How Honda Succeeded in the United States

How Honda Succeeded in the United States | Blog | design mind

The success of the Super Cubs eventually translated into success with larger bikes, and Honda went from no presence at all in the U.S. market in 1959 to 63% of the entire market . In the process they took a hatchet to the import market, dropping the share of British bikes from 49% in 1959 (when Honda started in the US) to 9% by 1973. By 1980, British bikes’ sales were less than 2.5 million, down from a high of over 35 million less than ten years earlier.

What is striking about the story of Honda entering the US motorbike market is the lack of planning ahead of time. As Kawashima recalled, “In truth, we had no strategy other than the idea of seeing if we could sell something in the United States”.

It’s easy in hindsight to look at Honda’s growth in the motorbike market (and its subsequent expansion into cars in the 1970’s) as a carefully planned strategy that inexorably built market share based on low-cost products which undercut incumbents. In fact, this was much the conclusion reached by the Boston Consulting Group when hired by a group of British motorbike manufacturers to find out why their US marketshare was cratering. But BCG was forced to look at the events retroactively and as so often happens when seeing events from a distance the messy richness of the details gets lost, along with it much of the truth. BCG applied standard strategy consulting models and smoothed out the dynamism of the story to turn it into an orderly decision-making process on the part of Honda.

In fact, there was no grand plan at all. If they had doggedly pursued their initial course of pushing the larger bikes with Buddha-moustache handlebars, as directed by Mr. Honda, things could just as easily have turned sour and today Honda would be just a footnote in automotive history. Honda’s open and entrepreneurial approach is a perfect example of what Gary Hamel calls “lucky foresight”, arguing that new business concepts are always combinations of happenstance, desire, curiosity, ambition and need.

Richard Pascale argues that Japanese companies approach strategy in a fundamentally less dogmatic way than their American counterparts:

"Their success, as any Japanese automotive executive will readily agree, did not result from a bold insight by a few big brains at the top. On the contrary, success was achieved by senior managers humble enough not to take their initial strategic positions too seriously… The Japanese don't use the term "strategy" to describe a crisp business definition or competitive master plan. They think more in terms of "strategic accommodation," or "adaptive persistence," underscoring their belief that corporate direction evolves from an incremental adjustment to unfolding events."

Posted via email from Pete's posterous

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