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Australia:case study 代寫

How can companies learn from Honda’s investment in the Indian market?
 Australia:case study  代寫
From the case study, there are a number of things that companies can learn from Honda’s investment in the Indian market. In recent years, India has emerged as one of the leading emerging economies of the world. The low penetration rate of cars and motorcycles together with the increase in disposable income of the middle class has made India an attractive destination for automobile companies (Gupta, Shektar 2010). Honda was quick to recognize the market potential of the Indian market, and wasted no time in implementing strategies to penetrate the market. Companies can learn from Honda by conducting research and formulating plans to enter a certain market immediately, once market potential is realized. This would grant the company first mover advantages, by capitalizing on the resources that later competitors can’t obtain, and also allow it to gain substantial market share with less international competitors in the market. However, there were political and legal barriers to entry into the Indian market. Honda chose to set up partnership with Hero, a bicycle company which has established a reputation for the best bicycle brand in India, and formed Hero Honda. From the start, one of Honda’s main goals was to sell motorcycles in the Indian market, as the sale of motorcycles was exceptionally lucrative in India. Honda saw the potential of leveraging Hero’s connections and reputation to sell motorcycles to Indian customers. Foreign firms attempting to enter an emerging market must also carefully consider which local firm to form a partnership with. Partnering with key local established firms can benefit foreign companies by granting them competitive advantages such as foreign alliances, first mover advantages, competitive positioning and diversification in the market (Kim, Kandemir, Cavusgil 2004). In addition, foreign companies would not need to waste large amounts of capital, efforts and resources in understanding local market conditions, as information can be attained from their local partners (Jack 2013). After successfully penetrating the two wheeler market, Honda utilized their market understanding and connections obtained from Hero to establish Honda Siel Cars India Ltd and Honda Motors India. The liberalization of the Indian economy and the increase in consumer income levels saw the rise in consumer expectations about products purchased (Gupta, Shektar 2010). According to Gopalan (2003), Honda Siel Cars to introduced the CR-V in the Indian market, aiming to exploit the market potential for higher-end vehicles. Honda Siel Cars also tried to take over the Indian small car segment by launching the Honda ‘Brio’ (Madhavan 2011). The aim of penetrating this small car segment was to deliver affordable vehicles which deliver more value at less cost. Honda was never satisfied with its achievements, and always developed new goals and visions for the company to work towards to, encouraging the success and expansion of the company. However, in recent years, India’s retail petrol price has risen by 33 per cent, while the price of diesel rose by just 8 per cent due to the subsidization of diesel by the Indian government (Madhavan 2011). As Honda does not produce diesel cars in the Indian market, it saw a significant drop in the sales of all its vehicles. To overcome this setback, Honda devised a strategy which saw the establishment of a research and development centre in India to utilize localization (Madhavan 2011). Honda used the experience and knowledge gained from operating in India, and recognized the importance and significance of localization, which allowed them to reduce production costs, hence cutting prices of all vehicles and raising sales. This strategy was successful in countering the declining sales of Honda vehicles due to negative externalities.
 
Honda and Hero – what made them such a great partnership?
 
Honda venturing up with Hero can be portrayed as a great partnership. The joint venture has change the structure of the Indian two-wheeler market (REFERENCE). Hero started out as a bicycle company called Hero Cycles in India, a company with proven manufacturing, distribution and management practices (reference). By 1975, Hero cycles became the largest bicycle manufacturer in India.
 
In the 1960s, there was a law which forbade foreign companies to enter the market of two-wheeler and three wheeler motor vehicles. However, in the 1980s, this rule was changed and the Indian government allowed foreign companies to enter the market but only through minority dual ventures with domestic coalition partners.
 
In 1984 Hero signed a joint venture with an already well-known brand outside of India, Honda. Hero and Honda worked together with a different view of the market, they saw the emerging market economic situation. Their market being in a developing country, Hero Honda presented their fuel efficient and low cost motorcycle in North India, an affordable motorcycle for the consumer. As the regulations in India become strict in regards to emission regulations due to air pollution, Her Honda was attractive for it’s environmentally friendly vehicles.
 
What made Hero and Honda have a great partnership was that they both had knowledge on the product of a two-wheeler bike. Honda brought to the table, it’s already sound knowledge of global marketing, it’s technology from Japan and Hero brought to the table, it’s current customers, its reputable name, its strong distribution channels and supplier networks, its knowledge of the Indian culture, economy, government and people. It was equally as important to have Honda and Hero to join forces. Hero had a decent understanding of the market dynamics in the rural and urban market. Although they were doing fine as a manual bicycle, Hero’s attempt to enter the automobile sector had failed until Honda came along to help capture the market.
 
