HONDA COMPANY

Honda Company



Honda Company

Overview of the Company

Honda is Japanese based company that is involved in manufacturing automobiles and motorcycles. This company is one of the largest motorcycle manufacturers that were established in 1959 by Soichiro Honda. Beside this, Honda has also been world's largest manufacturer of internal combustion engines which is measured via volume that produces each year more than 14 million internal combustion engines. Company headquarter in Japan - Tokyo (Honda Annual report, 2012, pp. 6)

Core business of the Company Company core business is an automobile and motorcycle development, manufacturing and distribution businesses. Honda motorcycle line encompasses of business as well as commuter models with sports models. This sports model comprises of trail and moto crossing racing, multi utility vehicles and allterrain vehicles. Beside this, they are also involved in passenger cars, mini vehicles, light trucks and power products such as general-purpose engines, grass cutters, portable generators and lawn tractors and so on.

They also offer and sell spare parts, after sales services, retail lending, leasing to customers along with wholesale financing to deal Tokyo (Honda Annual report, 2012, pp. 12).

Financial Highlights

2012 was a challenging for Honda due to economic environment. As Europe, United States, China, India and other Asian countries was facing firm economy, net sales and operating revenue reduced to 11.1%, regardless of recovery in production along with higher sales in motor-cycle operation. Due to flood in Thailand, this directly impacted on company motor cycle sales while production capacity increased in India and Vietnam.

Worldwide sales were considerably lower than last year which was due to the supply chain disruptions rooted via Earthquake in Great East Japan. As far as power products business is concern, there were a strong sales in North America while much higher sales of pumps in Asia. During 2012, Net sales and other operating revenues were ¥7,948,095 while it was ¥8,936,867. Net income in 2012 was ¥222,074 which was higher in 2011 i.e. ¥563,477. Earnings per share in 2011 were ¥295.67 which reduced to ¥117.34 due to lower net income and lower market price (Tokyo (Honda Annual report, 2012, pp. 4).

Honda Management

Honda management is pure Japanese management which is controlled by peers rather than managers. Management has formulated certain rules on the bases of which their entire product portfolio exits. There are many factors that contribute towards company's ability to be competitive in the industry. Competitive advantages of Hondas are efficiency, innovative, quality and responsiveness to customers due to which Honda has experienced higher profit than companies that are operating in the industry (Nonaka, Takeuchi, 2012, p. 161)).

Honda Corporate structure has been based on three companies, Honda Research and Development, Honda products and Honda Engineering. Honda management apply five different levels in order to operate their business and to accomplish their goals. These strategies comprise of enterprise strategy, operational strategy, business strategy, corporate strategy and individual strategy (Stolle, 2012, p. 75).

Honda main focus is on Business strategy that is they focus much on research and ...