Business Environment and Strategic Management Essay

Business Environment and Strategic Management - Essay Example After 1960, the company focused on production of cars and it hit the market with the Civic which was an eco-friendly and economic vehicle once again winning the hearts of American drivers, it went on to make the accord which became the most popular vehicle in the United States. Honda has since then diversified its products and today it is also involved in the manufacture of solar cells, Aircraft through its subsidiary company Honda Aircraft, power generators among other products. However its main business is the production of vehicles, it is the largest manufacturer of motorcycles in Japan and it ranked 3rd car company in the world after Toyota and ford motors. Today, Hondas leading market is in North America where their revenues were highest compered to its other global markets (Parker, 2001). It is the second most popular Asian car brand in the United States after Toyota and is set to grow even bigger being the only vehicle with a fuel cell engine certified for US where the standar ds are highest in the world (Trade.govermnets.com, 2010). Its main competitors both in America and globally are Toyota and ford which have larger supply and distributor networks. In the last fiscal year, the companies’ profits Quadrupled showing a strong recovery after the earthquakes in Japan; it is predicting an even bigger profit in the next fiscal years with projections of up to 7.7 billion USD. Analysis of the current business environment affecting the industry In the cause of the last few years, recession and the subsequent by economic uncertainty has resulted in a serious decline in the motor vehicle industry, the sales of motor vehicles fell to the lowest point since the 70s. While Japanese firms like Toyota and Honda are still major players in the market, in the last few years they have suffered severe setbacks, which American and Korean firms exploited to increase their competitive advantage in the industry. Toyota for instance lost much of its competitive advantage by yielding too much ground base on its bottom line and lost the confidence of many of its customers. Japan, which is the mother country of Toyota and Honda, was also hit by a double calamity in the Japan earth quake and the tsunami, the two firms suffered major losses and setbacks in production and distribution as a result (Newman, 2013). The shortage that ensued drove American customers away from the Japanese manufactures to other suppliers in America Europe and other parts of Asia such as Korea and India. Toyota’s earnings went down by 2.3 percent and Honda lost 1.6 percent in earnings for the year 2011. Unfortunately for European auto makers, they were not able to benefit much from Japans misfortune since Europe was also embroiled in a crisis of its own albeit it an economic one, European Union countries were in the worst recession ever and the financial crisis almost crippled the manufacturing industry.