A. Compare and contrast the two descriptions of Honda Corporation’s start-up, early growth and an entry into the U.S motorcycle market. How does each case explain Honda’s success?

Case A is based on the Boston Consulting Report that describes the decline of the British Motorcycle Industry. It informs us about the success of the Honda’s light motorcycle and the impact it made in the industry in a planned manner. In case B we get insider information with the description of the actual difficulties that Honda faced in the motorcycle industry. It states that the situation was not as smooth as the BCG Report made it sound.

Key SimilaritiesBoth Cases A and B show Honda’s interest in the US Market and How Honda wants to achieve as much sales possible. Case A and B mentions that Honda wanted to attract the general public, people who previously never considered about buying a motorcycle. Both the cases mentioned the campaign for Honda: ”You meet the nicest people on Honda”. This Campaign was to break the general perception of motorcycles and bikers which was not socially accepted. Both the cases have mentioned about how Honda entered the US Market right at the end of the Motorcycle trade season, how Honda took risks in entering a untouched market. Both the cases describe about the working together of the Honda Management team to succeed despite the management differences mentioned in case B.

Key DifferencesIn case A, the situation is framed which can be easily understood applying the theories and frameworks of strategy explaining Honda’s success. In contrast to this, in case B Honda’s success story is retold by honda’s executives. This account describes a messed up approach followed by Honda’s team and suggests that they did not achieve success the way they planned. Rather their actions were of trying everything taking huge risks. Case B seems much close to the real world scenario and shows how success and failure may emerge from a strategic effort.

The Honda Case A demonstrates how academicians, students can use frameworks to make a strategy and understand a situation. For example Case A, does not never mention about the sense of loyalty which the Japanese executives felt towards Honda but Case B suggests it was the sense of mutual commitment that convinced them that they will be able to sell Honda motorcycles in the US. Commitment and loyalty were not mentioned in Case A because such factors did not fit within the frameworks of the context presented in Case A.

C. a) what is the explanation for Honda’s success in USA Market according to case A?

1. Success of Honda was fueled by success in the Japan market. Since there was heavy demand of their products in the domestic market Honda experienced economies of scale, hence the cost of producing motorbikes declined with the level of output. Because of this Honda achieved a highly competitive cost position which they used to penetrate into the US market .They developed high model volumes.

2. The company set up its headquarters in the west coast of America. Hence, it moved away from other companies who relied upon distributors to sell their bikes.

3. Honda targeted a market which was untouched in US. They focused no not the frequent buyers of motorcycles but the general public which never considered about buying a motorcycle.

4. Honda’s Product The small, lightweight Supercub was sold at under 250$ compared to the bigger American or British motorcycles which were sold at around 1000 to 1500$.

5. Honda invested a lot of its time and effort in innovation, that is its designer and engineers compared to their competitors showing the value which the company placed on quality.

6. Honda was of developing itself in USA region by region. Over a period of four to five years they moved from the west coast of America to the east coast.

7. Honda invested a lot in advertising. The company spent heavily on the campaign “you meet the nicest people on a Honda”, to associate themselves with the general public.

C. b) What is the explanation for Honda’s success according to case B?

1. Association of partners, Honda who was Know how in technology and Fujisawa was the major reason for Honda’s Success. With Fujisawa’s decision making, they moved in the right direction.

2. Decision to reduce dependency on suppliers and distributers by becoming a full-scale manufacturer.

3. Using the Innovative ideas from Racing and applying it to produce an inexpensive, safe- looking motorcycle for commercial selling.

4. Utilizing the Success of Honda’s Supercub to restructure Honda’s Channels of distribution. Honda sold its Supercub to retailers directly primarily through bicycle shops.

5. Honda Entered the US Market without any strategy as per Case B. For many months they faced many challenges in US but luck favored them. The Honda 50s used by the employees in LA attracted a lot of attention and buyers. It was not planned but Honda did not have any choice because of the losses they were facing.

5. Though the management had initial disagreements but the decision to invest heavily in advertisement with the campaign “You meet the nicest people in a Honda” favored them hugely.

6. The system of Cash on Delivery started by Honda faced huge revolt but it became a pattern in the industry contributing to Honda’s Success.