SWOT Analysis of Honda
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Published: Tue, 05 Dec 2017
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Honda is truly a global company like no other. With 134 production facilities in 28 countries, plus another 31 research and development centers in 15 countries, we are achieving our goal of providing satisfaction to customers around the world. More than 160,000 Honda Associates help more than 23 million customers every year.
As of March 2007, the Honda Group comprised 507 companies worldwide. We have developed our global operations strategy based on the principle of manufacturing products close to the customer. Local information is key, and the hiring of Associates and procuring parts and materials is all done close to each Honda centre. However, certain functions – such as production planning, customer service and administration – are performed on a global scale to ensure optimal, integrated and forward-looking strategies.
Honda first established a commercial presence in the UK in 1961 when it opened an office in central London. In 1965 the operation was moved to a larger facility in Cheswick, west London, and sales of Honda vehicles started. First year sales reached 4,000 units with a model range that was initially the S600 and then the S800 sports car. This was followed by the Honda Civic in 1971.
In 2000 the business relocated to a purpose-built office in Langley, Berkshire. The building amalgamated the Head Office functions of Honda (UK) with Honda Motor Europe (HME), and subsequent growth of both organizations has led to staff numbers reaching in excess of 600 people. Extending Honda’s established policy of building its products close to its customers, Honda’s manufacturing presence in the UK began in 1985. Honda of the UK Manufacturing Ltd (HUM) was established in Swindon, Wiltshire.
Honda has an extensive dealer network in the UK, with the current total standing at 203 (car), 118 (motorcycle) and 530 (marine, energy, lawn and garden) sites. In excess of 10,000 people are either directly or indirectly employed by Honda in the UK. Annual sales of cars in the UK passed the 50,000 mark in 1995, and in 2007 broke through the 100,000 barrier.
HISTORY OF THE COMPANY:
Honda of the UK Manufacturing Ltd (HUM) was established in 1985 and began operations in August 1986 with a Pre-Delivery Inspection (PDI) unit in Swindon, Wiltshire. The Engine Plant was the second part of the Swindon site to open, and production of petrol engines for the Concerto began in 1989.
Three years later, in October 1992, the first cars start edrolling off the line when Car Plant 1 – with a capacity of 150, 000 vehicles per year – began manufacturing the Accord. Car Plant 2 was completed in 2001, boosting annual capacity to an impressive 250,000 units. Total investment by HUM in these state-of-the-art, fully integrated Car and Engine Plants currently stands at £1.38billion.
When it celebrated its 20th anniversary in August 2006, Masaaki Kato, Managing Director of HUM, said: “HUM has developed into a mature and successful car and engine manufacturing operation, which could not have been achieved without the strong driving force of our dedicated Associates.”
His comment illustrated perfectly the value we place on all our staff, not just in the UK but globally. Following the creation of 700 new jobs in September 2006, HUM currently employs 5,000 Associates – 50% of our total for the whole of Europe.
1986: Honda begins research in Japan on both small aircraft and jet engines.
1993: Honda begins research on composite body aircraft with Mississippi State University (MSU), leading to development of aircraft called “MH-02” that is jointly fabricated and tested by Honda and MSU. Research continues until 1996.
1995: Honda begins high altitude testing of its first generation turbofan engine, HFX-01, conducting more than 70 hours of tests through 1996.
1999: Development begins of the HF118 turbofan jet engine in the 1,000 to 3,500-pound thrust class, featuring a compact, lightweight, and fuel-efficient design.
2000: Honda R&D Americas establishes a research facility at Piedmont Triad International Airport in North Carolina in October 2000 for the purpose of researching, fabricating and flight testing of Honda Jet.
2002: Honda conducts high altitude tests of the HF118 engine starting in June 2002.
Honda publishes and reports its first technical paper in June 2002 concerning technological achievements of the new airframe. Honda continues publishing technical papers, with the most recent paper in June 2005.
