STRATEGIC MANAGEMENT - HONDA MOTORS

Case Study: Reconciling Managerial Dichotomies @ Honda Motors in De Wit & Meyer

Executive Summary

Honda's strategic management has been built up based on a special method of thought: reconciling dichotomies, which means that Honda chooses to take advantage of all the contradictions of strategic concepts such as individualism-collectivism, vertical-horizontal structure, vertical integration-market relationship, sequential-simultaneous development, cost-differentiation strategy and load more. Reconciliation refers to an approach in which the two poles are somehow made in harmony with each other. Honda's approach to reconciling dichotomies is an exemplary innovation in management. Honda has contributed efficiently in teaching twentieth-century managers the best ways to resolve some of the hardest management dilemmas. It is also a great reference for management students all around the world.

Case Study: Reconciling Managerial Dichotomies @ Honda Motors in De Wit & Meyer

Question 1a) In order for a business to assess the balance of power in different situations, it is actually important for it to rely on two helpful techniques which are Porter's five forces model and Porter's value chain.

Porter's five forces is as simple but powerful tool that helps companies out understanding both actual and future competitive position in terms of strength. It is also relevant at determining whatever new products or services are likely to be successful or not, which actually determines its profitability, and thus its performance. (Marks, 2001, 451-483)Porter's Five Forces Analysis The Threat Of New Entrants  For Honda Motors case, I would say that the automobile industry is a very hard one to enter, since economies of scale and costs of entrance are a high barrier for new manufacturers, and not too many investors would be able to finance such a project. Also, an automobile company would need a huge time to get successful and productive in the industry. (Zaccaro, 2001, pp. 43-50)

Bargaining Power Of Buyers  In the automobile industry, the consumer is actually offered a wide range of cars' brands. But still, Honda is a company that knew how to maintain its customers over years. Also, consumers are not that powerful over the brand since they never buy huge quantities of cars anyways. (YVES, 2003, pp. 55-60The Threat Of Substitute Products And Services  For Honda, substitutes exist as the consumer will think twice before purchasing a car, wondering about the costs of operating, such as gasoline and time convenience. Buses, taxis, tramways, planes, trains, bicycles and all other transportations can be a direct substitute to a car. (Kapoor, 2004, pp. 61-65 The Bargaining Power Of Suppliers  Honda has always maintained a good and long term relationships between its component makers, which doesn't mean that its suppliers have a great power over it, because even though, any trouble may occur would make Honda turn to another supplier.

The Intensity of Competitive Rivalry

The price-bases competition is no more a factor in increasing the size or the market positioning of an automotive maker. Cars' manufacturers focus nowadays on financing and long-term warranties to attract consumers, which is more likely to create an intense ...