During the 1960s, when it was a small manufacturer, Honda broke out of the Japanese motorcycle market and began exporting to the US. Taking Honda’s story as an archetype of the smaller manufacturer entering a new market already occupied by highly dominant competitors, the story of their market entry, and their subsequent huge success in the US and around the world, has been the subject of some academic controversy. Competing explanations have been advanced to explain Honda’s strategy and the reasons for their success.

The first of these explanations was put forward when, in 1975, Boston Consulting Group (BCG) was commissioned by the UK government to write a report explaining why and how the British motorcycle industry had been out-competed by its Japanese competitors. The report concluded that the Japanese firms, including Honda, had sought a very high scale of production (they had made a large number of motorbikes) in order to benefit from economies of scale and learning curve effects. It blamed the decline of the British motorcycle industry on the failure of British managers to invest enough in their businesses to profit from economies of scale and scope.
2004 Honda Super Cub
2004 Honda Super Cub

The second story is told in 1984 by Richard Pascale, who had interviewed the Honda executives responsible for the firm’s entry into the US market. As opposed to the tightly focused strategy of low cost and high scale that BCG accredited to Honda, Pascale found that their entry into the US market was a story of “miscalculation, serendipity, and organizational learning” – in other words, Honda’s success was due to the adaptability (and hard work) of its staff, rather than any long term strategy. For example, Honda’s initial plan on entering the US was to compete in large motorcycles, around 300cc. It was only when the team found that the scooters they were using to get themselves around their US base of San Francisco attracted positive interest from consumers that they came up with the idea of selling the Supercub.
Honda Outboard motor on a pontoon boat
Honda Outboard motor on a pontoon boat

The most recent school of thought on Honda’s strategy was put forward by Gary Hamel and C. K. Prahalad in 1989. Creating the concept of core competencies with Honda as an example, they argued that Honda’s success was due to its focus on leadership in the technology of internal combustion engines. For example, the high power-to-weight ratio engines Honda produced for its racing bikes provided technology and expertise which was transferable into mopeds.

Honda's entry into the US motorcycle market during the 1960s is used as a case study for teaching introductory strategy at business schools worldwide.

Its first entrance into the pickup segment, the lightduty Ridgeline, won Truck of the Year from Motor Trend magazine in 2006 (also in 2006, the redesigned Civic won Car of the Year from the magazine, giving Honda a rare double win of Motor Trend honors).

[edit] Initiatives

Although a relatively small manufacturer compared to the other Japanese automakers, Honda is the largest engine maker in the world. Honda has a number of firsts in many categories, including the first engine to meet the 1970 US Clean Air Act (1975 CVCC), the first luxury Japanese car (1987 Legend) and motorcycle (2006 Gold Wing bikes) equipped with an airbag, as well as the first mid-size pickup truck with independent rear suspension (2006 Ridgeline).

The 2006 Ridgeline was a reintroduction of the concept of a Uni-Body truck. Earlier examples of this concept are the Subaru Brat, Volkswagen Rabbit pick-up, and Dodge Rampage/Plymouth Scamp.

Honda has also pioneered new technology in its HA-420 HondaJet that allows new levels of reduced drag, increased aerodynamics and fuel efficiency thus reducing operating costs.

Honda's robot ASIMO (see below) as an R&D project brings together expertise to create a robot that walks, dances and navigates steps.

[edit] Marketing

Honda's official slogan is "The Power of Dreams" however has never used this to sell their products. It was Mr. Honda's belief that well built products will sell themselves. Many of Honda's most remarkable advertising campaigns have been released for the UK market, and have not been broadcast in North America except on the internet.

In 2003, Honda released its Cog advertisement in the UK and on the Internet. To make the ad, the engineers at Honda constructed a Rube Goldberg Machine made entirely out of car parts from the Honda Accord. To the despair of the engineers at Honda, all the parts were taken from 2 of only 6 hand assembled pre-production models of the Accord. The ad depicted a single cog which sets off a chain of events that ends with the Honda Accord moving and Garrison Keillor speaking the tagline, "Isn't it nice when things just... work?" It took 606 takes to get it perfect.[6]

In 2004, they produced the Hate Something advert, which is still shown on British television now, usually immediately followed by a shortened version of the 2005/2006 Impossible Dream advert.

