International Management

Presented By ( Group 5 ): Om Prakash Anand| Tanumoy Sengupta | Sukanya Chakraborty

|Sumit Saurav | Bishal Roy
Introduction

 Honda is a Japanese public multinational corporation ( incorporated in 1948 )

and is one of the major producer of automobiles for the world market .
 Honda became the second-largest Japanese automobile manufacturer in 2001.
 Honda is the fourth largest automobile manufacturer in the world behind
Toyota, Volkswagen Group , General Motors as on 2019 ( source Global Auto
Brands Ranking , 2019 )
History of Honda
 Honda’s founder , Soichiro Honda won the contract with Toyota and built a factory
to construct pistons for them .
 Unfortunately the factory was destroyed in an earthquake . Due to gasoline
shortage during World War II , Mr Soichiro was unable to use his own car and his
novel idea of attaching a small engine to his bicycle attracted much curiosity .
 He then established the Honda Technical Research Institute in Japan to develop and
produce small motorbike engines.
 Eventually Mr Soichiro Honda received capital to engineer the first motorcycle, the
Honda Cub. This marked the beginning of Honda Motor Company, which grew as
the world’s largest manufacturer of motorcycles in 1964 .
 The first production automobile from Honda was the T360 mini pick up truck ,
which went on sale in August , 1963 . It was powered by a small 356 cc straight four
gasoline engine and it was classified as the cheaper Kei car tax bracket.
 Eventually Honda came out with its sports car S500 in 1964
Global Line-up of Honda Motors

The Honda Fit, also marketed as the Honda Jazz, is a four-door, front-engine, front-wheel
drive subcompact car manufactured and marketed by Honda since 2001 and now in its third
generation.

In 1982, the Accord became the first car from a Japanese manufacturer to be produced
in the United States when production commenced in Marysville, Ohio at Honda's
Marysville Auto Plant.

The Accord has achieved considerable success, especially in the United States, where it
was the best-selling Japanese car .
Global Line-up of Honda Motors

The Honda CR-V is a compact crossover, manufactured since 1995 by Honda. CRV stands for
"Compact Recreational Vehicle" and CR-V is produced Sayama, Japan, and Swindon, UK, for
worldwide markets.

The Honda City was Originally made for the Japanese, European and Australian
markets, the City 3-door hatchback was retired in 1994 after the second generation.

The nameplate was revived in 1996 for use on a series of subcompact four-door sedans
aimed primarily at developing markets, first mainly sold in Asia outside Japan but later
also in Latin America and Australia.
Global Line-up of Honda Motors

The first generation Civic was introduced in July 1972, Initially gaining a reputation for being
fuel-efficient, reliable and environmentally friendly, later iterations have become known for
performance and sportiness, especially the Civic Type R, Civic VTi, Civic GTi and Civic SiR/Si.

Honda claims the tenth generation ( the current model in production ) reaches 60mph from
0mph in 7.0 seconds.
 Honda was the first Japanese automobile manufacturer to release a
dedicated luxury brand, Acura, in 1986.
 The brand was launched in the United States and Canada and it
focusses on marketing luxury, performance and high-performance
vehicles.
 It was introduced to Hong Kong in 1991, Mexico in 2004, China in
2006, Russia on 2014 ( although it was discontinued ) and Kuwait in
2015 .
Global Presence
 Honda is currently the fourth largest vehicle manufacturer in the world .
Honda sells its cars in 150 markets globally
 Models such as the Civic , Accord , CRV , City , Fit are best sellers in many
regions , the Accord has been America’s best selling car over the past four
decades .
 The national offices of Honda span across four major regions . Honda sells in
30 countries across Japan and Asia Oceania , 38 countries in America , 46
countries in Europe , 36 countries in Africa and Middle East .
 Each office is supported by Honda headquarters’ delivering the exclusive
Honda experience .
Worldwide Vision
 Soichiro Honda from his earliest days has embraced the challenge of
building cars outside Japan .
 Honda was the first Japanese company to make cars in America . It was a
huge venture overseas , but Soichiro's determination helped it to make huge
success .
 Honda ensures its vehicles work well across the world by conducting
research and development on all continents .
 Honda has far reaching R & D facilities in Japan and major projects are led
from its headquarters .
 In addition to that Honda does extensive Research and development in
global facilities before launching a new product .
Honda in India
 Honda Cars India Limited entered the Indian market in 1995 as a joint venture
between Honda Motor Company and Usha International of Siddharth Shriram
Group . Later the company changed its name to Honda Cars India Limited ( HCIL )
and became a hundred percent subsidiary of Honda .
 Honda’s product line up in the passenger vehicles segment includes Amaze , Jazz ,
WR-V , City , BR-V , Civic , CRV , Accord .
 Honda entered into another joint venture in the year 1984 with the Hero Group
called Hero Honda Motors Limited to manufacture motorcycles .
 Apart from launching new models , one of the important steps that Honda India
took was to drastically reduce the prices of its vehicles in India during the
slowdown in the automobile industry in 2019 .
 New launches from Honda India is expected to give good results to the company in
2020 like the Honda Vezel , Honda HRV in the form of higher sales and market
share .
Honda’s Philosophy
 The centre of Honda’s philosophy is the Company Principle, which was
written in 1956.
 Underlying the Company Principle are two fundamental beliefs:

- Respect for the Individual; and

- the Three Joys.

