Pepsi Operations Management Problems

Pepsi Operations Management Problems Operations management is considered as an important division of study equally in the corporate world in addition to in academics. Reference to academics, operations management, is a central part of in the curriculum of management studies. In the other words, it could be seen as the theoretical base that a particular manager or else an executive desires to deal with the issues of the company are taught in the curriculum. The subject; Operations management is again a key part in an organization or business (Sweet, Franklyn H. 1964, pp 89-90). A full-blown department or section of the organization is allocated to take care of this need of the organization or business. Additionally to this, concern is kept that the issues that the organizations face in the subject of operations department or section is resolved at the earliest, as a result that the production and as well as quality of the products that go out of the company does not obstruct the development and image of the organization or business. Operations management studies the internal working and work process of a company. Indeed it could be said that the planning, producing and making of the products of the organization or business is smoothen by a range of processes of the operations department or section of any organization or business (Sweet, Franklyn H. 1964, pp 89-90). The technical aspects of an organization or business are looked after of by the operations management of that organization. Indeed every single one of organizations and firms has operations management officers and full-blown departments to take care of this aspect of the company. Thus, an organization or business tends to take up the marketing strategies that make an important part of the operations management. Scholars and market analysts are already having conducted bundle of studies and researches in operations management field and have established that the principles and theories of operations management and strategies are well-match ed in any organization or business and in any sector (Ackoff, R., Rivett, P. (1963), pp. 45-77). In the 18th century, it could be seen the introduction of the operations management theory. Later on also in the entire of Industrial Revolution, a variety of new theories of operations management and other ideals were used. These ideas allow to a huge increase in the business of organizations or businesses and all at once ensure that the a variety of approaches developed as a part of the operations management theories were utilized by the organization. Out of a lot of sub theories and approaches that were made as part of operations management are; Waltham-Lowell system, Assembly line practice, etc. As well as this, the scientific management and the development of the theories and principles of the operations management systems make certain that these help the organization leads success and flourish (Ackoff and Rivett, 1963). One of such organization found in the United Kingdom that is one of the well known brands in terms of taste and quality and many moreà ¢Ã¢â€š ¬Ã‚ ¦This organization was suffered huge losses due to miss-management and issues in the operations management section. The company is the renowned beverage maker Pepsi Company. This is a world renowned name in the field of carbonated beverage industries. Pepsi advanced to be one of the most recent kinds of confectioneries (O Sullivan, N., Wong, P. (1991), pp.139-55). Pepsi Company is today identified as one of the most trusted brands, due to the strategic planning and management and marketing strategies that it has been utilizing since long ago. As a result, it could be said that the operations department of Pepsi Company has to play a key role in the establishment of the Pepsi brand as one of the most adamantine names in this sector. On the other hand, even such a well-defined operations department of Pepsi Company was unable to handle the q uality of the Cadbury products (Sweet, Franklyn H. 1964, pp 89-90). There was news in the many of Medias that the Pepsi Cola was contaminated with pesticides. This rumor spread out everywhere in the world like a wildfire. This carelessness by the operations department of Pepsi Company exaggerated the organization in terms of money value and as well as in terms of loss of brand trust and brand name (Peters, T. and Waterman, R. 1982, pp. 12-23). This to be sure came as a distress to the whole nation as nobody has expected that yet the highly trusted brands like Pepsi can have never faced such as issue. All the world was sensitized at this, as this played as a chance for other competitive brands to build solid place in the market and as well as for new brands to panic. Therefore this dilemma of the Pepsi Company and it become more aware of the significant of quality and a better operations management department or section (Sweet, Franklyn H. 1964, pp 89-90). An brief explanation of the process at issue in the Pepsi group and the process map Even though the finding of pesticide residuals in the Pepsi Cola was world news and it was in progress being forbidden in most of the places. All stock of Pepsi Cola was in custody. Those in the factories were stopped from coming out of the company (Sweet, Franklyn H. 1964, pp 89-90). This made question for the already on hand operations management procedures that would be utilized and prominent in the Cola industry. This also insisted on the management of Pepsi Cola to consider of the processes which already existed in the company. As well the quality assurances of the processes in addition to the legitimacy of these processes were under issue and evaluated. Pepsi Cola has at all times levied importance in the maintenance and updating of the quality processes that were already existing in the organization. The quality processes that were being utilized were under strict monitoring and test out. While this problem relating to the quality of Pepsi Cola came up, after that an indicatio n of the process map started taking shape (Chaffee, 1985). The range of processes that already existed in the organization is given below: Manufacturing of soft drink: In the beginning the ingredients necessary for making the soft drink are prepared to be available. These ingredients are consisted with vanilla beans, flavor oils, kola nuts and sweeteners. Strict care was paid that these items are best in the quality and that the water utilized in it are distilled and free of all impurities (Chaffee, 1985). Transferring to the packaging house: subsequent to the soft drink is all set; there are taken to the packaging places in cans (Chaffee, 1985). Special attention is also taken in carrying on these steps, as not any chemicals are mixed with the soft drink. So that the amount of soda in soft drink is not changed. As well as this, the greatest technology is utilized at this stage to make sure that the quality remains unchanged as that are while in manufacturing (Chaffee, 1985). Packaging: This is the third step that also requires best care of maintaining the quality of the soft