Posted: May 25th, 2022
Honda Case Study
Honda Motors the iconic Japanese automobile and engine manufacturer was the definitive example of the 1980’s and early 90’s surge of Japanese dynamism and economic muscle. “Only 25 years after the firm entered the automobile industry, the ‘industry of industries’, Honda had become one of the world’s top ten producers” (Mair, A. 1997). Over the last two decades though Japan has been mired in a morass of economic stagnation however, Honda continues its long run success by capitalizing on its ability to adroitly navigate the competitive global automobile landscape with innovation, economic prowess, and a focus on Total Quality Management; “a set of management practices throughout the organization, geared to ensure the organization consistently meets or exceeds customer requirements” (Free Management Library. N.D.).
The continued focus on producing superior products and technology has propelled the company to the seventh position in global vehicle sales with three million units in 2009 (International Organization of Motor Vehicle Manufacturers. 2009). Over the course of the company’s history their great success can be attributed to effectively reconciling dichotomies inherent in production, R&D, and management. The Andrew Mair case study on the “Honda Way” limns the strategic importance of reconciling dichotomies as the key to Honda’s success.
“Superior operations, proactive care and maintenance, a focus on functional flexibility, wellness and reliability and healthy manufacturing; this is the essence of Honda” (Arnold, P.N.D.). Honda’s achievement of this quality standard rests on dismissing the notion of tradeoffs as the only viable strategic solution to polar opposite positions in areas such as: “buyer-supplier relations, work organization, product development processes, and product quality, cost, and delivery” (Mair, A.). The “Honda Way” describes an ongoing process of thought which seeks to develop a best of both worlds solution to problems long considered irreconcilable and mutually exclusive. Of particular interest in the case study is the discussion on positioning vs. developing internal resources dichotomy which has broad implications in “strategic approach to manufacturing, marketing, and product positioning (Mair, A. 1997). Analysis of this overarching dichotomy is best explicated by looking at two instances detailed in the case study; product strategy and production and logistics.
Product strategy for Honda is the continuous development and refinement of technological innovation for their customers. Technological innovation broaches the long held dichotomy of cost vs. benefit, to what extent will capital spending “deliver direct and immediate competitive advantage” (Mair, A. 1997) The development of the CVCC (compound vortex controlled combustion engine) and the VTEC (variable valve timing and lift electronic control) are striking examples of the “refusal to accept taken-for-granted trade-offs to technological change” (Mair, A. 1997). Product strategy is seen also in the design of Honda’s automobile line, specifically speed of development process and model replacement. Again the transparent theme of these examples is the reconciliation of long held bifurcations. Development lead times for products which historically took five to six years were reduced by Honda to two years, all without sacrificing quality or increasing costs of production (Mair, A. 1997). Too, model replacement reconstituted the traditional approach between “complete model change in which the whole design process starts from scratch, and the ‘facelift’ in which only a small number of components are redesigned” (Mair, A. 1997). Honda’s approach instituted a hybrid of the two positions with a “rolling or iterative model change program with significant and regular changes to each model (and hence a regular boost to consumer interest)” (Mair, A. 1997)
The logistics and production of Honda’s operations reveal the
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