By becoming a joint venture, it can be seen it made an excellent partnership.
 
Imagine yourself as CEO of Honda in the Asia Pacific region. Would you choose India or China to establish a new manufacturing plant for producing cars and two-wheelers?
 
Setting up a new manufacturing plant is a decision to be taken wisely and strategically by Honda in order to grow, capture large market shares and maximize profits. It requires keen analysis and evaluations of the pros and cons the set up would bring along.
India has 2nd largest population and is one of the largest economy and two-wheeler market in the world. India has the availability of cheap and young labor in abundance to take cost advantage from. Since Honda has established its brand name, has been successful in tapping Indian markets and has also collaborated with well known Indian companies and associations, it is in a better position to negotiate for land prices and several other costs to be incurred in setting up the plant also because of the repute and advantage it brings to the country in form of employment and investment.
Honda has gained a strong footing in India despite the political and security issues. India’s economy is gaining strength, so is china’s. The decision of setting up a manufacturing plant either in India or China needs to consider number of factors. India is experiencing tremendous growth in terms of its economy. It is emerging as one the strongest economies according to the US and European states. Although is not an Export-hub yet but it can be projected to be one as far as the pace at which it is growing is concerned. Their labor and capital productivities are improving (Masanori, 2012:23-25), thus setting up a manufacturing plant in India would save time lags, duties, transportation and other expenses that may incur in bringing cars and two wheelers to India from some foreign land. Exporting automobiles from India is also very much feasible.
India being an emerging market, with increasing demand for two-wheelers and cars seems to be a favorable choice for Honda in setting up a new manufacturing plant there. Honda has been successful in forming agglomerates in India and their marketing strategies have worked big time. (Horn, Forsans and Cross, 2012:341-378). Honda has competitors in form of Bajaj and others, therefore having their on manufacturing plants across India would strengthen their footing in India. It will save them from any sorts of shortages in supplies. Governments of third world countries, like India, offer several relaxations in terms of regulations to keep the interest of multi nationals intact.
Although China has larger domestic markets and larger international ties, India has an edge over China in terms of cheaper labor costs, geographic suitability, lower country risk and cultural understanding. (Wei, 2005: 719-736). Setting up a plant in China, involves high risk and costs as it is a huge investment. Wage rates in china are rising. There will be barriers in form of language, understanding customers, analyzing and arranging resources though China d is economically strong but setting up a production plant in a well understood and gauged market like India will be recommended. As a CEO I would like to set up our plant in the most effective and efficient manner and the above scenario and the current position of Honda seems to get benefitted from setting up production plant in India by cutting back on costs and maximizing profits.
 
 
 
 
 Australia:case study  代寫
 
 
 
Reference:
Gopalan, M 2003, 'Honda build on long term success', Automotive Engineer, 28, 6, p. 28, Academic Search Premier, EBSCOhost, viewed 29 August 2013.
 
Kim, D, Kandemir, D, & Cavusgil, S 2004, 'The Role of Family Conglomerates in Emerging Markets: What Western Companies Should Know', Thunderbird International Business Review, 46, 1, pp. 13-38, Business Source Premier, EBSCOhost, viewed 22 August 2013.
 
 
MADHAVAN, NN 2011, 'LIVELY NEW HOPE', Business Today, 20, 20, pp. 38-40, Business Source Premier, EBSCOhost, viewed 28 August 2013.
 
Gupta, N, & Shekhar, V 2010, 'The Indian Mid-Segment Passenger Car Industry', IUP Journal Of Business Strategy, 7, 3, pp. 60-72, Business Source Premier, EBSCOhost, viewed 24 August 2013.
 
Jack, R, 2013. International Business. 1st ed. Australia: Pearson.
 
Masanori,K.(2012). Strategies for Japanese Companies in India. Available at [Accessed 29 Aug. 2013]
Wei, W.(2005). China and India: Any difference in their FDI performances?. Journal of Asian Economics. Vol. 16, No. 4, pp. 719–736.
Horn, S., Forsans, Ni.,  and Cross, A. (2010). The strategies of Japanese firms in emerging markets: The case of the automobile industry in India. Available at [Accessed 29 Aug. 2013]
 
 Australia:case study  代寫
 

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