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Corporate Strategy

Honda Corporate Strategy
Introduction
Notwithstanding Honda’s leading technological position in the world automobile industry, it remained to be seen whether the Honda research and development engineers could at last create a 'breakthrough product' which would translate this leadership into significant competitive advantage; there were now strong echoes of the late 1960s, which produced the CVCC engine. If there was to be no such breakthrough, a key element of the industrial model that had guided Honda’s trajectory for fifty years would remain unproven.
Context
Honda was unusual in having already created an industrial model by the time it entered the automobile industry. Twelve years after it was founded in 1948, Honda had become the world's largest motorcycle manufacturer, on the basis of a strategy which focused on product innovation and production flexibility and on the mass production of products which had in effect opened new market segments.
Other non-Japanese carmakers ask: why do the Japanese learn better from experience than we do? Is it because they stress company wide continuous improvement? For example, Japanese executives worry less about whether overhead allocation reflects the precise demands that each product makes on corporate resources than about how it affects the cost reduction priorities of middle managers and shopfloor workers. American executives often dismiss Japanese management accounting techniques as misguided, or even simplistic (1995). Yet, these same Japanese management styles were the ones that helped Honda become successful in today’s fast changing world.
The issues that Honda handled so successfully are the central questions of strategy. Honda had to consider what markets to enter, how to position their products within these markets, how to build relationships with dealers and component manufacturers. The subject of strategy analyses the firm's relationships with its environment, and a business strategy is a scheme...