Honda UK strategy analysis.docx

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Honda UK: Motor Vehicle Strategic Business Unit
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Executive Summary
Honda UK is a subsidiary of a Japanese company Honda. The company has ventured in the United Kingdom with Motor vehicle Strategic Business being one of its lucrative ventures. In the external environment, the report deduces that the opportunities in the United Kingdom industry are; political stability, low level monetary interest policies, desirable trade flows and patterns, saturated fashion and trends, desirable economic framework , imperative R&D, internet integration car technology, and high level lifestyle and income distribution. From the external environment in the United Kingdom industry, deducible threats are; strict rules and regulations, harsh carbon dioxide emissions and EU tough legislations, complex safety and customer rights compliance aspects, and high inflation.
Under internal environment, Honda UK has the following strengths in its market; After sales service that connects the company with its customers, SAP software, engagement of many suppliers thus leading to discounts, increased innovation, maintenance of suppliers portal through JIT production philosophy, brand regeneration via total quality control attitude, lean manufacturing techniques, customer customisation and interactivity and effective batch shipment mechanisms. Honda UK weakness in the United Kingdom is unmanageable and soaring remuneration and wage cost.
Honda UK applies differentiation strategy in the United Kingdom Motor vehicle industry which should also be maintained since the company has not exploited the market fully through this strategy.











Table of contents
1.0 Introduction 1
2.0 External environment analysis 1
2.1 PESTEL model 1
2.1.1 Political Factors 1
2.1.2 Economic Factors 1
2.1.3 Social Factors 2
2.1.4 Technological factors 2
2.1.5 Legal factors 2
2.1.6 Environmental Factors 2
2.2 Porters five forces model 3
2.2.1 New Entrants threat 3
2.2.2 Competitive rivalry 4
2.2.3 Buyers bargaining power 4
2.2.4 Suppliers bargaining power 4
2.2.5 Substitute products 5
3.0 Honda Internal environment analysis (Value chain) 5
3.1 Support activities 6
3.1.1 Firm infrastructure 6
3.1.2. HRM 7
3.1.3 Technology development 7
3.1.4 Procurement 7
3.2 Primary activities 7
3.2.1 Inbound logistics 7
3.2.2 Operations 8
3.2.3 Outbound logistics 8
3.2.4 Marketing and sales 8
3.2.5 Services 8
4.0 SWOT 8
5.0 Current issues that faces Honda UK 10
6.0 Bowman's strategy clock 10
7.0 Conclusion 12

1.0 Introduction
Honda is a Japanese company that developed a venture strategy for Europe in 1979. The company strategized on availing cars to the United Kingdom market. Some of the Honda UK motor vehicle Strategic Business Unit brands are CRV Honda, Civic sport, Jazz, Accord Saloon among others (Gifford, 2009).
This report undertakes analysis of Honda motor vehicle strategic Business Unit of the Honda UK based on its performance in reflection to the competitors' motor vehicles. It is significant to study the Motor vehicle SBU for Honda UK for purposes of measuring market trends and also what is required in the UK motor cycle industry. This report is structured into the following parts; external analysis, key issues, internal analysis, strategic analysis and conclusion.
2.0 External environment analysis
2.1 PESTEL model
This model is acronym representing political factors, economic, social factors, technological factors, environmental, and also legal factors. All these factors make a structure for the macro environment that is important in the strategic management.
2.1.1 Political Factors
Honda UK has complied with UK strict rules and also regulations that govern the manufacture of motor vehicles. For example, the United Kingdom government insists on automobile firms to manufacture cars that have fuel efficiency capability and this is shown through standard and safety issues and vehicle emissions (Jones, 2013). Enforcement of a CO2 emission law and also the EU legislation change relates to end of life vehicle for the vehicle is a major political measure which affects the automobile firms negatively. The UK Automobile manufacturing firms in the country enjoys the country political stability (Frisendal, 2012).
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2.2 Porters five forces model
This model outlines the firm strategic management also industry analysis. The models play a significant role in identifying the power axis within a certain business situation (Crain, 2010). Thus, porters' model focuses on undertaking and exploring business competitive advantage analysis. However, the limitation associated with this approach is that most strategic consultants rarely use it in scenarios of undertaking business strategic position qualitative evaluation (Crain, 2010). Also, See appendix 2.

Figure 1: Porters Five forces structure (Source: Kannegiesser, 2008)
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2.2.5 Substitute products
The threat for substitute products in the UK is moderate. This in essence means that the effect of substitute products in the motor vehicle industry is relatively low. In cities such as London, motor vehicles have increased in roads leading to congestion and thus need for substitutes such as Motorcycles. Also, the parking charges for motor vehicles are relatively high in the United Kingdom prompting people to use other means of transport. Lastly, the high cost involved in the running cars prompts people to seek for substitutes that are relatively cheap. However, the effect of substitutes has not been immense due to many advantages that are attributable to Motor vehicles for instance Cars are usable in all weather especially in UK whereby there is Winter and Summer, and therefore the threat is moderate.
3.0 Honda Internal environment analysis (Value chain)
The internal environment analysis entails both the support and also the primary activities as captured in this section in respect to Honda UK car SBU. This analysis tends to make description of all the activities that are encompassed under business and perfectly connects to business competitive strength analysis improvement (Gereffi et al., 2005). Honda UK management concentrates much on the value addition aspect for purposes of ensuring that all its motor vehicles for instance Honda CRV are widely acceptable in the UK industry based on their performance.

Figure 2: value chain model (Source: Trapp, 2014)
3.1 Support activities
This refers to those operations that are not directly to any manufacturing process. In Honda UK, support activities are used for purposes of ensuring effectiveness and efficiency materialises in the company improvement (Gereffi et al., 2005).