Marketing of Honda Motorcycles in the USA

Marketing of Honda motorcycles in the USA

The American Honda Motor Company was established as a subsidiary by Honda

in 1959. During the 1960's the type of motorcycles brought by Americans

underwent a major change. Motorcycle registrations increased by over

800,000 in five years from 1960. In the early 60's the major competitors

were Haley - Davidson of U.S.A, BSA, Triumph and Norton of the UK and

Motto - Guzzi of Italy. Harley-Davidson had the largest market share with

sales in 1959 totalling a6.6 million dollars. Many of the motorcycles

produced were large and bulky and this led to the image of the motorcycle

rider as being one who wore a leather jacket and went out to cause trouble.

The Boston Consulting Group ( BCG ) report was initiated by the British

government to study the decline in British motorcycle companies around the

world, especially in the USA where sales had dropped from 49% in 1959 to

9% in 1973. The two key factors the report identified was the market share

loss and profitability declines an the scale economy disadvantages in

technology, distribution, and manufacturing. The BCG report showed that

success of the Japanese manufacturers started with the growth of their own

domestic markets. The high production for domestic demand led to Honda

experiencing economies of scale as the cost of producing motorbikes

declined with the level of output. This provided Honda to achieve a highly

competitive cost position which they used to penetrate into the US market.

" The basic philosophy of the Japanese manufacture is that high volumes

per model provide the potential for high productivity as a result of

using capital intensive and highly automated techniques. Their marketing

strategies are theref...

... middle of paper ...

...as a corporation, who

had looked at the market, formulated a strategy to cope with the

environment and competition pressures and implemented it, making all

Hondas plans and activities deliberate. The second model known as the

emergent strategy portrays a different image to the Andrews model and

shows how Pascale viewed Honda. The model shows a realised strategy made

up from a an intended strategy together with an emergent strategy which

is not planned but emerges in relation to activities within the

environment. Pascale seemed to think that in Hondas case a substantial

proportion or the companies corporate strategy was emergent and less was

actually intended strategy. The actual strategy followed by Honda is

likely to be a combination of both.

Bibliography

Minzburg, H. & Quinn, J.B. ( 1991), The strategy Process. Prentice hall.

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