Case Study Description of Honda Canada: Relaunching Honda Fit
In May 2014, Honda Canada was planning to relaunch the Honda Fit-its entry-level car. The purpose of the relaunch was to kick-start growth in sales of the Honda Fit, which had fallen from 14,836 units in the launch year of 2008 to 9,512 units in 2013. The target customer group was an up-and-coming demographic cohort known as millennials. Honda Canada's manager of Customer Conquest Management was mandated with strategizing and executing the relaunch. She had to make two core decisions: How should Honda Canada connect with millennials, and what communication medium should it choose to reach them?
Swot Analysis of "Honda Canada: Relaunching Honda Fit" written by June Cotte, R. Chandrasekhar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Honda Relaunch facing as an external strategic factors. Some of the topics covered in Honda Canada: Relaunching Honda Fit case study are - Strategic Management Strategies, Manufacturing, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Honda Canada: Relaunching Honda Fit casestudy better are - – technology disruption, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Honda Canada: Relaunching Honda Fit
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Honda Canada: Relaunching Honda Fit case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Honda Relaunch, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Honda Relaunch 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 Honda Canada: Relaunching Honda Fit can be done for the following purposes –
1. Strategic planning using facts provided in Honda Canada: Relaunching Honda Fit case study
2. Improving business portfolio management of Honda Relaunch
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Honda Relaunch
Strengths Honda Canada: Relaunching Honda Fit | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Honda Relaunch in Honda Canada: Relaunching Honda Fit Harvard Business Review case study are -
Analytics focus
– Honda Relaunch is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by June Cotte, R. Chandrasekhar can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Successful track record of launching new products
– Honda Relaunch has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Honda Relaunch 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.
Effective Research and Development (R&D)
– Honda Relaunch has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Honda Canada: Relaunching Honda Fit - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Honda Relaunch is present in almost all the verticals within the industry. This has provided firm in Honda Canada: Relaunching Honda Fit case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Superior customer experience
– The customer experience strategy of Honda Relaunch in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Honda Relaunch 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 Relaunch is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Honda Relaunch in the sector have low bargaining power. Honda Canada: Relaunching Honda Fit has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Honda Relaunch to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Honda Relaunch 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 Relaunch is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Honda Canada: Relaunching Honda Fit Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Sales & Marketing industry
– Honda Canada: Relaunching Honda Fit firm has clearly differentiated products in the market place. This has enabled Honda Relaunch to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Honda Relaunch to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Honda Canada: Relaunching Honda Fit 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.
High brand equity
– Honda Relaunch has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Honda Relaunch to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Honda Canada: Relaunching Honda Fit | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Honda Canada: Relaunching Honda Fit are -
Products dominated business model
– Even though Honda Relaunch 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 - Honda Canada: Relaunching Honda Fit should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Honda Canada: Relaunching Honda Fit 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 Relaunch has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Honda Canada: Relaunching Honda Fit has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Honda Relaunch 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Honda Relaunch is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Honda Relaunch needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Honda Relaunch to focus more on services rather than just following the product oriented approach.
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 Relaunch supply chain. Even after few cautionary changes mentioned in the HBR case study - Honda Canada: Relaunching Honda Fit, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Honda Relaunch vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Honda Relaunch needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Honda Relaunch products
– To increase the profitability and margins on the products, Honda Relaunch needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Honda Relaunch, firm in the HBR case study Honda Canada: Relaunching Honda Fit needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Honda Canada: Relaunching Honda Fit 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 Honda Canada: Relaunching Honda Fit can leverage the sales team experience to cultivate customer relationships as Honda Relaunch is planning to shift buying processes online.
High cash cycle compare to competitors
Honda Relaunch has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Honda Relaunch is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Honda Canada: Relaunching Honda Fit can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Honda Canada: Relaunching Honda Fit | 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 Honda Canada: Relaunching Honda Fit are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Honda Relaunch 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, Honda Canada: Relaunching Honda Fit, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Honda Relaunch can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Honda Relaunch is facing challenges because of the dominance of functional experts in the organization. Honda Canada: Relaunching Honda Fit case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Honda Relaunch to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Honda Relaunch to hire the very best people irrespective of their geographical location.
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 Relaunch 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Honda Relaunch can use these opportunities to build new business models that can help the communities that Honda Relaunch operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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 Relaunch can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Honda Relaunch can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Relaunch in the consumer business. Now Honda Relaunch can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Honda Relaunch in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Honda Relaunch has opened avenues for new revenue streams for the organization in the industry. This can help Honda Relaunch to build a more holistic ecosystem as suggested in the Honda Canada: Relaunching Honda Fit case study. Honda Relaunch can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Honda Relaunch 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.
Buying journey improvements
– Honda Relaunch can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Honda Canada: Relaunching Honda Fit suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Honda Canada: Relaunching Honda Fit External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Honda Canada: Relaunching Honda Fit are -
Increasing wage structure of Honda Relaunch
– 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 Relaunch.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Honda Relaunch 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 Honda Canada: Relaunching Honda Fit .
Environmental challenges
– Honda Relaunch 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 Relaunch can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Honda Relaunch can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Honda Canada: Relaunching Honda Fit, Honda Relaunch may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Honda Relaunch with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Honda Relaunch is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Relaunch 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.
High dependence on third party suppliers
– Honda Relaunch 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Honda Relaunch in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Relaunch business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Honda Relaunch in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Honda Canada: Relaunching Honda Fit 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 Honda Canada: Relaunching Honda Fit 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 Honda Canada: Relaunching Honda Fit 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 Honda Canada: Relaunching Honda Fit 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 Honda Canada: Relaunching Honda Fit 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 Relaunch needs to make to build a sustainable competitive advantage.