Honda 50cc bikes - A story of Imposed strategy

10 May 2008 |

Strategy formulation is a continuous process of refinement based on past trends, current conditions and estimates of the future, resulting in a clear expression of strategic direction, the implementation of which is also planned in terms of resource allocation and structure.

Honda Story of 50cc bikes circa 1958

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.

Prairie Air Show

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 ?

Regards,

Santosh Puthran
AICWA

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