Honda SWOT Analysis 2021 – A Detailed Report!

honda swot analysis

Honda Motor Company, Ltd. is a Japanese public multinational conglomerate company that mainly focuses on manufacturing automobiles, motorcycles, and power equipment. It was founded on 24 September 1948. It sells its products worldwide. Its headquarters is in Minato, Tokyo, Japan. A Honda SWOT analysis helps the company executives to analyze and assess all the internal and external factors of the community.

A Honda SWOT Analysis is a proven management framework that enables Honda to benchmark its business & performance as compared to the competitors and industry.

Honda – At A Glance

Company NameHonda
IndustryConglomerate
Founded24 September 1948
FoundersSoichiro Honda, Takeo Fujisawa
CEOTakahiro Hachigo
HeadquarterMinato, Tokyo, Japan
Annual Revenue¥15.36 trillion (FY 2018)
Websiteglobal.honda

Honda SWOT Analysis

SWOT analysis is a strategic planning frame that can be used by the company managers to get a successful situation analysis of the company. A Honda SWOT analysis framework can assist them to realize their internal strategic factors such as strength and weakness, and also their external strategic factors such as opportunity and threats.

The Honda company maintains its intimidating presence in the business sector only by reviewing the SWOT analysis regularly and improving itself. So, a Honda SWOT analysis will be of great use for this company.

Strengths of Honda in SWOT Analysis

strengths-of-honda

Honda company has a plethora of strengths that will help it to thrive in the main field. A Honda SWOT analysis will help to focus on these strengths. Based on Fern Fort University’s studies, some of these strengths are enlisted below:

Global reach: Honda is a worldwide Japanese multinational company. It operates in almost all the countries across the globe. So, it has a great deal of the global footprint. This makes it more recognizable to the public and helps with its publicity. So, it can implement its global thinking with local execution. This means that it can pursue its ubiquitous goals and can still win the hearts of its consumers.

Financial position: Honda has a strong financial base. It has been gaining market slowly but surely for about 75 years. It has earned the public trust as a star company in the automobile field. Its financial position has it on a point of a pure advantage that increased its market value and brand name by leaps and bounds. So, this financially secure position does good for the company.

Huge research and development: Honda company is highly focused on its research and development department. This is the sole reason why Honda has been on the top of the game for so long. In 2013, Honda invested about 5.7% of its total revenue, which is about 6.8 million dollars, on its research and development sector. They also take special care to train their workforces regarding this sector.

The largest manufacturer of automobiles: Honda is the largest motorcycle manufacturer since 1959. It reached a production of 400 million by the end of 2019. It has also become the largest manufacturer of internal combustion engines measured by volume. It produces more than 14 million internal combustion engines every year. Honda became the second-largest Japanese automobile manufacturer in 2001. Honda became one of the 8 top automobile manufacturers in the world in 2015. Honda was also the first Japanese automobile manufacturer to release a dedicated luxury brand, Acra, in 1986.

Weaknesses of Honda in SWOT Analysis

weaknesses-of-honda

Weaknesses are part of the internal factors of a company. These points leave the company prone to drawbacks and as a result, the company suffers deeply. A Honda SWOT analysis will bring many of these to light.

Higher funds in the technology sector: All though Honda spends enough money to develop its technological sites. It is still quite behind in this matter since many of its competitors are ahead of it in this matter. This puts it as quite an inconvenience as they put a damper on the team’s morale.

Brand connection strategy: The world is changing rapidly. So, it is high time, Honda changed its strategies to cope with it. Its traditional branding and communication methods need a revolution. It needs to change not only the messages, but also the media. Social branding plays an important role in this case. If Honda is adamant about not changing these customs, it will cost them heavily in the future.

High costs and prizes: As the Honda company makes large investments in the research and development sector and the latest technology, the product pricing goes over the roof. So naturally, the products are a bit on the pricey side. Even though it is a weakness, but it is necessary. Because if it tries to lower the price the brand equity will also fall. And this is something the Honda company can simply not afford.

Requires mass usable products in its product portfolio: The most common complaint is that Honda products are made for the upper-middle class, not for the mass population. So, it needs more products suitable for the lower middle class and the lower class. So, it needs to expand its product portfolio to accommodate all types of people regardless of their class. This is a fatal weakness for Honda.

Hero and Honda separation from India: Hero and Honda were a successful merger of the two successful brands in India. However, for multiple reasons they had to separate which left Honda in a vulnerable position in the Indian market. It is still trying to recover from it.

Opportunities for Honda in SWOT Analysis

opportunities-for-honda

The opportunities are outside factors of a company that they can exploit for profit and benefits for themselves. These external factors help the company to identify more scopes for its overall growth. The Honda SWOT analysis will help the executives to contemplate them before their next big move.

New markets: As the government has agreed to lend a hand to the economic development there are new markets in the making. This will help Honda broaden its already wide horizon of business. This will also ensure that it finds new fields to grow and develops new products to launch.

Business Diversification: Even though Honda has plenty of products to sell, there are many new products that it could launch. People are now aware of its presence. So, this will be advantageous for the company. Business diversification can get people more interested and invested in the company. This will work as publicity and raise the profit.

Alternate fuel vehicles: The age of fossil fuels is coming to an end. As all of our automobiles are dependent on fossil fuels, this is a massive drawback. Because we are at the brink of suffering from energy exhaustion. So, thinking about the future, much clean energy fueled automobile prototypes are being made. This is a huge field for Honda to work with. This is a good opportunity to take over the automobile market.

Increasing numbers of automobiles: The number of automobiles is getting higher and higher each day. This is possible only because the buying ability of each individual is rising. This promises more customers than its current stage. This is a good opportunity for Honda to snatch up as many customers as possible.

Threats for Honda in SWOT Analysis

threats-for-honda

Threats are the most important part of a swot analysis. These are also the external factors of the company. A Honda SWOT analysis will point out the threats to this community that has been holding it back.

Increasing competition: In recent times, many new companies are mushrooming in this new market. This increases the competition. Many local, regional and national players are threatening to take over Honda’s position in the market. It has to stay ever vigilant about its every move. This situation is making dents in Honda’s total revenue.

Impact of Pandemic: This is the time of the pandemic. Honda is one of the leading companies in the consumer goods department. Even though this pandemic has failed to make any big impact on the sales figure, that does not mean that the magnitude of the situation is any less. This pandemic has affected the manufacturing, distribution, and purchasing of Honda products. This has fueled major changes in Honda’s business strategies.

Government Regulation: The rules and regulations that the government imposes may be a major threat for Honda, especially if it does not abide by its profit-based agenda. Environmental pollution is one of the many reasons the government is keeping an eye on it. This is giving Honda a hard time in its business and production.

Honda SWOT Analysis Overview Template

honda swot analysis overview template

Conclusion & Recommendations for Honda

Here are some recommendations for Honda to improve their market game from the experts:

  • Improving the health and safety of the company’s employees.
  • Enhancement of the people by a long shot.
  • Encourage the workers to be creative
  • Lifting the team morale by achieving the team goals.
  • Training their workforces to the point of making them experts.

In conclusion, it can be said that a steady line of profit and global reach are the key strengths of Honda. As for its greatest weakness, that would be its lacking of mass usable products in its product portfolio. It may not look like much, but it is a huge load to carry.

A Honda SWOT analysis helps the company in many different ways. Only because it would allow the executive directors to theoretically take apart the company’s strategic approach to this day and scrutinize them.

Written by: Angela N. Davis

I'm Angela, founder & content creator of SWOT Hub. As an entrepreneur, I love to explore various brands/companies & write about them.

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