Strategic Management at Honda Essay -- Business Management Studies

Strategic Management at Honda1. Firstly what is strategic management? It is the process ofspecifying an governments objectives, developing policies and plansto achieve these objectives, and allocating resources so as toimplement the plans. Strategic management is usually performed by thehighest level of managers in the company. A companys system must berealistic enough for it to achieve it hence it must make sure it hasthe right resources to be able to cope with the strategy. An standardof an overall business strategy may be to put the organization in aposition where it can carry out its mission. Now to catch up with how thedefinition of strategic management conforms to whats been writtenabout how Honda grew and developed its trades in the US. Firstly inthe BCG account of how Honda grew into the US markets it quotes thesuccess of the Nipponese manufactures originated with the harvest-time oftheir domestic market during the 1950s. To think strategically thereare three big hesi tations that need to be answered that are, where arewe now? Where do we want to go? How will we get there? I believe thefirst question of thinking strategically is now answered, where arewe now Honda must of seen that they have been made in theirown domestic market and are ready to go into other markets so at thispoint they must have been thinking where do they want to go next hencethe succor strategic question. Another quote from the BCG report,.the basic philosophy of the Japanese manufactures is the highvolumes per model provide the potential for high productivity as aresult of using capital intensive and highly automated techniques. This now I believe has answered the third question of thinkingstrategically, how will we get there. Honda knew from the successof their own domestic market the key to their success was gainingeconomies of scale as the terms of producing motorbikes declined withthe level of output. So this would be their way of entering the USmarkets as they also knew their competitors would have a scale economydisadvantage in technology and manufacturing. If we look at thesecond account of how Honda grew and developed its markets in the USwe can see other ways of how its conforms with strategic management. Pascals version is based on interviews with the Japanese executives. They say they had no ... ...aving aformalised approach to strategy and implementations there are somedisadvantages. Having a formalised strategy can beggarly a lot of timeand thought need to be put into forming a good strategy which mightmean a huge drawback in cost savings whereas this time and thoughtcould be implemented elsewhere in the business. A formalised approachto strategy development can also mean a slow response when there is achange in the market. Developing a strategy and implementing as saidbefore takes a grand time and a lot of thought which in business meansmoney so when there is a change in the market the strategy may not berelevant to the new situati on which could consequently mean furthercost occurring such as forming new strategies and responding to thenew market situation. A situation like this can be learnt from Hondawhen they thought their larger bikes would sell as Americans likedbigger things and also they thought the Buddha like handlebar would aid in sales of these larger bikes, but when this was not the caseand they learnt it was the smaller bikes (50cc) the consumers wantedthey had to quickly change their main strategy and follow on with anew one.