The Honda Effect

Topics: Honda, Motorcycle, Internal combustion engine Pages: 5 (1614 words) Published: July 11, 2010

The two reports are based on Honda’s entry onto the US. They are The BCG report, which was commissioned by the British government to investigate the decline of the British motorcycle industry, and the second report was recorded by Richard Pascale, which looked at Honda’s entry into the US Market.

Honda is a Japan based company and is the world’s largest manufacturer of motorcycles as well as the world’s manufacturer of internal combustion engines (motor vehicles) producing more than 14 million internal combustion engines each year. Honda’s trademark had been registered in Japan since November 13, 1953 it was not until a decade later that the motorcycle and automobile company filed for trademark registration in the United States.

Honda is headquartered in Minato, Tokyo, Japan. Their shares trade on the Tokyo Stock Exchange and the New York Stock Exchange, as well as exchange in Osaka, London, Paris and Switzerland just to name a few.

Honda’s global line up consists of the Fit, Civic, Accord, Insight, CR-V, Odyssey and S2000. An early proponent of developing vehicles to cater to different needs and markets worldwide, Honda’s lineup varies by country and may feature vehicles exclusive to that region. (

1What are the key differences between these two accounts of Honda’s entry in the US motorcycle market?

According to the two reports, BCG and Pascale, there are seven differences in the way Honda entered the US motorcycle market, the seven differences are tabulated below:

BCG ReportPASCALE Report
This report focused on changing the bad image that motorcycles had, by getting rid of the stereotype that motorcyclists were leather-jacketed teenage troublemakers.This report focused on attaining 10% of the import market thus competing with European exports. According to this report Honda started its push in the US Market with the smaller lightweight motorcyclesIn this report, Honda pushed into the US market by introducing the larger machines, i.e. the 250cc and 350cc In this report it states; Honda’s selling point for the lightweight motorcycle was its three-speed transmission, an automatic clutch, five horsepower (the American motorcycles only had two and half), an electric starter and step through frame for female riders. According to Pascale’s report, the heavy larger motorcycles’ selling point was the shape of the handlebar, which looked like the eyebrow of the Buddha, which Mr Honda felt would be a strong selling mechanism. In this report; Honda established an American subsidiary in 1959- an American Honda Motor Company, different to foreign producers who relied on distributorsIn this Report, Honda chose to establish in Los Angeles because it had a large second and third generation Japanese community, a climate suitable for motorcycle use and a growing population. This report states that Honda followed a policy of developing the market region by region.According to Pascale Honda followed a policy of going directly to retailers. In this report, Honda started doing the West Coast region where they lined up 125 distributors and spent $150 000 on advertising.In Pascale’s report it is stated that; Honda ran ads in motorcycle trade magazines for dealers. By spring 1960 they had 40 dealers who had their inventory in their stores. According to the BCG report, Honda’s advertising was directed to young families and their theme was ‘Meet the Nicest People on a Honda’Pascale’s report states that Honda’s advertising was directed to the macho, tough and rough market

Even though these two accounts had the same underlying reason for their draft, to establish Honda’s entry into the US market, they had a lot of differences in the way they went about it.

2To what extent was Honda’s apparent strategy deliberate and/or emergent?

Yes the strategies were both deliberate, and emergent. Strategies can be viewed as patterns or paths to be followed in an organization and therefore...

References: and bibliography:
R Pascale, 1996
Mintzberg et. al, 2003, The Strategy Process, 4th edition, Prentice Hall
Gerry et. Al ,2008, Exploring Corporate Strategy, 8th edition Prentice Hall
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