What is the explanation of Honda’s success in the US market?

The Honda’s success in the US market was because of clearly defined strategy. Honda established a US subsidiary, American Honda Motor Company and enters in the US market by offering very small light weight motorcycles which was superior among top players. Honda was following Differentiation strategy, it spent a lot on Regional Advertising which means placing ads of any media within a specific geographic location to influence decision in one locality. Honda had outspent its competitor time after time in advertising, due to which it also established the largest dealership network in US. Honda had larger dealers than their competitors. Honda was even ready to bear short term losses in order to increase market share and build sales and distribution network.

Due to this strategy its US sale rose from $500000 in 1960 to $ 77 million in 1985. Honda has created a market through its advertising and promotional effort for the recreational use of motorcycles. By using Differentiation strategy , company achieved a competitive advantage over its competitor. Honda used productivity based cost advantage and research and Development to Introduce new models, at prices less than its competitor. They target all income class people that is low, middle and high class so in order to achieve market share they was ready to cut the prices. According to analysis Honda is leading among major four Japanese companies over the last 15 years. Sales and Distribution is an important factors for marketing, market share is also influenced by Sales and Distribution systems. There is a interaction between product related variables and sales and distribution systems. The better the product range the best will be the sales and distribution of the company.

The fundamental Reason behind its success in the US market are:

Inexpensive labor Focuses on Long term profitability i.e Building customers High advertising and promotional efforts Large Selling and distribution systems

Lastly I would like to conclude that Honda has combine the manufacturing of motor cycle with the great product design and catchy advertising.

What is the value to Managers?

To become a successful managers, they should have a clearly defined strategy, defined goals before doing any business they only they can succeed.After making strategy managers should implement that strategy in the same way and always try to create differentiation to gain competitive advantage. A good manager should always focus on long term objectives they should focus on Building customer relationship first.

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