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What is strategic management? honda

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Introduction

Honda 1. Firstly what is strategic management? It is the process of specifying an organization's objectives, developing policies and plans to achieve these objectives, and allocating resources so as to implement the plans. Strategic management is usually performed by the highest level of managers in the company. A company's strategy must be realistic enough for it to achieve it; hence it must make sure it has the right resources to be able to cope with the strategy. An example of an overall business strategy may be to put the organization in a position where it can carry out its mission. Now to see how the definition of strategic management conforms to what's been written about how Honda grew and developed its markets in the US. Firstly in the BCG account of how Honda grew into the US markets it quotes "the success of the Japanese manufactures originated with the growth of their domestic market during the 1950s." To think strategically there are three big questions that need to be answered that are, where are we now? Where do we want to go? How will we get there? I believe the first question of thinking strategically is now answered, "where are we now" Honda must of seen that they have been successful in their own domestic market and are ready to go into other markets so at this point they must have been thinking where do they want to go next hence the second strategic question. ...read more.

Middle

Also the larger bikes handlebar shape looked like the eyebrow of Buddha which they thought was a good selling point. However Honda marketed their 50cc in such ways that it might not usually be called marketing. They used the 50cc to ride around Los Angeles on errands but at the same time little did they realise this was a form of marketing. When riding around on errands they were indirectly advertising the 50cc which caused attraction and a lot of attention. When Honda came into the US they wanted to sell motorbikes to the general public who had never before given a second thought to a motorcycle so Honda priced their products much cheaper than their competitors. Honda had to market themselves in such a way that US consumers saw Honda different to any other motorcycle company. When they entered US a group called Harley Davidson had the largest market share but sales were declining for them. This was because motorcycles were produced large and bulky and it led to the image a motorcycle rider as being one who wore a leather jacket, had tattoos on him and was out to cause trouble. So Honda had to dissociate themselves with this image so they started a advertising theme "you meet the nicest people on a Honda." Production and Human resource management were to other key areas as well in the strategic move by Honda into the US. ...read more.

Conclusion

Honda at first were pushing for sales for their larger bikes but then later found out it was the smaller bikes that would be successful and sell in the US market. However after looking into what advantages there are of having a formalised approach to strategy and implementations there are some disadvantages. Having a formalised strategy can mean a lot of time and thought need to be put into forming a good strategy which might mean a huge drawback in cost savings whereas this time and thought could be implemented elsewhere in the business. A formalised approach to strategy development can also mean a slow response when there is a change in the market. Developing a strategy and implementing as said before takes a long time and a lot of thought which in business means money so when there is a change in the market the strategy may not be relevant to the new situation which could consequently mean further cost occurring such as forming new strategies and responding to the new market situation. A situation like this can be learnt from Honda when they thought their larger bikes would sell as Americans liked bigger things and also they thought the Buddha like handlebar would assist in sales of these larger bikes, but when this was not the case and they learnt it was the smaller bikes (50cc) the consumers wanted they had to quickly change their main strategy and follow on with a new one. ...read more.

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