INS4003-02

FINAL
ASSIGNMENT
Honda Company
a monument in the VEHICLES
industry in Vietnam
LECTURE: PHD NGUYEN PHUONG MAI

GROUP 11
 THE CONTRIBUTION OF GROUP 11

No. Full name Date of Student Contribution Signature

birth ID level

1 Trần Quỳnh Trang 16/03/2001 19071534 100%

2 Nguyễn Phương Quỳnh 10/07/2001 19071487 100%

3 Lê Hà Thu Phương 28/12/2001 19071473 100%

4 Nông Dương Thanh 31/12/2001 19071495 100%

5 Nguyễn Duy Phong 22/12/2001 19071468 100%

TABLE OF CONTENT

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EXECUTIVE SUMMARY..........................................................................................4
I. PART 1......................................................................................................................5
1. Introduction to the company................................................................................5
2. Analyze its mission and vision. Is the mission and vision of the company
customer- driven or product-driven?..............................................................................6
3. Use the five forces model of competition to analyze the industry in Vietnam
that this company is doing business. How do these competitive forces affect the
company?........................................................................................................................7
4. Use the VRIO framework to identify any distinctive competencies of this
company.........................................................................................................................8
5. Identify the institutional factors that might affect the company in Vietnam.
How do these factors affect the company ?..................................................................10
II. PART 2...................................................................................................................11
1. Use the Porter’s Diamond Model to analyze the context of this company in
Vietnam........................................................................................................................11
2. What is the company’s entry mode into Vietnam? Identify the advantages and
disadvantages of the company’s entry into Vietnam....................................................15
3. Explore the corporate-level strategies that the company is pursuing in the
Vietnamese market.......................................................................................................16
4. Identify any hinders or motivations for the execution of the company’s chosen
corporate-level strategies..............................................................................................17
CONCLUSION AND RECOMMENDATION........................................................19
REFERENCES...........................................................................................................20

EXECUTIVE SUMMARY
Developing and executing a competitive business strategy is a crucial priority for the
leadership team of any organization. Given the rapid growth of the industry and the

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heightened consumer demand for similar products and services, the significance of a
competitive strategy in today's business landscape cannot be overstated. It is essential
for businesses to establish their position within the industry and gain a competitive
advantage over their rivals.
Honda is the fifth largest automobile manufacturer and the leading motorcycle
manufacturer in the world. Honda entered the Vietnamese market in 1996. With
nearly 30 years of presence in Vietnam, Honda Vietnam has been constantly
developing and becoming one of the leading companies in the field of motorcycle
manufacturing and a prestigious automobile manufacturer in the Vietnamese market.
The success of Honda can be a model for today's businesses that are looking to
improve their corporate performance.
In this research paper, we have studied Honda's strategy when entering the
Vietnamese market and made some comments based on what we have learned in
class, including both positive and negative factors. The data and information in the
article are taken from reputable sources to ensure the reliability of the report. You can
refer to it at the end of the report.

I. PART 1
1. Introduction to the company
1.1 History
a. The Beginning

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Honda was founded in 1948 by engineer Soichiro Honda. Eleven years after the
founding of Honda Motor Company, in 1959, Honda officially had an office in Los
Angeles with only 6 employees. Honda has come a long way in a short time, in the
60s Honda became a phenomenon in the motorcycle industry. According to Berlin
City Honda of Portland, in 1969, the Honda Dream CB750 motorcycle debuted in the
United States; in the same year that the first Honda automobile, the Honda N600, went
on sale in the US (Portl, 2013).
b. Moving Forward
The 1980s and 1990s are considered memorable milestones marking the strong
development of Honda automobiles. In 1987, Honda launched a model called Acura,
this was the first model of the Japanese automaker. In particular, the model is offered
through 60 different dealers throughout the United States. In 1988, the Honda Accord
Coupe became the first American-made vehicle to be exported from the United States
to Japan. Not stopping there, in 1990, Honda launched the Acura NSX, which was the
world's first all-aluminum body car.
In 2001, Honda launched the Civic Coupe- the first compact product designed and
manufactured in the US. This product has earned a 5-star safety rating from the
National Highway Traffic Safety Administration (NHTSA), marking an important
milestone for Honda in maintaining and enhancing its reputation for quality and safety
products to this day. Up to now, Honda has been present in 33 countries with more
than 129 facilities and the ability to supply 20 million vehicles to the market,
including cars and motorcycles. Particularly in the motorcycle segment, Honda is
leading the world (Top 10 Best Motorcycle Brands in Asia, n.d.).

