Description
Strategic Managment report ,SWOT,TOWS,IFM matics,BCG Matrix
SZABIST ISLAMABAD
HONDA ATLAS CARS.
STRATEGIC MANAGEMENT REPORT
WAHEEDULLAH JAN,MOHAMMAD SHOAIB,KHALID KHAN,ARSLAN
SADIQ
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Executive Summary.
This report is as an attempt to apply the strategic management concepts that we have
learned in our course of Strategic Management. We have applied the comprehensive strategy
evaluation framework to HONDA ATLAS Cars and did our analysis by evaluating the different
stages strategy evaluation.
The information collected is through ingenious methods and all the calculations are based
on the personal judgment. However much of the attention is given to application of basic
concepts and tools of the strategic management in relation to the company.
The leaning from this report is that the strategic formulation, implementation and
evaluation are the one the key management practices that are necessary for the survival business
environment. These strategic decisions are made based on the analyzing both the internal and
external assessment.
The limitation of this report analysis conducted it did not include all the key factors while
analyzing both the internal and external evaluation. The companies generally do not share the
confidential data.
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Contents
Executive Summary. ........................................................................................................... 1
Introduction to the Company .............................................................................................. 4
“Slogan” .............................................................................................................................. 5
Products: ............................................................................................................................. 5
“Vision” .............................................................................................................................. 5
“Mission” ............................................................................................................................ 5
“Quality Policy” .................................................................................................................. 5
Environmental Policy.......................................................................................................... 6
Management Policy ............................................................................................................ 6
Saftey, Health, and Environment ........................................................................................ 6
Operating Principles............................................................................................................ 7
Competitors ......................................................................................................................... 7
Pak Suzuki ...................................................................................................................... 7
Indus Motor Company (Inc.) .......................................................................................... 8
External Audit of the Company .......................................................................................... 8
The External Assessment: ............................................................................................... 8
Economic forces: ............................................................................................................ 9
Political forces ................................................................................................................ 9
Instability and political clashes: ...................................................................................... 9
Depreciation Allowance: .............................................................................................. 10
Technological Forces: ................................................................................................... 10
Social, cultural, demographic and environmental forces: ............................................. 11
Competitive forces ............................................................................................................ 12
Indus Motors: ................................................................................................................ 12
Suzuki: .......................................................................................................................... 13
Dewan Farooque Motors: ............................................................................................. 13
Daihatsu: ....................................................................................................................... 14
Porter's Five Forces Model: .............................................................................................. 14
Threat of new entrant: ................................................................................................... 14
Economies of scale: ...................................................................................................... 14
First Mover Advantage: ................................................................................................ 14
Access to Channel of Distribution and Relationships: ................................................. 14
Threat of Substitute Products ........................................................................................ 15
Bargaining power of buyers .......................................................................................... 15
Bargaining power of suppliers: ..................................................................................... 15
External Factor Evaluation Matrix: .................................................................................. 15
Competitive Profile Matrix (CPM): .................................................................................. 17
Internal Audit of the Company ......................................................................................... 18
Marketing of Honda: ..................................................................................................... 18
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Honda Atlas Marketing Objective: ............................................................................... 18
Honda Atlas Marketing Mix: ........................................................................................ 18
Promotion:..................................................................................................................... 19
Place / Physical Distribution: ........................................................................................ 20
Marketing Operations/ Function of Marketing Department: ........................................ 21
Sales: ............................................................................................................................. 21
Services ......................................................................................................................... 21
Spare Parts: ................................................................................................................... 22
IFE Matrix:........................................................................................................................ 23
The Matching Stage .......................................................................................................... 23
The SWOT matrix............................................................................................................. 24
The Decision Stage ........................................................................................................... 24
QSPM (Quantitative Strategic Planning Matrix): ......................................................... 24
Conclusion: ....................................................................................................................... 25
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Introduction to the Company
Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company
Limited Japan, and the Atlas Group of Companies, Pakistan. The company was established in
November 04, 1992 and joint venture agreement was signed on August 05, 1993. The
groundbreaking ceremony was held on April 17, 1993 and within a record time of 11 months,
construction and erection of machinery was completed. The first car rolled off the assembly line
on May 26, 1994. Official inauguration was done by then President of Pakistan, Sardar Farooq
Ahmad Khan Leghari. Mr.Kawamoto, President of Honda Motor Company Limited Japan was
also present to grace the occasion. The company is listed in Karachi, Lahore and Islamabad
Stock Exchanges.
On July 14, 1994, car bookings started at six dealerships in Karachi, Lahore, and
Islamabad. Since then the Dealerships network has expanded and now the company has Twenty-
One 3S (Sales, Service and Spare Parts), Eighteen 2S (Service and Spare Parts) and Five 1S
(Spare Parts) authorized dealerships network in all major cities of Pakistan.
Since the commencement of production in 1994, the company has produced and sold
more than 200,000 cars until July 12, 2012.All dealerships were constructed in accordance with
the standards defined by Honda World over. Percentage of local parts conforms to the
government's policy. Local vendors are continuously patronized to develop parts locally. The
quality of local parts is thoroughly checked to meet stringent international standards.
We always strive to give outstanding service to our valued customers. In addition to
providing regular service to customers, the company also regularly conducts Service Campaigns,
to facilitate customer's need for service. This has given our customers absolute confidence in our
cars, evident from the ever-increasing sale volumes.
