Competitive Position Assignment – Honda Motors

1. Introduction:

Honda Motors Company is the Japan based automobile, motorcycle, engine and
aircraft manufacturer. Honda was founded by Soichiro Honda in 1948 as the
manufacturer of automotive parts. Later, it moved to the manufacturing of
motorcycles and become the largest manufacturer of motorcycle across the globe.
Later it started manufacturing automobiles and become the first company who
launched the dedicated luxurious brand Acura. And considered as the 8th biggest auto
manufacturer giant in the world. Over several years, Honda started to venture in many
other industries and now started to manufacture robots and jets. This diversification is
the main reason for achieving the competitive advantage among its competitors
(Jurevicius, 2016).

Honda always highlights towards its core objectives and business is engines, and all
products which company ventured in towards its building. Honda is growing fast as
compare to its rivals over the past years because of automobiles. Honda has become a
top choice for the buyers. It has gained a remarkable reputation and famous for the
quality building activities and parts or components, this is totally not undeserved. Its
products are continuously ranked high for quality perspectives by the Consumer
Reports and also by the multitude of some independent groups of consumers. The
testament for the quality is sheer amount of vintage vehicles of Honda that are still
moving on roads (Simpson, 2018).

In addition to this, Honda paid high attention towards satisfying its customers by
focusing on the fuel efficiency of the vehicle. It gained higher marks in this, as it has
gained the position of industry leader in fuel efficiency fleets and models, which has
propelled it as famous during the times when gas prices were high. The model of
CRX HF Honda is the car which sold on the basis of merits of the mileage of gas,
because its gas mileage was on bar at the time of its launch, which many hybrids now
have. Recently, Honda is one of the first companies who released hybrid vehicles in
Honda Odyssey. It continues to lead towards the way of massive selection of both
hybrid and ordinary vehicles (Hill, 2017).

Honda has achieved its competitive advantage by increasing its product value and
brand value among rivals. It is regularly cited as the best “bang for the buck” brand of
cars. Whether looking at its product line of sports cars or luxury line, it is true that
buyer gets more of the value car as compare to the money he pays (Simpson, 2018).
It laid great focus on research and development, which is valuable and explore new
and unique ways of satisfying consumers with advance technologies. It allows Honda
to incorporate some technological advancements and breakthroughs into the broader
line. Its investment is relatively high in R&D as compare to its rivals. Brand equity of
Honda is extremely valuable and big source of gaining competitive advantage, as it
 consumers are willingly paying premiums for its vehicles due to the brand power and
value and quality association. It cause Honda having best-in-class repetitive rates of
purchasing (Hill, 2017). Honda is into the businesses of lease-sales as well. Honda
Motor Co. LTD will keep on catering its clienteles throughout world with supreme
products that are accustomed and valuable, distributing the joy of usefulness by
making the most of and following the potentials of its electrification and engine
technologies.

2. Degree of Competition:
The competition amongst the standing companies is strong which can bring down the
prices and reduce the general productivity of the business. Honda Motor Co. LTD,
functions in such a trade where the struggle with rivals does affect the total long term
productivity of the business. Therefore it's important to build up a supportable
differentiation strategy and producing it on the economies of scale to compete
strongly and cooperating with challengers to escalate the size of the market rather
than only conflicting for market share.

3. Negotiating Authority of Customers:

Customers are generally most demanding aspect of business. They require best
product with minimum price. This burdens the profitability of the company in the
long run. Honda has a large customer base which helps it fight with their bargaining
power, it is also innovating which keeps the customer authority to minimum, by
handling the shortcomings of existing products and increasing the demanded features
by the customers. Therefore, we can say Honda is powerful enough to handle its
customer base with authority.

4. Negotiating Authority of Suppliers:

The supplier base is diverse and varied in the Auto Manufacturing sector. Dominant
position of suppliers can shrink the profits margins therefore Honda has built up
proficient supply chain with several suppliers. The company can shift to one raw
material to another through advancement in its technology. Many suppliers depend on
Honda for their existence therefore they have less say in the companies’ policies or
business.

5. Threat of New Entrants:

The new entrants carries most innovation in the Auto Manufacturing segment, fresh
means of doing things and fresh technologies can put burden on Honda Motor Co.
Ltd, through advancement lesser pricing strategy, dropping costs, and forwarding
novel value proposals to the clienteles. Honda has to face many such encounters and
form operative obstacles to protect its advantage against competitors. Honda has to
face this challenge by continuously bringing innovative product, fresh technologies
which not only gets large customer base but also make the present customer a motive
to purchase Honda Motor Co. Ltd.’s goods. The economies of scale should be adopted
as a policy which meaningful decreases the space of unexpected revenues for the
fresh companies thus deject new performers in the business.
6. Threat of Substitutes:
With the entry of every substitute product or service a need of a customer is addressed
in a different manner. It suffers the profitability of the industry. The danger of a
substitute is high if it bids a value offers that is exclusively diverse from current
submissions of the business. The danger from substitutes is moderate for Honda
Group. There are many competing brands; as well as there are other methods of
public transportation which can act as substitutes well. Though, there are certain
features that make the risk from substitutes moderate. These features comprise,
marketing, competences, and extensive range of products, brand image along with
client belief and reliability.

7. References:
 Global Honda. (2019). Honda Global | Company Overview. Accessed 2 Apr. 2019:
https://global.honda/about/profile.html
 Honda Motor (2018) Annual Statement of Honda Motor.
 M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
 O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975)
 Jurevicius, O. 2016. SWOT analysis of Honda. [Online], Available at:
https://www.strategicmanagementinsight.com/swot-analyses/honda-swot-
analysis.html, [Accessed on: 27th January, 2018].
 Hill, N. 2017. Honda by the numbers. [Online], Available at:
http://www.industryweek.com/leadership/honda-numbers,
 Simpson, L. 2018. Competitive advantage of Honda. [Online], Available at:
https://itstillruns.com/competitive-advantages-honda-5916489.html,