Honda A Essay

944 Words4 Pages
1. Why was Honda so successful in invading the U.S. motorcycle market? Honda was successful in invading the U.S. market fundamentally because they adopted a “market philosophy”, and allowed that clear strategic approach to permeate the company’s approach to marketing, sales, production, and R&D. This was in contrast to the incumbent U.S. and British motorcycle manufacturers, who failed to recognize success of Honda’s strategy in the Japanese market, leaving open the opportunity within the U.S. The “market philosophy” emphasized 1. Capturing market share and 2. Increasing sales volumes above short-term profitability. Honda’s approach began by re-conceptualizing the motorcycle in the minds of consumers (“You meet the nicest people on a Honda”), based on identified customer need, and supported by high advertising expenditures. This had the several direct effects: a) The new market positioning expanded the size of the motorcycle market out of leisure and into affordable transportation, initially in an area where the U.S. and European motorcycles were less competitive in terms of product features and pricing. b) Honda valued market responsiveness as critical. Consequently, the company invested heavily in R&D, achieving a shortened conception-to-production cycle, and maintaining a “Cold Storage” of future designs at the ready. c) Design and product features supported the positioning and the sales volume: for example, a step through frame, one-handed controls, and an automatic transmission. d) Viewing unit costs as a curve inversely proportional to volume (the Experience Curve), the market philosophy drove down the curve faster. This allowed Honda to achieve relatively lower pricing or higher margins or both. e) Heavy investment in R&D allowed the company to create a steeper Experience Curve, by developing advanced manufacturing techniques. Because

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