The company is credited with identifying and targeting untapped market of small 50cc bikes in the US, enabling to expand, overwhelm European competition ( dominated by British motorcycles ) and severely damage US bike manufacturers. By the late 60’s, Honda had more than 60% of the US market. But this occurred by accident.
On entering this market, Honda wanted to compete with the larger European and American bikes of 250ccs and over. These bikes had a defined market, and were sold through dedicated motorbike dealerships. Disaster struck when Honda’s machines developed faults. Honda had to recall them all.
Uptil then Honda had made little effort to sell their small 50cc motorbikes – their staff rode on errands around Los Angeles. Sport goods shops and ordinary bicycle and department stores had expressed interest, but did want to confuse its images in its ‘target’ market of men who bought the larger bikes.
The fault in Honda’s larger machines meant that reluctantly, Honda had to sell the small 50cc bikes just to raise money. They proved to be quite popular with the people who would never have bought motorbikes before. Eventually the company adopted their new market with enthusiasm with the slogan : “You meet the nicest people on Honda’.
The strategy had emerged, against managers concious intentions, but they eventually responded to the new situation.
Do you see any opportunity around you, which you ignored before ?
Do you like to be updated in Accountancy ?
- Red Monkey Innovation
- World’s 50 most innovative companies
- Resistance to Change
- Strategic Drift
- Strategic Development
- Books of Mintzberg on Amazon
- Books of Philip Kotler
- Porter’s Diamond
digg_url = ‘http://managementaccountant.blogspot.com/2008/05/honda-50cc-bikes-story-of-imposed.html’;
digg_bgcolor = ‘#ff9900’;
digg_skin = ‘compact’;
digg_window = ‘new’;