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Honda A Case Solution

Solution Id Length Case Author Case Publisher
1983 586 Words (4 Pages) Evelyn T. Christiansen, Richard Tanner Pascale Harvard Business School : 384049
This solution includes: A Word File A Word File

The most important factor was Honda’s cost competitiveness. Honda successfully introduced low-cost products tailored towards the needs of the middle class and advertised effectively. Honda invested heavily in their R&D to compete on cost and design. They discovered and catered previously Unexploredd segments of the market. Another feature of Honda ‘s products was their diversity; they were the market leader in innovation and perhaps the only company with a multi-product line at that time. While the British manufacturers were focused on heavy bikes, Honda gathered the market share by focusing on small, lightweight vehicles for daily use. It was not seen as a threat by the British manufacturers like Harley Davidson, who failed to foresee the future of motorbikes as a transportation vehicle. Honda established a short product cycle, and it took only 18 months for their new product to develop from its conception. All these aspects help them to beat the competition (Christiansen & Pascale, 2011).

Following questions are answered in this case study solution:

  1. Why was Honda so successful in invading the US motorcycle market?

  2. Based on the case, how do you think that Sochiro Honda spent his time?

  3. How did he add value?

  4. What messages does the Boston Consulting Group’s report on Honda (from which this case study is extracted) send to top managers?

Case Study Questions Answers

2. Based on the case, how do you think that Sochiro Honda spent his time?

Sochiro Honda seems to be a person with long term vision and strategy. He was focusing on gathering the large market share for motorbikes all the time and has worked on all aspects of the business from R&D to Marketing and improving distribution network as well. He looks like a strategic leader, who was studying market and competitors while simultaneously planning his next move. He developed a culture of originality within the company and focused on improving the capabilities of its employees, that should be the core reason for the high productivity of his employees.

3. How did he add value?

He did add value mainly by improving R&D, tapping new markets, and developing new products. Under his headship, Honda was able to gain significant market share in domestic and foreign markets and had an annual average growth rate of 14% from 1959 to 1974. The highest market share of 40%-50% could only be achieved through developing high-quality products. In terms of innovation, diversity, cost competitiveness, and market share Honda appeared as a front-runner.

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