Honda Motor Company is a multinational conglomerate with its headquarters in Tokyo, Japan. The company manufactures motorcycles, automobiles, and power equipment. It was found by Soichiro Honda and Takeo Fujisawa in 1946 (Honda, 2019). The company started by manufacturing motorcycles and now has expanded into various other products. It is the largest motorcycle manufacturer for more than fifty years (Johnson, 2005). It is also one of the largest sellers of automobiles and internal combustion engines. It was also the first company to launch a dedicated brand, Acura, for luxury vehicles. Various other automobile manufacturers followed. The company has also stepped into artificial intelligence, robots, and aerospace products. The company has numerous production units across the globe that serve various nations. In 2018, the company generated revenue of 15.36 trillion Japanese Yen with the help of more than 216,000 employees (Anon., 2018).
Following are the four dimensions of the Ansoff Matrix for Honda:
Market Penetration
Market penetration is the activity of launching existing products in existing markets. Honda has developed various strategies in this regard. The first strategy the company has developed is to regularly promote its products through various marketing channels. It also allows consumers to walk into its showrooms and test drive the vehicles to understand what the vehicle has to offer. Various discounts are also offered at certain times to increase sales. Honda also offers installation and other payment plans at its showrooms or through car dealers to motivate consumers to purchase its vehicles. Existing owners of Honda products are motivated to purchase newer models of the products they own (Johnson, 2005). The various products the company offers are also improved over time to match consumer needs. The company already holds a large share of the various markets it operates in creating a tough environment for the competitors. These efforts help ensure continuous sales.
Market Development
This activity involves the sale of existing products in new markets. The first strategy that Honda uses in this regard is to set up its production units and sale showrooms at new geographic locations. These can be inside nations it is already operating or new nations that it currently does not have production facilities in. These facilities help reduce the need to import Honda products into the nation and also help lower their prices as they are locally manufactured. Honda also launches various sub-brands to target particular market segments. This can be in the form of a low-cost brand or a premium brand targeting a market segment to create market segmentation. Certain Honda products are also offered in smaller sizes for certain markets to meet consumer needs. For example, certain Honda vehicles come in both 4-door and 2-door variants to meet different consumer needs. This also leads to the market segmentation based on price. Each strategy helps increase the profits of the company.
Product Development
Product development is the strategy to launch new products in existing markets by an organization. The first strategy that Honda uses in this regard is to launch new models of its products. These include new models of motorcycles, vehicles, and engines. New products are different from earlier versions based on their shape, specifications, and efficiency. They are designed keeping consumer needs and technology growth in mind. Another strategy the company uses is to improve its existing products by offering variants of these products. These variants are slightly different from the existing product and are targeted at certain users that have specific needs. Each new product goes through various product development steeps. Research and development expenses are a large part of the budge of Honda. Each product passes through rigorous quality checks before it is launched and marketed. This helps ensure product development is successful.
Diversification
Diversification is the strategy of lanching new products in new markets. Honda has already done this in various ways. It has already stepped into various industries such as automobiles, heavy machinery, motorcycles, and so on. These are slightly related to each other. It can further diversify into unrelated industries as well such as consumer electronics, broadcasting, hospitality, and so on. The company has an excellent financial background allowing it to take such risks. One difficulty would be the association of the brand name with motorcycles and engines. This can make unrelated diversification challenging for Honda.
References
Anon., 2018. HONDA MOTOR CO., LTD. REPORTS. [Online] Available at: https://global.honda/content/dam/site/global/investors/cq_img/library/financialresult/FY201803_4Q_financial_result_e.pdf [Accessed 13 jan. 2020].
Honda, 2019. THE HISTORY OF HONDA. [Online] Available at: http://www.cars-directory.net/history/honda/ [Accessed 13 Jan. 2020].
Johnson, R.A., 2005. Six Men Built the Modern Auto Industry. MotorBooks Internaitonal.