Modern management of Honda Company - Research Paper Example

? Modern Management of Honda Company Table of contents Introduction External factors affecting business SWOT analysis Strategy planning of organization Conclusion Recommendations References Introduction Honda is the leading global developer of motorcycles and internal combustion engines. It is located in Singapore, Japan. This company became dominant over Nissan in 2001 and gained the position of one of the most successful and largest manufacturers in Japan. In 2008 Honda over passed Chrysler and became the greatest manufacturer in the USA. In the world the Company gains the position of the sixth largest manufacturer of automobile. As far as we can see, the company is a powerful and estimable competitor in the arena of the global automobile industry. In order to advance its positions in the modern world, Honda should increase its sales. Unlike its main competitors, the Detroit Big Three and Toyota, Honda gained a 1% increase of sales in America (The Official Website of Honda). Still, there is a need to focus more on the demands of global markets and take into account advanced needs if the customers all over the world. Two basic pillars of the modern demand of the automobile industry is environmental safety and energy efficiency. Moreover, in accordance with recent statistical data: “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” (The Official Website of Honda). The most beneficial strategy chosen by Honda in terms of economical crisis in the world can be illustrated by the Civic and the Accord automobiles. These models of automobiles are of mid-size and there is a high fuel-efficiency of the vehicles. There is also an essential flexibility of the automobiles. Moreover, within the last decade Honda managed to create their factories more flexible and these are able to reshape any Honda model of the automobile at any moment. Global locations of the Company’s plants in such countries as Canada, England, Brazil, Belgium and many others indicate their leading positions of Japanese market and the important role it plays globally (Honda Raffles Trip to Japan to Celebrate 20 Years).  Another benefit of Honda is its acknowledgement by the customers around the globe, because it produces economically friendly automobiles. Moreover, constant innovative developments indicate Honda’s ability to be successful in the global arena. High quality products at a low price- this is one of the main advantages of the company as well, especially in the post-crisis economical period. Environmental factors affecting business Modern automobile industry exists in a challenging global environment. Such factors, as social, political, economic and technological ones should be taken into account by the car producers. On the example of Honda it should be noted that this large car manufacturer is surrounded by preventive environmental factors. Political factors, such as degree of intervention in the economy, are rather influential external factor for automobile industry. There are set customers protection laws, which are focused on the safety of customers’ interests. Moreover, the qualities of the infrastructure of the economy as well as the knowledge of the workforce are determinant factors in the political context of the country. Practices of employment or labor laws are also important for the automobile industry. Workforce protection laws are followed by Honda. Moreover, a tendency for a constant innovations and technological advancement is also reflected by the policies of the Company. Economic Environment of Honda influences development of economically safe and reliable automobiles and engines, which are customer-friendly. Business decisions of Honda are developed with respect to the main concerns of economic factors (Khanfan & Loudon, 2008). There is a strong balance between social, economic and technological concerns at Honda. Social factors of Honda reflect the demographic and cultural factors of the macroenvironment. The demands of the customers around the globe are taken into account by Honda managers. There is a need to develop diverse policies, focused on individual’s concerns. Honda Company takes into account various social factors, such as customer’s age, importance of safety, population rate and others.  Technological factors influencing Honda operations are the following: the company is focused on environmental and natural aspects of the modern world. It is completely involved in the researches and developments of environmentally-friendly policies. Moreover, Honda takes into account innovations of automobile industry around the world. Technological innovations implemented by Honda have led to the following positive results: the record wastage is reduced; waiting time is decreased. Therefore, innovations in processes and services have been reflected on the basis of different issues. There is a need to improve management of the Company, develop team responsibility and quality of management systems (The Official Website of the company). Environmental factors are also considered by the Company’s managers. Thus, a change of temperature, weather and climate are controlled by the Company. Global warming is another important issue in the modern context. Therefore innovative developments of Honda are directed on the engine efficiency in terms of potential global climate change. The following measures are taken by the managers: noise environmental management; resource conservation of oil, electrical energy, water, chemicals etc. Thus, in terms of environmental legislation Honda takes into account environmental discharges of the automobile manufacturing process (Jackson & Tomioka, 2003). Legal Environment factor is considered with regards to the politics of Japan. New chances for businesses and environmental issues should be correlated with the policies of taxation, employment, import and export in the Honda Company. SWOT analysis Strengths: Sales Increase Fuel efficiency Service High financial performance Thus, Honda provides its customers with a perfect correlation of price and quality of the automobiles. Moreover, Honda is focused on efficient fuel consumption and provides a better mileage. Free service of motorbikes around the globe, in case there is a guarantee with due date for service. Sales, profits and assets are well balanced by the managers of the company (The Official Website of the company). Weaknesses: High maintenance Less promotion Labor relations Such products of Honda as Karizma, CBZ, Hunk are rather difficult for further maintenance. Moreover, the competitors are aware of other models of automobiles and there is a lack of a proper labor organization in the Company. It is even better to say that more attention should be paid to the involvement of the employees and managers to innovative developments and practices. Opportunity Good will of the company The company is focused on a young generation and middle-class consumers. Thus, a number of target audiences are impressive and there is a need to implement these practices of promotion around the globe. Style, look and price of the automobiles may be attractive not only for Japanese market, or US market, but also for European countries. Threats Technical aspect: Bajaj pulsar and TVS apache are the major competitors for Honda. These products have the same high level of flue efficiency, like Honda’s models, such as threat Karizma, CBZ and Hunk (The Official Website of the Company). Inflation rate is also an intimidating factor for Honda. In case this rate is high, the Company may increase the price for products and the customers would divert their attention from motorbikes.  