Acura was launched in the mid 1980s, and it was the first Japanese produced luxury car, however it lacked many of the features that customers were looking for in high end vehicles and Acura went through almost five years of net losses before Honda finally figured out their design and distribution methods. Honda depends too much on their ingenuity and ability to adjust once a product enters the market, and as a result, they often make hasty and faulty decisions that they must then spend millions and years to fix.
Honda has significant opportunities in the near future to become the premier manufacturer in the world. The biggest opportunity lies in their technology advantage, as the frontier leader within fuel economy, they have had years of research to help them build motors that are highly fuel efficient. This applies to every single market that they operate in and with the socio-economic interest in saving fuel and find alternative solutions to energy waste; Honda could become an even bigger player within the manufacturing market than they already are. Additionally, another advantage is the flailing of other major American manufacturers that formerly had a vice grip on the American motor industry. General Motors and Ford are both in deep debt and appear to be years away from full recovery, as a result, the door is open for Honda to seize their existing market share by both pricing the competition out of the market, and by dominating the overall quality of their products. If they can leverage their current advantage on a full scale, Honda will be able to gain a significant amount of the market share that was previous taken up by GM and Ford. Finally, the emergence of new markets means that there is a market expansion for Honda products. Both China...
Honda already has a foothold in China, and are beginning to enter heavily into India and should they take control at the inception of these two powerhouses, their overall revenue should increase exponentially in the next decade.
The major threats to Honda are two fold, first the existing motor manufacturers that are in direct compete with Honda over revenue. Chiefly this would be Toyota Motors and the rising star, Honda Motors. Both of these Asian manufacturers have been just as effective as Honda in creating highly efficient low cost products with Toyota possibly having even more brand recognition than Honda. Honda on the other hand, price competes at a much lower level than both Honda and Toyota and with their increased dedication to quality and marketing they could become major players and highly competitive with Honda's market share across the board in all markets. The other threat to Honda is emerging motor manufacturers. With China's recent burst of economic activity it has become evident that they will churn out many new competitors with the man power and financial resources to compete on the open market. Therefore developing nations with high potential could also compete with Honda for its overall market share.
Despite these problems Honda is still considered one of the most lucrative and best managed companies in the world. Their slogan "The Power of Dreams" permeates their entire business strategy and culture because they believe themselves to be the innovators of tomorrow. As long as they can commit to this strategy they will achieve continued success.
