The strategy of Honda In Europe

Résumé du document

Honda is a Japanese conglomerate and produces automobiles (the automobile service represents more than 80% of its revenue), motorcycles, power products and power tools and offers financial services. Honda became famous abroad and expanded from Japan to the US in the 50s and to Europe in the 60s, thanks to its effort and investments in Formula-1.

In the 1990s the automobile market was saturated and highly competitive. Honda has chosen to enter the European market by building its first factory in the UK. But in 2001, Honda represented only 2.4% of this market and suffered from a weak brand image.

This situation can be explained by the marketing strategy chosen by Honda for the European market. Honda decided to sell many different models in the UK where the cars were first produced (the larger range of models including few diesel-powered cars), Germany, France and Italy. The company priced its products at a similar level to that of the competition but did not spend a lot of money on promotion, but relied on the word of mouth. Concerning the distribution, Honda has chosen to sell both its cars and motorcycles in the same places throughout Europe.

Since the late 90s, Honda's sales has been constantly decreasing, due to a lack of popularity, especially in Italy and France. A study of the difference between cultures in Europe and the cultural context could explain this problem. In Europe we can highlight two different kinds of nations: those with a high-context (France, Italy and moderately the UK) and those with a low-context culture (Germany).

Extraits

[...] Use the new green wave to get a different image in europe. We would like to position Honda as a green brand which care about the environment. We feel that the most green car company will be the first car company in europe during the next decade. ž We think that we could use a nest strategy at the begining to segment and after this, that means after improving our image, we can attack the rest of the European market. [...]

[...] o Some products are not adapted to the country where they are sold: for instance, diesel cars are sold in UK whereas French and Italian consumers are more likely to buy this product Alternative solutions First solution Offer new cars with a new technology. Indeed, in order to integrate the European market, Honda has to propose Diesel cars. To be competitive faces to local car makers, Honda needs to diversify its range and improve its image. So, Honda can integrate the European market with its new technology : hybrid cars. The aim of environment grows an this market become bigger and bigger. [...]

[...] Concerning the distribution, Honda has chosen to sell both its cars and motorcycles in the same places throughout Europe. Since the late 90s, Honda's sales are constantly decreasing, due to a lack of popularity, especially in Italy and France. A study of the difference between cultures in Europe and the cultural context could explain this problem. In Europe we can highlight two different kinds of nations: those with a high-context (France, Italy and moderately the UK) and those with a low-context culture (Germany) Conduct a situation analysis o Corporate Level Environment Political and economic environment: Mature stage of life cycle of the automobile industry Market highly saturated Increasing number of mergers and acquisitions, excluding Japanese market participants Increasing gasoline prices National and legal environment No common European policy, eg. [...]

[...] Thanks to their history and the recent mergers or associations there are succeeding in remaining global carmakers. They own a big part of the market shares. Other companies arrived more recently and they are forced to sell in niche markets and their market shares are much smaller SWOT analysis of a company 4. Problem identification In the Honda case, the major problem is the decision making about the European market: the company has decided a standardization of its policy. However, it would be relevant to divide it into 3 markets: United Kingdom, Germany and France/Italy. [...]

[...] The brand strategy brand strategy of Honda 1. General overview Honda is a Japanese conglomerate and produces automobiles (the automobile service represents more than 80% of its revenue), motorcycles, power products and power tools and offers financial services. Honda became famous abroad and expanded from Japan to the US in the 50s and to Europe in the 60s, thanks to its effort and investments in Formula-1. In the 1990s the automobile market is saturated and highly competitive. Honda has chosen to enter the European market by building its first factory in the UK. [...]