drink. It is made sure that the sealing of the Pepsi Cola cans are such that they are air tight and there is not any chance of leakage. As well as this, the cartons, caps and the CO2 used to carbonate soft drinks are in the optimum quantity. Special care is put in carbonating the drink as the actual quality if the soft drink depends on the carbonating. Special equipment and tools are brought in use to take out the cans. Pepsi Storage: highest care is also put in the storage of the cans. As it was believed that while under the store, the cans were run over by rats and other small insects. This might be caused a variety of diseases to the people. It is ensure that the cans are packaged properly and machines do the shifting and storing of the cans before they are sent to the retailers and stores (Peters and Waterman, 1982) Analysis of the Problem It is easy to analysis of the problems, if the problems are listed or displayed in such a manner that they can be easily read, then the can be easily studied (Peters and Waterman, 1982). Therefore, high care would be taken that the analysis of the problems is easy. The various measures that require to be taken to solve the problem. This systematic resolving of problems is very important so that the problems are first broken down in to smaller sections so that their root causes can be traced (Hamel and Prahalad, 1994). Ideas Generation Ideas generation is very important to resolve the problem. As an example, the processes that are to be taken for the modification of the problems are first break down and then the ideas are generated as part of the tea or at personal levels that would help in the resolving of the issues. Such thinking is results in cropping up of excellent and effective ideas so that the problems are addressed in a improved way and the root causes of the problems are identified. Ideas testing Generation of ideas in important but the process does not end there. After the listing and jotting down of the ideas, they are tested whether the ideas can prove helpful in solving the problems. In addition to that, the stages in which the ideas are to be used also differed and so they should not be implemented without testing the (Peters and Waterman, 1982). Thus, the effectiveness of these ideas is first tested and then depending on the results, they are finally implemented. The testing of ideas is more like a pilot survey that is made because the actual implementation of the ideas. This helps in gauging the effects of the implementation of the ideas in solving the problems beforehand (Hamel and Prahalad, 1994). Without testing of ideas, it is not generally used directly in any organization. Implementing Ideas Testing the ideas give an idea of the kind of feedback that will be generated after the ideas are actually implemented. Thus after this pilot study the results is first analyzed and if the results are as desired, the ideas are implemented (Peters, T. and Waterman, R. 1982, pp. 12-23). After the implementation of the ideas, it is clear that the operations program can now be tacked such that the organization does not face similar problems again in future. Checking the Results This is the last and the finals stage of the implementation of the TQM techniques. Although the ideas were first tested for their potential results and the implemented, a check is always required at the final stage. Thus, even after the implementation of the ideas to solve the operational problems, a check is required to gauge the results of the implementation of the ideas. After getting the results after implementing the ideas, an assessment or evaluation of the results is done. This gives a feedback of the effectiveness of the ideas and helps decide whether the ideas are needed for the future processes or not. Fish bone theory Developing the fish bone theory and the fish bone diagram was done by Kaoru Ishikawa. It is seen that because this theory was developed by her, the theory was also known as Ishikawa diagram. The root of this theory is that problems need to analyze by jotting down the problems on a sheet of paper and then relating it to the cause and the effect (Heskett, 1989). This theory was later in used by various disciplined and branches of academic studied. The fish bone diagram now forms an important part of management studies and ensures that the problems that an organization faces is first jotted down and then analyzed. This gives the problems a pictorial looks and thus ensures an easy and clear understanding of the problems. This diagram when seen after the completion gives an impression of being drawn on the model of a fish. In fact the diagram is of the shape of a fish. A spine of the fish is drawn and this the plane in which the problems are written extending towards the outer sides. The problems are jotted along the sides giving an impression that these are the bones of the fish (Peters, and Waterman, 1982). This pictorial representation makes the understanding of the problems easy. In addition, while listing the problems they are started form the grassroots level and decided into various categories. For example, the various categories of the organization that might be responsible for the operation problems cropping up in the organization are decided and then the problems that can be placed in these areas are listed. This gives a clear impression of the problems and when this is presented before the higher management, it become easy for them to link the cause and effect and then work towards solving the problem. In addition to this another important reason because of which the fish bone theory acts as an important tool in the analysis of the operations problems is that it divided the problems into smaller sub sections. This makes the problem seem easy as when a problem is bigger no way to break that down is found. However, when the problems got broken into smaller parts they seem easy. In addition to this, the linking of the problem to the cause an effect also makes the problems easy to identify. Another pertinent reason that recommends the use of the fish bone theory is that it is generally made in a group. Thus it cats as a medium through which various ideas and knowledge of different people are channelized into one single chart (Peters and Waterman, 1982). Thus the chart itself is very informative as the opinion of people from different experiences and history A comparison of the theory with the actual practice in the Pepsi Company It was seen that the fish bone diagram and the TQM techniques gave an idea of the various problems that Pepsi faced. In addition to this, the Fish bone diagram also listed the various strategies tat are already part of the Pepsi group. These theories hint that the operational department of Pepsi had taken up strict measures for maintaining the quality of the products of Pepsi. However, it is seen that there still were loop hole in these processes because of which there were issues in the quality of the Pepsi Company. The various loopholes in the processes that were although defined in the guideline and quality assurance of the Pepsi Company but were not followed in practice are given below: 1. Although various hi tech machines were used for the purification of the water that us being used in the production of Pepsi, there was issues in the quality of the water. When an investigation committee was set up to discuss the reason that led to the finding of pesticides in the packaged cans of Pepsi, it was found put that the ground water was found to be contaminated (Kearney, 1992). Various water purifiers are available in the Pepsi Company and they boost of use of high boiling canisters that free the water. In fact the quality process of Pepsi says that not filtered but distilled water is used for preparing the soft drink. Had this process be really followed in reality Pepsi would have not suffered huge losses and spoiled the name and reputation of the organization. Thus it was seen that purification of water was one miss match where Pepsi did not keep up the quality assurance stages that was streamlines in its work plan (Kearney,1992). 