EXECUTIVE SUMMARY

The following project deals with the various kinds of critical incidents in Honda s world class
make Honda Civic. The following project deals with the critical analysis on the various
strategic model and strategic implementations .Also the project also helps us to understand
the key strategies which needs to be designed and compete in the global market. It is very
easy to design strategies but at the same tie it is equally challenging at time to implement
them in the market due market shifts and changing market conditions. The following report is
a work of thorough research from different books, Journals ,scholarly articles and
newsletters. Critical analysis for each and every task is being discussed in brief.
 COMPANY INTRODUCTION: HONDA

(www.venturebeat.com)1

Honda Motor Company is one of the best automaker in the automobile industry. It is the third
largest automobile maker and it is on number one position when it comes to Bikes. The
company has its majority sales in the United States and that is its main market. Some of the
major sales making car for Honda are Civic, Accord, Acura, and Pre-lude in the U.S. market.
The Accord is the second highest most purchased car in the United States. Some of the
motorcycles produced by Honda are Super Cub, Foresight and shadow 750.

Company Profile: The company has its headquarters in Minato, which is in Tokyo
,Japan..The company trades at the New York Stock Exchange, Tokyo Stock Exchange as
well as it has it investments and trades in London, Paris, Switzerland, etc .Also the company
has a number of assembly points all round the globe like in China, Pakistan ,U,S, England
,Canada and much more. The company has its maximum revenue fro the North America as it
is one of the main markets for the car. Chairman of the company currently is Takanobu Ito

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Current Position:

Due to the recession and high oil prices the U.S economy is growing weak. In such
conditions also Honda showed a sales increase by almost 1 % whereas the automobile giant
Toyota had to suffer losses due to changing conditions. Currently Hondas Civic and Accord
is one of the best selling cars in the global market. After the analysts having a research in the
company they drew two main factors for Honda to grow. Out of that one factors is the
company product-line consists of Small-size to Medium Size but at the same time they are
highly fuel-efficient car. The second factor is the kind of factories designed by the company.
As they have check Honda s factories are so flexible as they can actually produce the kind of
car they want in the market according to the changing demands.

Product Line-The Company have a long and efficient Product-line but the most prominent
ones are Civic, Accord, etc and it is also in to motorcycles. Honda is the largest Producer of
motorcycles. Ever since the existence of the company in 1955it has always been at top
position for motorcycles .The Honda supercub is one of the high selling motorcycle in th
market

CRTITCAL INCIDENTS : HONDA

“A critical incident is something which we interpret as a problem or a challenge in a

particular context, rather than a routine occurrence.” www.prodait.org2

Honda had introduced its Civic in the year 1972 with the tailgate. In the present day, Civics is
compressed cars which are offered in vehicle, sedan, or hatchback models. Hybrid which is
an electric car hit the market in the year 2003. Since the foundation, Civics is known for its
reputation of being reliable, comfortable and safe. In true sense there are some common
problems in Honda Civics which are few but needs to be considered.

Civic trouble the 2002 model experiencing repeated breakdown of the driver's access control
in the front. This gadget tells you that whether the door f the car is opened or closed. As and
when the door switches cease working, there is a key reminder system (which beeps the car
as and when someone leaves the keys in the ignition of the car plus the door of the car is not
closed) moreover the dome glow would not be working appropriately. This is one of the most
irritating repairs needed in the car.
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The fuel distribution unit in the 1999 Civic at times, go out. In simple terms, we can't say the
amount of gas remaining in the car. Plus, this kind of problem is expensive to be fixed in
simple terms. The Civic had received “a five star frontal crash rating” by the U.S. National
Highway Traffic Safety Administration which is the most top level mark as well as the safest
one. nevertheless, things which needs to be taken into concern is the expenses for smash up
because of thievery and crash lean to be of a higher than average. So if the customer stays in
a locality where the amount of thefts and crash is usual then the customer ha to land up
paying more money.

Majority of the problem faced by a number people’s experiences with this car is more or less
Complaints. A number of people criticize to facilitate the mid-90s model has loud cabin as
well as it do not provide space to taller people. All these complaint need to be address as
well as rectified by the -90s. rattle in the dart and chest regularly happen as the car gets old, it
is quite common in such cars. The current model Civics do have a high, loose-fitting
suspension which can handle outstandingly usual conditions but it also makes driving very
much difficult in the rain.

