GLOBAL CORPORATE STRATEGY

Global Corporate Strategy

Global Corporate Strategy

Introduction

Honda Motors, initially a maker of motorbikes, succeeded in becoming an automobile producer after all others, in the mid-1960s, by implementing a strategy of innovation and flexibility and by constructing an industrial model enabling it to avoid or limit the risks peculiar to that strategy. The firm's success owed much to the mechanical and commercial imagination of himself. Based on the long-standing philosophy of, "building products in the markets where they are sold," Honda now has more than 100 manufacturing facilities in 33 countries.

The successful Honda model as a whole could continue to function dynamically without strong high-technology challenges that engineers could meet in the form of automobiles that succeeded in the market. But still, there is a need for a continued search for 'holy grail' technologies that would be needed to make the Honda model work through the fast changing times.

Notwithstanding Honda's leading technological position in the world automobile industry, it remained to be seen whether the Honda research and development engineers could at last create a 'breakthrough product' which would translate this leadership into significant competitive advantage; there were now strong echoes of the late 1960s, which produced the CVCC engine. If there was to be no such breakthrough, a key element of the industrial model that had guided Honda's trajectory for fifty years would remain unproven.

The aim of this paper is to carry out a critical analysis and evaluation of the strategies adopted by Honda Motors to date, with the information provided and other materials researched.



Honda's strategic challenges

Honda was unusual in having already created an industrial model by the time it entered the automobile industry. Twelve years after it was founded in 1948, Honda had become the world's largest motorcycle manufacturer, on the basis of a strategy which focused on product innovation and production flexibility and on the mass production of products which had in effect opened new market segments.

The issues that Honda handled so successfully are the central questions of strategy. Honda had to consider what markets to enter, how to position their products within these markets, how to build relationships with dealers and component manufacturers. The subject of strategy analyses the firm's relationships with its environment, and a business strategy is a scheme for handling these relationships. Such a scheme may be articulated, or implicit, pre-programmed, or emergent. A strategy--like that of Honda --is a sequence of united events which amounts to a coherent pattern of business behaviour (, 1995).

The firm's success owed much to the mechanical and commercial imagination of himself. His associate, who was in charge of the organization and its finances, had been concerned from the start to find the resources needed to overcome the difficulties inherent in this profit strategy. Besides loss of capacity to innovate over the long term, the risks of the strategy included of course the inevitable failures, the over- or under-estimation of demand and the refusal of investors in banks to finance projects. Industrial models which are to be consistent with ...