2. It has been defined in the work plan of the organization that the store and the factory where the soft drink has to be manufactured are free from all types of temperature and humidity issues. In fact, the organization showed that various new and improved storage canisters and rooms have been specifically designed so that the soft drink after manufacturing is placed in better stores before they are packaged. However, this process was not maintained properly and it was later inferred that the machines and storage room that were made were not of the required quality. This made the soft drink being alter in their chemical composition in the high temperature differences in various countries. Thus, owing to theism there were chemical reactions and microbes were able to breed in them and thus contaminate this (Kearney, 1992). 3. Although the Pepsi Company says that they have hygienic and special ceils to store the soft drink for long time till they are finally packaged and delivered, they did not take proper measures to make this practically happen. It was seen that after the Pepsi was manufactured they not stored in hygienic and cold storages. This change in temperature and the unhygienic conditions of the theories led to the contamination of Pepsi. 4. Although Pepsi boost of having a very well trained staff, they failed to provide proper quality management training to their staff and employees. Owing to this they were unaware of ensuring that none of the variation in temperature level, etc should be done as it drastically affects the quality of the drinks (Kearney, 1992). The employees and crew of the Pepsi Company being unaware, ignorant and negligent of these issues ended up in contaminating the drink. Consideration of its impact on quality and/or customer focus These problems definitely had a greater impact on the organization. Pepsi was a bigger name in the beverage industry and none of the companies were as popular as it is and give it tough competition. However, with the spread of the new of the Pepsi drink containing pesticides, this acted as a major loss to the organization. Pepsi was banned in all colleges and school on the United Kingdom. In addition to this, various factories of Pepsi were seized and the drink that was already prepared was seized. This new also spread in other parts of the world. In fact all countries stopped the selling of the Pepsi. In addition this affect in the business, the customers also got sensitized by this new. They themselves became much aware of the contamination and abstained from drinking this drink (Kearney, 1992). They also barred their friends and children from having this drink. This indeed acted as a great set back to the Pepsi Company and destroyed its business. In addition to that the trust that it had managed to create among the people was lost. Even till date many people avoid drinking the Pepsi products as the shock that they got regarding its contamination is not out of their minds still. Recommendations After studying and analyzing the principles in the operational management department of Pepsi co, one of clear of the problems that the organization was facing and the reasons that led to these problems were identified. Thus, the various recommendations that can be given to the Pepsi co group are as follows: 1. It can be inferred that most of the problems that cropped up regarding the quality of the products is due to the negligence of the employees. It was seen that the staff and crew that were part of the manufacturing department were not well trained and well skilled. Owing to this they did not understand the importance of maintaining accurate temperature and pressure. They did nit understand that minor changes in the level of temperature and pressure while purifying the water etc can lead to drastic disasters as it happen in the case of Pepsi. Thus Pepsi must ensure that all their staff is properly trained before they become part of the manufacturing and operational team of the company (Kearney, 1992). 2. The company should also understand that when the product that they are producing are consumable items special care is taken that they are hygienic and do not cause any health hazards. This is because a slight negligence on the part of the company may lead to severe results on the health problem and thus in turn may be disastrous to the life of the company and they may even end up losing their license. Thus, Pepsi should ensure that the machines that they are using in the production and purifying of water should be the best of quality. More and more high quality machines need to be brought to test the presence of microbes and other such organization and at the lowest possible level (Chaffee, 1985). 3. Quality assurance is an important part of the operational management department in Pepsi. This department has to take up the responsibility of ensuring that the products of the organization are best of the quality and that they are passed through various rounds of quality checks such that the products that finally pass out of the organization are best of the quality (Chaffee, 1985). 4. The management also has to be sensitized towards this cause. They have to ensure that the work process of the organization needs to be changed as there are loopholes in the process. And the loop holes are such that they resulted in blunders foe the organization, Thus, the management needs to incorporate more levels of quality checks and ensure that there is strictly monitoring at all levels. Conclusion Thus, it is seen that Pepsi faced several problems due to the negligence by the operational management department. In addition to this there were various other problems that led to such huge loss of eh organization (Chaffee, 1985). However with various theories and approaches of the management of the organization, the main problems that the organization faced were identified. In addition to the identification, the methods and theories that need to be used in order to rectify these problems are highlighted. It is through the use of these theories that Pepsi was able to regain its lost trust and business.