“Finally, the biggest complaint people express about Civics is that the 1.6-liter engine does
not produce enough horsepower. In trading horsepower for fuel economy, you get excellent
gas mileage but slow acceleration on the freeway. The older Civics tend to have a little more
oomph, particularly those made before 1996. If you love the Civic but need more power from
your car, you do have options. Civics are very easily customizable, and there are a plethora of
compatible aftermarket parts to give your car more torque.” (www.fundinguniverse.com)3

Civic Hybrid trouble since with the yardstick Civic, customers are usually very much
satisfied with the Hybrid. though, for the reason to facilitate Hybrid technology is reasonably
innovative, also it make logic that effort would evolve precise to the Hybrid model. A few
people have faced the transmission problem at a ery low mileage ever since the civic hybrid
was launched in the market in the year 2003.The primary indication of the difficulty is a
complain throughout acceleration. The conduction trouble has been experienced by people.
Nevertheless, it has occurred whilst the car is s covered under the warranty provided by the
manufacturer. In a way the darn is free of charge to the customer, excluding there is still the
problem of fixing it. Every car does not get the advertise the gas mileage of 50 miles per
gallon. It is a problem as people buy these model to be cost effective and fuel effective. In
reality the car does get good mileage bu on the flat road and appropriate weather ,But if the
car is to be used in cold weather or mountainous road then the mileage will drop down till 40
gallons. The truth is, the car gets much better gas mileage in warm weather and on flat roads.
If you live in the mountains or a cold climate, you can only expect to get 30-40 miles per
gallon

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 MINTZBERG THEORY OF STRATEGIC MANAGEMENT

www.baclass.panam.edu4

MINTZBERG MODEL

“The strategic apex is the organization's top management. The middle line
comprises the middle managers with line authority. The operational core
comprises workers and first line supervisors. The Technical staff is
engineers and other technical professions and trades that serve as advisors
to the production processes of the organization. The administrative staff is
the staff professionals who advise the line managers on non-technical
concerns such as human resources,”
(www.baclass.panam.edu5)

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http://www.baclass.panam.edu/comm2002/Textbook/Chapter04.html
KEY STRATEGIES UNDERTAKEN BY HONDA FOR STRATEGIC
MANAGEMENT

1) Supply Chain Assessment

The company have realised the mistakes done by them and they have decided to
rework the supply chain management in order to reduce cost whenever required.
Supply chain is one of the most integral part f the Automobile industry where they
need to make sure that they have the effective supply chain management just to make
sure that all the necessary goods are reached to the given point at a particular period
of time. There should be a very optimum level of coordination between all the
parties for the successful delivery of the automobiles. Since most of the Honda s
Plant is overseas it generally tries to develop their Supply chain management. The
company have a flexible system of plants so in accordance to the plant it also needs
an effective supply chain management system.
“American Honda has been counting on its dealers to help them forecast demand,
and now both parties seem pleased with the results of the web-based system called
MOVE. That's short for market-oriented vehicle environment.As a result, the
company's inventory went to 38 days compared to the industry average of 70 day”
http://wardsdealer.com/ar/auto_honda_retailers_move/6

2) Effective Communication and coordination

This is one of the most important strategy designed by Honda as they know what they
lack in and what they need to develop.On that basis an effective communication plan
is being drafted internally and externally so as there adequate coordination between all
the employees as well as the suppliers as well as other necessary stakeholders of the
organisation. In case of Honda, it has large market overseas which they need to handle
soon that basis they have to coordinate with in terms of supply of goods,spare parts
etc. Effective communication and coordination is very much crucial when strategic
model is in to context

3) Right people on right job:

This is one of the main factors that should be there in all the companies. According
to the market survey Honda is one of the leading Automobile Company in the
market. It becomes very much necessary for the company to employ the best person
to accomplish the task. The company needs quality people and that also at the right
place. The company basically has a name in the market and with this strategy it can
actually become a market leader if applied thoroughly

4) Limited Suppliers
Depending upon the volume and the kind of business the company need to have the
suppliers for them. In the case of Honda it needs a very unique amount of suppliers
which can make sure that quality product is being supplied to the company and that
also from time to time Suppliers play a major role when it come s for organisational
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 development. “Honda needs to have limited amount of suppliers but the best one in
the market..

5) Developing Incentive Developing Performance

There are a number of instances where in just to improve the overall performance,
The Company bring in various incentive plans. The incentive plan would definite
increase the efficiency level with in the organisation as well as performance of the
suppliers would also increase. Just in order to receive the incentive benefits the
supplier would start giving full efficiency to the company and tat would help the
company to improve its own efficiency and plunge in more profits. The plan should
be a very flexible in nature. This would help in order to attain complete
organisational development. Also the incentive packages should be reviewed and
increased from time to time just i order to keep the suppliers motivated.

6) Trust Factor

The company have to make sure that they have a very healthy relation with the
customers as well as suppliers. The company has lost trust a number of time in front
of the customers as being constant failures,will affect the brand name directly. So the
company has to make sure that there is a level of trust between the employees as well
as the supplier and as well as the customers should be well maintained..The company
has to see that all the needs for the customers are fulfilled and the suppliers are
supplying the auto parts on time. Trust factor is a very important factor in order to
attain complete organisational development
Challenges that Honda would be facing in current global market place:

1. Challenge related to their sales:

This is one of main issues or challenge that they would be facing in the current global
environment. As we have interpreted that Honda has few incident that have made
their life very much difficult and for them it is quite difficult to survive and remain
competitive in the market and that is all because of their major problem with their
brakes and many other things. Sales is the ultimate motive of any given organization
and if they are unable to drive good amount of sales, then it would be quite difficult
for them to survive. They have to actually do something relating to them and improve
their network, and make their marketing activity more lively and improved that
customers are obviously attracted towards them and also at the same time, they need
to make sure that their sales target are being achieved at any given point of time.

