A DETAILED REPORT on GLOBAL AUTOMOBILE INDUSTRY

With the increased competition and globalization, the automobile industry is changing its face dynamically with major players in the market in order to gain the maximum market share with the implementation of business strategies, models and standards. Honda Motor Company is a multinational Company. Honda Company started in Japan at the early first time. Then, Honda Company starts to spread to other nation such as Europe, United State, and Asia. How can this company structure itself so successful? Honda Company is using the matrix structure. Matrix organizations are flexible, because they allow different dimensions of the organizations mixed together. The company is working on its strategies in relation to various models and standards that exist.

TABLE OF CONTENTS

1. Topic Name 
2. Introduction
3. Main body
4. Conclusion
5. References

INTRODUCTION

The automobile industry is changing its momentum very fast as per the needs and demands of the market. A number of players are ruling the market over many years with the class of strategic planning and its implementation to provide value to the end users. Honda is one of the finest as well as a chief company in the market, which is producing well with the aid of all the newest and modern technologies. Apart from automobile, Honda is one of the best and the prime producer of engine. Honda was the one, which struggle with Nissan and achieved the peak productivity. Honda was the first Japanese automobile-based manufacturer, which formed the luxury-based brand. This company is thus functioning well and generating efficient outcomes. Apart from this, several threats as well as weaknesses are present which plays a significant role in weakening this corporation. Therefore, in array to analyze the feeble areas and to emphasize the strong areas of a company, SWOT analysis completed which results in improved and dynamic outcome. Globalization had certainly left its blow on the automobile business. Now, overseas auto dealers were facing smaller boundaries to function in overseas markets.

GLOBAL AUTOMOBILE INDUSTRY:

The worldwide automobile industry had covered an outstanding drive spanning through centuries covering craft production, mass production and lean production techniques, setting different milestones for manufacturing sector. The universal automobile industry, observed robust expansion in the face of increased global requirement with major contributions by Asian & European countries. The major players who contributed to the growth of global automobile industry as well as to the global economy are GM, FORD, BMW, HONDA, NISSAN, PEUGEOT and TOYOTA etc. In the automobile industry, operation cost economics, and technology changes determined the structure. The major players focused on commercial management of technological improvements with the aim of contributing more competent automobile to consumers. Globalization covered the path for deregulation opening up the markets to overseas competition. The consumers stood to grow with more diversity to prefer from at competitive charges. The global automotive industry received a major hit during the financial crisis of 2008. With the increased prices of automotive fuel, the demand for sport utility vehicles (SUVs) along with other low fuel economy vehicles dropped down. The Asian and European market received the major negative impact on its demand for vehicles. Car companies from all over the world implemented creative marketing strategies for cost and work force cutting techniques to minimize the associated risk related to cost. The consumers turned to smaller, cheaper and more fuel-efficient cars imported from cheaper sources and assembled in their own area. Honda Motors in 2008 publicize it would be downsizing due to the 2008 financial disaster and predicted that the may be work force reductions at all levels of management in the beginning of next year probably. De Wit, B. and Meyer, R. (2004) - Strategy Process, Content, and Context: An International Perspective, 3rd Edition, Thomson Learning www.honda.com HONDA MOTORS

Porter's Five Forces (Industry Analysis):

Bargaining Power of Suppliers:

The automobile supply corporations have restricted bargaining power. A  There are so many supply firms and there are numerous parts that are require constructing an automobile, requiring numerous suppliers, one would believe that the automakers would be at the supplier's pity. However, the suppliers actually have very small power. A  With the JIT (Just in Time) manufacturing tactic Honda utilizes, there is a push-pull system.

Bargaining Power of Buyers:

The automotive industry is extremely competitive, hence buyers have some measure of power, as there are numerous automobiles from which to chose. A  Consumers have the maximum power in the connection in the standardized nature of the automotive commodity and the little switching costs coupled with choosing from challenging brands. A  Honda has the past of delivering elevated quality and fuel proficient vehicles. A  With the boost in fuel price and the state of the financial system, the customers are seeking the excellent product for a superior price. A  Honda has been a leader in manufacturing fuel competent and low emissions vehicles. A  As the world has a superior awareness of the requirement to shield the atmosphere and to go green, Honda continues to improve the vehicles created with this focal point. A

Threat of New Entrants:

The presented loyalty to major brands, enticement for using a particular buyer, high fixed costs, shortage of resources, high costs of switching companies, and government regulations constitute the barriers to entry, which in turn reduced the competition in an industry. The triumph of foreign car producers like those that the Honda Motor Co. had controverts the general conviction that the Big Three were unbeatable.

Availability of Substitutes:

If substitutes were accessible offering similar services, the likelihood of buyers switching over to another competitor depended primarily on the cost. The price of the automobiles along with their in service costs was driving customers to gaze for another transportation options. The rising gasoline cost was bound to manipulate the buyers.

Competitive Rivalry:

The existence of many players of approximately the same size, small differentiation between competitors, and a very adult industry with very minute growth were the features of a extremely competitive industry. Higher the competition in the industry lesser would be the income margin. To remain to the front in competition, automakers were tempted to present value additional services to the customers incurring additional costs. Easy finance alternatives and long-term warranties offered to lure the customers. De Wit, B. and Meyer, R. (2004) - Strategy Process, Content, and Context: An International Perspective, 3rd Edition, Thomson Learning

 

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