Respect for the Individual.
 Initiative: Associates at Honda should not be bound by preconceived
ideas, but should think creatively and act on their own initiative and
judgment, while understanding that they must take responsibility for
the results of those actions.
 Equality : to creating equal opportunities for each individual. An
individual’ race, sex, age, religion, national origin, educational
background, social or economic status have no bearing on the
individual’s opportunities.
 Trust. The relationship among associates at Honda should be based on
mutual trust for all customers, business associates, suppliers and the
members of society
The Three Joys

 ‘The Joy of Buying’ for every customer who buys a Honda

product.
 ‘The Joy of Selling’ for every dealers and distributors who are proud to
represent Honda to the customer.
 ‘The Joy of Producing’ for manufacturing, production engineering and
research and development, as well as Honda suppliers.
Porters 5 forces
 The Threat of Entry - medium
 Economies of scale, for example, direct cash purchasing or group
purchasing of new Car product benefits.
 Government policies of South East Asian Countries and their actions
influences.
 The Bargaining Power of Buyers - low
 Flexibility of car products: Honda Corporation make a car product very
flexible means it made by according to buyers requirements. It’s easy
to any customer for drive or all aspects
Porters 5 forces
 The Bargaining power of suppliers - low
 Supplier’s power is low as the brand of Honda Car Corporation is powerful.
 The Threat of Substitutes - high
 Market position is tight because of others cars products high rates and
people preferring other modes of transport.
 Competitive Rivalry - high
 Honda car has the competitors such as Toyota, Hyundai, Mahindra and some
local automobile manufactures. Thus, Competitive rivalry is high for this new
Honda car corporation
Business plan
 Honda is preparing to be the first Japanese automaker to launch a vehicle
with Level 3 autonomous driving.
 Level 3 autonomous driving frees up the driver to engage in different
activities like reading , etc .
 For India: Instead of an electric power-train, Honda is planning to introduce
hybrid versions of the Jazz hatchback and City sedan after 2020.
 Honda Motor CEO Takahiro Hachigo said that the company is planning to
launch six models in India in the next three years, and the current favourite
is the hybrid technology, as it is more acceptable to consumers for its
similarity to the gasoline engine.
Marketing Campaigns
 Dream Makers: By combining the art of filmmaking and creating cars, Honda
is able to craft stories that reflect the innovativeness of the brand.
 #Cheerance: Honda’s cheerance impacted 3 million people. The company
also donated $100,000 to the Paediatric Brain Tumour Foundation.
 #Firebladeselfie . While top brands had an average engagement of 0.07%
per tweet, Honda’s campaign generated an average engagement of 11.85%
per video. The Honda Fireblade was sold out in the UK!
 Candy Cane Lane project: For every “like” or “heart” the video received, the
company donated $1 to CHOC Children’s and the Paediatric Brain Tumour
Foundation, for up to a total of $100, 000.
“Glocalization”
 Hondas major core strategy is staying “Close to the customer” –
“Glocalization” – “Manufacturing region”.
 Here Glocalization means “To be local company to the globe by
integrating plants market wise.
 The problem was that developing and producing different cars for
each strategic region was too expensive to sell the cars cheaply,
because economies of scale were not achievable.
 Honda put itself into a position in which it had diversified products
which were still similar, so it could serve different markets with
adjusted products and could achieve economies of scale at the same
time.
 Product design
 Honda created a special department to accelerate the product design.
It is called interdepartmental ‘SED’ (Sales-Engineering-Development)
 It has a quick response in terms of ideas generation, design and
testing, and final design through information flow and cooperation.
 Facility location
 Taking Honda in Ohio, North America, as an example, there are over
40 Japanese-owned firms producing automobile components which
enable Honda to carry out Just-in-time logistics to material supplies.
 On the other hand, the firms are dispersed to small town locations
10-20 miles apart, which avoids the increase labour cost via
separation the local labour markets.
“Lean Manufacturing System”
 In the LMS, people do not work on manufacturing belts; they are
working in units of people (manufacturing units). Furthermore,
machines are shared by the manufacturing units.
 This makes the system very flexible, different car types can be
produced with high efficiency at the same time and fewer machines
are needed, because machines are shared by the manufacturing units
 Synchronized engineering: all of the vehicles coming into a factory's
assembly zones share common designs, such as similar locations and
installation techniques for functions like brakes or transmission.
Supply Chain Management
 For a number of components Honda arranges the purchase of the raw
materials two or three tiers back along the supply chain, which enable
the suppliers gain advantage of price and quality.
 Honda often dispatched experts to support the suppliers and solve
the problems relating with components delivery and quality.
 This kind of partnership assures continues supply of materials at a
reasonable cost and involves the supplier to materials innovation and
improvement which will facilitate the organization to produce
products with variety.
 Quality control
 Honda considers safety and quality as the business ethics and it commits
itself to fulfil them. For example, its airbag innovation has high quality of
protection
 Honda enhanced the communication between the engineers with the front-
line works to capture the accurate information about the feasibility of the
design and the improvement on the quality of products.
 Listen to Engineers
 Since the company was founded in 1949 all of its CEOs have been engineers.
 Consequently, their success as managers is measured not by quarter-to-
quarter results but instead by how well they cultivate individual creativity
throughout the organization and how well they disburse Honda's unique
corporate culture to its decentralized localization strategy to produce
continuous innovation,”
 Encouraging employees to question the status quo
 Soichiro Honda, founder of Honda, emphasized on workers initiative
and was against the hierarchy management structure: ‘On the whole,
people work better if they are not forced and controlled.’
 Diversity, Inclusion in Driver’s Seat
 As Honda continues to expand and grow its diverse supplier base, the
company’s minority opportunity board actively seeks partnerships
with other organizations in the field to enhance and strengthen
relationships with diverse suppliers.
 Externally, the company partners with organizations such as The Posse
Foundation Inc., with which Honda developed diversity programs to
provide real-world work experience, scholarships and mentoring for
students who may not be able to get into college through traditional
means.
Recommendation
 Simplify trim choices to reduce costs
 Honda Motor Co. CEO Takahiro Hachigo said that complicated vehicle
configurations are sapping the company's resources from both
development and manufacturing.
 The Civic Touring sedan model has three choices of 18-inch alloy
wheels, then three choices of wheel decals: blue, green or red. Inside,
customers have their pick from four interior panel trims: black, blue,
green or red. Top that off with four options for cabin illumination.
 They should focus on reducing the variants as much as possible by
communizing the components not seen by customers, such as those
in the engine compartment, passenger cabin and rear.
Recommendation
 Honda should work on “ getting it right the first time ” - The Honda
fleet has been dogged by recalls.

