Potential Modes of Development of Honda Company - Case Study Example

? Honda Company Table of contents Introduction Factors affecting business SWOT analysis Strategies and tactics of the modern Honda Conclusion and Recommendations References Abstract The paper discusses the Honda Company. It is focused on potential modes of development of the company and on providing numerous options of advancement based on the relevant ecological, economic and marketing policies. Moreover, the paper is based on the relevant researches and studies providing an unbiased overview of the current state of events. It should be mentioned that “going global” is a current need of Honda, and it is relevant to consider required strategies and tactics of innovative and profitable development. Strategic planning, the issues of controlling, and other determining factors of the company are based on relevant SWOT analysis and current data from reliable resources. Key words: globalization, economy, management, strategies and tactics, innovations, technological progress. Introduction The role of the organizational change cannot be denied in the modern world. The main emphasis of the organization is made on the competitiveness and outstanding demand in the global market. To catch the wave, the company should be able to sustain external factors and complexities. Current proposal is focused on a famous international company, Honda. It is a well-acknowledged company. It produces engines, bikes, cars; marine production and many other manufacturing options are possible in case of the company’s performance in the global market. Nevertheless, Honda has to advance its positions in the world. Currently, there are many international competitors, and Honda has to fight against Nissan and many other manufacturers. Honda occupies its positions as the sixth largest manufacturer in the world. Nevertheless, the company has many intentions to advance and perform profitably. A path to the future is thorny, and Honda is able to support its image by introducing numerous innovative techniques and strategies during the period of advancement. Factors Affecting Business The main goal of the company is to increase its sales around the world, but the issues of environmental safety and economic concerns should be paid considerable attention, too. The official website of the company proclaims: “Honda is the largest engine maker in the world, producing nearly 11 million engines annually for its three product lines, including sales of engines to other manufacturers. Honda also builds products in more than 100 manufacturing plants in 33 countries, employing more than 125,000 associates globally”. On the one hand, these figures are impressive; on the other hand, Honda can go global, and for this purpose organizational management of the company, its policy and strategies should be changed and advanced. Firstly, Honda introduced and increased production of Civic and Accord automobiles, which are mid-sized and high fuel-efficiency vehicles. Honda plays an important role in the global market. Thus, the company implemented an effective strategy in the context of international marketing: it offers reliable automobiles at an affordable price. There are a number of factors influencing automobile industry development: social, political, economic and technological ones. Honda came across numerous challenging factors and it is difficult for the company to remain a competitive global leader. Political triggers in the world can be damaging for the company, and it can be very difficult for Honda to effectively address those challenges. Also, the company has internal problems related to the conditions of labor for the employees. There is a perfect professional potential in the company and it cannot be denied that Honda sets the tone of workforce management and regulations in the world (Jackson & Tomioka, 2003). Moreover, the customers of the company are satisfied with its internal regulations. Honda managers are able to find out the interests of people around the world. Such issues as age of the customers, their preferences, the importance of safety issues etc are properly considered. The demands of the customers around the globe are taken into account by Honda’s managers. Influential technological factors are hazardous for the success of the company in the future. Honda is aware of the necessity of advancing technologies and methodologies. As the company has taken these measures, communication with the customers was advanced and waiting time was decreased (Khanfar & Loudon, 2008). Quality management systems and other changes in the sphere of management are very important for the company nowadays. Besides improvement of internal factors of the company, Honda is focused on the external conditions of their operations. Thus, the issues of environment are among the most important in the world. There is no doubt that Honda positions itself as an eco-friendly company. The modern developments of Honda are correlated with the issues of the global warming. Electrical energy, conservation of oil, preservation of water and chemicals are the issues of the highest importance for Honda. Actually, the policy of the modern Japan is correlated with the well-known crucial issues, environmental ones (“Honda Raffles Trip to Japan to Celebrate 20 Years”, 2010). Other policies of Honda are mainly correlated with the political and economic conditions of the countries of their operations. In spite of numerous pitfalls, it can be said that the company is on the way of dealing with the most complex issues in the modern context. Thus, it is relevant to provide SWOT analysis of the company, which is focused on future perspectives basing on the given conditions. SWOT analysis Strengths: A constant growth of sales; Effective usage of fuel; Improvement of services; Financial performance advancement. Weaknesses: Costly maintenance; Lack of promotion; Weak basis for labor relations development. Opportunities: Expansion of products among middle-class people; Socially favorable conditions for operations of the company; Growing exports of products. Threats: Fuel efficiency competitors; High rates of inflation; Political conditions of the countries of operation. There is a general tendency in the modern world to consume resources of the environment and to focus more on the protection of nature. The same tendencies are appropriate for the development of the Honda. It is mainly focused on providing its clients with effective and affordable cars, but at the same time it is focused on environmental issues. Furthermore, to expand globally and to extend the limits of export, Honda performs better than its rivals such as Toyota and exceeds the number of their sales by almost 20% (Khanfar & Loudon, 2008). Strategies and Tactics of the Modern Honda Strategy planning in Honda concerns many different issues. It is very important to direct strategies of development in different sectors of the company. In other words, effective measures should be taken with respect to innovations, production and development of better engines. A