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Honda
Honda Motor Co., Ltd., or simply called Honda is a Japanese manufacturer of automobiles, trucks, motorcycles, scooters, robots, jet engines and jets. However, as the name of the company in Japanese suggests, the company is often described as an engineering or engine company rather than a car company. Honda makes ATVs, water craft, electrical generators, marine engines, lawn and garden equipment, and aeronautical and other mobile technologies. Honda's high-end line of cars are branded Acura in North America.
With more than 14 million internal combustion engines built each year, Honda is the largest engine-maker in the world. In 2004, the company began to produce diesel motors, which were both very quiet whilst not requiring particulate filters to pass pollution standards. It is arguable, however, that the foundation of Honda's success is the motorcycle division.
Honda is headquartered in Tokyo. Their shares trade on the Tokyo Stock Exchange, the New York Stock Exchange, as well as exchanges in Osaka, Nagoya, Sapporo, Kyoto, Fukuoka, London, Paris and Switzerland. American Honda Motor Co., is based in Torrance, California. Honda Canada Inc. is headquartered in the Scarborough area of Toronto, Ontario, and is building new corporate headquarters in Richmond Hill, Ontario, scheduled to relocate in 2008. Honda of Canada Manufacturing is based in Alliston, Ontario.
Company history
In September 24, 1948 the Honda Motor Co. was founded. Soichiro Honda took advantage of a gap in the Japanese market that was decimated by World War II, Japan was starved of money and fuel, but still in need of basic transport. Honda, utilizing his manufacturing facilities, attached an engine to a bicycle, creating a cheap and efficient transport.
Soichiro Honda was a gifted mechanic, who after working at Art Shokai, developed his own design for piston rings in 1938, hoping to sell them to Toyota, who rejected his first design, but after two years of work and study, further refined them and earned a contract from Toyota. He constructed a new facility to supply Toyota, but soon after, during World War II, the Honda piston manufacturing facilities were almost completely destroyed. Soichiro Honda created a new company with what he had left, giving it the name "Honda Giken Kogyo Kabushiki Kaisha" which translates to "Honda Research Institute Co. Ltd." Despite its grandiose name, the first facility bearing that name was a simple wooden shack where Mr. Honda and associates would fit engines to bicycles. Interestingly, the official Japanese name for Honda Motor Co. Ltd. remains the same, in honor of Soichiro Honda's efforts. in 1958 the American Honda Co. was founded.
Honda began to produce a range of scooters and motorcycles and Soichiro Honda quickly recovered from the losses incurred during the war. By the late 1960s, Honda had conquered most world markets. The British were especially slow to respond to the Honda introduction of electric starters to motorcycles. By the 1970s, Honda was the largest producer of motorcycles in the world, a title it has never relinquished.
Honda began producing road cars in 1960, mostly intended for the Japanese market. Though participating in international motorsport, Honda was having difficulty selling its automobiles in the United States. Built for Japanese buyers, Honda's small cars had failed to gain the interest of American buyers.
Honda finally established a foothold in the American market in 1972 with the introduction of the Civic-larger than their previous models, but still small compared to the typical American car-just as the 1970s energy crisis was impacting worldwide economies. New emissions laws in the US, requiring American car makers to affix expensive catalytic converters to exhaust systems, increased car prices. However, Honda's introduction of the 1975 Civic CVCC, CVCC being a variation on the stratified charge engine, allowed the Civic to pass emissions tests without a catalytic converter.
In 1976, the Accord was immediately popular because of its economy and fun-to-drive nature; Honda had found its niche in the United States. In 1982, Honda was the first Japanese car manufacturer to build car plants in the US, starting with an Accord plant in Marysville, Ohio. They now have four plants located in Ohio: two in Marysville (the Marysville Auto Plant and the Marysville Motorcycle Plant), Anna, and East Liberty. They also have plants in Lincoln, Alabama (Honda Manufacturing of Alabama), and Timmonsville, South Carolina, and have recently (2006) opened a new plant in Tallapoosa, Georgia. Honda also has an extensive after market parts operation located in Marysville, Ohio, and a Research and Development facility in Raymond, Ohio. Honda's North American and U.S. headquarters are located in Torrance, California. Honda's Canadian and many US-market Civics are manufactured in their plant in Alliston, Ontario since 1986. On June 27, 2006, Honda announced that another vehicle assembly facility will be opening in North America, this time in Greensburg, Indiana. Its completion is expected in 2008.
Honda was the first Japanese automaker to introduce a separate luxury line of vehicles. Created in 1986 and known as Acura, the line is made up of modified versions of Honda vehicles usually with more power and sportiness than their Honda counterparts.
In 1989 Honda launched their VTEC variable valve timing system in its production car engines, which gave improved efficiency and performance across a broader range of engine speeds. One of the first of its kind in passenger vehicles, it worked on the premise of tuning one engine to operate at two different 'settings' depending on load. Normal driving would use a "shorter" cam lobe that resulted in more efficient operation. A more aggressive, longer duration, cam engages when engine RPM reaches a set point resulting in more power during hard acceleration.
For the 2007 model year, Honda plans to improve the safety of its vehicles by providing front-seat side airbags, side-curtain airbags, and anti-lock brakes as standard equipment in all automobiles available in North America (except the Insight and S2000, which will not have side-curtain airbags). By 2006, Honda plans to have as standard equipment Vehicle Safety Assist and rollover sensors in all light trucks, including the CR-V, Odyssey, and Acura MDX. Honda also plans to make its vehicles safer for pedestrians, with more safely-designed hoods, hinges, frame constructs, and breakaway wiper pivots.
Strategy
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.
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.
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, completing a "one-two" combination, as its redesigned Civic also won Car of the Year. Part of its warm reception from the industry stems from its innovation in offering all wheel independent suspension, the first for a pick up truck. With a unibody design that boasts 20x the rigidity of a traditional construction framework, it provides solid handling and a controlled car-like feel even while hauling a load.
Initiatives
Although a relatively small manufacturer in terms of vehicle sales, Honda is the largest engine maker in the world. Honda has a number of firsts in many categories, including first motorcycle equipped with an airbag, as well as the first mid-size pickup truck with independent rear suspension (2006 Ridgeline).
The 2006 Ridgeline is one of the first Uni-Body trucks produced (after the early 1980s Volkswagen Rabbit pick-up).
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 as an R&D project brings together expertise to create a robot that walks, dances and navigates steps.