Developing Business Skills Essay

How do OMM activities create value and a competitive advantage at the input, operations, and output stages? The input stage of the operations and materials management process would include the materials needed to create the finished goods that the consumer desires. This is where the company determines the amount of value they create for the customer by purchasing products that have the greatest value for the money. The operations stage of the process is where the skills, knowledge, machines, and experts come together to produce the goods and services to sell to the consumer at the lowest cost possible to remain competitive in their market. The output stage of this process is when the products that were produced reach the customers that they were intended for. If these products cost more to make than the competitors, then the consumers will likely not buy their product because the cost will be higher to cover the expenses involved in making them. What is TQM, and why is it important for a company to improve the quality of its products? In terms of a company’s input, operations, and output stages, how can TQM be used to create a competitive advantage? The term TQM refers to total quality management and refers to techniques used to improve operational efficiency and effectiveness. This operational technique is aimed toward continuous improvement within the company from input to output. This technique helps companies to reduce the production time it takes to make a product as well as the waste involved in the process too. When a company focuses on streamlining their production process it allows them to reduce their initial cost involved in producing their products which, in turn, reduces their overall cost and allows them to pass the savings on to their consumers. What is Six Sigma, and it what ways can it be used to reduce the costs of a company’s OMM process? In terms of a company’s input, operations, and output stages, how can Six Sigma be used to create a competitive advantage? Six Sigma refers to the process that can measure how far a task deviates from perfection. It can also figure where the problems derive from and figure out ways to eliminate them. This process can produce no more than 3.4 defects per million chances for nonconformance. It revolves around six key concepts to acquire perfection within the process. These would include: critical to quality, defect, process capability, variation, stable operations, and design for Six Sigma. These six key concepts focus on how the consumers discern their product and the value that it provides to them. I have worked for a company that has this process in place and the key component that I found helpful was the fact that everything had a specific place that it should be. This made finding things very easy which eliminated running around hunting for things that you needed for the production process. This cut down on time wasted and made the production of the product much less time consuming. How does a just-in-time inventory system operate? In terms of a company’s input, operations, and output stages, how can JIT be used to create a competitive advantage? A just-in-time (JIT) inventory system requires that inputs and components are delivered at the exact moment they are needed to reduce the inventory levels. These systems cut costs by not requiring products stored in inventory for days or even weeks ahead of time. This allows a company to keep their overhead down and only purchase the exact amount of product they need to produce the product they are making. One way for a company to create a competitive advantage with a JIT is to work with their suppliers to incorporate a JIT process as well to reduce costs and increase quality. This process allows a company to change the design of their product without producing an abundance of their previous products because they must use up their inventory.

Who do you Think is to Blame for the Death of Eva Smith

Eva died two hours before the inspector came. She died because she drank a lot of â€Å"strong disinfectant† which burnt her â€Å"inside out†. Inspector Goole goes to the Birling’s house to confront each one of them and place responsibility on them. Though the inspector does not tell us it, it is quite obvious that he is there not to find the â€Å"main culprit† but instead he is there to make the Birling’s see through somebodies eyes of the Lower â€Å"class† and feel some â€Å"responsibility†.Each and every one of them, Mr Birling, Sheila, Gerald, Mrs Birling and Eric, all played a part in Eva’s death and the inspector wants them to realise this and accept responsibility. Mr Birling holds the big responsibility of starting the whole thing, and he was the first to turn Eva away. Eva Smith was working at â€Å"the Works† which Mr Birling owned. She had been working in one of the â€Å"machine shops† for over year and she was a â€Å"good worker†. She was about to be promoted to a â€Å"leading operator† which was a person who was the â€Å"head† of a small group of girls.When Eva and everyone else came back from the August holidays they were all â€Å"restless† and asked for a pay rise. However Mr Birling refused their offer saying he couldn’t even â€Å"consider† it. Eva and all of the other girls decided to go on strike which didn’t â€Å"last long†. The â€Å"pitiful affair† was over after a week or two. Mr Birling let everyone back apart from the ring-leaders, who â€Å"started all of the â€Å"trouble†. Unfortunately Eva was one of the ring-leaders and like the rest, she was fired. This was the start of the snow ball effect of events that drove Eva towards killing herself and her unborn child.However Mr Birling refused to accept responsibility for his actions. Sheila was next to turn Eva down, all because of her bad temper. After â€Å"two months† of barely surviving, after Mr Birling fired her, Eva found a job at a dress shop. This dress store was Millwards, which happened to be one of Sheila’s favourite dress shops and Eva was â€Å"very lucky† to get a job there. Sheila went into Millwards to try on a dress which both the shop