It is the constant endeavor of Honda Atlas Cars (Pakistan) Limited to achieve No .1
Customer satisfaction. Honda Atlas Cars (Pakistan) Limited is committed to meet customer
expectations, and to provide good value for money.
Currently, we are offering Honda Accord, Honda CR-V, Honda CR-Z, Honda Civic (four
models) and Honda City (four models) in wide range of colors with advanced technological
features
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“Slogan”
“THE POWER OF DREAMS”
Products:
“Vision”
“Striving to be a company that society wants to exist by sharing joys with people
throughout the world”
“Creating products that maximize the joy of customers, with speed, affordability and low
CO2”
“Mission”
“A dynamic growth oriented company through excellence in quality, dedication to
provide greater fuel efficiency at competitive prices, and service ensuring attractive returns to
equity holders, rewarding associates according to their ability and performance, fostering a
network of engineers and researchers ensuing unique contribution to the development of the
industry, customer safety, satisfaction and protection of the environment by producing emission
friendly green products as a good corporate citizen fulfilling its social responsibilities in all
respects.”
“Quality Policy”
We, at Honda Atlas Cars (Pakistan) Limited, strive for supplying top quality Honda Cars
to get complete Customer Satisfaction. We accomplish this by:
Honda
Atlas Cars
Accord
CR-V
Civic
City
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o Smart Team Work
o Meeting all applicable legal and regulatory requirements
o Continually improving our strategies and goals
Environmental Policy
Honda Atlas Cars (Pakistan) Limited, being responsible member of the society considers
the preservation of the global environment as a crucial concern. Our environmental philosophy is
firmly based on the following principles:
1. Recognize the impacts of our activities, products and services on environment;
2. Formulate objectives and targets for pollution prevention, environmental impacts
mitigation and resource conservation as far as technically feasible
Management Policy
1. Respect for all – man has priority over others.
2. Man is the key in controlling i.e. machines, methods and materials.
3. Follow 3S spirit i.e. small, smart and speed.
4. Believe in 3A “Hands on Approach” i.e. be on Actual Spot, look at the Actual Spot
and confront the Actual Situation.
5. 5. Be a good corporate citizen; assume a responsible role in community
Saftey, Health, and Environment
Honda Atlas Cars (Pakistan) Limited conducts its business responsibly and in a way to make
sure health, safety and protection from environmental aspects of its associates and the society.
We implement and maintain the programs that provide reasonable assurance that the business
will do the following
1. To comply with all applicable government and internal health, safety and
environmental requirements
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2. Design facilities and conduct operations in a way that avoids risk to human health,
safety and the environment
3. To examine and communicate the known hazards of operations with relevant health,
safety and environment.
4. To examine and communicate the known hazards of operations with relevant health,
safety and environmental protection information to potentially affected personal
protection information to potentially affected persons
Operating Principles
The companies operating principles are as under:
1. Always keep the deadline
2. Never make excuses
3. Teamwork
Competitors
Pak Suzuki
In pursuance of the terms and conditions of the Joint Venture Agreement executed
between Suzuki Motor Corporation of Japan (SMC) and Pakistan Automobile Corporation
(PACO), Pak Suzuki Motor Company Limited (PSMCL) was incorporated as a public limited
company in August 1983.The new company took over the assets, which included production
facilities of Awami Autos Limited. PSMCL started commercial operations in January 1984 with
the primary objective of passenger cars, pickups, vans and 4x4 vehicles.
The foundation stone laying ceremony of the company’s green field automobile plant at
Bin Qasim was performed by the then prime Minister of Pakistan in early 1989.On completion of
first phase of this plant in early 1990, in-house assembly of all types of Suzuki engines started.
The new plant was completed in 1992, on its completion all Suzuki products were transferred to
new plant and three box 1300cc Margalla car was also added to its range of production. In
September 1992, the company was privatized and placed directly under the Japanese
Management. At the time of privatization, SMC increased its equity from 25% to 40%
subsequently; SMC progressively increased its equity to 73.09% by December 31, 2001. The Bin
Qasim Plant further expanded its production capacity to 50,000 vehicles per year in July 1994
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and 300,000 vehicles have been manufactured at this plant by December 2003.The most modern
automobile manufacturing plant in the country distinguishes Pak Suzuki from other automobile
plants.
Pak Suzuki always endeavors to go aggressively for the sound development of the society
by increasing motorization industrialization, creating job opportunities thus improving the
people’s living standards with the combined efforts of all the dealers, vendors and Pak Suzuki
employees.
I ndus Motor Company (I nc.)
Indus Motor Company (IMC) is a joint venture between the House of Habib, Toyota
Motor Corporation Japan (TMC), and Toyota Tsusho Corporation Japan (TTC) for assembling,
progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990.
IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd. Vehicles in
Pakistan through its dealership network.
The company was incorporated in Pakistan as a public limited company in December
1989 and started commercial production in May 1993. The shares of company are quoted on the
stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation have 25
% stake in the company equity. The majority shareholder is the House of Habib. IMC's
production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area
measuring over 105 acres.
Indus Motor Company’s plant is the only manufacturing site in the world where both
Toyota and Daihatsu brands are being manufactured. Heavy investment was made to build its
production facilities based on state of art technologies. To ensure highest level of productivity
world-renowned Toyota Production Systems are implemented. IMC's Product line includes 6
variants of the newly introduced Toyota Corolla, Toyota Hilux Single Cabin 4x2 and 4 versions
of Daihatsu Cuore. We also have a wide range of imported vehicles.