1.2 Business
The R&D system plays an important role in Honda's business strategy. This is the key
system that creates Honda's competitive advantage. Specifically, Honda has invested
heavily in R&D to develop advanced technology compared to competitors. They plan
to spend JPY 50 billion in 2018 with a 9.4% increase from 2017 (Honda, 2017). In
addition, Honda's production and distribution system is also the source of Honda's
successor. With its global network, Honda's global strategies partly embrace the ethos
of globalization. Besides, Honda puts all its efforts into services, meeting the changing
values and increasingly complex needs of customers around the world.

1.3 Significant achievements

During its development journey, Honda has won many great achievements, most
notably: Honda is considered a pioneer in manufacturing and innovating means of
transport to serve people's travel needs. The company constantly launches new models
to meet the needs of users and is well-received not only in Japan but also around the
world.
Honda is not only the pride of Japan but also makes Asians feel honored when the
company's products are highly competitive in the market. It can be said that Honda's
technology is comparable to the production techniques of many European countries.

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This shows the progress and development of Asian countries in the international
arena.

2. Analyze its mission and vision. Is the mission and vision of the company
customer- driven or product-driven?
2.1 Mission
Honda mission statement is “Maintaining a global viewpoint, we are dedicated to
supplying products of the highest quality, yet at a reasonable price for worldwide
customer satisfaction”.
2.2 Vision
Honda vision statement is “ Serve people worldwide with the joy of expanding their
life’s potential” and “Lead the advancement of mobility and enable people
everywhere in the world to improve their daily lives”.
2.3 Message from the Board of Directors of Honda Vietnam:
“ Honda Vietnam continues to maintain its position as the leading company even after
the society has moved into the period of Automation.
As a leading company, Honda Vietnam joins hands with the Government to actively
solve problems and challenges related to Mobility".
2.4 Is the mission and vision of the company customer-driven or product
driven?
Honda's mission and vision are primarily customer-driven. Honda's product
development focuses on meeting customer needs. Honda's mission statement reflects
that customer satisfaction is a key driver of Honda's success. By focusing on benefits
and customer experience received, Honda, has become a leader in the Vietnamese
market for motorcycles and scooters.
Similarly, in the vision statement, Honda emphasizes “serve people worldwide” and
“lead the advancement of mobility”. As well as a message from the Board of Directors
of Honda Vietnam: that HVN joins hands with the Government to actively solve
problems and challenges related to "Mobility". This reflects Honda's concern for
current social issues. With a customer-driven business, Honda always innovates to
meet customer needs.
While product development is an essential component of Honda's business strategy, it
is ultimately driven by a customer-centric approach that prioritizes meeting the needs
and expectations of its audience target.

3. Use the five forces model of competition to analyze the industry in

Vietnam that this company is doing business. How do these competitive forces
affect the company?

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  Threat of new entrants (low)
The threat from new entrants in the industry is low. That is due to the high barriers to
entry and exit. In addition, technology and a highly skilled workforce will also require
a huge investment. Furthermore, it will need to invest in marketing and build trust
among customers before it can grow into a big brand with a large customer base.
Because Vietnamese people consider their motorbikes to be an asset, customers often
prioritize choosing big, reputable brands for a long time. All these factors prevent new
brands from entering the market and thus minimize the threat from new players.
 Threat of substitutes (moderate)
The threat of substitutes in Honda's case is moderate. In addition to products of other
brands, public transport also acts as an alternative to motorbikes and cars. However,
there are several factors that help reduce the threat posed by this substitute product:
brand image, marketability, large product distribution as well as customer trust in the
product advertisement.
 Bargaining power of customers (high)
The bargaining power of customers for Honda is high. For the vast majority of
Vietnamese people, motorbikes are valuable assets. Therefore, when choosing to buy
a motorbike, consumers often consider the manufacturer carefully. Even in the two-
wheel electric vehicle market, many new companies are also competing fiercely with
Honda in terms of price and features. It also offers them eco-friendly and low-
maintenance alternatives. As a highly interactive product, customers search for the
right product for them, and since all information is available to them, brand value
alone cannot attract customers. Although due to high customer switching costs, once a
buyer buys a Honda vehicle, they tend to continue to be its customers for maintenance
and spare parts replacement.
 Bargaining power of suppliers (low)
The bargaining power of suppliers for Honda is low. Vehicle companies compete with
each other based on durability, and the variety of products on the market. Brand