2003: Honda Jet takes first test flight, December 3, 2003. Honda makes first public announcement of the achievement days later.
2004: Honda and GE Aviation announce February 16, 2004, an alliance to commercialize the HF 118 engine, and establish a joint venture, GE-Honda Aero Engines, LLC, in October 2004, to pursue the development, production and sales of Honda’s HF118 turbofan engine in the light business jet market.
In July 2004, Honda establishes Honda Aero, Inc. to manage its aircraft engine business in the U.S. and the Wako Nishi R&D Center in Japan to research and develop turbofan jet and piston aviation engines.
2005: Honda Jet makes its public “world debut” at the EAA (Experimental Aircraft Association) Air Venture 2005 in Oshkosh, Wisconsin, July 28, 2005.
2006: Honda announces that it will commercialize Honda Jet at the EAA Air Venture 2006 in Oshkosh, Wisconsin, July 25, 2006.
Honda Aircraft Company, Inc. (HACI) established in August 2006, responsible for Honda’s overall airframe business strategy, and the further development, sales promotion and production of the innovative Honda Jet.
GE Honda Aero Engines successfully runs a proof-of-concept version of the GE Honda HF120 turbofan engine, exceeding the company’s internal development targets for both thrust performance and specific fuel consumption (SFP) on the engine’s first test run.
GE Honda Aero Engines announced that it had secured orders for the new HF120 engine (a higher thrust successor to the HF118), from Honda Aircraft Company, Inc., maker of the Honda Jet advanced light jet; and Spectrum Aeronautical, maker of the Spectrum Freedom business jet. The announcement was made at the National Business Aviation Association (NBAA) convention in Orlando, Florida, October 16, 2006.
Honda Aircraft Company, Inc. begins sales of Honda Jet at the NBAA (National Business Aviation Association) annual convention in Orlando, Florida, on October 17. Honda Jet will be powered by the HF120 turbofan engine. Honda Jet is targeted for type certification in 3-4 years with production in the U.S. beginning 2010.
2007: Honda Aircraft Company announces place of its $100 million world headquarters and production facility at Piedmont Triad International (PTI) Airport in Greensboro, North Carolina, Feb. 9, 2007.
Honda Aircraft Company breaks ground for new headquarters and production facility, June 27, 2007. Construction of the 219,000 sq. ft. offices and airplane hanger is scheduled for completion in spring 2008. The remaining 150,000 sq. ft. production facility is expected to be completed by fall 2009.
Honda Aero announced plans, July 17, 2007, to establish its headquarters and jet engine manufacturing facility in Burlington, North Carolina, beginning with production of the GE Honda HF120 turbofan engine in 2010.
Honda Aero conducted an official groundbreaking ceremony, November 28, 2007, for its new headquarters and engine manufacturing facility in Burlington, North Carolina, near the Burlington Alamance County regional airport.
Current strategic situation
Europe has significantly strengthened its marketing operation to provide greater strategic leadership and expertise to the 27 markets it serves from the company’s headquarters at Langley, near Slough.
As part of a “root and branch” reform, Tom Gardner has been appointed to the role of Head of European Marketing, Honda Motor Europe (moving from Head of Marketing, Honda (UK), and Cars). Tom will lead an expanded team, working closely with the in-country marketing departments to build a national media schedule and creative. Tom’s team is also charged with developing the long range marketing strategy for the business.
Starcom Media vest has been appointed as Honda’s European media buying agency.
Ian Armstrong has moved across to Honda Motor Europe as Manager – European Communications from his previous role in Honda (UK), Cars. Ian will oversee a European-wide creative to balance Brand Building Campaigns and Product Launch campaigns. A new version of Honda’s “Impossible Dream” advertisement featuring the voice of Andy Williams will lead the charge.
Within the European team, Harry Cooklin and Teresa Rizza will manage motorcycle communications with Lucy Powell looking after comms for Power Equipment.