External Audit of the Company
The External Assessment:
The external audit is to develop finite lists of opportunities that could benefit a firm and
threats that should be avoided. External forces can be divided into five broad categories;
? Economic forces
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? Social, cultural, demographic and environmental forces
? Political forces
? Technological forces
? Competitive forces
Economic forces:
The overall economic outlook of the country is not very sound and the country is ranked
D in term of overall risk assessment.In 2013, Pakistan’s growth has been driven by household
consumption. The 20% increase in civil service salaries in the last budget and transfers from
expatriate workers (mainly United Arab Emirates and United States) have contribute
considerably to the rise in consumption.Current GDP, will be insufficient, considering the large
number of people entering the job market. Indeed, 50% of Pakistanis are under 20. Growth needs
to be 7% so that the unemployment rate remains stable. Besides, the fall-off in international trade
will again dampen activity in 2013 through the decline in exports. Frequent electricity cuts as
well as the climate of insecurity will also harm production. Moreover, imports will again be
affected by energy costs, which alone accounted for the size of the trade deficit in 2012. Pakistan
has, however, some important advantages. It abounds in labor and the Baluchistan region has
rich natural resources (gas, oil). Furthermore, the country borders on Asia and the Middle East
and is a neighbor of India and Iran. The expansion of regional trade is an opportunity for the
country, which has a young population. Nevertheless, Pakistan does not exploit its advantages.
As a sign of these structural weaknesses, investment (11% of GDP in 2012) has been falling
sharply since 2007 (21%). In 2013 inflation have gone be above 10%, despite stable energy and
agricultural prices. The high level of inflation is partly explained by the funding of the sovereign
debt by the Pakistani Central Bank which leads to expectations of price rises.
Political forces
The government plays an important role in the operation and manufacturing products and
services in terms of regulations. Following are some of the factors that could cause Honda Cars
to differ materially from the expected results.
I nstability and political clashes:
Now a day’s Pakistani environment is instable due to political clashes among political
parties. Inside country war and drown attacks in north frontier areas. This political instability has
led to uncertain environment in the country, which is a threat for any business including Honda
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Depreciation Allowance:
In order to increase sales of locally made cars and increase revenue collection the auto
industry has emphasized on need to curb undue concessions to illegally imported used vehicle
and to revise the fixed duty set under SRO 577.This will enable the local car manufacturer in
capitalize and increase their maketshare.Furher more a reduction in taxes on the hybrid cars will
encourage the local car manufactures.This will also be helpful in the minimize current problems
of shortage of CNG and increasing petrol prices.
Technological Forces:
? Advances in technology can have a major impact on business success.
? Honda cars have always followed the tradition of introducing new technology and
providing global cars of international quality to its customers, since the launch of its first
model in 1994.
? During the short span of 15 years, your company has introduced 4 new models of Honda
Civic and 4 new models of Honda City –the highest among the other car makers in
Pakistan.
? Many features and specifications were introduced first time in Pakistan. Your company
introduced the 3rd Generation Honda City on January 31, 2009. It has V-tech Engine,
Anti Lock Braking System (ABS) and Euro- 4 emission systems, which are considered to
be the strictest emission standard worldwide.
? The new City has Drive-By-Wire (DBW) control technology for fuel efficiency. It has
also enhanced G-CON collision safety which reduces the impact on passenger cabin. To
maintain the global quality standards, the Company has invested Rs 2.1 billion on
development of local parts, dies and fixtures of Honda City. However, the new features
increased its cost and so the selling price.
? Honda produces cars of highest quality with high specifications of Honda to its global
customers. Honda has the pride of providing the environment - friendly, Euro IV
compliant cars to its customers, which no other maker has in Pakistan.
? On the strength of our confidence in our products, the company with new City launch
effective February 2009, increased warranty of new City to 70,000 Km or 3 years from
the date of purchase, whichever comes earlier, increasing Joy of Buying of new Honda
City.
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Social, cultural, demographic and environmental forces:
? Effects of the automobiles on societies:
Over the course of the 20th century, the automobile rapidly developed from an
expensive toy for the rich into the standard for passenger transport. The development of
the automobile built upon the transport revolution started by railways, and like the
railways, introduced sweeping changes in infrastructure, manufacturing and legislation.
The wide reaching effects of automobiles on everyday life have been a subject of much
controversy. Proponents on one end of the spectrum claim the car is a marvel of
technology that has brought about unprecedented prosperity, while opponents on the
other end claim it lead to a mode of urban and suburban planning that discourages
walking and human interaction, uses large amounts of polluting fuel.
? Economic changes
City Planning: The development of the automobile has caused changes in city
planning, as well as changing the roles of horses and railroads.
Industrial infrastructure: Huge industries devoted only to the automobile were
created. Others were expanded from once trivial insignificance to eminent importance.
Before the internal-combustion engine was developed, gasoline was a waste product,
often discarded. Once the automobile became common, the production of gasoline
blossomed into a matter of such importance that the governments took action to secure a
steady flow of oil. The steel industry was already established, but the coming of the
automobile created huge amounts of business for it. The chemical, rubber, and petroleum
industries were remade to suit the needs of the automobile and industries sprang up, such
as service stations, motels, and automobile insurance, that were completely reliant upon
the automobile for their livelihood. Infrastructure: Aside from industries, one of the most
visible effects the automobile has had on the world is the huge increase in the amount of
surfaced roads.
