Strategy - 3

Continuing our discussion on strategy, we begin with a small case on Honda.

When Honda Motorcycle Company decided to enter into the U.S. market in the early 1960s - it wanted to compete with the established firms like Harley Davidson, Triumph etc. Honda wanted to be successful in the US market by selling the large and powerful motorcycles. However, the US consumers did not want to purchase large motorcycles from Honda - they already had established players for it. The U.S consumers were really looking at buying the Honda's smaller motor scooters.

Once Honda discovered what customers in the US wanted, the strategy was changed and Honda began selling motor scooter. With the niche in smaller motor scooters established, Honda was able to introduce larger and more powerful motorcycles. This strategy was so successful that Honda along with other Japanese motorcycle firms virtually destroyed all the other motorcycle-manufacturing firms in the US. Today, Harley-Davidson is the only competing company from the 1960s to continue competing in the market.

This small caselet highlights an important aspect that - Sometimes, a firm's understanding of the critical economic process in an industry or market and how it can exploit those processes for its own advantage are simply wrong. The success if defined by how quickly the company learns and adapts.

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