Honda is a relatively new company in the automotive industry. The company was founded in 1948 as a motorcycle company, and it has remained independent since that time. The company recognizes engines as its core competency, and has built a company around that competency. Today, Honda participates in the motorcycle industry, light trucks, automobiles, generators, personal watercraft and lawn mowers, all built around the strategic competency of the company's ability to manufacture high-quality products. Unlike other automotive companies that have formed strategic alliances (including Toyota and General Motors) or even merged across national boundaries (Chrysler and DaimlerBenz), Honda continues to forge ahead independently, including offering customers in-house financing as do other major automotive manufacturers (Taylor, 2002).
The company takes a long-term approach to its strategy; Honda introduced one of the first hybrid electric cars and continues to be a pioneer in that market. The company is also doing research on hydrogen-powered cars. It is a conservative company with regard to expanding facilities and does not build excess capacity: if additional capacity is needed, another plant is built. However, the company brings new products to market faster than the competition, and brings new factories on line ahead of schedule--sometimes by as much as six months. It does not supply dealers with excess inventory, resulting in dealers charging a premium to end customers--and being remarkably loyal to Honda as a result--and in Honda being able to refrain from offering rebates and low interest rates that erode profit margins (Taylor, 2002).
Honda's strategy is one of independence, conservative expansion, and a dedication to maintaining its core competencies.
Ford is the opposite of Honda in many ways: Ford turns 100 in 2003, and still has a descendant of its founder running the company. While Honda has concentrated on a fe...