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popularity is also a criterion. Honda always develops products and brands that fully
meet the criteria that consumers are interested in.
The goal that Honda sets is to create a competitive advantage with low-cost products
that are suitable for the majority of people. Thus, it comes from the strategy of
applying a multinational promotion strategy for motorcycle products. Honda has
focused on building a well-known brand to develop a manufacturing plant in Vietnam
and skillfully take advantage of the country's geographical advantages.
Besides, Honda also has a strategy to focus on developing a variety of product lines.
From motorbikes to cars, target different customer classes regardless of the car in the
low-priced segment to the high-end segment.
 Competitive rivalry (high)
The automobile industry faces very high competition. As it is a business that depends
on innovation, continuous innovation is necessary to survive in this industry.
Nowadays, Honda Company is competing with quite a few other competitors in
Vietnam such as Suzuki, Yamaha,… Yamaha entered the motorcycle market a year
after Honda, but they have occupied a relatively solid position in the Vietnamese
motorcycle market, very trendy. In addition, Suzuki has a nationwide dealer network
(including more than 16 dealers and warranty centers in Hanoi). Moreover, Suzuki
also launched new models such as the shogun R125, smash 110, and hayate ...
Vietnamese people have gradually accepted and supported the company's products. As
far as motorcycles and internal combustion engines go, Honda is a world leader.

4. Use the VRIO framework to identify any distinctive competencies of this

company.
Each company has its own strengths and values that are reflected in their capabilities
and the VRIO framework shows that. VRIO is an acronym for a four-question
framework focusing on value, rarity, imitability, and organization, the criteria used to
evaluate an organization's resources and capabilities and VRIO of Honda is shown in
the table below.

Resources Value Rare Imitation Organization

Marketing Expertise within Honda Yes No Yes Yes

Distribution and Logistics Costs Yes No No Yes

Competitiveness

Successful Implementation of Digital Yes No Yes Yes

Strategy at Honda

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Resources Value Rare Imitation Organization

Marketing Expertise within Honda Yes No Yes Yes

Distribution and Logistics Costs Yes No No Yes

Competitiveness

Supply Chain Network Flexibility of Yes Yes No Yes

Honda

Vision of the Leadership for Next Set of Yes No No Yes

Challenges

Honda has built itself a foothold with a successful marketing strategy, they invest in
sponsorship & communication to increase coverage not only with sponsors and
partners but also to customers, especially the needs of customers. Therefore,
marketing expertise is the value of Honda and organized to capture value. However, it
can be initiated by competitors.
As a big man entering the Vietnamese vehicle market early, Honda has prepared itself
for a remarkable production capacity, with 3 motorcycle factories producing 2.5
million vehicles/year and a car factory. High-quality and prestigious automobiles have
helped this manufacturer to optimize costs when producing to meet the Vietnamese
domestic market. In addition, having many factories also gives Honda a competitive
advantage over other brands in distribution, logistics and quality assurance.
Distribution and Logistics Costs Competitiveness is Honda's value and organized to
achieve it.
Honda invests heavily in digital media, Honda invests heavily in TVC and media
campaigns. Specifically, Honda used to run the campaign "Going home", Successfully
implementing the Successful Implementation of Digital Strategy at Honda is their
success in terms of value and organization, but it can still be beaten by competitors
and competitors imitation on how to do it.
With an abundance of Honda Heads (sales centers) of 801, Honda is completely
confident in its supply network to customers. In addition, strong production
capabilities from Honda's factories also contribute to increasing the ability and
flexibility of the Japanese company's supply chain that gives them value and rarity and
organization. Honda has a clear vision for them, "Bringing ideal products and services
to meet individual needs and societal expectations". A social vision would be to bring
advantages to the company and the value and organization to achieve it.
5. Identify the institutional factors that might affect the company in
Vietnam. How do these factors affect the company ?