? Social status
The automobile signifies much more to many than simply a mode of
transportation. Henri Lefebvre called the automobile "the epitome of possessions". In the
early years, the car served as a mark of distinction above all others. The automobile
rapidly became a symbol of social status, and in some cases, a fashion item. The
automobile, more than any other possessions, allowed people to show off wealth. Not
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only was the ownership of an automobile demonstrative of a certain level of income and
prestige (and still is, especially in poorer nations), it is also highly visible.
? Safety
Automobile accidents caused many deaths and injuries, especially before
automobile safety laws were implemented. To this date, automobiles remain a major
cause of accidental death and injury, not to mention emotional stress.
? Vehicle Air Pollution:
Air pollution is viewed as a serious problem in many cities in South Asia. Many
city governments say that transport is mainly responsible for air pollution and have
adopted, or are considering adopting technological measures to reduce vehicle emission.
This situation demands selection of appropriate measures in the sector.
The impact of outdoor air pollution on public health and lost productivity should
be seriously taken as toxicity and ambient concentrations are the most damaging health
impacts. The particulate matter causing serious respiratory illnesses and premature deaths
throughout South Asia, and airborne lead, which retards intellectual development of
children in Pakistan and Sri Lanka is a common phenomenon, where leaded gasoline is
still used.
Competitive forces
Honda faces competition in the international markets from a number of brands such as
? Toyota
? Mitsubishi
? Mercedes
? BMW
However, Honda cars in Pakistan that had started its operations in Pakistan 1994 under a
joint venture with Atlas have been is enjoying the key position in 1300 c.c and above.
The main competitors of Atlas Honda in Pakistan are:
I ndus Motors:
Indus Motor Company (IMC) is a joint venture between the House of Habib, Toyota
Motor Corporation Japan (TMC) and Toyota Tsusho Corporation Japan (TTC) for assembling,
progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990.
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IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd. Vehicles in
Pakistan through its dealership network.
The company was incorporated in Pakistan as a public limited company in December
1989 and started commercial production in May 1993. The shares of company are quoted on the
stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation have 25
% stake in the company equity. The majority shareholder is the House of Habib. IMC's
production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area
measuring over 105 acres. Indus Motor Company’s plant is the only manufacturing site in the
world where both Toyota and Daihatsu brands are being manufactured.
Suzuki:
Suzuki is the leading name in small commercial vehicles and passenger cars. Suzuki
commenced its operation by assembling small 800 cc cars. Suzuki has so far a sole leader in
800cc and 1000cc passenger cars as well as 1000cc jeep Potohar. But the emergence of so many
competitors in the market will definitely trigger a very hard time to Pak Suzuki. Suzuki has
launched Mehran 800cc, Cultus 1000cc, Baleno 1.3 & 1.6 Eli and Gxi, Bolan van & Ravi pickup
800cc and Potohar jeep. The total production capacity of Suzuki Motors is about 50000 units and
the total actual production in 1999 is 32,805. The sales volume of Suzuki is highest among the
competitors with 31,296 cars as per June 30, 2000. According to Pakistan Association of
Automotive Parts and Accessories Manufacturers (PAAPAM) , Suzuki has achieved the 60 per
cent deletion status in 800cc Mehran car. Localization in other products like 1000cc Khyber 42
per cent, 1300cc Margalla/Baleno 32 per cent, 800cc pickup 50 per cent 10 passenger pickup 47
per cent and 1000cc Potohar jeep 40 percent.
Dewan Farooque Motors:
It is the major competitor which has commenced its operation with a wide range of
products in domestic automobile market. Dewan Motors is basically a collaboration with
Hyundai and Kia, two Korean auto manufacturers. The initial response to Dewan's offering in the
market with record company booking of its Santro Plus. It has launched its Kia classic 1300 cc
car with sophisticated features. In future wide range of models like Kia Shuma 1500-1800cc car,
Kia Sportage 2000 cc sports utility are expected to launch in the market. Dewan has also
launched its 1.5 tons Shehzore, the assembly of Hyundai light commercial vehicle has already
started at the Sindh Engineering Plant in Karachi under contractual agreement.
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Daihatsu:
Daihatsu, another new player in the market with its Cuore 850 cc, increased the
competition in the market. Daihatsu and Indus Motor signed an agreement to launch the Coure in
market. The project worth Rs 750 million was developed at Port Qasim between Daihatsu and
Indus Motor to produce Coure. Daihatsu also heated up the competition in small car segments.
Porter's Five Forces Model:
Michael Porter identified five forces that influence an industry. These forces are:
(1) degree of rivalry; (2) threat of substitutes; (3) barriers to entry; (4) buyer power; and (5)
supplier power. Like other industries operating under free market, capitalistic systems, viewing
the automotive industry through the lens of Porter’s Five Forces can be helpful in understanding
the forces at play.
Threat of new entrant:
Although Pakistani Market is dominated by protectionism but because of financial crisis
a lot of Automobile companies have their eyes on South –East Asia as a dumping site Honda
motors company must gear up for fierce competition. These new Entrants have sufficient capital
and guts to start a price war among the local industry.
Economies of scale:
Economies of scale no doubt reduces the cost of manufacturing but now days Customers
are Saving Oriented Rather Consumption Oriented low price in this period of recession will not
attract customer the best way is to go for fuel efficient cars.
First Mover Advantage:
Honda motors have the First Mover advantage in case of Fuel efficient Cars. Honda R&D
Department already achieved so much in this field depleting oil sources is a major problem for
every country now Toyota is looking for different options such as: Bio Fuels, Hydro Electric
power Cars, Electric powered cars & Cow Dung.
