Honda is a well-established multinational conglomerate company that has successfully catered to the needs of millions of people all around the world in the past years. It has a market share of 24.55% in the two-wheelers market.

Even the Honda company had its good times and bad times which helps them get valuable insights.

Thus this makes us keen to know the SWOT analysis of Honda. In this case study, you will know the Strengths, Weaknesses, Opportunities, and Threats of Honda.

Before we start with the SWOT analysis of Honda let us know about Honda as a company.

About Honda Company 

Honda was founded in 1948 by Soichiro Honda and Takeo Fujisawa. It has its headquarters located in Minato, Tokyo, Japan. It manufactures automobiles, motorcycles, power equipment, aircraft, and jet engines. 

It was Japan’s 1st automobile manufacturing company that launched a dedicated luxury brand in 1986. It has a total capital of 86 billion yen as of 2021.

This company is expanding its business in various countries all over the world and its target customers are mainly middle-income groups and youngsters whose first preference would be buying two-wheelers. Thus, this strategy has led to an enormous increase in sales. 

Before we begin with the SWOT Analysis of Honda. Let us know some more details about Honda.

What’s new with Honda

check out some current news about Honda:

• Honda to roll out 5 SUVs in India by 2030; enters high-selling midsize segment.
• Honda to Adopt North American Charging Standard (NACS) for its EV Models in North America
• All-Electric 2023 Acura ZDX and ZDX Type S Make Dramatic Global Debut; Arriving Early Next Year
• 2023 Honda Cars: New Accord, a Sporty-Looking Odyssey, and the Return of the Civic Type R
  

Target Audience of Honda

Let us have a look at the buyer persona of Honda:

Let us now start with the SWOT analysis of Honda.

SWOT Analysis of Honda

SWOT stands for the analysis of Strengths, Weaknesses, Opportunities, and Threats of a company. Through SWOT analysis, a company can identify its strengths and weaknesses and how it can work on both these factors by grabbing the existing opportunities and with an effective response to the threats in the external environment.

Let us first see the Strengths from the SWOT Analysis of Honda company.

1. Strengths of Honda

• New innovative techniques and products – With the usage of proper and new innovative techniques and products, it has been able to increase the sales of the company to a large extent.
• Export business – In developed countries, Honda has set up its giant manufacturing hubs and they also indulge in the export business of bikes from premium editions to such countries, where they can make more money from the sales.
• Social Media Marketing – Honda has used its social media marketing strategies and has gained a lot of audience by advertising some relatable campaigns.
• A broad range of products – Honda manufactures a wide variety of products like motorcycles, power equipment, private jets, engines, and automobiles that have made the lives of people so much easier.

• The pricing strategy – Honda’s market has around 28 million customers buying its products every year all over the world as it sells fine quality products even at an affordable range of pricing.

• Brand Storytelling –Through its brand storytelling, Honda indulges in the art of making things and creating new experiences which is its rare ability to create solutions.

• Largest motorcycle manufacturer – Honda is leading in the motorcycle manufacturing chart in the world as of 2020.

Let us now see the weaknesses of Honda.

2. Weaknesses of Honda 

• Decrease in sales revenue – Due to the pandemic, a steep fall is witnessed in the sales and demand for the products and services of Honda. The company’s sales dropped by 25.2% according to the September 2020 census due to the decrease in sales revenge in all its business operations.
• Branding Strategy – One of the biggest weaknesses of Honda is that it still follows the strategy of traditional branding and methods of communication which needs a change along with the fast-changing world, otherwise, this can prove to be a major problem in the near future.

• Requirement of Higher Investment – Honda needs to make a higher investment in the technological sector. Even though it spends quite a considerable amount on the development of its technological sites, yet, it is still far behind its competitors in this case, which can later lead to unavoidable circumstances.

Let us now see the Opportunities for Honda.

3. Opportunities for Honda

• New Markets – Due to the pandemic, every company whether big or small has suffered adversely, and hence, the governments have taken an initiative to help in the economic development of the countries. Thus, bringing up new markets can help Honda come back on track and help it grow and widen its scope of business.

• Diversification in Business – Since Honda is a well-known and established company, it is advisable for the company to launch its new products which will fetch them more profits. It can also prove to be very advantageous for them, as this diversification in business will attract more people and will help them gain publicity.

• The Production of Electrical Vehicles – The harsh truth is that fossil fuels are exhausted to such an extent that sooner or little later electrical vehicles or “zero-emission vehicles” can take over the market. And since Honda has the full potential to produce such vehicles with its available resources, the company should definitely take this initiative.