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There are several institutional factors that can affect Honda companies in Vietnam,
including:
Government regulations in Vietnam play a pivotal role in shaping the business
landscape for Honda and other companies. The Vietnamese government's proactive
approach to regulation encompasses a wide range of aspects beyond the typical
taxation, environmental protection, labor laws, and import/export regulations. Some
distinctive government regulations affecting Honda's operations in Vietnam are
localization requirements, emerging market incentives, innovation and research
initiatives…v.
Political stability is a crucial factor for Honda's business operations in Vietnam. A
stable political environment fosters investor confidence and provides a favorable
setting for business activities. In Vietnam, the government's commitment to
maintaining political harmony and policy consistency ensures a predictable business
landscape for Honda. The country's participation in regional cooperation initiatives
and positive international relations further contribute to its political stability. When
leveraging the stability of Vietnam's political environment, Honda can make strategic
decisions, attract investment, and establish long-term partnerships to thrive in the
market.
The availability and quality of labor in Vietnam significantly influence Honda's
business operations. Vietnam boasts a young and dynamic workforce that offers a
unique advantage to the company. The country's emphasis on education and skill
development ensures a pool of talented individuals who can contribute to Honda's
productivity and innovation. Honda can enhance its operational efficiency and drive
innovation in its products and services. The continuous investment in human capital
development allows Honda to leverage the availability of skilled labor, giving the
company a competitive edge in Vietnam's market.
Intellectual property protection is of utmost importance for Honda and other
technology-driven companies operating in Vietnam. An effective and robust
intellectual property protection regime is vital to incentivize investment in research
and development, foster innovation, and promote healthy competition. In contrast, a
weak intellectual property protection regime poses significant risks, as it can
discourage companies from investing in new technologies and innovative solutions.
Without adequate protection, companies like Honda may face the threat of intellectual
property infringement and unauthorized use of their proprietary technology, which can
undermine their competitive advantage and hinder market growth. Thus, a strong and
enforceable intellectual property protection framework is essential to foster an
environment conducive to investment, innovation, and sustainable growth for Honda
and other innovative companies in Vietnam's market.
A well-developed financial system plays a pivotal role in Honda's business operations
in Vietnam. It provides Honda with access to capital, facilitates investment, and fuels
economic growth. A robust financial system enables Honda to secure funding for
expansion, research and development, and innovation initiatives. It also allows the
Honda to manage cash flow effectively and navigate financial challenges. In contrast,
an underdeveloped financial system can create constraints for businesses, limiting
their access to capital and hindering their growth potential. Difficulties in obtaining

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financing and inadequate financial infrastructure can impede Honda's investment
plans and restrict its ability to seize market opportunities. Therefore, a well-developed
financial system is essential for Honda to thrive in Vietnam's market, fuel its growth
ambitions, and ensure long-term success.
For example, government regulations can increase the cost of doing business, and
political instability can create uncertainty for the company's long-term investment
plans. The quality of infrastructure can also impact logistics and distribution networks,
affecting the company's ability to reach customers efficiently.

II. PART 2
1. Use the Porter’s Diamond Model to analyze the context of this company in
Vietnam.

1.1 Factor Conditions

 Capital resources: Automobile and motorcycle production activities are
mainly based on equipment and machinery, so the company needs long-term
investment, high maintenance costs, and equipment depreciation. In such
manufacturing processes, increasing production levels can be very costly as it will
require higher investment in such machinery and equipment. Therefore, foreign
factories using cheaper premises and high-quality labor will save costs for companies
to concentrate capital.
 Human resources: With a highly skilled and qualified workforce, the World
Bank (WB) rated Vietnam's human resources at 3.79 (10-point scale), ranking 11/12
Asian countries participating in the ranking. Especially for industries with high
technical requirements. However, the number of workers in Vietnam is very large and
they can meet the demand for high skills of employers such as overtime, shift work.
With the above number of employees, they can take on the role of processing,
assembling equipment and distributing to the market. In addition to the abundant and
qualified labor force, labor costs in Vietnam are considered very competitive
compared to the region.

