GLOBAL STRATEGY

Global Strategy



Global Strategy

In the time of globalization, every business activity becomes more competitive. In this paper, I will analyze the different strategies that a multinational company such as Honda Motors undertakes to survive in the business environment of today. Honda Motor Co. Ltd is a car manufacturer which is based in Japan. The company follows some principles on the basis of which it operates. These principles are; respect the individual and the three joys which are the joy of buying, the joy of selling and the joy of creating. Honda is one of the largest motorcycle producers in the world. It manufactures cars which meet the criteria of all types of people who belong to different social classes.

The vehicles that Honda manufactures fit all sorts of purpose. It manufactures, scooters, motor cycles, cars, sports cars, jeeps and other kinds of vehicles. Its products are available throughout the world and at reasonable prices. The company now has 501 subsidiaries which operate under it and are affiliated with the company in some way or the other, using the equity method. The company was established in 1948 and has been providing us with vehicles for 51 years now. Honda also produces power products.

Cultural Dimensions of Globalization

As mentioned earlier, as the world globalizes the level of competition increases because companies all over the world are competing. In this way there will always be bigger and better companies who will be able to takeover the smaller companies which can not survive on their own.

According to Michael Porter there are some factors which when developed correctly can help companies gain a competitive advantage which can not be easily broken by other companies. There are five forces which help develop this competitive advantage, these are: threat of new entrants, rivalry among existing competitors, bargaining power of suppliers, bargaining power of buyers and threat from substitute products. (John, R. & Gilles, G.L. 1996)Rivalry is a good thing as it helps the company stay on its toes and be proactive. The concentration of companies in an industry will have an affect on the level of rivalry that will exist. The ability for the company to differentiate its products from that of other companies will also enable it to keep a competitive edge. The car manufacturing industry has some barriers to entry in the form of high startup capital costs. This keeps many new entrants from entering the market.

Bargaining power of suppliers depends on the number of suppliers in the market. If there are few suppliers than the supplier can demand higher prices, but if there are many suppliers, those with the lowest prices will benefit. In the long run, it is beneficial to maintain a contract with one supplier, this helps build a relationship. The supplier will understand the type of material that is needed and will be willing to cater to the company's demands.

Bargaining power of buyers depends on the number of buyers that exist in the market for that particular ...