Access to Channel of Distribution and Relationships:
Honda motor has the advantage of customer satisfaction and distribution channels. Honda
motor conducts workshops and seminar for Dealer Staff so that the interaction with the
customers shall be a pleasant one. This Customer care leads to Customer Loyalty.
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Threat of Substitute Products
The emerging new technologies and auotomobiles are a considerable threats for the
company.The Mass tansport systems like Metro buses and fast moving trains can potential
factore for furture oulook of the auto-mobile industry.The dumping of the autos in the
developing counties have also affected the local car manufactures.
Bargaining power of buyers
Buyers are price sensitive because products are little differentiated and switching cost is
lower. The buyers hence have greater power to bargain on the finished good, i.e. vehicle. The
switching cost is very low for the customers. However the automobile industry remains
marginally strong due to the large buyers to producer ratio
Bargaining power of suppliers:
Honda motors almost produces 98% of car in Pakistan but Most of the Raw material is
imported through Toyota Japan so Suppliers is the parent company that is why importing
material is not a big issue for Honda. The automotive industry is a dynamic place. With the
forces above at play, and with history as a guide, it is safe to say that the automotive industry
will continue to change, evolve, and adapt.
External Factor Evaluation Matrix:
An external factor evaluation matrix allows the strategists to summarize and evaluate
economic, social, cultural, demographic, environmental, political, governmental, legal,
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technological, and competitive information. The threats and opportunities of Honda Company
have been identified in the PEST analysis and the ratings of the factors (1-4) have been done
from the brain storming and the facts and figures that have affected the company.
Following is the EFE matrix:
From the above matrix calculation, we can see that the total weighted score for Honda
Motors is 2.49 which is 0.01 points lower than 2.50 i.e. the midpoint a and is below the average.
This shows that the company is not performing that well due to the bad economic and political
conditions of the country.
External factors Wght Honda Atlas
Opportunities Rating Wgtd.Score
1. People’s awareness about Global Warming
.05 2 0.10
2. Customer desire for hybrid and fuel efficient
vehicles
0.08 3 0.24
3. Increase in technology in automobiles forces customers to
return to dealer for service 0.1 4 0.40
4. Introduction of ethanol fuel in Pakistan 0.02 1 0.02
5. Increase in demand of small vehicles 0.05 3 0.15
Threats
1. Recession in the economy 0.05 1 0.05
2. WTO (World trade Order) opening local markets for global
competition 0.02 1 0.02
3. Entry of reconditions cars 0.13 2 0.26
4. Political instability 0.05 1 0.05
5. Tightening monitoring Policy 0.06 2 0.12
6. Energy crises 0.1 3 0.30
7. Depreciation of rupee against dollar 0.1 4 0.40
8. Increase in Petroleum and steel prices. 0.09 2 0.18
9. Inflation 0.07 2 0.14
10. Declining quality of the infrastructure in the country. 0.03 2 0.06
Total 1 2.49
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Competitive Profile Matrix (CPM):
The competitive profile matrix (CPM) identifies a firm’s major competitors and its
particular strengths and weaknesses in relation to the sample firm’s strategic position.
Honda Atlas Indus Motors Pak Suzuki
Critical success factor Weight Rating Score Rating Score Rating Score
Product Quality .14 4 0.56 4 0.56 2 0.28
After Sale Services .10 4 0.40 4 0.40 3 0.30
Price Competitiveness .13 4 0.52 4 0.52 4 0.52
Technology
.10 4 0.40 4 0.40 3 0.30
Dealership Network .12 2 0.48 4 0.24 4 0.48
Market Share .10 2 0.20 3 0.30 4 0.40
Spare Parts .12 2 0.36 3 0.24 4 0.48
Environment Friendly .09 4 0.27 3 0.36 2 0.18
Customer Loyalty .10 4 0.40 4 0.40 2 0.2
Total 01
3.32
3.69
3.94
From the above matrix we can observe that the most important factor for the automobile
industry is the product quality, followed by price competitiveness and then the dealership
networks and the availability of the spare parts. Suzuki is the strongest of all the three companies
as it is proven from the matrix and also from its market share in Pakistan that is the highest
among all. Honda is the lowest and the weakest of the companies.
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Internal Audit of the Company
Marketing of Honda:
Honda Atlas Marketing Objective:
Honda Atlas Pakistan Limited as well established automobile companies in Pakistan they
always keep focus on that mission and vision in the same direction HACPL does target of goal
achievement. The standard of the HACPL according to marketing is very high. HAPL existence
and central point of Honda Atlas to sell dream Car because in Honda point of view “Power of
Dreams” itself attracting the customer for that need to build unique product.
HACPL marketing objective has been targeting in terms of provide satisfied customer
service, make possible to keep in reach the product, and strive to give outstanding service to
valued customers. In addition to providing regular service to customers, the company also
regularly conducts Service Campaigns, to facilitate customer's need for service. This has given
company customers’ absolute confidence in their cars.
In the constant endeavor of Honda Atlas company to achieve No .1 Customer
satisfactions with respect to loyalty of brand. Honda Atlas Company has been committed to meet
customer expectations, and to provide good value for money.