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 Technological innovation: Honda Vietnam has incorporated modern
technology into its products to become one of the leading innovators in the
manufacturing industry: new generation intelligent engine, traction control system,
Honda SMART Key smart locking system and the addition of anti-lock braking
system (ABS). It has showed Honda Vietnam's constant attempts to improve its goods
so that users can have wonderful and worthwhile experiences.
 Infrastructure: Since Honda entered the Vietnamese market, Honda has
continued to invest in building production infrastructure to meet the growing demand
of the market, where motorcycles account for nearly 90% of all vehicles in major
cities. Up to now, Honda has 2 factories in Vinh Phuc and 1 factory under
construction in Ha Nam, with a total production capacity of 1.5 million vehicles /
year.
1.2 Demand Conditions
 Size of the domestic market
The General Statistics Office estimates that 351,100 locally built motorcycles will be
added to the Vietnamese market by December 2022. Estimated motorcycle output in
December was 351,100 units, up 4.4% from the same time previous year but down
0.8% from November (353,900 units). The Ministry of Industry and Trade anticipates
that the market for cars would reach a high level of 800-900 thousand vehicles per
year by 2025. Over 70% of the market share will be taken up by vehicles with fewer
than nine seats. The market share will eventually decline as the flow of trucks and
buses reaches saturation.
 Sophisticated and demanding domestic customers
The current pricing of models offered by Honda Vietnam, which range from VND 10
million to VND 30 million, are comparatively appropriate for the income of
Vietnamese people. Customers will therefore have a wide range of options thanks to
the abundance of products. Honda Vietnam demonstrates in part how well it
understands consumer psychology and wants in order to provide a suitable pricing
plan. It's clear that Honda Vietnam's pricing strategy focuses primarily on their target
market, which is the middle class. For the past few years, this has been the company's
primary customer base. As a result, the business's policy always prioritizes this client.
However, Honda does not stop there; in order to attract high-end clients, they also
import luxury goods from abroad. The pricing of these products has also been done
relatively successfully by Honda, the price Honda offers is relatively high but
consumers can easily accept this price to own such a luxury motorcycle.
1.3 Related And Supporting Industries
All industrial sectors must be interconnected to support one another's growth and a
holistic strategy for the overall success and development of a business or a nation.
Honda also intends to use the expansion of its empire in Vietnam for this aim.
In terms of the motorcycle industry, 90% of the vehicles in Vietnam are motorbikes.
As a result, there are over 60 businesses that are involved in the motorcycle
manufacturing and assembly sector, including major businesses from Japan, Italy, and
Taiwan. Vietnam's supporting industry for the manufacture and assembly of
motorcycles has improved the localization rate of motorcycle products by producing
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around 70% of all types of components and replacement parts, as opposed to having to
import 100% of these items from overseas. However, domestically produced parts and
accessories are still expensive and of variable quality.
The automobile industry is anticipated to receive numerous development preferential
policies, but as of now, the localization rate is still very low, only 10% for passenger
cars, and due to the small market size, it is unable to draw spare parts producers into
the supply chain. Vietnam has imported a variety of spare parts and components,
primarily from Japan (23%), China (23%), South Korea (16%), and Thailand (16%),
to support vehicle assembly. Only a select set of components and spare parts, such as
those for vehicle chassis, car bodies, cabin covers, car doors, tires, and radiators, have
been produced by supporting industries in Vietnam for the automobile manufacturing
and assembly sector. Vietnam must therefore continue to import the majority of
product categories with high technology content and added value.

