Honda Motor Company, Ltd. Honda Technology Research Institute Company,
Limited) is a multinational corporation headquartered in Japan.
The company manufactures automobiles, motorcycles, trucks, scooters,
robots, jets and jet engines, ATV, water craft, electrical generators,
marine engines, lawn and garden equipment, and aeronautical and
other mobile technologies. Honda's line of luxury cars are branded
Acura in North America. More recently they have ventured into mountain
Honda is the 6th largest automobile manufacturer in the world as
well as the largest engine-maker in the world, producing more than
14 million internal combustion engines each year. In August 2008,
Honda surpassed Chrysler as the 4th largest automobile manufacturer
in the United States. Currently, Honda is the second largest manufacturer
in Japan behind Toyota and ahead of Nissan.
Honda is headquartered in 1-1, Minami-Aoyama Nichome, Minato,
Tokyo, Japan. Their shares trade on the Tokyo Stock Exchange and
the New York Stock Exchange, as well as exchanges in Osaka, Nagoya,
Sapporo, Kyoto, Fukuoka, London, Paris and Switzerland. American
Honda Motor Co. is based in Torrance, California. Honda Canada
Inc. is headquartered in the Scarborough district of Toronto,
Ontario, and is building new corporate headquarters in Markham,
Ontario, scheduled to relocate in 2008; their manufacturing division,
Honda of Canada Manufacturing, is based in Alliston, Ontario.
Honda has also created joint ventures around the world, such as
Honda Siel Cars and Hero Honda Motorcycles in India, Guangzhou
Honda and Dongfeng Honda in China, and Honda Atlas in Pakistan.
With high fuel prices and a weak US economy in June 2008, Honda
has reported a 1% sales increase while its rivals, including the
Detroit Big Three and Toyota, have reported double-digit losses.
Honda's sales were up almost 20 percent from the same month last
year. The Civic and the Accord were in the top five list of sales.
Analysts have attributed this to two main factors. First, Honda's
product lineup consists of mostly small to mid-size, highly fuel-efficient
vehicles. Secondly, over the last ten years, Honda has designed
its factories to be flexible, in that they can be easily retooled
to produce any Honda model that may be in-demand at the moment.
Honda, Nissan, and Toyota, three of the strongest vehicle companies
in the world, were still not immune to the global financial crisis
of 2008, as these companies reduced their profitability forecasts.
The economic crisis has been spreading to other important players
in the vehicle related industries as well.
Honda spends about 5% of its revenues into R&D.
The second explanation was offered in 1984 by Richard Pascale,
who had interviewed the Honda executives responsible for the firm’s
entry into the US market. As opposed to the tightly focused strategy
of low cost and high scale that BCG accredited to Honda, Pascale
found that their entry into the US market was a story of “miscalculation,
serendipity, and organizational learning” – in other words, Honda’s
success was due to the adaptability and hard work of its staff,
rather than any long term strategy. For example, Honda’s initial
plan on entering the US was to compete in large motorcycles, around
300 cc. It was only when the team found that the scooters they
were using to get themselves around their US base of San Francisco
attracted positive interest from consumers that they came up with
the idea of selling the Supercub.
The most recent school of thought on Honda’s strategy was put
forward by Gary Hamel and C. K. Prahalad in 1989. Creating the
concept of core competencies with Honda as an example, they argued
that Honda’s success was due to its focus on leadership in the
technology of internal combustion engines. For example, the high
power-to-weight ratio engines Honda produced for its racing bikes
provided technology and expertise which was transferable into
Honda's entry into the US motorcycle market during the 1960s is
used as a case study for teaching introductory strategy at business
Its first entrance into the pickup segment, the lightduty Ridgeline,
won Truck of the Year from Motor Trend magazine in 2006 (also
in 2006, the redesigned Civic won Car of the Year from the magazine,
giving Honda a rare double win of Motor Trend honors).
It created the first luxury Japanese car (1985 Legend) and motorcycle
(2006 Gold Wing bikes) equipped with an airbag, as well as the
first mid-size pickup truck with independent rear suspension (2006