Strategy Planning and Implementation In order to plan necessary strategy directed on success of the company. The main emphasis is made on innovations and production of better engines. There was a need to combine different resources of the company. On the one hand, it is relevant to develop and advance innovative engines. On the other hand, there is the invention of better engines, directed on the customers. In order to organize innovative productions, Japanese Company was focused on the shift of accents in the motorcycle industry to the delivery of better automobiles with more reliable and cost-effective engines (Coffin, 2003). Moreover, relations between the dealers and manufacturers should be more concentrated in the hands of manufacturers. There is a risky decision if the company is more responsible for its own production. Leading the strategy of the company requires additional cultural developments within the company. The strategy of the company is more relevant in case leadership positions of the company are promoted. On the example of Honda promotion in the US, Honda should follow alternative ways of development.  Moreover, in terms of another environmental challenge, managers of the company should produce bikes with reliable and customer-friendly engines. It is relevant to implements smooth strategies of a new market entry in order to meet the demands of the customers around the world. Unfortunately, the government is not completely involved in the process of Honda innovations developments: “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 the company). Therefore, it is better to lead innovative strategies from region to region, searching for the new customers from west to the east. Controlling The strategy introduction controlling depends on the managers’ ability to dispose their efforts throughout the regions. Therefore, there is a need to launch advertising campaigns friendly for the customers all over the globe. Moreover, they were focused on lightweight motorbikes. The promotion of such kind of automobiles resulted in supercubs development and promotion. The example of international Honda relations with America can be illustrated 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” (Website of the Company). Therefore, managers were focused on the target customers of America. Moreover, it is possible to give a piece of advice to the Honda Company and focus both on an intended strategy and an emergent strategy.   The strategic decisions of the company are usually performed both by senior managers and middle-range managers. The strategic position of the company is supported at different levels. All employees of the company have the ability to make essential contributions to the company’s development. Moreover, with respect to the environmental hazardous factors, such as imbalance between international communities and corporations, there is a need to pay balanced salaries for the employees of the Honda company: " jobs we're keeping aren't allowing us to keep up with our tax base for the public services we need" (The Official Website of Honda). Conclusion We can summarize an innovative vision of Honda Company. There is a need to interfere in the innovative global market by implementing Honda's manufacturing innovations, such as customer-savvy and economically-savvy automobiles. The new system of speed and flexibility of Honda’s automobiles is developed on the basis of reduced time for manufacturing and investing in the new models of cars. Moreover, there is a need to retool factories and plants of the company and thus Honda is focused on the re-tooling plants easily. Cooperative costs reduction and developing efforts of the suppliers’ results in introduction of competitive market products and profitability increase. Moreover, technological considerations of the company are also focused on investing in the research and development of the company. IT development system is efficient for the innovations development. It can be also claimed that advanced IT systems facilitate the process of automobile and engines manufacturing. Environmental concerns of Honda can be discussed in accordance with 3 main principles: automobile efficiency maximization with the implementation of internal combustion systems; hybrid systems development and advancement; fuel cell powered vehicles concentration (The Official Website of the company). It should be also noted that employees and the managers of the company are able to contribute much in the development of innovations or strategic advancement. Recommendations Innovative developments of Honda in the global market can be more focused on individual concerns of different customers. The next generation of compact automobiles and a series of lightweight 4-cylinder gasoline engines, which are rather essential in comparison with previously developed engines, are the main strategic concerns of Honda nowadays. Moreover, the company should develop more tolerant price policies and focus on the middle-class customers. There is a need to mention that engines developed by Honda are considered to be the next generation of engines. Hybrid technologies of Honda are the most important strategic steps taken in the global context by the company. A new launch of the new Civic should be reached by implementation of a new hybrid innovative system. There is a need to concentrate on fuel economical consumption in order to appeal for the interests of the global consumers. References 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. Retrieved December 18, 2011, from http://www.honda.com/newsandviews/article.aspx?id=20010103000988 Coffin, B. (2003, December). Ethics and Compliance at Honda of America. Risk Management, 50, 12+. Honda Raffles Trip to Japan to Celebrate 20 Years. (2010, October 22). Manila Bulletin, p. NA. Read More