1.4 Firm Strategy, Structure and Rivalry

1.4.1 Firm Strategy
 Low cost strategy
Honda's goal is to create a competitive advantage by creating products at the lowest
cost. Thus, stemming from the use of a multinational strategy for the motorcycle
product. Honda has focused on developing its manufacturing plant in Vietnam to take
advantage of Vietnam's advantages of location economy. In addition, Honda also
focuses on the strategy of developing a variety of product lines targeting different
target customers, from low-priced cars to high-end segment cars, typically Honda
Wave with low price.
 Differentiation strategy
With any product line, Honda always innovates designs and techniques to suit
consumers. In addition, Honda also introduced into Vietnam market a high-quality
product line such as SH and PCX motorcycles. Besides, Honda has given a very
convincing differentiation criterion for customers to buy the product which is "fuel
saving" with the introduction of FI technology with electronic fuel injection.
 Central Strategy
Honda also offers a number of product lines suitable for female customers such as
convenience and fashion while the price is only average. This is a very easy to use, no
need for clutches, gears, a large storage box that can hold many important things such
as Lead, Air Blade models. In recent years, with the increasing trend of using compact
scooters, Honda launched Vision as Honda's cheapest scooter with a youthful and
dynamic design aimed at young users and those in need a scooter for commuting.

1.4.2 Structure

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1.4.3 Rivalry
Honda's main competitors in the motorcycle market are: Yamaha, Suzuki, SYM,
Piaggio.
 Yamaha: entered the motorcycle market a year after HVN, Yamaha has an
advantage over Honda in the category, its category is very diverse, very trendy.
 SYM has emerged thanks to products with diverse designs with affordable
prices for consumers, the brand from Taiwan will be a competitor in the low-cost
product segment with Honda.
 Piaggio: entered the market quite late, but this car company focuses on the
high-end scooter market such as vespa, Beverly, liberty, zip, fly…
 Suzuki: is a compatriot with Honda, used to be a strong counterweight with
Viva, Smash,...
In the car segment, Honda is not really prominent in the market, some of their main
competitors will be Asian car manufacturers, namely: Toyota, Mazda, Mitsubishi,
Suzuki. ..

1.5 Chance
The market for electric vehicles and alternative fuels is growing.
Green energy is looking toward the future of the automobile market, in which people
will need to use clean energy instead of fuels such as Gasoline, Diesel, and CNG
(compressed natural gas). That creates an excellent opportunity for Honda if it wants
to set foot in this market.
The number of users is increasing.
The number of cars in Vietnam is increasing. One of the reasons is the increase in the
purchasing power of individuals. Another is that having a motorbike or car has
become a social norm. As a result, consumption is now at an all-time high.

1.6 Government:

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Political Stability: The stability of the government plays a crucial role in determining
the business environment in Vietnam. Stable political environment ensures that laws,
regulations and policies remain consistent and predictable, and minimizes the risk of
disruptions and social unrest that may negatively affect Honda Vietnam's operations.
Economic Development: The government's commitment to economic development
and industrialization has played a significant role in shaping Vietnam's economic
growth. The government has implemented policies to promote industries such as
manufacturing, construction, and technology, which have contributed to the country's
growth. Honda Vietnam has benefited from the government's policies aimed at
encouraging foreign investment and promoting the textile and garment industry.

