Honda's global strategy which was successful in Japan and North America failed in Europe because the company failed to understand the European culture and treated it like a one single market.The selection criteria among European car buyers are not based on economy and performance as in North America, but on brand image and individuality.The imbalance between Honda's technical side and marketing side created a serious organizational mismanagement in 1990 which caused the departure of the technologically-biased president and founder of Honda.Honda in Europe has struggled due to a relative decline in price competitiveness, the improving product quality of competitors, and weakness in design and brand image.Honda did not adapt to the merger and acquisition strategy which took place in 1990 in the global auto industry arena; rather it expanded its operation by setting up manufacturing plants in regional market.
After examining Honda's efforts of reaching European markets, it is determined that Germany held promise for success.
Germany is comprised of a low-context society; that is, one which interprets information explicitly. Germany yielded the highest profits for Honda in the late nineties, and will probably continue to do so in the future. This is because of the Germans interest in the environment. Honda leads the industry in greenhouse gas reduction, hybrid innovation and fuel efficiency . So although the Germans may not be thrilled with the styling of these vehicles, the environmental aspects of the new Hondas may outweigh those aspects. The new environmentally safe vehicles combined with advertising towards a low-context culture, and a new perceived image of quality will help make Honda succeed in Germany.
2005 has been a record breaking year for Honda. For the first time in its history, Honda (UK) topped 90,000 car sales and breached 3.5% market share . Strong...