Comperitive

Management

Submitted to: Sir Imran Hameed

Submitted by: Waqas Rehman

Usama Mohiy ud Din

 Bilal Butt

History

HONDA JAPAN:

From a young age (7), Soichiro Honda had a great interest in automobiles. He
worked as a mechanic at a Japanese tuning shop, A self-taught engineer, he later worked on a
piston design which he hoped to sell to Toyota. The first drafts of his design were rejected, and
Soichiro worked painstakingly to perfect the design, even going back to school and pawning his
wife's jewelry for collateral.

Eventually, he won a contract with Toyota and built a factory to construct pistons
for them, which was destroyed in an earthquake. Due to a gas shortage during World War II,
Honda was unable to use his car, and his novel idea of attaching a small engine to his bicycle
attracted much curiosity. He then established the Honda Technical Research Institute in
Hamamatsu, Japan, to develop and produce small 2-cycle motorbike engines. Calling upon
18,000 bicycle shop owners across Japan to take part in revitalizing a nation torn apart by war,
Soichiro received enough capital to engineer his first motorcycle, the Honda Cub. This marked
the beginning of Honda Motor Company, who would grow a short time later to be the world's
largest manufacturer of motorcycles by 1964.

HONDA PAKISTAN:

Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company
Limited Japan, and the Atlas Group of Companies, Pakistan.

The company was incorporated on November --, 1992 and joint venture agreement was
signed on August ---, 1993. The ground breaking ceremony was held on April 17, 1993 and
within a record time of 11 months, construction and erection of machinery was completed. The
first car rolled off the assembly line on May 26, 1994. Official inauguration was done by
President of Pakistan, Sardar Farooq Ahmad Khan Leghari. Mr.Kawamoto, President of Honda
Motor Company Limited Japan was also present to grace the occasion. The company is listed on
Karachi, Lahore and Islamabad Stock Exchanges.

Introduction
 Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company
Limited Japan, and the Atlas Group of Companies, Pakistan.The company was incorporated
in 1992 and joint venture agreement was signed in 1993. The ground breaking ceremony was
held on April 17, 1993 and within a record time of 11 months, construction and erection of
machinery was completed.

The first car rolled off the assembly line on May 26, 1994. The company is listed on
Karachi, Lahore and Islamabad Stock Exchanges.On July 14, 1994, car bookings started at
six dealerships in Karachi, Lahore, and Islamabad.

Since then the Dealerships Network has expanded and now the company has
sixteen 3S (Sales, Service and Spare Parts) and thirty 2S (Service and Spare Parts) Pit stops
network in all major cities of Pakistan.

Honda Atlas Cars (Pakistan) Limited has Dealership Network covering all of
Pakistan, and Dealership are equipped with all the facilities a modern dealership should have.
The facilities include Sale, Service and Spare parts.

HONDA MISSION STATEMENT

“We see the world not as it is, but as it could be.”

We see the world through the eyes of dreamers. Because we are a

company founded by a dreamer. And we are a company built on dreams.

We see the pursuit of impossible dreams as an empowering force, capable

of producing revolutionary ideas. Dreams inspire us to create innovative products
that enhance human mobility and benefit society. Honda encourages all of its
associates to pursue their dreams. And it's our mission to share these dreams with
others and to make them a reality.

We see "The Power of Dreams" as a way of thinking that guides us and

pushes us forward. The strength of our company comes from this philosophy —
which is based on the visionary principles of our founder, Soichiro Honda.

We see things from a global perspective, always striving to create and

produce products of the highest quality at a reasonable price for worldwide
customer satisfaction. The power of Honda's dreams will continue to lead to new
insights and technologies in automobiles, motorcycles, power products, parts and
other fields of mobility.
 We see it as our responsibility to serve humanity through our global
commitments to helping protect the environment and enhancing safety in a mobile
society. In every endeavor we pursue, we strive to be a company that people all
over the world want to exist.

We see a bright future fueled by the Power of Dreams. Can you see it, too?

Company Philosophy:

 Dynamic Manufacturing and marketing of prestigious products to the entire

satisfaction of customers.

 Create ideal working environment for continuous development of product and

personnel.

 Provide adequate return to shareholders and fulfil corporate civic and fulfil
corporate civic obligations.

Image of Company:

 Zero line stop and zero defect.

 No.1 customer satisfaction
 Fair rules.
 Profitable organization
 Market leader.
 Respect for all.
 Self reliant, exceeding the goal.
 Open and frank atmosphere.
 Believe in originality
 Encourage localization
 Environment friendly
 Environment conditions

Honda conducts its businesses in Pakistan and throughout the world (including North
America, Europe and Asia). A continued economic slowdown, recession and the sustained loss of
consumer confidence in these markets, which may be caused by rising fuel prices or other
factors, could trigger a decline in demand for automobiles, motorcycles and power products that
may adversely affect Honda‘s results of operations U.S financial crisis has affected the
economics over the world.

