Perspectives on Strategy: The Real Story Behind Honda's Success SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of Perspectives on Strategy: The Real Story Behind Honda's Success
Contradictory accounts of Honda's success in the world motorcycle industry demonstrate the need to challenge our overemphasis on "strategy" in explaining their success. Alternative perspectives are needed to cope with the managerial challenges of the 1980s.
Swot Analysis of "Perspectives on Strategy: The Real Story Behind Honda's Success" written by Richard Tanner Pascale includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Honda's Perspectives facing as an external strategic factors. Some of the topics covered in Perspectives on Strategy: The Real Story Behind Honda's Success case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Perspectives on Strategy: The Real Story Behind Honda's Success casestudy better are - – increasing energy prices, geopolitical disruptions, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%,
wage bills are increasing, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Perspectives on Strategy: The Real Story Behind Honda's Success
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Perspectives on Strategy: The Real Story Behind Honda's Success case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Honda's Perspectives, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Honda's Perspectives operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Perspectives on Strategy: The Real Story Behind Honda's Success can be done for the following purposes –
1. Strategic planning using facts provided in Perspectives on Strategy: The Real Story Behind Honda's Success case study
2. Improving business portfolio management of Honda's Perspectives
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Honda's Perspectives
Strengths Perspectives on Strategy: The Real Story Behind Honda's Success | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Honda's Perspectives in Perspectives on Strategy: The Real Story Behind Honda's Success Harvard Business Review case study are -
High switching costs
– The high switching costs that Honda's Perspectives has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Strong track record of project management
– Honda's Perspectives is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Honda's Perspectives is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Honda's Perspectives is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Perspectives on Strategy: The Real Story Behind Honda's Success Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Honda's Perspectives in the sector have low bargaining power. Perspectives on Strategy: The Real Story Behind Honda's Success has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Honda's Perspectives to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Honda's Perspectives has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Perspectives on Strategy: The Real Story Behind Honda's Success HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Honda's Perspectives has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Honda's Perspectives has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy in the Perspectives on Strategy: The Real Story Behind Honda's Success Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Cross disciplinary teams
– Horizontal connected teams at the Honda's Perspectives are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– Perspectives on Strategy: The Real Story Behind Honda's Success firm has clearly differentiated products in the market place. This has enabled Honda's Perspectives to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Honda's Perspectives to invest into research and development (R&D) and innovation.
Innovation driven organization
– Honda's Perspectives is one of the most innovative firm in sector. Manager in Perspectives on Strategy: The Real Story Behind Honda's Success Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Honda's Perspectives has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Honda's Perspectives to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Honda's Perspectives is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Honda's Perspectives in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Perspectives on Strategy: The Real Story Behind Honda's Success | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Perspectives on Strategy: The Real Story Behind Honda's Success are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Perspectives on Strategy: The Real Story Behind Honda's Success, is just above the industry average. Honda's Perspectives needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Richard Tanner Pascale suggests that, Honda's Perspectives is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Honda's Perspectives supply chain. Even after few cautionary changes mentioned in the HBR case study - Perspectives on Strategy: The Real Story Behind Honda's Success, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Honda's Perspectives vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Perspectives on Strategy: The Real Story Behind Honda's Success HBR case study mentions - Honda's Perspectives takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Perspectives on Strategy: The Real Story Behind Honda's Success HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Honda's Perspectives has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Honda's Perspectives is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Honda's Perspectives needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Honda's Perspectives to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Honda's Perspectives has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– It come across in the case study Perspectives on Strategy: The Real Story Behind Honda's Success that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Perspectives on Strategy: The Real Story Behind Honda's Success can leverage the sales team experience to cultivate customer relationships as Honda's Perspectives is planning to shift buying processes online.
Products dominated business model
– Even though Honda's Perspectives has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Perspectives on Strategy: The Real Story Behind Honda's Success should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Honda's Perspectives has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Perspectives on Strategy: The Real Story Behind Honda's Success, in the dynamic environment Honda's Perspectives has struggled to respond to the nimble upstart competition. Honda's Perspectives has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Perspectives on Strategy: The Real Story Behind Honda's Success | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Perspectives on Strategy: The Real Story Behind Honda's Success are -
Better consumer reach
– The expansion of the 5G network will help Honda's Perspectives to increase its market reach. Honda's Perspectives will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Developing new processes and practices
– Honda's Perspectives can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Honda's Perspectives can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Learning at scale
– Online learning technologies has now opened space for Honda's Perspectives to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Honda's Perspectives has opened avenues for new revenue streams for the organization in the industry. This can help Honda's Perspectives to build a more holistic ecosystem as suggested in the Perspectives on Strategy: The Real Story Behind Honda's Success case study. Honda's Perspectives can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Honda's Perspectives to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Honda's Perspectives in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Honda's Perspectives can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Honda's Perspectives can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Perspectives on Strategy: The Real Story Behind Honda's Success, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Honda's Perspectives can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Honda's Perspectives can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Honda's Perspectives can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Honda's Perspectives in the consumer business. Now Honda's Perspectives can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Perspectives on Strategy: The Real Story Behind Honda's Success External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Perspectives on Strategy: The Real Story Behind Honda's Success are -
Shortening product life cycle
– it is one of the major threat that Honda's Perspectives is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Honda's Perspectives can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Perspectives on Strategy: The Real Story Behind Honda's Success .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Honda's Perspectives
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Honda's Perspectives.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Honda's Perspectives needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Honda's Perspectives needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Honda's Perspectives can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Honda's Perspectives high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Honda's Perspectives will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Honda's Perspectives needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Honda's Perspectives business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Honda's Perspectives can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Honda's Perspectives has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Honda's Perspectives needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Perspectives on Strategy: The Real Story Behind Honda's Success Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Perspectives on Strategy: The Real Story Behind Honda's Success needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Perspectives on Strategy: The Real Story Behind Honda's Success is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Perspectives on Strategy: The Real Story Behind Honda's Success is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Perspectives on Strategy: The Real Story Behind Honda's Success is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Honda's Perspectives needs to make to build a sustainable competitive advantage.