 Culture of incremental improvement and production line efficiency,

called “kaizen” cannot provide fast and flexible approach needed for
today’s challenges – electrification, computerization, self-driving cars.

 Honda should come up with something like “Express Service” ( i.e. 60

minutes vehicle service introduced by Toyota )
Recommendation
 Honda needs to respond quickly to changing market dynamics in the
automobile sector in India –
– Despite having a strong product pipeline, an expansive dealer network and most
importantly an enviable brand, Honda India is losing its market share on all its
cars except the City.
– Honda’s several offerings have / had a dated design hence it could not catch the
market share as expected.
 Honda needs to focus on pricing and positioning of the product
– In 2010, Honda launched its premium hatchback Jazz, pitching it in the same
category as Maruti's four-year-old highly successful blockbuster Swift. As with all
Honda products, it was priced at `6.99 lakh, while the Swift then cost `3.99 lakh
– Brio's design, too, failed to impress, and this effort flopped as well.
Conclusion
 Honda started its internationalization very early and achieved through
steady adoption to international competition.
 Honda’s marketing strategy - building different, cheap cars for
different markets - has contributed to the high demand for Honda’s
cars.
 Even today, Honda shows through the adoption of the Lean
Manufacturing System its adaptability. Moreover, Honda was able to
achieve economies of scale and had diversified products at the same
time.
References
 Honda Global website - https://global.honda/
 https://www.acura.com/rdx
 https://www.hondacarindia.com/
 https://global.honda/about/group/list.html?countr
y=pakistan
 https://www.honda.co.uk/cars/world-of-
honda/present/honda-in-the-world.html
 Sebastian Schmidt (Author), 2001, The process of
Honda`s internationalisation, Munich, GRIN Verlag,
https://www.grin.com/document/105988
 Harrison and Grancis, (2001), Supply Chain
Management Workbook, Butterworth-Heinemann
 https://www.ukessays.com/essays/management/o
perational-strategy-of-honda-company.php
 Automobiles Honda (n. d.) environment. Available
at: < http://automobiles.honda.com/cr-
z/environment.aspx
 https://www.washingtonpost.com/business/how-
honda-makes-globalization-
work/2014/08/07/b84f16be-1cd0-11e4-ab7b-
696c295ddfd1_story.html
 Mair, A. 1997 Honda case study. Strategy: Process,
Content, Context : an International Perspective.
 Global Auto Brands Ranking ,
https://focus2move.com/world-cars-brand-
ranking/
 https://cars.usnews.com/cars-trucks/battle-of-the-
brands-toyota-vs-honda
 https://www.referralcandy.com/blog/honda-
marketing-strategy/
Thank You