Case Study Description of Honda Canada (B): Tsunami and Sourcing Disruption
Honda Canada was coping with a communications and supply chain crisis after a triple disaster - an earthquake followed by a tsunami and a nuclear meltdown - that hit Japan in March 2011. Honda's worldwide supply chain was characterized by a just-in-time, single-source approach, wherein the supplier for each component provided the best quality at the lowest price. The approach normally ensured economies of scale but now, in an abnormal time, Honda's supply chain was vulnerable. In the short term, Honda Canada had to manage the chaos through effective communication with its stakeholders. In the long term, it had to ensure checks and balances in its supply chain.
Authors :: Mary Weil, Dina Ribbink, Ramasastry Chandrasekhar
Swot Analysis of "Honda Canada (B): Tsunami and Sourcing Disruption" written by Mary Weil, Dina Ribbink, Ramasastry Chandrasekhar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Honda Honda's facing as an external strategic factors. Some of the topics covered in Honda Canada (B): Tsunami and Sourcing Disruption case study are - Strategic Management Strategies, Manufacturing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Honda Canada (B): Tsunami and Sourcing Disruption casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, challanges to central banks by blockchain based private currencies, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
wage bills are increasing, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Honda Canada (B): Tsunami and Sourcing Disruption
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Honda Canada (B): Tsunami and Sourcing Disruption case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Honda Honda's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Honda Honda's 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 (B): Tsunami and Sourcing Disruption can be done for the following purposes –
1. Strategic planning using facts provided in Honda Canada (B): Tsunami and Sourcing Disruption case study
2. Improving business portfolio management of Honda Honda's
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Honda Honda's
Strengths Honda Canada (B): Tsunami and Sourcing Disruption | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Honda Honda's in Honda Canada (B): Tsunami and Sourcing Disruption Harvard Business Review case study are -
Learning organization
- Honda Honda's 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 Honda's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Honda Canada (B): Tsunami and Sourcing Disruption Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Honda Honda's is one of the leading recruiters in the industry. Managers in the Honda Canada (B): Tsunami and Sourcing Disruption are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Honda Honda's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Honda Canada (B): Tsunami and Sourcing Disruption Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the Honda Canada (B): Tsunami and Sourcing Disruption 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Honda Canada (B): Tsunami and Sourcing Disruption firm has clearly differentiated products in the market place. This has enabled Honda Honda's to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Honda Honda's to invest into research and development (R&D) and innovation.
Analytics focus
– Honda Honda's 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 Mary Weil, Dina Ribbink, Ramasastry 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 Honda's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Honda Honda's 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.
Innovation driven organization
– Honda Honda's is one of the most innovative firm in sector. Manager in Honda Canada (B): Tsunami and Sourcing Disruption Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Honda Honda's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Honda Honda's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to lead change in Leadership & Managing People field
– Honda Honda's 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 Honda's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Honda Honda's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Honda Honda's 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 Honda Canada (B): Tsunami and Sourcing Disruption HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Honda Canada (B): Tsunami and Sourcing Disruption | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Honda Canada (B): Tsunami and Sourcing Disruption are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Honda Canada (B): Tsunami and Sourcing Disruption, in the dynamic environment Honda Honda's has struggled to respond to the nimble upstart competition. Honda Honda's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Honda Honda's products
– To increase the profitability and margins on the products, Honda Honda's needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Honda Honda's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Honda Canada (B): Tsunami and Sourcing Disruption can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Honda Honda's, firm in the HBR case study Honda Canada (B): Tsunami and Sourcing Disruption needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Mary Weil, Dina Ribbink, Ramasastry Chandrasekhar suggests that, Honda Honda's 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.
Slow to strategic competitive environment developments
– As Honda Canada (B): Tsunami and Sourcing Disruption HBR case study mentions - Honda Honda's 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.
Slow decision making process
– As mentioned earlier in the report, Honda Honda's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Honda Honda's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Aligning sales with marketing
– It come across in the case study Honda Canada (B): Tsunami and Sourcing Disruption 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 (B): Tsunami and Sourcing Disruption can leverage the sales team experience to cultivate customer relationships as Honda Honda's is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Honda Canada (B): Tsunami and Sourcing Disruption, is just above the industry average. Honda Honda's 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.
No frontier risks strategy
– After analyzing the HBR case study Honda Canada (B): Tsunami and Sourcing Disruption, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Honda Canada (B): Tsunami and Sourcing Disruption 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 Honda's 's lucrative customers.
Opportunities Honda Canada (B): Tsunami and Sourcing Disruption | 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 (B): Tsunami and Sourcing Disruption are -
Better consumer reach
– The expansion of the 5G network will help Honda Honda's to increase its market reach. Honda Honda's 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.
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 Honda's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Honda Honda's can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
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 Honda's 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Honda Honda's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Honda Honda's 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 Leadership & Managing People segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Honda Honda's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Loyalty marketing
– Honda Honda's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Honda Honda's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Honda Canada (B): Tsunami and Sourcing Disruption - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Honda Honda's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Honda Honda's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Honda Canada (B): Tsunami and Sourcing Disruption 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.
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 Honda's can use these opportunities to build new business models that can help the communities that Honda Honda's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Honda Honda's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Honda Honda's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Honda Honda's is facing challenges because of the dominance of functional experts in the organization. Honda Canada (B): Tsunami and Sourcing Disruption 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.
Threats Honda Canada (B): Tsunami and Sourcing Disruption 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 (B): Tsunami and Sourcing Disruption are -
Stagnating economy with rate increase
– Honda Honda's 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.
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 Honda's business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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 Honda's 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.
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 (B): Tsunami and Sourcing Disruption, Honda Honda's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Honda Honda's 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 Honda's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Honda Honda's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Honda Honda's needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Environmental challenges
– Honda Honda's 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 Honda's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Honda's in the Leadership & Managing People sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Honda Honda's.
Consumer confidence and its impact on Honda Honda's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Honda Canada (B): Tsunami and Sourcing Disruption 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 (B): Tsunami and Sourcing Disruption 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 (B): Tsunami and Sourcing Disruption 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 (B): Tsunami and Sourcing Disruption 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 (B): Tsunami and Sourcing Disruption 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 Honda's needs to make to build a sustainable competitive advantage.
