What Is the Strategy That Has Allowed Honda to Be So Successful in the Motorcycle Industry in United States?

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British bikes were known for their premium quality finish, elegant styling, superior handling and high performance but Japanese companies topped in performance tests and technological changes that improved their handling characteristics

Japanese models incorporated features such as electric starters, disc brakes and five-speed transmission features which British struggled to add to existing models.

British motor cycles were known for their mechanical features, particularly oil leaks.

Warranty claims were resisted by dealers and spare parts were hard to come by

British models tended to be prices at or slightly above the prices of Japanese models with comparable displacements.

NVT priced its models nearly $400 above comparable Japanese models.

Design and production

More than two-thirds of the manufacturing costs were incurred before the machine left the factory

Honda and NVT took very different approaches to each of the manufacturing steps

Design :

Honda-

Marketing personnel performed a commercial evaluation of any new product or feature and production engineers assessed its costs before design of the product or feature began

Employed 1300 people or 0.75 people per $1 million

Design personnel could take an idea from conception to production in 18 months

NVT-

Staff focused on pure design considerations and would use non-standard parts and unusual fittings if necessary to improve performance, handling or styling and projects were controlled informally with no paperwork

Staff numbered roughly 100, or 2.7 people per $1 million of corporate sales

Minimum of 18 months to move idea from conception and more than that to tool up production

Production of engine and frame parts:

Honda carried out its global production of nearly 2 million bikes per year in four plants which were specialized using relatively automated die casting techniques which NVT did not have

Assembly:

Honda assembler could put together 2.3 motor cycles whereas NVT assembler could make just one

Procurement and other components:

NVT suppliers used production techniques that are not those of NVT itself, not the latest, high-volume production techniques

Selling and distribution

Dealer relations:

Honda sold its motorcycles in US through 1974 dealers, 84% of which sold Honda bikes exclusively

US distribution network was in flux in 1975. In 1972 before the merger BSA had 850 dealers and Norton had 750 in US which got down to 408 dealers for BSA and Norton was not reported by BCG consultants

Major reasons for the loss of British motorcycle’s position in US

- NVT’s less support to its dealers than Honda impacted its sales

- Substantial charge associated with the merger of Norton Villiers and BSA/ Triumph

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