Honda Atlas Marketing Mix:
Marketing mix elements or 4p’s strategy of marketing is the essence of any business
same like this strategy of marketing mix apply in top listed automobile company overall the
world Honda atlas these key elements of marketing mix make the difference between Honda
atlas and other automobile companies, Honda atlas also comes up with a strategy to figure out
which strategy is best for them given the objectives and resources. They must also consider the
strengths and weaknesses of the company as well as opportunities and threats. To enhance the
aptitude of the companies, a marketing mix strategy is introduced. The marketing strategy will
create lucrative marketing mixes for defined target markets. Honda atlas has been enhancing
their outcomes and marketing value by implementing the right combination of the four P’s.
Product:
Honda Atlas has competitive edge to other automobile Companies in term of product
quality.
Accord:
Witness the debut of the astonishing new Honda Accord: the outcome of our all-out
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pursuit of sedan excellence, successfully uniting all contradictory elements. A bold exterior
presence with a luxury air, yet a sporty youthful feeling. An expansive upper-class cabin with
comfortable travel space for five adults and panoramic visibility. A larger body with sportier
performance than ever before and powerful I-VTEC engines designed for high fuel economy. A
renowned global car with all advanced Honda technologies for driving command, plus eco-
performance for increased recyclability.
And, Honda's world-leading safety protection, which even extends to pedestrians and
those in other vehicles. Experience its overall quality, riding comfort, and details for yourself,
and you'll know why the new Accord represents a distinct "status upgrade" for the sedan.
Civic:
What moves you? What drives you? What excites you? Honda seeks the pinnacle of
technology in pursuit of answers. Now, we present a bold way to stir the body and soul, designed
to quicken the pulse at first glimpse, and stimulate the senses with each and every encounter. The
sporty new Honda Civic possesses rare spirit, and so do you. See, touch, feel, drive and discover.
City:
See it coming, like an arrow. Striking good looks, cutting-edge design, sharply focused
tension. See it shoot straight ahead. What is it? Discover the compact sedan breakthrough with
strength to open a new era and outlast fleeting trends. Sleek styling and strong performance, with
swift, gutsy response to the driver's pedal action. Class-leading* spaciousness and relaxing ride
for outstanding comfort. Imagine the pride of driving and owning this distinctive new-generation
standard. Get ahead in the new City. People will be watching.
CR-V:
Dynamic styling appeal. Elevated SUV outlook. Premium driving refinement. And an
exhilarating yet stable feeling. The new Honda CR-V has all you want, and more. A spacious
cabin and utilities, due to packaging innovation. Plus superb i-VTEC response, quietness, and
safety. Discover delightful CR-V driving. Now, all roads are exciting.
Promotion:
Honda Atlas (Pakistan) always strives to give outstanding service to valued customers. In
addition to providing regular service to customers, HONDA also regularly conducts Service
Campaigns, to facilitate customer's need for service. This has given to customers’ absolute
confidence in Honda cars. Honda also participates in promotion of that product. Honda Atlas has
a rapidly and quickly promote products more than its competitors.
20
Place / Physical Distribution:
Honda Atlas Network of dealership has expanded and now company has twenty one 3S
(Sales, Service and Spare Parts) and thirty 2S (Service and Spare Parts) Pit shops network in all
major cities of Pakistan.
LOCATION 3S DEALERS 2S DEALERS
KARACHI 6 4
HYDERABAD 1 -
LAHORE 4 7
ISLAMABAD 1 1
RAWALPINDI 1 2
MULTAN 1 1
FAISALABAD 2 2
SARGODHA 1 1
GUJRANWALA 1 -
SIALKOT 1 -
MIRPUR 1 -
PESHAWAR 1 -
ABBOTTABAD - 1
BAHAWALPUR - 1
BUREWALA - 1
AZAD KASHMIR - 1
GUJRAT - 1
MARDAN - 1
OKARA - 1
RAHIMYARKHAN - 1
SAHIWAL - 1
SUKKUR - 1
VEHARI - 1
Total 21 30
21
Marketing Operations/ Function of Marketing Department:
Marketing operation functions is the very essential tool and it is excellent essence of any
business same as this strategy imply by Honda Atlas Company to its authorized Dealer. It is
dealing with brand loyalty of Honda products my concern exists between dealers and customers.
Honda Atlas also depends on 3S but also facilitating with separately 2S as well (Service and
Spare Parts). This offer of facilities Honda Atlas Motor compares to the Total Quality
Management style of Honda Atlas Itself. These 3S and 2S always monitor by Honda Atlas itself
that what’s going on in which Direction? These 3S and 2s has been facilitating through Dealers.
Let we discuss these three elements simultaneously:
Sales:
The HACPL’s Sales Deals by its authorized Dealers. The dealers engaged in providing
facilities the customer to buy Honda Brand(s). Honda Atlas Company has given dealership
authority approximately sixteen Dealers (cars) all over Pakistan. All of the sales strategies
followed by Honda Atlas Itself and it are directly involve and time by time Honda Atlas keep
attached with each sector, do analysis the sales, performance of the dealers most importantly
after sales, customer satisfaction report. Sales facilities part of Honda Atlas is to facilitate its
loyal customer and overcome customer’s ambiguity, buying conflict and provide them maximum
information before purchase. Honda Atlas is also very conscious in sales as well as Customers
Satisfaction.
All the authorized dealerships in Pakistan are a source of customer satisfaction. The after
sales are supported by the immaculate service and the availability of spares at competitive prices
for every car sold. To facilitate the customers for any assistance they require, Honda Atlas has a
separate department, called Customer Relations, at the head office. This department is supported
by the subsequent Customer Relations Officers at all dealerships. The purpose of Customer
Relations Department and Customer Relations Officers is to enable our customers in getting any
sort of help required by them.