“I am excited by the prospect of designing and creating the structures to enable Honda to deliver a consistent and powerful message to consumers in all 27 countries across Europe,” said Ian Armstrong. “There’s a lot to do in the next few months and I look forward to working with markets and agencies to ensuring we have the best possible presence in the European market.”
Meanwhile, Martin Moll takes on the role of Head of Marketing at Honda (UK), covering cars, motorcycles and power equipment. This move follows Martin’s three years as Head of Marketing, Power Equipment. Martin will provide the vital interface between the European strategic function and its tactical implementation in the UK market for all three product divisions.
While Honda has abundant backbone to their name, they as well ache from some above weaknesses. The primary weakness of Honda is oftentimes one of their above strengths as well. By afraid to their accouterments as the technology innovator aural their industry, Honda divests abundant of its assets in exploring new methods to enhance their products. However, they generally conduct analysis and accession in fields that accept no applied appliance until continued into the approaching (Corporate Info, nag).
Take for archetype their ammunition adeptness research; Honda was the industry baton in ammunition adeptness from 1985 to present (Investor Guide, nag). However, alone until afresh did gas prices accession top abundant to accreditation the ammunition abridgement as a cogent advantage. Had Honda bald added of their assets to added top end upgrades such as aggressive aural the SUV market, they adeptness accept fabricated abundant added profits. Thus, award the antithesis amid approaching analysis and accepted profits is one of the above weaknesses with Honda. Another one of its weaknesses is that Honda relies on its “entry first, organizes later” action for new bazaar assimilation (Wright Report, nag).
Its accumulated action appears to be to access accustomed markets with their avant-garde articles and advance an basement and alignment afterwards they beam how the bazaar reacts. Although this action has formed able-bodied in some cases such as Honda’s access into the ablaze barter division, area its Ridgeline won Barter of the Year, about in added cases such as the barrage of Acura success was met aboriginal by years of balloon and error. Acura was launched in the mid 1980s, and it was the aboriginal Japanese produced affluence car, about it lacked abounding of the appearance that barter were searching for in top end cars and Acura went through about 5 years of net losses afore Honda assuredly ample out their architecture and administration methods. Honda depends too abundant on their adeptness and adeptness to acclimatize already a artifact enters the market, and as a result, they generally accomplish hasty and adulterated decisions that they accept to again absorb millions and years to fix.
- High R&D
- Market share leadership
- Strong brand equity
- Unique products
- Exotic interior
- Unique aerodynamic shape
- Developed afterwards connected R&D with the latest technology
- Various models targeting assorted chump segments.
- Honda FCX is the aboriginal ammunition corpuscle car in the world
- Fuel efficient
- Revolutionary engine technology
- Road grip
- Uses of Cutting bend technology gives acceleration to problems
- Interior design
- Civic models could cause abashing for the customer
- High cost structure
- Honda requires a deposit for higher purchase but Nissan and Toyota don’t.
- They depend greatly on profits coming in internationally, where they need to focus more on domestic sales in case something were to happen with others’ economies.
- Due to increased interest from consumers into more fuel efficient and lower pollution cars, Honda can use its strength in high R&D to develop these kind of cars to suit consumers needs.
- Emerging markets and expansion abroad
- There is an advance of absorption in environmentally affable vehicles, and Honda’s R&D focus agency that it is able-bodied assertive to capitalize on its ability in this industry. Honda Borough has assorted models that alter in discharge ratings, Honda borough GX NGV is termed as the cleanest car on Earth as far as centralized agitation engines are concerned
- In addition, Honda is a above amateur in the arising markets like Pakistan.
- Car leasing in Pakistan is a befalling for Honda borough to become added widespread.
- Various borough models that ambition altered chump segments.
- Economic slowdown
- External changes (government, politics, taxes, etc)
- Lower cost competitors or imports
- Price wars
- Rising oil and raw actual prices in the apple bazaar can advance to decreased appeal for automotive vehicles. In addition, added costs accept led to decreased customer spending and the aggressive animosity is actual top in this industry.
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