assistant and Mrs Birling were â€Å"against†. When Sheila tried on the dress she knew they were right because it â€Å"didn’t suit† her and this put her in a bad mood.Eva and the assistant, â€Å"Miss Francis†, brought the dress up from the work room. Miss Francis asked something about the dress and to show them Eva held up the dress as if she was â€Å"wearing† it and Sheila thought it â€Å"suited† her. When Sheila tried the dress on and saw it didn’t suit her, she â€Å"caught sight† of Eva smiling to Miss Francis and Sheila interpreted Eva’s smile wrongly. Sheila became infuriated and was â€Å"very rude† to them. She stormed off to the manager and told him that Eva had been â€Å"very impertinent†.She told the manager that if he didn’t fire Eva she would never â€Å"go near† Millwards again and would â€Å"persuade† Mrs Birling to â€Å"close† the family account. This was the next event that let suicide persuade Eva. However Sheila accepted responsibility for her actions and even grieved for Eva. After Sheila â€Å"compelled† Millwards to discharge Eva, Eva changed her name to Daisy Renton to start again. This is when Gerald stepped into her life and became one of the main people in her roller-coaster life. Gerald went to the Palace Hotel Bar in Brumley because the show in the Music Hall wasn’t â€Å"very bright†.He first saw Daisy when she was â€Å"wedged† into a corner by Old Joe Meggarty, who was known as a â€Å"notorious womaniser†. Daisy saw Gerald looking at her and gave hi m a look which was â€Å"nothing less than a cry for help†. Gerald told Mr Meggarty that â€Å"the manager had a message for him†. This freed Daisy from Mr Meggarty and his â€Å"half-drunk and goggle-eyed† stare. Gerald took Daisy out of the Palace Bar at once. He took her to the County Hotel and they talked. They met again two nights later, â€Å"not accidently this time†, and he let her move into his friends â€Å"set of rooms† while he was in Canada.He also gave her money to keep her going and visited her â€Å"regularly†. She soon became his â€Å"mistress† after he became the â€Å"most important person† in her life. However in the â€Å"first week of September† Gerald had to go away on a business trip and he broke it off with Daisy before he left. Daisy was very â€Å"gallant† about it because she knew he didn’t love her and would never marry her. However this did affect her a lot because once again her hopes had been risen, only to be put back down again. Quite rightly Gerald accepted responsibility and felt bad for his actions toward Daisy.The next person to meet and turn down Eva was Eris. Eris meet Eva in the same place Herald met her, the Palace Hotel Bar one night in November. He was there with a few friends and he had been there for a few hours so he was a bit â€Å"squiffy†. He went over to Eva and began talking to her. He â€Å"stood† her a few drinks and by the time they left he was rather â€Å"far gone†. He insisted on going to her lodgings. However Eva refused to let him in which made Eric angry just as Sheila had been. He began to threaten her saying he would â€Å"make a row† which would get her kicked out of where she was staying.She reluctantly let him inside. He met her again about a fortnight later, but not by â€Å"appointment† and the events of before was very â€Å"vague† in Eric’s mind. Eric went home with her again but they talked for â€Å"a bit† this time. They met twice again and Eva told Eric that she was going to â€Å"have a baby† and Eric was in a â€Å"hell of a state† about it and so was Eva. Eva didn’t want to marry Eric so instead Eric gave her some money to keep her going for a while, until she â€Å"refused† to take anymore because she knew it was stolen.This put Eva into a very sticky situation because the money she had was not going to last her long and she was now going to have a baby to support as well. Eric wished that he could have done more and he accepted responsibility. However this did push Eva even further towards her end. Mrs Birling was the final person to turn Eva down and the one who finally pushed her over the edge. After running out of money, Eva decided to go to the Brumley Woman’s Charity for help. Eva was on her final straw and changed her name to â€Å"Mrs Birling† after Eric.Unfortunately for Eva the real Mrs Birling was the one who took her appeal. When Mrs Birling meet Eva and found out what she was calling herself, she thought it was a piece of â€Å"gross impertinence† and she soon became â€Å"prejudice† against Eva. Eva created a fake story so she didn’t look as bad and was sure to get a â€Å"claim†. She told Mrs Birling that she had been married but her husband had â€Å"deserted† her, leaving her with no money. However Mrs Birling began â€Å"questioning† her and Mrs Birling soon â€Å"broke† her. Eva told Mrs Birling about Eric, however she never revealed his name to Mrs Birling.Mr Birling didn’t believe her, due to the fact that Eva used Mrs Birling’s name which made Mrs Birling â€Å"prejudice† against her. Mrs Birling used her â€Å"influence† to get the committee to â€Å"refuse† Eva’s claim. Eva was refused help and was turned down once again apart from this was the last tim e. Mrs Birling refused to accept responsibility because she feel she’s did nothing wrong and only Eva had â€Å"herself to blame†. In conclusion I feel everyone is equally responsible for the death of Eva Smith. Even if alone each thing each person did to Eva didn’t affect her too greatly, together they caused the death of two people, Eva and her unborn child.The Birling family must have driven Eva so far into depression that Eva believed that there was no point of her child being born and have to live the life she did. However it may seem obvious that it was the Birling family that was mainly to blame for the death of Eva Smith, but if you look into the background of the novella it is actually the Birling’s social â€Å"class you need to blame. This is because people of the Middle Class in 1912 looked down on the Lower Class and treated them harshly just as they did with Eva. Moreover I believe this is who J B Priestly is trying to blame but he has port rayed it through the Birling family.