Services
The product sold is not means that close the window for customer now, it is beyond that
further after sales customer has largely engaged to deal in service and Spare parts aspect.
HACPL is a customer service conscious company, for which it is always looking for avenues to
develop further relations with the customers who have already purchased the Product. Honda
Atlas considers purchase of any product as the beginning of relations with customers. To prolong
22
this relationship and encourage the customers to keeps on coming to the dealers, providing
customer service the reason for this facility is to stress on the importance of periodic
maintenance. Periodic maintenance is essential for every existing if this is performed regularly as
per the maintenance schedule the car is trouble free and life of car increases by many years. For
these free services the labor is not charged, where as the customer has to pay for only the
consumable like engine oil, oil filter, etc.
HACPL is providing regular trainings to the dealers' technicians. The trainings cover all
aspects of the cars and related Products including the periodic maintenance, diagnostics, trouble
shooting and repairs according to HONDA standards. From this we want to facilitate the
customers in maintaining their cars in top-most condition and enjoying the comfort and
performance of the luxury vehicles they own. It is our endeavor to have uniform service
standards made available at all dealerships in accordance with the international Honda standards.
We consider the properly maintained vehicles not only to be a source of satisfaction to our
customers; they also increase the sale value of their car.
Spare Parts:
The Spare parts element is heavily concern and involved with brand loyalty of Honda
cars because cost of spare parts also consider when customer want to buy the car, customers are
also price conscious, availability of spare parts and as well as quality of spare parts. Honda spare
parts are expensive because they have to import those form Malaysia.
Honda Atlas always follow those strategies which they can gain customer most attention
to its brands. Honda Atlas always make possible to be genuine and look genuine. Honda attract
its customer in under the statement that “Buy Honda genuine parts from Honda dealers and enjoy
6 month's Honda Warranty, the Honda warranty can vary product to product and contribute to
the country’s economy and enjoy the satisfaction of using 100% genuine Honda Parts. But if
customers buy the parts from open market; most probably is that customer may be buying
smuggled parts and thus committing a moral crime and robbing your country from precious
revenue, customer may unable to claim but if customer buy from Honda authorized Dealer so the
part will be 100% genuine, customer has no need to buy from open market, the trust between
customer and Honda Dealers become long lasting etc. It is the Honda Atlas’ aim to be No.1 in
customer satisfaction in all three S, Sales, Service and Spare Parts and two S in the same time.
23
IFE Matrix:
Key internal factors Weight Rating Weighted score
STRENGHTS
Brand Image 0.05 4 0.2
Advance Technology .1 4 0.4
Customer Loyalty 0.06 4 0.24
Strong R&D 0.08 4 0.32
Greater Fuel Efficiency 0.08 4 0.32
Environment Friendly Cars 0.05 4 0.20
Safety 0.03 4 0.12
Smoother Drive 0.02 4 0.08
TQM 0.06 4 0.24
Global Models 0.03 3 0.09
WEAKNESS
Dealership Network 0.1 1 0.1
Costly Spare Parts 0.07 1 0.07
Limited Product Line 0.04 2 0.08
Lack Of Utilization Of Capacity 0.06 1 0.06
Shortage Of Trained Technicians Due To
Complex Sensor Technology
0.03 2 0.06
High Cost Of Production 0.04 1 0.04
Maintenance Cost 0.05 1 0.05
Resale Value 0.05 2 0.10
TOTAL 1 2.77
The Matching Stage
The strategy is defined as the match an organization makes between its internal resources and
skills and the opportunities created by its external factors. The matching strategy formulation
framework consists of five techniques that be used in any sequence:
? The SWOT matrix
? The SPACE matrix
? The BCG matrix
? The IE matrix
? Grand strategy matrix.
24
These tools rely upon information derived from input stage to match the external
opportunities and threats with internal strengths and weaknesses.
In this project, we will be using only the SWOT matrix for the determination of the
alternative strategies.
The SWOT matrix
A scan of the internal and external environment is an important part of the strategic
planning process. Environmental factors internal to the firm usually can be classified as strengths
(S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or
threats (T). Such an analysis of the strategic environment is referred to as a SWOT.
The SWOT analysis provides information that is helpful in matching the firm's resources
and capabilities to the competitive environment in which it operates. As such, it is instrumental
in strategy formulation and selection. The following diagram shows how a SWOT analysis fits
into an environmental scan:
The Decision Stage
QSPM (Quantitative Strategic Planning Matrix):
In order to reach a decision based on objectivity and priority-based analysis, one of the
most frequently used techniques is the QSPM. This technique enables us to measure the
attractiveness of feasible alternative actions. QSPM objectively indicates which alternative
strategies are the best
QSPM uses input from stage 1 and matching results from stage 2 analyses to decide
among alternative strategies. Like other strategy formulation analytical tools, QSMP requires
good intuitive judgment.
In the stage three of Honda Atlas Cars, there were three alternative strategies that we
found very attractive. The data collected from the external and internal audit, and the matching
done from the opportunities, threats, weaknesses and strengths brought us to consensus of
selecting these alternative strategies. We selected three strategies in total
1. Increase in the number of Dealership network
2. Product Diversification
3. Attaining economies of scale
25
The increase in the number of dealership network is chosen because; Honda had a
smallest dealership network against his competitors Indus motors and Pak Suzuki. Honda is
unable to access a number of potential customers due to a small dealer ship network.
