Born Global, Grow Global

What to Learn From Honda

Toshikata Amino

Executive-in-Residence

Fisher College of Business

The Ohio State University

Executive Vice President (Retired)

Honda of America Mfg., Inc.

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Honda Motor Co. Was

Founded in 1948

• By Mr. Soichiro Honda

• He was 41 years old

• Elementary school

graduate

• Capable auto

mechanic, successful

auto repair shop

owner in Hamamatsu,

then auto parts

supplier for Toyota

Honda’s First Small Motorcycle

Plant in Hamamatsu,Japan

• Birth place of

Japanese

motorcycle

industry

Honda, Yamaha

Suzuki

Mr. Honda’s Ambition

• Be competitive in the global market

He said “We should be competitive in the

global market. Otherwise, we cannot

compete even against our domestic

competitors”

(Remember that Japanese industry was still

recovering from the total damage of World War II. Not much attention to global market in Japanese

business people’s minds at that time)

Mr. Honda’s Personal Ambition

Became

Honda Corporate Principle

• Maintaining A Global Viewpoint, We

Are Dedicated To Supplying

Products Of The Highest Efficiency

Yet At A Reasonable Price For

Worldwide Customer Satisfaction

(1956)

Global Honda

• Honda was a “Global- Minded”

company almost from the beginning.

Today We Are Living in a Much

More Globalized Society

・Ever advancing Information technologies

・Online marketing

・Instant knowledge sharing beyond

countries’ borders among customers

・Free Trade Agreement

・Rapidly developing countries and new

market

・Global moving of people (Consumers)

Globalization

• We have no reason not to take

advantage of globalization

• Think to grow in global arena from

the beginning of your business

How To Do It

• Maintain your global viewpoint

• Request your partners/employees to

maintain their global viewpoint

• Always keep in touch with global

happenings

• Make it a custom to relate global

happenings to your business

What Honda Did

“Increase Global Presence”

Actively participated to motorcycle racing from 1954

• San Paulo International Motorcycle Racing

• Announcement of Honda’s participation in

TT Race On The Isle of Man to be recognized

as a new motorcycle manufacturer in world

market

Continuously Go Abroad

１９５９

• American Honda was established

Why first overseas operation in U.S.?

Why not Asia or Europe?

Global Motorcycle Market (1950)

In Asia

• Needed

inexpensive

transportation

(Bicycles are major

transportation)

・Short distance from

Japan

In Europe

• Big market size

• Mature (Long history of motorcycles)

• Many motorcycle racing enthusiasts

• However, very tough competition

among established European

motorcycle manufacturers

Why Did Honda Decide to Come to

U.S. As a First Overseas Market?

• Mr. Takeo Fujisawa,

Co founder of Honda

“We should take the

toughest challenge.

Our dream should not

be limited to the

motorcycle business.

We will go into the auto

business in the future.”

American Honda’s First

Office

• A tiny office / warehouse located on Pico Blvd.

Los Angeles

• Sales were very slow

• Honda sales team visited motorcycle dealers one by one by truck fully loaded with Honda motorcycles

Change the Image of Motorcycles

“You Meet The Nicest People On

A Honda” Campaign

• Mass Advertisement

Time, Life, TV

Be creative and

innovative

Think Global, Act Local

• If you are successful in globalization,

sooner or later you have to consider

being local in each market

How to act locally in Japan?

How to act locally in Tibet?

Honda’s Localization

Why Production in U.S.?

• Honda Philosophy

“We produce where we have customers”

• Why?

・Better access to market

・Better delivery when customer wants

・Better understanding of customers

Why?

(continued)

• Better chance to contribute to the

community

・Employment

・Purchasing

・Tax

・Export

Why?

(continued)

• Better cost competitiveness

・ Less logistics costs

・ Less impact of currency fluctuation

・ (Less labor and material cost)

Give, give and take. Win Win relationship

Strongest Motivation

“Dream”

• Manufacturing was a long time

dream since Honda came to America

in 1959

Power of Dreams

Result of Feasibility Study (1975)

Manufacturing in U. S.

• Sept 1979 Motorcycle Production

• Jan 1980 Announcement of auto

production plan

150,000/year

Auto Production Was

Started and Expanded

• Nov 1982 Auto Production

• 1985 Expansion of auto plant

completed 300,000/year

• 1985 Engine Production in

Anna

Repeat

• We have no reason not to take

advantage of globalization

• Think to grow in global arena from

the beginning of your business

• “Glocalize” your business

Thank You for Listening

• Questions?