A DETAILED REPORT ON GLOBAL AUTOMOBILE INDUSTRY - Free Essay Example

Sample details Pages: 10 Words: 2980 Downloads: 7 Date added: 2017/06/26 Category Transport Essay Did you like this example? With the increased competition and globalization, the automobile industry is changing its face dynamically with major players in the market in order to gain the maximum market share with the implementation of business strategies, models and standards. Honda Motor Company is a multinational Company. Honda Company started in Japan at the early first time. Don’t waste time! Our writers will create an original "A DETAILED REPORT ON GLOBAL AUTOMOBILE INDUSTRY" essay for you Create order Then, Honda Company starts to spread to other nation such as Europe, United State, and Asia. How can this company structure itself so successful? Honda Company is using the matrix structure. Matrix organizations are flexible, because they allow different dimensions of the organizations mixed together. The company is working on its strategies in relation to various models and standards that exist. TABLE OF CONTENTS Topic Name Page No. IntroductionÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.4 Main bodyÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚ ¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦..ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦5-17 ConclusionÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦Ã ƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦..ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦..18 ReferencesÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å ¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦19 INTRODUCTION The automobile industry is changing its momentum very fast as per the needs and demands of the market. A number of players are ruling the market over many years with the class of strategic planning and its implementation to provide value to the end users. Honda is one of the finest as well as a chief company in the market, which is producing well with the aid of all the newest and modern technologies. Apart from automobile, Honda is one of the best and the prime producer of engine. Honda was the one, which struggle with Nissan and achieved the peak productivity. Honda was the first Japanese automobile-based manufacturer, which formed the luxury-based brand. This company is thus functioning well and generating efficient outcomes. Apart from this, several threats as well as weaknesses are present which plays a significant role in weakening this corporation. Therefore, in array to analyze the feeble areas and to emphasize the strong areas of a company, SWOT analysis completed which results in improved and dynamic outcome. Globalization had certainly left its blow on the automobile business. Now, overseas auto dealers were facing smaller boundaries to function in overseas markets.   Ãƒâ€š MAIN BODY GLOBAL AUTOMOBILE INDUSTRY: The worldwide automobile industry had covered an outstanding drive spanning through centuries covering craft production, mass production and lean production techniques, setting different milestones for manufacturing sector. The universal automobile industry, observed robust expansion in the face of increased global requirement with major contributions by Asian European countries. The major players who contributed to the growth of global automobile industry as well as to the global economy are GM, FORD, BMW, HONDA, NISSAN, PEUGEOT and TOYOTA etc. In the automobile industry, operation cost economics, and technology changes determined the structure. The major players focused on commercial management of technological improvements with the aim of contributing more competent automobile to consumers. Globalization covered the path for deregulation opening up the markets to overseas competition. The consumers stood to grow with more diversity to prefer from at competitive charges. T he global automotive industry received a major hit during the financial crisis of 2008. With the increased prices of automotive fuel, the demand for sport utility vehicles (SUVs) along with other low fuel economy vehicles dropped down. The Asian and European market received the major negative impact on its demand for vehicles. Car companies from all over the world implemented creative marketing strategies for cost and work force cutting techniques to minimize the associated risk related to cost. The consumers turned to smaller, cheaper and more fuel-efficient cars imported from cheaper sources and assembled in their own area. Honda Motors in 2008 publicize it would be downsizing due to the 2008 financial disaster and predicted that the may be work force reductions at all levels of management in the beginning of next year probably. De Wit, B. and Meyer, R. (2004) Strategy Process, Content, and Context: An International Perspective, 3rd Edition, Thomson Learning www.honda.co m HONDA MOTORS Porters Five Forces (Industry Analysis): Bargaining Power of Suppliers: The automobile supply corporations have restricted bargaining power.    There are so many supply firms and there are numerous parts that are require constructing an automobile, requiring numerous suppliers, one would believe that the automakers would be at the suppliers pity. However, the suppliers actually have very small power.    With the JIT (Just in Time) manufacturing tactic Honda utilizes, there is a push-pull system. Bargaining Power of Buyers: The automotive industry is extremely competitive, hence buyers have some measure of power, as there are numerous automobiles from which to chose.    Consumers have the maximum power in the connection in the standardized nature of the automotive commodity and the little switching costs coupled with choosing from challenging brands.    Honda has the past of delivering elevated quality and fuel proficient vehicles.    With the boost in fuel price and the state of the financial system, the customers are seeking the excellent product for a superior price.    Honda has been a leader in manufacturing fuel competent and low emissions vehicles.    As the world has a superior awareness of the requirement to shield the atmosphere and to go green, Honda continues to improve the vehicles created with this focal point.  Threat of New Entrants: The presented loyalty to major brands, enticement for using a particular buyer, high fixed costs, shortage of resources, high costs of switching companies, and government regulations constitute the barriers to entry, which in turn reduced the competition in an industry. The triumph of foreign car producers like those that the Honda Motor Co. had controverts the general conviction that the Big Three were unbeatable. Availability of Substitutes: If substitutes were accessible offering similar services, the likelihood of buyers switching over to another competitor depended primarily on the cost. The price of the automobiles along with their in service costs was driving customers to gaze for another transportation options. The rising gasoline cost was bound to manipulate the buyers. Competitive Rivalry: The existence of many players of approximately the same size, small differentiation between competitors, and a very adult industry with very minute growth were the features of a extremely competitive industry. Higher the competition in the industry lesser would be the income margin. To remain to the front