combination of various products of the company should be directed for the engines’ advancement. There is no doubt that innovative engines should be correlated with the needs and wants of the customers. In the current study by Ahmad and Chopra (2004) it was found out that “outstanding companies emphasize nurturing good relations with various, external and internal stakeholders and developing a synergistic network of relationships with them” (Ahmad & Chopra, 2004). There are five basic factors to be identified by every company. These factors are identified in terms of 'Win Win' relationships. Firstly, it is very important for the organizations to help both stakeholders in productivity improvement and advance the quality for the value creation. Here, Honda, for example, is responsible for caring for profits increase and vendors’ success. There are also such important factors as: Functional Relationship with Relevant Business and Societal Entities; Concerns for Interests of All Stakeholders; Sensitivity to the Community and Environmental Issues; “Extended Family” Like Relationship with Key Stakeholders (Ahmad & Chopra, 2004). Manufacturers of Honda should be responsible for their production and develop cultural relations within it. In other words, it is very important to develop cultural relations in the company and advance it to a greater level (Coffin, 2003). Leadership positions of the company are promoted and they should follow alternative ways of development. Bikes with customer-friendly prices, environmental safety and efficiency, as well as reliable cars, should be promoted by the managers of the company. Engineers of Honda should be properly focused on the dominant role of the advancement of vehicles and constant improvement. Smooth strategies of a global expansion are the best ways for the company. For example, it is possible for the company to trigger innovative and reliable self-development. At the same time, there are many challenges in this context and Honda explains its mode of development in the following way: “The lack of funding from the ministry of finance and the pouching back of profits into inventory meant they had a tight budget to follow” (The Official Website of Honda Company). Both regional and global advancement of Honda requires innovative strategic decisions. It can be surely claimed that the developers and managers of the company realize many facts and try to found numerous opportunities of the company’s advancement. The first relevant strategy is “Controlling”. This strategy was chosen basing on the following factors: managers should be enabled to make their efforts in different regions. To attract the customers all over the world, the company needs to enforce their advertising campaigns in different countries. It can be said that friendly advertising campaigns lead to a positive results in the products’ advancement. A current success of Honda can be explained in the following way: “The impression that it was through an incidental sequence of events which led to Honda gaining a strong hold in the U.S market, mainly through the unexpected discovery of a large untapped segment of the market while at the same time trying to retain the interest of the current market” (The Official Website of Honda Company). Strategies of Honda illustrate the outstanding ability of the company to feel the needs of the customers. To go global means to be innovative. Being a global player, Honda is a skillful and an experienced leader in the field of cars and automobile production. The company contributes much to environmental problems’ solutions, as well as conducting of a fair pricing policy. Customers of different social classes can afford to buy the production of the company (Ahmad & Chopra, 2004). Nevertheless, imbalanced regional policies are very hazardous for the success of the company. That is why there is a great need to integrate the best strategies into one holistic approach and allow taxes to serve for the public needs (The Official Website of Honda Company). Competitive market products can be introduced in case all needs of the modern technological progress are considered by the company. Profitability increase depends on appropriate investments and company’s strategies. Investment in the modern and innovative IT systems is an important step forward to development of engines and automobiles. Environmental concerns of the company can be considered in the following contexts: internal combustion systems improvement, advancement of hybrid systems, etc. Conclusion and Recommendations In conclusion it can be said that Honda is focused on innovative practices in its current activities. Market innovations, advancement and promotion of the products internationally depend on customer-savvy and available automobile production. Reforming of tools and factories in accordance with the current technological trends and modern ideas are two other important integral components of Honda policy. From the global level and the global issues it is necessary to come to individual concerns of customers and employees. For example, employees’ concerns should rely on ambitions of the employees, their inspiration and effective performance. This is how management strategies are outlined on the official website of the company: Proceed always with ambition and youthfulness; Respect sound theory, develop fresh ideas and make the most effective use of time; Enjoy your work and encourage open communications; Strive constantly for a harmonious flow of work; Be ever mindful of the value of research and endeavor (The Official Website of Honda Company). The coming generation of engines, which have a light weight and have 4 cylinders, are more advanced comparing with the engines of the previous generation. Hybrid technologies of engines produced by Honda should be fully respected and well-known around the world. Economic consumption of fuel and focus on the environmental issues are the most important strategic steps taken in the global context by the company. In the field of management, it is evident that policies are rather innovative and bring some novelties to the strategies implemented by the company. Technological advancement in numerous companies of the modern world should be correlated with three basic pillars of the modern world: economy of the countries, politics, and environment concerns. References Ahmad, Abad, & Chopra, O. P. (2004). Passion to win: How winning companies develop and sustain competitive edge. New Delhi: Excel Books Private Limited. Coffin, B. (2003). Ethics and compliance at Honda of America. Risk Management, 50, 12+. Honda raffles trip to Japan to celebrate 20 years (2010, October 22). Retrieved from http://www.mb.com.ph/node/283547/honda-raffle Jackson, K., & Tomioka, M. (2003). The changing face of Japanese management. New York: Routledge. Khanfar, N.M., & Loudon, D. (2008). Dr. Talal's Honda. Journal of the International Academy for Case Studies, 14(3), 121+. The official website of Honda Company (n.d.) Retrieved from http://www.honda.com/newsandviews/article.aspx?id=20010103000988 Read More