Some commentators argue that Pakistan is already in recession—an appraisal that was
reinforced by the biggest fall in five years in corporate capital spending for the last quarter of
2008. Shares in Pakistani manufacturing corporations dropped sharply. Not only Honda lost 4.1
percent but also Toyota lost 5.1 percent too

Competition
The competitors of HONDA includes all the local and foreign Cars manufacturers
including

Suzuki

 Toyota

 Mitsubishi

 Mercedes

 BMW

Major type of competition:

 Brand competition TOYOTA, MITSUBUSHI.

 Product Competition Other automotive manufactures.

 Generic Competition Rental cars, motor bikes, bicycles.

  Totals Budget Competition Vacations, Debit Reduction, Home remodeling.

GLOBAL CHALLENGES

In this globally competitive business world, every firm has to face many challenges,
and Honda does, too. There are four common challenges that Honda has to face: problems that
cannot be solved, managing intangibles, managing diversity, and addressing new issues for
which managers and organization are ill-prepared.

SWOT Analysis

Strengths
Product

 Brand name image

 Smoother drive as compared to competitors
 Market leadership – Enjoying 56% share in motorcycles.
 Efficient performance
 Durability/Reliability
 Quality – ISO Certification
 Easy availability of Spare Parts
 Strong asset position/increased profits with each year
 High resale value
 Low maintenance costs
 Technical expertise – Benchmarking Honda, Japan.

Price

 Reasonable price of genuine parts

 Cheap maintenance

Promotion

 Successful Promotional campaigns via TV and Newspaper channels enjoying extensive

viewer ship

People

 Management/non-management work as a single unit, as a team

 Highly loyal, committed and motivated employees
 Hardworking, experienced and qualified staff
 Technological and managerial know-how
 Job evaluation which is totally performance based, gives staff incentive to work harder
each time
 Bonuses and reward system for employees
 Trainings given to dealers, motorcycle mechanics and users

Processing

 TQM principles practiced in work processes

 Kaizen (continuous improvement) principle in all processes
 State of art plants and equipment
 ISO 9002 certified

Physical Environment
  Frank and congenial work environment
 Positive work climate and organization culture – single code of dress supports to maintain
discrimination free work environment

Others

 Customer loyalty
 Old and established brand name
 Safety guidance given to customers.

Weaknesses

 After sales customer service not up to the level actually expected by the customer.
 Less of a proactive approach to different matters, reactive approach applied more
 Limited investment in high technology equipment
 Price higher than prevailing competition in market, which gives customer thoughts about
nearest substitutes available
 Bike launching new features as those of new entrants in market
 From customer point of view, in case brand is unavailable for a long time, high pending
level allows customer to switch brand
 Credit availability schemes no well managed and customer not informed about them
 Customer conscious of bike as a status symbol refrain from buying available Honda
brands. It is considered more of a family bike
 No safety measures installed in bikes against snatching dilemma.

Opportunities
  Growing motorcycle market – Estimated bikes 500,000 by the end of 2007 compared to
300,000 in 2005/2006
 Customers realizing quality matters, as problems are already cropping up in new entrants
models
 Initiatives and proposals in process for coping with increased demand of bikes
 Newer segments introduced with entry of new models, design, which still have huge
potential for growth
 Karachi, a segment which has tremendous potential for growth and profitability.

Threats

 Many new features inherent in latest bike models increasing customer expectations a
great deal for the future.
 Crucial economic conditions of Pakistan can lead to the decreased sales.
 WTO (World trade Order) opening local markets for global competition
 Competitors launching newer models with stress on reduced price for our price-sensitive
economy proving serious threat in near future
 Theft and snatching of bikes increasing, reaching 2500 bikes in period of January -May
2007.

Management strategies and approaches

Enterprise Strategy

The Mission Statement of Honda is try to maintain a global point of view, with the
dedication to supply the highest quality products at a reasonable price for worldwide customer
satisfaction.
 Moreover, taking new challenges with the pursuit of Initiative, Technology and Quality,
Honda is pursuing their 2010 Vision: Striving to be a company society wants to exist through
creating new value, globalization, and commitment for the future.

