and fast
machines.

Prior to World War II, motorcycle riding was

largely a hobby.

Riders were often members of community-

based clubs, with matching uniform or at
least a tie when riding .

It was a somewhat daring and still evolving

‘adventure sport,’ but without any
significant negative stigma attached. 03
With the end of World War II there
was a significant new actor in
American motorcycling culture
appeared.

The new character was the “outlaw”

motorcycle rider. Anti-social or
“socially deviant”—that is, resisting
societal authority and deviating from
social norms.

After the second world war,

motorcycles in the U.S.A. attracted a
very limited group of people other
than police and army personnel who
used motorcycles on the job.
04
While most motorcyclists were no doubt, decent people, groups of
rowdies who went around on motorcycles and called themselves by
such names as ’Hell’s Angels,’ and "Satan’s Slaves" gave motorcycling a
bad image.

Even leather jackets which were worn by motorcyclists as a protective

device acquired an unsavory image.

Prior to 1960, the U.S. market was served mainly by Harley-Davidson of

the U.S.A., BSA, Triumph, Norton of the U.K., and Mo to-Guzzi of Italy.

Harley was the market leader with total 1959 sales of $16.6 million

05
Entry Of Honda
In 1959, Honda established its
subsidiaries in the US by selling big
motorcycles, mostly 250cc and
above

Despite Honda’s success in the

domestic market, The US market was
revealed to be a disaster

However, Honda took a surprising

turn and restructures its strategy by
selling its signature Honda 50cc.

Honda entered the U.S. market with

this step-through Honda 50cc
motorcycle 06
The Honda motorcycles, with their small frames and strange, boxy features,
looked like nothing they had seen before.

In fact, many of them thought the product would never sell.

Those who test-drove the motorcycles were invariably impressed by their

performance, and often they would purchase bikes as examples of Japanese
design and craftsmanship.

07
Honda : The Strategy model

Region by Region strategy

In 1959 Honda established an
American subsidiary-American
Honda Motor Company
They moved region by region,
west to east

08
Volume related cost
reductions
Low-priced: $250
(vs. competitors $1000-1500)

Prices were set at levels

designed to achieve market
share and to reduce it if
necessary

Economies of Scale model

Plants with capacity to

manufacture more than 30,000
motorcycles per month 09
Research & Development
In 1960s Honda’s R&D –staffed with 700 designers/Engineers
(vs competitors with 100 designers in R&D)

In 1962 Production per man-year 159 units

Honda's net fixed asset investment was $8170 per employee

Product features
Smallest lightweight motorcycles 50cc, 5 hp
3-speed transmission Electric starter
Automatic clutch Steps through frame

10
Advertising Policy

11
Target Group
Firstly they tried to change the
negative image of motorcyclists
(Motorcycles were vehicles for
outdoorsmen, racing enthusiasts and
hotrodders)

Created a whole new market

considering & focusing that "Anyone
can have a motorbike''

12
Distribution Policy
In 1961 they lined up 125 dealers; later became the
largest dealer network in the US

Honda was willing to take short term losses in order to

build a large selling & distribution network

The high demand forced the distribution channels

(two-tier distribution system) to be restructured

Distribution of Supercubs were directly done through

retailers (Bicycle shops) with much higher bargaining
power in comparison to competitors
13
Technology &
production methods

Specialized production
systems
Balancing engineering
and market requirements
Cost efficiency
Reliability of suppliers

14
 OUTCOMES
15

Honda went from no presence at all in the US

market in 1959 to 63% of the entire market in
1963.

By the end of the year, Honda had sold more

than 100,000units in the US - more than all
other motorcycle manufacturers combined.

By 1964 nearly one out of every two

motorcycle sold in the US was a Honda.

Larger motorcycles eventually had success

thanks to the Super Cubs' success.

It's US sales skyrocketed from $500,000 in

1960 to $77 million in 1965.
Thank You!