in competition, automakers were tempted to present value additional services to the customers incurring additional costs. Easy finance alternatives and long-term warranties offered to lure the customers. De Wit, B. and Meyer, R. (2004) Strategy Process, Content, and Context: An International Perspective, 3rd Edition, Thomson Learning Question One: a) In the context of the strategic process analysis, outline what PEST and SWOT techniques are, and elucidate their practical significance to strategic planners at Honda Motors. (10 marks) Solution: STRATEGIC ANALYSIS: Strategic analysis pertains to the analysis of the potency of business stand and understanding the vital external factors that may manipulate that position. A number of tools assist the processes of strategic analysis are: PEST ANALYSIS: It is a technique to understand and analyze the environment where the business operates. This analysis considers the issues related to political/Legal, Economic, Social, and Technological issues. Political/Legal: it includes Environmental regulation protection, corporate consumer taxation, internal trade regulation, consumer protection, competition regulation etc. Economic: It includes economic growth, monetary policy, taxation, inflation, policy towards unemployment and stages of business cycle etc. Social: It includes demographics, lifestyle changes, labor social mobility, education, living conditions, health and welfare. Technological: It includes government paying out on research, new discoveries developments, speed of technology transfer as well as the impact of changes in information technology. PEST analysis in the context of Honda Motors: Honda motor has a good political record all over the globe, follows norms of the government, and maintains customer safety. The marketing and manufacturing process considers society. Honda motor came out with various models in the market with technological enhancement and efficiency. SWOT ANALYSIS: It is another technique to review the key concerns arising from an evaluation of a business internal stand and exterior environmental influences. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are internal factors.   . Opportunities and threats are external factors. The strength factors helps to discover new opportunities and weaknesses helps to determine that what may pose threat to the existing scenario. SWOT analysis in the context of Honda Motors: Strength ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ soaring and influential RD ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Innovation ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ finest market share control ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ sturdy and powerful brand equity ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Radical locomotive technology with the aid of which Honda is gaining victory ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Popularity is another strength that the company receives. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢Different and unique products Weakness ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢Cost structure of Honda is tall as compare to other automobile producers. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Apart from Nissan Toyota, Honda wants privileged buy deposit ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢Honda spotlights more on universal deposits as evaluate to domestic deposits. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Civic model considered as the main weakness for Honda Company. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Honda yields are termed as harmless in terms of style and design ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ costs for non-luxury vehicles are far elevated as compare to other manufacturers ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ In truck column, Honda Company is not offering sturdy yields and proposals Opportunities ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Honda has the best view to employ its RD in constructing cars according to the needs and demands of their consumer. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Honda is gaining popularity in the market with the kind of vehicles they have; they could maximize the profit potential. Threats: ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢Honda may face tough price competition from competitors ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Costs for automobiles, motorcycles and power products can be unstable ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Honda may face low consumer attention as it lacks the stylish look in this dynamic and trendy era Available from: https://tutor2u.net/business/strategy/what_is_strategy.htm b) Critically evaluate the process of reconciling dichotomies at Honda Motors with reference to the product-related core competencies versus process-related core capabilities dichotomy. (20 marks) Solution: Product-related core competencies: Product Quality In response to increasing customer requirement, Honda will advance its quality control through increasing the functions of and harmonization among the development, purchasing, production, sales and service departments. Products Honda is planning to launch new stylish models along with all other inherited features like robustness, durability and efficiency from its existing models. Safety Technologies Honda is working to build up safety technologies that improve accident reckoning and prevention, technologies to help decrease the threat of injuries to passengers and pedestrians from car accidents, and technologies that augment compatibility between bulky and small vehicles, as well as develop its lineup of products integrating such technologies. Honda will underpin and persist to advance its contribution to traffic protection in motorized societies in Japan and abroad. Honda also intends to stay active in a variety of traffic protection programs, including sophisticated driving and motorcycling training methods provided by local dealerships. Process-related core competencies: Research and Development Along with focus on effective safety and environmental technologies, Honda will enhance creativity in its advanced technology and products, and will create and swiftly introduce new value-added products that convene particular needs in various markets around the world. Honda will also maintain its efforts to carry out research on future technologies. Production Efficiency Honda will establish and develop efficient and flexible production systems and enlarge production capacity at its global production bases, with the mindset of increasing its ability of supplying far above the ground quality products. Sales Efficiency Honda will stay proactive in its efforts to enlarge product lines through the innovative use of IT and to upgrade the sales and service arrangement in order to satisfy its customers. Honda paying attention on establishing a foothold for the future, concentrating on reconciling its product and process based core competencies as well as: ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Strengthening the heart characteristics that make Honda unique ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Strengthening the groundwork for global growth ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Strengthening Hondas efforts to