VIEWPOINT TAKEN

Honda Cars Philippines Inc. (HCPI) is a subsidiary of Honda Motor Co., Ltd. Of
Japan, Duly incorporated in October 1990, completing its plant and start
production of completely knocked-down units in 1992 and capturing a strong
foothold in the passenger car sales market in 1996.
In 1997 and 1998, HCPI was among the business Worlds Top 100 companies.
HCPI is in the passenger car and sports utility vehicle in the commercial vehicle
industry.
The company product line includes the following: Honda Accord, Honda civic,
Honda City, Honda CR-V, Honda Legend, and Honda Odyssey.
HCPI offers a wide array of vehicles which include among others passenger cars,
sport utility vehicles and even tricycle, making all these products available
through an extensive network of authorized Honda Dealers all over the country.
The manufacturing plant is located in Sta. Rosa Laguna in 236,000 sq.m
property, employing 1000 associates as of October 1992. The stockholders of
HCPI are the following: Honda Motor Co., Ltd. (47% share), Mitsubishi
Corporation (23%share), Ayala Corporation (15%share) and Rizal Commercial
Banking Corporation (15% share).

TIME CONTEXT
The case covered years 1997-2000 but may still be applicable up to present.

I.

STATEMENT OF THE PROBLEM

The main problem of this case study is how Honda Cars Philippines
Incorporation can sustain their present market position to increase
market share in passenger car models even if there is a keener
competition due to other competitors dynamism and aggressiveness in
terms of sales.
What strategic major initiatives are required of HCPI to dramatically
outperform other players in the industry in the light of changing market
conditions?

II.

OBJECTIVES
Long term:
To increase market shares in the passenger car models.
To sustain its market position even if there is a keener competition.

Short Term:
To create an extensive advertisement for customer awareness and
promotion of the products.

III.

AREAS OF CONSIDERATIONS
SWOT ANALYSIS
INTERNAL ENVIRONMENT
1. Strengths
High and powerful research and development (R&D)
Innovation
Best market share leadership
Strong and powerful brand equity
Different and unique products
One major strength is the revolutionary engine technology with the help of
which Honda is gaining success day by day
Popularity is termed as one of the best strength which results in
betterment for the company

2. Weaknesses
Cost structure of Honda is high as compare to other automobile
manufactures
Apart from Nissan & Toyota, Honda requires privileged purchase deposit
Honda focus more on international deposits as compare to domestic
deposits
Civic model is consider s one of the major weakness for Honda Company
Honda products are termed as inoffensive in terms of style and design
Prices for non-luxury vehicles are far high as compare to other
manufactures
EXTERNAL ENVIRONMENT
3. Opportunities
Emerging market is one of the best opportunity for this company
Various models are there which caters the lower segment
Improved incomes of many Filipinos.

 Healthy economic indicators for immediate

international trade barriers by government

years

relaxation

of

4. Threats
One of the major threat is the economic slowdown
All the external changes for instance taxes politics as well as government
are the major threats for Honda Company
Another threat is the lower cost competitors
Price war is also consider as an important threat for this company
Oil prices are contributing a lot towards the loss of Honda company
Second movers are the major threat for Honda Company
Substitutes products are the major threats for the Honda Company
Economic crisis in the country may arise.
Continued increased of gasoline prices.
Reluctance of banks to lend the private sector in spite of the decline in
interest rates.
Strong probability of manufacturing capacity glut for passenger car
manufacturers due to brightened prospects in the entire manufacturing
sector.
Emerging trends towards SUVs and AUVs.

IV.

ALTERNATIVE COURSES OF ACTION

Make an innovative advertisements and promotions that will create an
impact or attraction to the buyers and customer product awareness.
Advantages:

To reach significantly more people to increase customer product awareness.

It introduces a new product in the market.
It may create an expansion of the market.
It may increase sales.
It supports the salesmanship.
Disadvantages:

Added cost
Company has to spend a large amount on advertising. It
increases the costs of products
Confusion to buyers

Many a time distorted version of reality is shown in the

advertising. Believing in advertising, consumers buy the
product.
Some advertisement is in bad taste
Foul language and objectionable pictures are being used in
advertising in order to attract a particular class.

Search for more suppliers of spare parts of passenger cars to reduce high
costs of spare parts and product pricing.
Advantages:
It may lessen or reduce costs of spare parts.
It may also lower product pricing.
Disadvantages:
It may be time and effort consuming to search for suppliers instead of doing
other important matters.
Not sure of quality of spare parts for the new supplier of it.
Make an extensive research and development to create new product like
designing a product that will use alternative resources like electricity
instead of oil or product that will be an environmental friendly.
Advantages:
It may create new market.
It may develop new opportunities.
Competitors may have reached a declining phase if your new product is
successful.
It may also increase sales and market share.
Disadvantages:
It can be costly to develop a new product.
May lead to product failure.

V.

RECOMMENDATION
Short Term:
Create an extensive advertisement
Creating an extensive advertisement helps to build salesmanship.
Long Term:
Make an extensive research and development to create new product like
designing a product that will use alternative resources like electricity
instead of oil or product that will be an environmental friendly.
Create a new product line that is new in the market.
Marketing strategy plan should be revised
Develop a product that is according to the nations culture

VI. PLANS / PROGRAMS FOR IMPLEMENTATION

ACTIVITIES

RESPONSIBILITY OF

RESOURCES

TIMEFRAME

Feasibility Study,
1.

Research &

Customers

commercial vehicles

Development

Feedback,

particularly in passenger cars.

Department

Internet, Social

Researching for new trends in

mos.

media surveys
Research &
2.

Study on cost reduction/

minimizing cost for spare parts

Development,
Suppliers

2 mos.

Production and
Budget Dept
Internet,

3.

Making Research and

Development proposal for

Research &

computer,

Development

presentation

2 weeks

approval.

applications
Spare parts and
other materials in

4.

Production of new product

Production

5 mos.
producing new
product
TV commercials,

5.

Advertising and promoting

the new product for customer
product awareness

Internet and Social

Advertising agency,
Media Promotions,
salesman
Tarpaulins, flyers,
and stickers

1 mo.