2. Being International and overall growth strategy:

This organization was considered very much lively and very much international in its
own way because, the overall growth strategy is very good and also at the same time,
they are international in their own way due to presence in more than 50 countries
worldwide. This is very true that due to the problem, Honda is being affected a lot not
only in terms of sales, but if they see from long term point of view and also at the
same time, growth has been come to a standstill after the issue and so they have to
make sure that, they have overall good growth strategy and also to remain competitive
in the current market place. They have to focus on every single thing and make sure
that they just don’t rely on other things except their employees and their outside
suppliers.

3. Trust from the consumer:

Consumer confidence is very important if we see from their point of view. They have
to ensure that trust of the consumer who were the regular buyers of the Honda vehicle,
do not just go away, and for that they really need to communicate in an open manner,
by way of media, marketing, advertising and also at the same time, they need to make
sure that consumer is happy with the product after all an organization is doing
business or is able to do it only when they have sales and is making good amount of
profit but that is possible when they know what is right and whether the quality of the
product is quite good enough or not.

4. Reducing the cost in the best possible way:

Reduction of their cost is ultimate challenge for them. They have to actually interpret
all those factors, due to which they are now incurring huge amount of cost and they
have actually recall of their vehicles to avoid any more mishaps or any sort of
accident at any given point of time of the day. They also have to ensure that at any
 given point of time, the quality of the product is not at all affected as that would result
in lower sales and also cost is the main factor by which a company can either improve
the profit margin or increase their loss to a great extent. Hey need to control their
warehousing cost, control good amount of inventory level and also at the same time,
what other things is there, so just to make sure that everything goes well and as per
the plan.

5. Activities relating to the marketing:

Marketing can either make their organization or either break them to great level. Here
are times when organization is unable to produce good product or the quality is not up
to the level, so at that point of time, they have to be well prepared with their
marketing activity and also they have to ensure that marketing is the only thing which
would make customers buy their product and also they can increase their sales and
there would be customer satisfaction. No matter what ever the problem is, marketing
is the factor that would help them to get back in the market and prove the world what
is good for them and how they are able to remain competent in the current global
market place.

6. Maintaining of their operations department:

They have to also make sure that they maintain their operation and supply chain
department properly and systematically. There are times, when supplier is unable to
supply right quality of the product due to any circumstance and due to which , not
only the supplier but also the each and every person would be affected by them. A
company would lose market share, and also there are many other factors which are
relating to it. And they need to be controlled by them. Operations department is the
backbone of very organization, they have to ensure that the design is up to the mark,
and also at the same time, they need to make sure that design of the product is being
tested and every minute detail is being taken care of and so this is also one of the main
challenges that is being faced by the organization.
Conclusion:

It needs to be concluded that Honda is being regarded and very much well known as the one
of the best brand in the industry. They would be affected not only by supplying bad quality of
the product, but also at the same time their brand name is getting affected and once this
situation arises, it would be quite difficult for them to survive in the global market place.
Sales figure would go down tremendously and so it has been understood that once the
company losses the market share then it would not be possible for them to improve it anyhow
and also at the same time, they need to make sure that their brand is staying on the top and in
the consumers mind when quality is taken into consideration. They have stated taking
qualitative decision as they are quite aware of the impact on their brand and also they are
making sure that everything is going as per the plan and quality is being given utmost
importance. They need to use their experience and recruit the best possible staff to make sure
that their supplier are quite good and reliable when supplying the quality raw materials are
concerned and also other parts and equipments, delivery is also given very much importance
and so they Honda is like coming out with the best quality product in the next few years as
per their planning and analysis.

They need to show to the world that they are not just the normal company who produces car
just for the sake of doing business, but in fact they need to make sure that the vehicles they
manufacture are the best or unique in terms of quality, design, looks and it attracts consumers
to buy it. Quality is the main factor that affects the sales of the company and this has been
very well understood by the company. Communication is also one of the factor that plays a
major role in getting good customers to the market and also at the same time, Government is
being informed regularly regarding the progress of the organization. As they need to ensure
that international trade relation are not affected badly due to fewer accidents in other parts of
the country when customers are using their vehicles for their general or business need. Also
at the same time, there are many other people who are related to the company like
shareholder, stakeholders and what are their role in meeting the needs of the world and also
there are special audits in place currently to ensure best quality product is in the market to
tackle the global environment.

REFRENCES
http://venturebeat.com/2010/01/29/honda-takes-the-lead-in-hydrogen-car-game-tests-
fuel-pump/

http://www.fundinguniverse.com/company-histories/Honda-Motor-Company-Limited-
Company-History.html

http://www.baclass.panam.edu/comm2002/Textbook/Chapter04.html

http://www.baclass.panam.edu/comm2002/Textbook/Chapter04.html

http://wardsdealer.com/ar/auto_honda_retailers_move/

http://www.prodait.org/approaches/cia/

Employee Handbook,Honda.2010

BIBLIOGRAPHY
www.strategicmanagement.net