Honda Case

Honda Success

Honda changed mind set of investing in one design until it became obsolete.

Instead offered multi-product line, took leadership in product innovation, and exploited opportunities for economies of mass production by gearing designs to production objectives.

Found untapped market: small-motorcycle business. Its success allowed them to invest in in a larger manufacturing facility and invade the U.S market in 1959. Their product was superior to American and British competitors in terms of size, performance, and cost.

Began investing heavily in advertising as them began grabbing more market share as they made there was from the west coast to the east coast. Honda changed public view on motorcycles "You meet the nicest people on a Honda."

1960-1965 - U.S sales increased from $500,000 to $77 million and lightweight motorcycles dominated the market. Expansion of motorcycle market brought benefits to both American and British producers.

1965 - Domestic sales were only 59% of Honda's total sales. Volume increase from 285k units to 1.4 million.

Created significant product advantage through heavy commitment to R&D and manufacturing techniques. Used productivity based cost advantage and R&D capability to introduce new models at prices below competitors. New products had a short lead-time of 18 months. Honda was willing to take short-term losses in order to build-up and adequate selling and distribution system. Outspent competitors on advertising and established largest dealership network in U.S

BCG - factors leading to decline of British motorcycle industry.