Lastly, let us see the Threats from the SWOT Analysis of Honda.

4. Threats for Honda

• Increase in competition – In recent years, there has been an enormous increase in the number of new companies in this market sector which has resulted in increased competition. Thus, there is cut-throat competition and the competitors of Honda are planning strategies to take over the market.

• Impact of COVID-19 – Due to the pandemic, the sale of Honda’s products has been affected largely as it posed a great threat to the manufacturing and distribution sectors of the company. Thus, leading to drastic changes in the business strategies of the company.

• Government Regulations – Honda is facing challenges posed by the government’s new rules and regulations mainly in its business and production sector. Pollution is one of the major reasons why the government is giving the company a hard time and also if the government declares that it is not in favor of the profit-based tactics, the company can suffer in the years to come.

Moving further with the study of the SWOT Analysis of Honda. Let us have a look at the Competitors of Honda:

Top 5 Competitors of Honda

• Ford Motor

In 1903, Henry Ford established the Ford Motor Company. The business is renowned for being the first to use assembly line production techniques, which completely changed the automobile industry. Trucks, SUVs, and electric models are all part of the company’s vehicle inventory. Ford has a long history of influencing the global automotive landscape from its headquarters in Dearborn, Michigan, in the United States.

• Mitsubishi Motors

Mitsubishi Motors, which was founded in 1970 as a separate company within the Mitsubishi Group, is best known for creating SUVs, electric vehicles, and the iconic Mitsubishi Lancer. In Asia and other international markets, it is well-established. The company is based in Tokyo, Japan, and has benefited the car industry with its distinctive designs.

• BMW Group

The BMW Group, previously Bayerische Flugzeugwerke AG until changing its name to Bayerische Motoren Werke AG (BMW) in 1916, is recognized for its luxury automobiles and motorcycles. Luxury and performance brands like BMW, Mini, and Rolls-Royce are part of this German automotive powerhouse. It symbolizes exact engineering, and it has its headquarters in Munich, Germany.

• Mercedes-Benz Group

The Mercedes-Benz Group, a division of Daimler AG and established in 1926, is well-known for its opulent luxury cars and commercial vehicles. It has a long history of breaking new ground in both automotive safety and technology. The German automaker Mercedes-Benz, with its global headquarters in Stuttgart, continues to stand for excellence and innovation.

• GAC Group

Guangzhou Vehicle Group (GAC) was established in 1997 and has since evolved to become one of China’s largest vehicle manufacturers. GAC produces a wide range of vehicles, including passenger vehicles, SUVs, and electric vehicles. GAC has expanded its global reach by partnering with international manufacturers such as Toyota and Honda. The company is headquartered in Guangzhou, China, and it is a major participant in the country’s expanding vehicle industry.

Before we conclude the study on SWOT Analysis of Honda let us see an example of a campaign of Honda that faced user criticism.

Example of a Failed Campaign Or Backlash from Viewers

What was the issue?

Honda introduced the “Fit She’s” advertising campaign in 2012, which was targeted solely towards female drivers in Japan. The campaign’s objective was to promote the Honda Fit as a vehicle designed exclusively for women.

What backlash did the brand face?

The ads’ use of gender stereotypes and patronizing language drew harsh criticism. Since it reinforced the presumption that women are exclusively interested in pink cars with cosmetics canisters, many viewers found it to be rude and sexist. Critics said that it diminished the intelligence and creativity of female drivers.

This ends the case study on the SWOT Analysis of Honda. Let us sum up our understanding in the next section.

Conclusion

To conclude, Honda is a brand that is reliable and unique in its own way, which clearly has the ability to fulfill the demands and requirements of the customers. 

One of its strengths is that the company uses new innovative techniques and products in the market. They also have a wide range of products to serve in the market and they export premium products to places with more demand helping them gain more profits.

The brand also has some weaknesses which are the decrease in sales revenue due to COVID-19, it uses traditional marketing strategies which can become a disadvantage for the company.

With the passing of time, new opportunities are emerging such as the initiative by the government to help businesses to get the economy back up and the new market of electric vehicles. Honda can take advantage of these opportunities and capture more of the market.

Honda also has some threats in the market like the increase in competition and the new government regulations imposed.

Hope you have learned something new from this blog. If you are still interested in knowing more about the company then do check our other blog on Honda’s marketing strategy.

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