Business Strategy

R&D is sharpening the business advantage of Honda, together with the fierce
competition between Honda and competitors, and they all define the B u s i n es s S t r a t e g y
of Honda. One of the proudest things about Honda is its R&D system. With the systematic way
of approaching, focus on durability, reliability and basic performance to establish a creative and
innovative technical foundation. With the wisely approach to the future, the Honda products do
care about the economical, environmental, and social issues – This leads to a increase steady in
Pakistan recently meanwhile the whole industry is going down by some external factors such as
depreciation, Oil price raising, political recession … etc
Honda is keeping involving in the research and development that benefit people in the
future through leading-edge technology and commitment to innovation that opens up new
possibilities in mobility.The dealership of Honda is also one of its strengths. Through creating
products and services that provide the core values that make Honda unique, the Honda‘s
associates around the world keep creating such inspiring experience for its customer.
Honda put heartfelt endeavors into services, responding to changing values and
increasingly complicated needs of customer . Its services focus on improving customer relations,
with friendly and attentive sales, responsive service support, thorough maintenance and repairs.
Honda began unifying its multiple dealership channels into a single Honda sales channel, seeking
to strengthen the Honda brand, enhance customer satisfaction, and help ensure lifetime customer
loyalty.
The manufacturing and distributing system of Honda are also sources for the succession of
Honda. With the global network, Honda‘s global strategies somehow include the globalization
characteristic. Honda has established independent local operation in Pakistan and pushed local
autonomy and proactive efforts to localize the needs regional with mutual understanding. The
competition between Honda and others speed up year by year. This is somehow carry the
win/lose characteristic.

P LANNING A ND D EVELOPMENT
Currently, Honda Atlas Cars (Pakistan) Limited is not in a position to make major
changes in its cars. Only minor changes can be made here and decisions about these changes are
made at the top level. Marketing & Production people play an important role in this regard.

Research & Development Department:

 The role of research and development is to introduce innovative ways to achieve the
objectives especially through production facilities. Unfortunately, there is no research and
development department in HACPL. This function is performed by Honda Motor Company,
Japan. All major changes in models of Honda cars are introduced there. Employees of HACPL
are sent to Japan, where they are trained according to new conditions. Later on, these changes
are introduced in the models offered in Pakistan.

Deletion Programme:

“Deletion is to replace the imported parts of vehicles with the parts either
manufactured in house or purchased through local vender industries.”

Honda Atlas Cars (Pakistan) Limited is pursuing a realistic and progressive deletion
programme for indigenisation of assemblies, parts and components. This dynamics programme
is being implemented through in-house assemblies and manufacturing operations, and is being
supplemented by vendor development.

HACPL is almost same as that of its major competitor, i.e. the manufacturer of Toyota
Cars. Efforts are being made by top management to increase this percentage.

Achievement of Objectives through Operations:

The production department of HACPL is playing a vital role in achieving the overall
objectives of the company through efficient utilization of resources.

1. HACPL is achieving production efficiency through:

 Evaluation & improvement of quality control.

 Training of production employees.

  Modernization of plant and machinery.

2. Similarly cost minimization objective is being achieved through:

 Deletion programme

 Avoiding poor quality products, which are a loss for the company. As
mentioned earlier, HACPL is achieving excellent quality levels through
giving training to personal plus proper use of technology.

T OTAL Q UALITY M ANAGEMENT

Total Quality Management: (T.Q.M.)

T.Q.M. stresses three principles:

 Customer Satisfaction

 Employee Involvement

 Continuous Improvement

Attaining quality in all areas of a business is a difficult task. It is necessary for an

organization to provide its customers with best or even consistent quality products in order to
survive in the environment. The success of any business depends upon how accurately the
company perceives the expectations of Customers plus its ability to bridge the gap between
consumer expectations & operating capabilities.

Customer Satisfaction:
 HACPL’s employees try at their level best in satisfying the customers & hence
stepping forwards the objective of the company. The contribution of Marketing & Production
department is very important in this regard. These departments continuously go for the ways to
improve the features of existing HACPL’s products and hence satisfying the customers.
Employee Involvement:

HACPL’s management considers its employees a great asset. The employees along with
sales dealers are part of the large “Honda Family” and they form an integral part of policies
and decisions that help shape the future of the company.

The management of HACPL considers the proposals/Suggestions of its employees up to a

great extent. It appreciate the employees in this regard through Monetary or Non Monetary
benefits. Management of HACPL put great emphasis on creating and maintaining an enterprise
environment in the company that maximizes the interest and motivations of its employees
which is very vital to enhance labour productivity and efficiency.

Training of Personnel:

HACPL puts great emphasis on training and development of employees to help them
realize their full potential. Employees from all departments especially form production, finance
and marketing attend training courses in their respective fields. This has greatly contributed in
improving employees performance and efficiency at all level.

Continuous Improvement:

The Management of HACPL has a view of continuous improvement in order for the
better Utilization of resources and improving Honda brand image in the market. HACPL is
trying at its level best to introduce and implement better quality control procedures,
redesigning the production process, automating the whole plant etc. Employees involvement is
playing vital role in this regard.

S UGGESTIONS

1. Efforts should be made to reduce the cost of Honda cars.

2. There should be more coordination between HACPL and its suppliers.

3. A low-priced model should be introduced to capture the market share of SUZUKI.

4. Deletion programme should be implemented rapidly.

 5. Although HACPL has taken some steps for environmental protection, more
efforts should be made in this regard.

6. The dealership network should be widened.

7. Employees should be encouraged to give suggestions.

8. Some sort of research should be done at HACPL.

9. Efforts should be made for better utilization of capacity.

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