In 2006, Honda released its Choir advertisement, for the UK and the internet. This featured a 60-person choir who sang the car noises as film of the Honda Civic are shown.

In December 2005, Honda released The Impossible Dream a 2 minute panoramic advertisement filmed in New Zealand, Japan and Argentina which illustrates the founder's dream to build performance vehicles. While singing The Impossible Dream (The Quest), a man reaches for his racing helmet, leaves his trailer on a minibike, then rides a succession of vintage Honda vehicles; a motorcycle, then a car, then a powerboat, then goes over a waterfall only to reappear piloting a hot air balloon, with Garrison Keillor saying "I couldn't have put it better myself" as the song ends. The song is from the 1960s musical "Man Of La Mancha", sung by Andy Williams.

In Australia, Honda advertised heavily during most motor racing telecasts, and were the official sponsor of the 2006 FIA Formula 1 telecast on broadcaster channel "Ten". In fact, they were the only manufacturer involved in the 2006 Indy Racing League season. In a series of adverts promoting the history of Honda's racing heritage, Honda claimed they "built" cars that won 72 Formula 1 Grand Prix. Detractors scoffed and called it "false advertising", saying that nearly all those victories were claimed by Honda powered (engined) machines, with the cars themselves designed and built by Lotus F1, Williams F1 and McLaren F1 teams respectively. However, former and current staff of the McLaren F1 team have repeatedly proclaimed that Honda contributed more than just engines and provided various chassis, tooling and aerodynamic parts as well as funding. Ayrton Senna, arguably the greatest F1 driver of all time, repeatedly stated that Honda probably played the most significant role in his 3 World Championships. He had immense respect for founder, Soichiro Honda and had a good relationship with Nobuhiko Kawamoto, the chairman of Honda at that time. Senna once called Honda "the greatest company in the world".

For the last several years, during model close-out sales for the current year before the start of the new model year, Honda's advertising has featured an animated character known simply as Mr. Opportunity, voiced by Rob Paulsen. The casual looking man talks about various deals offered by Honda and ends with the phrase "I'm Mr. Opportunity, and I'm knockin'", followed by him then him 'knocking' on the television screen or "thumping" the speaker at the end of radio ads. Also, commercials for Honda's international hatchback, the Jazz, are parodies of well-known pop culture images such as Tetris and Thomas The Tank Engine.

As part of their marketing campaign, Honda is an official partner and sponsor of Major League Soccer.

In late 2006 Honda released an ad with ASIMO exploring a museum, looking at the exhibits with almost child-like wonderment (spreading out its arms in the aerospace exhibit, waving hello to an astronaut suit that resembles him, etc.), while Garrison Keillor ruminates on progress. It concludes with the tagline: "More forwards please".

The latest campaign for Honda, released May 2007, focuses on their strengths in racing and the use of the Red H badge — a symbol of what is termed as "Hondamentalism". The campaign highlights the lengths that Honda engineers go to in order to get the most out of an engine, whether it is for bikes, cars, powerboats — even lawnmowers. Honda released its Hondamentalism campaign. In the TV spot, Garrison Keillor says, "An engineer once said to build something great is like swimming in honey." while Honda engineers in white suits walk and run towards a great light, battling strong winds and flying debris, holding on to anything that will keep them from being blown away. Finally one of the engineers walks towards a red light, his hand outstretched. A web address is shown for the Hondamentalism website. The digital campaign aims to show how visitors to the site share many of the Hondamentalist characteristics.

[edit] Facilities (partial list)

[edit] Japan

* Suzuka, Mie — cars
* Hamamatsu, Shizuoka — motorcycles (ending 2009)
* Sayama, Saitama — cars, light trucks
* Kikuchi, Kumamoto — motorcycles, ATVs (all Honda motorcycles produced from 2008)
* Utsunomiya, Tochigi — vehicle R&D