2. What is the company’s entry mode into Vietnam? Identify the advantages
and disadvantages of the company’s entry into Vietnam.
Honda entered the Vietnamese market by establishing a joint venture with a local
company called Vietnam Manufacturing and Export Processing Company (VMEP) in
1996. The joint venture was named Honda Vietnam Co., Ltd., with Asia Honda Motor
Company (Thailand), and Vietnam Mechanical Corporation (VEAM). Honda
officially entered the Vietnamese market in March 1996 with an investment capital of
31.2 million USD for the joint venture. Honda holds 70% of the shares, and 30%
belong to VEAM. The second method, also considered the official method of entry.
At that time, Honda Vietnam Co., Ltd. was established as a joint venture between
Honda and Vietnam Export Processing Company (VMEP). VMEP is a subsidiary of
Vietnam Engine and Agricultural Machinery Corporation (VEAM). This joint venture
allows Honda to establish a presence in Vietnam and leverage VMEP's local
manufacturing capabilities and market knowledge.Honda Vietnam has since expanded
its operations and supplied products to the country. The northern facility, located in
Vinh Phuc province, focuses on motorcycle production, while the southern facility,
located on the outskirts of Dong Nai, is mainly concerned with scooter production.
These facilities help Honda meet the demand for motorbikes and scooters in the
Vietnamese market.
a. Advantages:
 Local Market Access: Honda's entry mode through a joint venture with
VMEP has provided the company with direct access to the Vietnamese market. This
allows Honda to understand local customer preferences, adapt its products
accordingly, and establish a strong presence in the country.
 Knowledge and Expertise Sharing: Collaborating with a local partner like
VMEP enables Honda to tap into its knowledge and expertise in the Vietnamese
market. This helps Honda navigate cultural, regulatory, and logistical challenges more
effectively, potentially leading to better business outcomes.
 Manufacturing Efficiency: Establishing manufacturing facilities in Vietnam
allows Honda to produce motorcycles and scooters closer to the market. This can help
reduce transportation costs and improve supply chain efficiency, leading to faster
delivery times and potentially competitive pricing.

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 Government Relations: Through its local joint venture, Honda can establish
and maintain relationships with government authorities and officials in Vietnam. This
can facilitate smoother operations, favorable policies, and better regulatory
compliance.
Example: Visit the local market.
For example, Honda has developed models of motorcycles that are compact, fuel-
efficient and suitable for traffic and infrastructure conditions in Vietnam. This has
helped Honda build trust and become one of the most popular motorcycle brands in
Vietnam.
b. Disadvantages:
 Joint Venture Dynamics: Operating through a joint venture means sharing
decision-making authority, profits, and risks with the local partner. This can lead to
potential conflicts, differences in strategic direction, or difficulties in aligning business
objectives.
 Dependency on Local Partner: Honda's success in Vietnam is partially
dependent on the performance and capabilities of its local partner, VMEP. If the local
partner faces financial or operational challenges, it may impact Honda's operations
and market competitiveness.
 Limited Control: As a participant in a joint venture, Honda may have limited
control over certain aspects of its operations in Vietnam. Key decisions may require
the consensus of both partners, potentially slowing down the decision-making process.
 Political and Economic Risks: Operating in any foreign country involves
exposure to political and economic risks. Changes in government policies, regulations,
or economic conditions in Vietnam could impact Honda's operations, profitability, or
market position.
Example: It depends on the local partner.
For example, if the VMEP is exposed to financial risk, funding provision and
production management could be affected, negatively affecting production processes
and the ability to meet market demands. This could disrupt and impact Honda's
business performance in Vietnam.

3. Explore the corporate-level strategies that the company is pursuing in the

Vietnamese market.
 Market Expansion: Honda aims to expand its presence in the Vietnamese
market by increasing its market share and reaching a larger customer base. Honda
strengthens its distribution network nationwide by expanding the number of dealers
and showrooms. This helps the company reach customers in many different locations
and increase its reach to potential customers. Currently, Honda has 929 motorbike
shops and 49 auto dealers. Regarding Honda's market share in Vietnam, the motorbike
market accounts for 78% and the car market share is 7%. Honda expands the
motorbike market by heading to the countryside. Because the rural area of Vietnam
accounts for 70% of the population. Honda develops a good quality, cheap price
product line that brings satisfaction to consumers.