diminish its ecological footprint c) Explain the main advantages of international trade and the arguments for restricting international trade in the context of the global automobile industry. (10 marks) Solution: With increased industrialization, globalization and outsourcing, the international trade system has gone dynamic and versatile. International trade  is exchange of  wealth,  merchandise, and  services  across  international boundaries  or territories. The advantages of international trade in global automobile context: Consumers do have various choices over products. Vehicles with better quality and efficiency are available. Manufacturers are bound to provide good quality due to competition. Increase in Environmental policy adherence The company involved in trade is a part of monetary gains to maximum as well. The trade provides a competitive edge and recognition at local and international level Better communication and sharing of technical expertise gathered over globe Closer knots between nations helps to maintain political stability Available from: https://www.paggu.com/business/world-economy/why-international-trade-advantage The arguments for confining international trade in the perspective of the global automobile industry lie in the disadvantages of international trade in global automobile context: Native production may get affected Local small companies may be outshined by their international competitors Rich countries may manipulate political matters and get control over negotiating terms. Ideological differences may appear between nation and company with regard to the procedures in trade practices. Available from: https://www.paggu.com/business/world-economy/why-international-trade-disadvantage Question Two: Explain your understanding of Whittingtons Evolutional and Systemic Schools of idea in the circumstance of strategy development at Honda Motors. (10 marks) Evolutionary Approach on Strategy Evolutionary approaches do not depend on top managements ability to plan and take action rationally. Instead of depending on managers, they trust that markets will resolve profit maximization and not the managers. Whatever schemes the managers will adopt, the best performance will be the one that survive. In evolutionary perspectives, competition is not `handled by isolated calculation such as in classical viewpoint but by regular struggle for endurance in the jungle. The biological principle of natural choice is at the core of evolutionary theory. The weaker performer has to drive out of the market. Available from: https://www.academon.com/Essay-Whittingtons-Four-Approaches-to-Strategy/ Systemic Approach on Strategy Systemic theorists believe that the group is proficient of planning and acting efficiently. According to them fiscal activity cannot be divided from social relations such as family, state or belief. These social issues influence the means and ends of a universal approach and define what the suitable behavior is for their members. In a systemic approach, the organization comprises of social groups with interests. The variables that Systemic contend through are class and professions, nations and states, families and gender. The policy then depends on the societal surroundings of the firm. Available from: https://www.academon.com/Essay-Whittingtons-Four-Approaches-to-Strategy/ Critically evaluate how you might apply the two Schools of Thought to Honda Motors. Explain and explore which school of thought you prefer, and why? (15 marks) The two schools of thoughts applied in the context of Honda motors as the company remains alert of the marketing changes and strategies imposed by competitors in the market. They follow evolutionary approach because they trust market and just their managers. The strategic decisions are dependent on both viewpoints taking top management as well as market conditions into consideration. Honda motor carries its strategies forward with a mix of evolutionary as well as systematic approach on strategy. The company involves the interest of its employers as well as consumers. The company has survived the recessionary period and is again growing well because its moving ahead innovatively to cut throat the competition. Honda models are `known for comfort, durability and efficiency. It does value the sentiments of social values and beliefs into consideration. However, I prefer evolutionary approach as it gives more focus to the market and profit maximization and not the strategic decisio ns taken by management. In this approach, the risk seems more calculated and handled effectively. Question Three: Staceys (1996) integrated representation of decision-making and control encompasses of four loops. Using your understanding of Whittingtons (2000) Processual School of Thought, critically evaluate the implications for strategic management of each of the four loops. (25 marks) SOLUTION: Processual Approach to Strategy Processual approaches do not agree with the evolutionary viewpoint either of send off the profit-maximizing outcomes to the market. To them, organizations and markets are filling with uncertainty and mess. The best Processual method is not to struggle for the superlative but to work with what the veracity offers. The Processual Approaches believe that rational monetary man is not possible because we cannot oversee all factors at the same time. Human character is simply flawed. Micro-political view implies that firms are not uniting towards a sole goal such as profit. As an alternative, it is made of a number of persons with different wellbeing and brings them to the organization. The members of the organization negotiate between themselves to appear at a set of goals that is suitable to them all. The main approach for this approach is to make simpler complex processes. Available from: (https://www.academon.com/Essay-Whittingtons-Four-Approaches-to-Strategy/) Staceys (1996) integrated model of decision-making and control: The model comprises of four loops: the rational: This loop focuses on the rational materials to reach a rational outcome. the overt politics: The company shares it strategies and regulations widely to focus on consumer transparency and ensure that consumers should be conscious about the brand. It focuses on adherence to the government rules and regulations as well as quality standards. the covert politics: Honda motors do focuses on its structure and policies to ensure satisfaction of its employees and keep on improving its processes to gain efficiency. Culture and cognition: It does believe in social values and standards considered according to the traditions of the society. Honda Motors co. Ltd Annual Report(2008) Honda CONCLUSION Honda Company chooses physically defined divisions as the procedure units for local marketing, because of their expert local knowledge of consumers. At the same time, it may still desire global product division liable for the worldwide management of product development and manufacturing, taking benefit of economies of scale and specialization. The main reserve in the company is people. The company viewpoint is Respect for the Individual, The Three Joys (the joy of buying, the joy of selling, and the joy of creating). For this two main goal in the Company, the company recruit member of staff with the marketing expertise to help the company accomplish the joy of buying, and joy of selling.