A Business Opportunity of Honda Motors in Thailand - Case Study Example

Strategic Environmental Analysis The rapid growth in population and availability of better and advanced products has increased concern for the business. This has made organizations look towards understanding the environment. Environment includes both the external and internal world and organization which is able to cope with the changes is able to ensure opportunities of growth. Thailand is looked by organization as one of the most favorable destinations to conduct business. This is primarily due to the varied opportunity, the growth rate and rising disposable income which had enabled companies to get a good return on their investments. The motorcycle sector is Thailand is growing rapidly and with motorcylce being used as a mode of tourist attraction has further developed the market and increased the demand for new and trendier motorcycle (Panthong, 2012). This has ensured that Thialand has a strong reason for Honda Motors to start there venture as the growth rate will ensure bigger business and an ooprtunity to grow. PEST Analysis PEST analysis looks into the external environment and helps to identify factors which will have an effect on the working of company in the country. Companies that are able to understand the effect of political, economic, social and technological effect will be able to deal with the situation in a better way and ensure proper growth for the business. Honda Motors which looks towards a business opportunity in Thailand needs to understand the factors that will help them and areas they need to watch out so that they are able to grow their business and achieve the objectives with which they are entering the country. Political Issues Political factors have a role for organizations performing in an economy and stability on the political front ensures that the business is conducted smoothly (Daniels, Radebaugh & Sullivan, 2007). A new firm looking towards a new business venture looks to understand the political situation so that they are able to deal with the situation and garner maximum support for the business. Thailand on this front has a stable government and the policies of the government find time to be in operations. Toursim has added as one of the major contributions towards the growth of the country and the policies of the government have ensured development of the economy. The country has looked towards ensuring that more and more foreign funds flow into the country and development of the tourism industry has ensured better flow of foreign capital (Lin & Yeh, 2002). The government has also ensured that the legal requirements are looked into. The government has framed laws which has reduced quota and warrants thereby ensuring fair competition (Hill, 2009) for all. The economy has a fluctuating exchange rate which has ensured that the different players are able to grow and grow their business with the outside world (Na & Lightfoot, 2006). Economic Issues Thailand is presenting a strong face in terms of economic growth and is witnessing growth rate of 7.8% (Thailand GDP, 2007) when other economies are feeling the heat of recession.. This makes Thailand a very favorable destination for trade. The high disposable income will make it easy for Honda Motors to sell motorcycle and will ensure that the demand remains high even in difficult situation. The way the economy has grown and increased their dependance of vehicles will further help Honda Motors to sell motorcycle and will help them to cater to a market which is flourishing and growing thereby enabling them to ensure better opportunities of growth in the future. Social Issues Honda Motors while entering Thailand needs to understand the social issues and customs surrounding Thailand. The country has a strong presence of tourist and being able to develop the motorcycle business by banking on the increasing trend of toursit towards motorcycle will ensure proper growth. This will provide an opportunity to ensure that trendier motorcycles are easily acceptable by the people. Thailand has a strong traditional system and follows old ideologies (Hill, 2009). Honda Motors need to understand these ideologies and look towards designing and launching their motorcycle in a similar manner so that is becomes acceptable to the masses. This will help Honda Motors to develop a relationship where customers feel a part of the brand and this will gradually help Honda Motors to be able to sell their vehicle in Thailand. Technological Issues Thailand is technologically very advanced compared to some countries. This has helped them grow and ensure more foreign funds flow into the country. Honda Motors need to understand it and develop their strategy which focuses on developing the supply chain network in such a manner that it helps to removes the bottlenecks and ensures smooth supply. The high technological advancement provides an opportunity for Honda Motors to develop their research centers so that motorcycle with better features and technology is developed which will enhance customer satisfaction and will make them purchase more and more products. SWOT Analysis This analysis based on the external analysis above will help to understand the manner in which the internal factors can be used by Honda Motors in developing their business and ensuring that they are able to grow and ensure proper returns for the stakeholders. The internal analysis looks as Strengths Weakness Strong Brand Name (Honda Motor, 2011) Little Knowledge about Chinese Market Technological Advancement Limited product Range Improved after sales service Uncertain Chinese financial sector Efficient workforce looks to enhance customer satisfaction Trendier and stylish motorcycles   Opportunities Threats Expand in markets like Europe and Asia (Honda Motors, 2011) Increased competition from global players (Honda Motors, 2011) Increased demand for stylish and sports motorcycle Increased threat from Chinese manufacturer Growth in the motorcycle segment Economic recession engulfing economies Growth in younger generation preferring motor cycle   References Daniels, J.D., Radebaugh, L.H. & Sullivan, D.P. (2007). International business: environment and operations ,11th edition. New Jersey: Pearson Education Hill, L.W.Ch. & Jones, R.G. (2004). Strategic management: An integrated Approach. (6th ed.). Boston: Houghton Mifflin Company Honda Motors. (2011). Honda Motors Co. Ltd. Data Monitor. Retrieved from www.datamonitor.com Panthong, K. (2012). Big Bike Market Set to Change Gear. Retrieved on February 22, 2012 from http://www.nationmultimedia.com/business/Big-bike-market-set-to-change-gear-30175431.html Thailand GDP. (2012). Thailand GDP. Retrieved on February 22, 2012 from http://www.indexmundi.com/thailand/gdp_real_growth_rate.html Thailand. (2012). Thialand GDP Growth Rate. Retrieved on February 22, 2012 http://www.tradingeconomics.com/thailand/gdp-growth Read More