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 Product Diversification: Honda focuses on diversifying its product portfolio
to cater to the diverse needs and preferences of Vietnamese consumers. The company
offers a wide range of motorcycles, automobiles, and power products, providing
options for different customer segments and addressing various market segments.
 Localization: Honda emphasizes localization by adapting its products and
operations to suit the specific requirements of the Vietnamese market. This includes
localized production, sourcing of components and materials from local suppliers, and
incorporating local design and features into its vehicles. Honda takes advantage of
locally available resources. Honda expands the system of domestic component
suppliers to help increase the localization rate and reduce the cost of the product.
 Quality and Reliability: Honda maintains a strong focus on quality and
reliability in its products and services. Honda products are known for their durability,
beauty, powerful engines and fuel economy. Honda constantly researches and
develops products to maintain its number one position in the market. The company
strives to deliver high-quality vehicles and power products that meet the expectations
of Vietnamese consumers. This commitment to quality helps to build trust and brand
loyalty among customers.
 Technological Innovation: Honda invests in research and development to
introduce innovative technologies and features in its products. The company aims to
stay at the forefront of technological advancements, offering vehicles and power
products that are equipped with the latest innovations and meet the changing needs of
Vietnamese customers. Honda introduced to the market FI technology, electronic fuel
injection, which has hit the customer's mind when gasoline prices increased
continuously.
 Environmental Sustainability: Honda promotes the development and
adoption of environmentally-friendly technologies. Honda strives to reduce its carbon
footprint and contribute to a greener and more sustainable future in Vietnam. The
company is the first automaker in Vietnam to bring an advanced Hybrid engine to a
commercial vehicle. It is the combination of a traditional gasoline engine with an
electric motor to create a system that is not only more powerful but also
environmentally friendly.
 Customer Focus : Honda places a strong emphasis on customer satisfaction
and loyalty. The company aims to understand customer needs and expectations and
continuously improve its products and services to meet those requirements. Honda
provides after-sales service and maintains strong customer relationships.

4. Identify any hinders or motivations for the execution of the company’s

chosen corporate-level strategies
4. 1 Motivation
 Market Condition: Vietnam is one of the countries with the number of
motorbikes ranked in the top of the world due to economic development conditions
and social lifestyle, so the demand for motorbikes in Vietnam is high, large and
varied. In 2022, motorbike sales in Vietnam jumped 20.5% year-on-year to more than
three million , after recording sales of 2.49 million in 2021 and 2.71 million in 2020
17
(Duc, 2023). Besides, Vietnam also has an abundant and young labor force. This labor
can easily access machines and technology, which will be an advantage for Honda as
they develop their Product Diversification strategy. Because when Honda wants to
develop many different products such as motorcycles, cars and electrical products to
suit many customer segments, it means that Honda has to expand production and need
a large workforce. Besides, the quick access to machinery and technology of the
young workforce in Vietnam also helps to accelerate the production speed, thereby
creating more products for Honda to distribute to consumers for the large demand of
using motorbikes in Vietnam.
 Agreement: There is the Vietnam-Japan Agreement (VJEPA) signed in 2008
between Vietnam and Japan. This agreement again agreed to remove many barriers
for Japanese investors, the most important of which is to remove conditions on
product localization rate, sales scale, export rate, etc. As a Japanese-invested
enterprise operating in the field of manufacturing and assembling motorcycles in
Vietnam, Honda will benefit from this Agreement, especially in the localization
strategy.
4.2 Hinder
 Competitive context:
Vietnam possesses many advantages in the motorcycle market, but it also means that
Honda has to contend with a lot of competitors, such as Suzuki, Yamaha,.... Actions
of companies Competitors, changing market shares, and competitors' technological
advances can pose challenges and require Honda to adjust its strategy.
 Regulatory environment: Regardless of any rule change, such as emissions
standards, safety regulations or import and export laws, can affect Honda's strategies.
Compliance with evolving regulations may require adjustments to product design,
manufacturing processes, or supply chain operations.

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 CONCLUSION
In summary, Honda's foray into the Vietnamese market has undeniably been a
triumph, propelling the company to a position of prominence in motorcycle
manufacturing and automobile production. Over the course of nearly three decades,
Honda Vietnam has exemplified its prowess in adapting and thriving within an
intensely competitive industry. By harnessing their global expertise and deep
understanding of consumer preferences, Honda has effectively outmaneuvered its
rivals, securing a strong competitive edge in the Vietnamese market. The exhaustive
analysis of Honda's market entry strategy contained in this research paper presents
invaluable insights for businesses eager to elevate their corporate performance. By
drawing from reputable sources, this report guide for those seeking to explore and
understand successful market entry strategies.

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