Honda Management Report

Honda Management Report

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Table of Contents

Introduction 3

Motorcycle Business 3

Automobile Business 3

Power Product and Others 4

Financial Services Business 4

Financial attributes and industry environment 4

Motor vehicle industry 4

2. Analysis of the current business environment affecting the industry 5

Trends 5

Manufacturers and distributors 5

Suppliers 5

Dealership 6

PESTLE and Five Forces analysis 6

Political 6

Economic factors 7

Social factors 7

Technological factors 7

Legal factors 8

Environmental factors 8

Porter's Five Force Model 8

New entrants 9

Bargaining powers of suppliers 9

Bargaining powers of Buyers 9

Threats of substitutes 9

Porter's three generic strategies for competitive advantage 10

Cost leadership 10

Differentiation strategy 10

Focus 10

Analysis of the company's strategic capabilities 10

Resources 11

Capabilities 12

Competitive advantage 12

Attractive industry 13

Strength and weaknesses for Honda 13

Evaluation of possible future strategies for the company 13

Potential future strategies 14

Conclusion 15

References 16

Introduction

Honda Motor Co., Ltd. (Honda) was registered in year 1948. Honda is in the motor product industry that involves designing, construction and manufacturing of an assortment of motor products, varying from general-purpose engines and scooters to niche sports vehicles. The Company's focus divisions are the motorcycle, automobile, financial services, and energy product among others. Honda home office is in Japan but its operations spread worldwide, including North America, Asia and Europe. Major recent strategic moves include selling of all its interests in Hero Honda Motors Ltd to two investors namely Hero Investments Pvt. Ltd and Bahadur Chand Investments Ltd. Honda recently acquired Usha International Ltd in year 2012.

Motorcycle Business

In the Motorcycle section, Honda produces a variety, ranging from the small class to the larger class in cylinder displacement. They employ use internal combustion engines made in-house that come with several assorted features. The company motorcycle section consists of products for business, sports and individual customers.

Automobile Business

The Company's vehicles use a variety of gasoline engines and gasoline-electric hybrid structures. In line with modern trends, it also offers unconventional fuel-propelled motors, such as natural gas and fuel cell vehicles. The range of its vehicle products include passenger, sport function vehicle, multi-wagons and mini cars. Its most famous passenger vehicle designs include Legend, Civic, Accord and Acura RL. The other varieties include Elysion, Step Wagon, FR-V, Fit/Jazz, Ridgeline, Element, CR-V, and CR-Z. The mini varieties brands include Life, Zest, and Vamos. Hondas production sites are in the United States, Canada, United Kingdom, Thailand, India, and in Brazil.

Power Product and Others

The company manufactures a collection of power products that include tillers, generators, all purpose engines, cutters, marine engines, pumps, sprayers, mowers and tractors. Additionally, Honda produces and sells film solar cells for domestic, public and industrial use.

Financial Services Business

Honda provides a variety of financial services to its clients and traders through finance subsidiaries. The services are aimed at providing sales sustainability for its outputs. The subsidiaries normally extend retail lending, rental to clientele and other financial functions.

Financial attributes and industry environment

The company has reported a relatively stable revenue and net income growth over the last four years. Financial reports indicate a $ 97 billion and $ 3 billion for revenue and income after tax respectively for period ended March 2013. The balance sheet as at the end of the same period shows that total assets at almost double the liabilities while the cash flow shows a balanced cash flow all cash elements. Although Honda has achieved a lot in the domestic market, its major success has been in the international markets especially in Europe and North America (Canada and USA). Currently, the international market comprises almost 65 percent of its market share. Main competitors for Honda in both domestic and international market include Toyota motors Ltd and Nissan.

Motor vehicle industry

The industry covers a wide array of organizations and that are involved in planning, development, production, marketing of motor vehicles, motorcycles and related products. It is one of the world most important industries both in revenues and as a propeller to other industries. The industry encompasses all elements and aspects of both used and new vehicles right from production and importation to delivery, retailing, renting and hiring. Aftermarket activities in both products and services forms part of the sub segments of the industry. The aftermarket comprises part producers, accessory wholesalers, converters and remanufactures. Dealers,