The next alternative strategy that is built with a consensus was to do product
diversification. Honda has a small market share as compared to Indus motors and Pak Suzuki.
One of the major reasons was the product diversification by its competitors. If Honda is able to
do product diversification, it can increase its sales; capture the market share on the bases of
strong brand image and customer loyalty.
Attaining the economies of scales was another highly preferred alternative strategy that
could help the company to increase its income and improve its performance. Honda has done
expansion of its company, but it has not been using its plants up to its required optimal capacity.
Due to this, the company is facing high cost as well. So if the company mass produces the cars
and use the plants to its maximum capacity, it will be able to decrease the cost. The only
variables affecting this strategy are the marketing promotions done by the company, and sale of
the manufactured cars.
Conclusion:
? The weights taken for the following factors were from the EFE matrix and IFE matrix.
? The rating is done on the bases of intuition, brainstorming and consensus at the end
among the group members.
? After the comparison of above-mentioned strategies and their total attractiveness score, it
is more appropriate and feasible for an organization to follow the product diversification
strategy.
? In this context, the company will ha to put new production plants in order to produce new
cars. This will include the arrangement of heavy budget and extensive marketing of the
new products. Since the monetary policies of the country are tight at present, the
company should arrange the capital in form of equity by floating the shares in the market
or wait for the interest rates to fall down as the economic and inflationary situation of the
country stables.
? The products will contain product line of small cars i.e. 800 c.c. and below.
26
27
Alternative strategies Increase in the number of
Dealership network
Product diversification Economy of scale
External factors W
ght
AS TAS AS T
AS
AS TAS
Opportunities
6. People’s awareness about Global Warming 0
.05
1 0.05 4 0.20 2 0.10
7. Customer desire for hybrid and fuel efficient vehicles 0
.08
3 0.24 4 0.32 2 0.16
8. Increase in technology in automobiles forces customers
to return to dealer for service
0
.1
4 0.40 3 0.30 1 0.10
9. Introduction of ethanol fuel in Pakistan 0
.02
3 0.06 4 0.08 2 0.04
10. Increase in demand of small vehicles 0
.05
3 0.15 4 0.20 2 0.10
Threats
11. Recession in the economy 0
.05
2 0.10 3 0.15 1 0.05
12. WTO (World trade Order) opening local markets for
global competition
0
.02
2 0.04 4 0.08 3 0.06
13. Entry of reconditions cars 0
.13
-- -- -
-
-- --
14. Political instability 0
.05
-- -- -
-
-- --
15. Tightening monitoring Policy 0
.06
4 0.24 3 0.18 2 0.12
16. Energy crises 0
.1
4 0.40 2 0.20 1 0.10
17. Depreciation of rupee against dollar 0
.1
3 0.30 4 0.40 2 0.20
18. Increase in Petroleum and steel prices. 0
.09
1 0.09 3 0.27 4 0.36
19. Inflation 0
.07
2 0.14 4 0.28 3 0.21
20. Declining quality of the infrastructure in the country. 0
.03
- -- -- -
-
-- --
Total 1
STRENGHTS
1. Brand image 0
.1
4 0.40 3 0.34 2 0.20
2. Advance technology 0
.1
2 0.20 4 0.40 3 0.30
3. Safety 0
.08
1 0.08 4 0.32 2 0.16
4. Environmental friendly 0
.07
1 0.07 4 0.28 2 0.14
5. Customer loyalty 0
.06
4 0.24 3 0.18 2 0.12
6. Strong R&D 0
.1
1 0.10 4 0.40 3 0.30
7. Fuel efficiency 0
.09
1 0.09 4 0
.36
2 0.18
8. Total quality management 0
.05
3 0.15 4 0
.20
2 0.10
9. Timely new models 0
.06
4 0.24 3 0
.24
1 0.06
WEAKNESS
1. Dealership network 0
.08
4 0.32 2 0
.16
3 0.24
2. Costly spare parts 0
.05
1 0.05 3 0
.15
4 0.20
3. Market share and profitability 0
.08
3 0.24 4 0
.32
2 0.16
4. Limited product line 0
.03
1 0.03 4 0
.12
2 0.06
5. Shortage of trained technicians due to Complex sensor
technology
0
.05
3 0.15 2 0
.10
1 0.05
TOTAL 1 4.57 6
.19
3.87
28
SWOT Analysis of
HONDA Atlas Cars
STRENGHTS
1. Brand image
2. Offering Global models
3. Smoother drive as compare to
its competitors
4. Timely new models
5. Decentralized environment
6. Advance Technology
7. Safety
8. Environment Friendly
9. Customer loyalty
10. Highly loyal, committed and
motivated employees
11. Greater fuel efficiency
12. TQM
13. Friendly working environment
14. Advertisement
15. Strong human resource
16. Reliability
17. CSR
18. Strong R & D
WEAKNESS
1. Dealership Network
2. Resale value
3. Maintenance cost
4. Costly Spare parts
5. Limited product line
6. Shortage of trained
technicians due to Complex
sensor technology
7. Lack of utilization of
capacity
8. Market share and
profitability
9. High cost production.
OPPURTUNITY
1. People’s awareness about
Global Warming
2. Customer desire for hybrid
and fuel efficient vehicles
3. Increase in technology in
automobiles forces
customers to return to
dealer for service
4. Introduction of ethanol fuel
in Pakistan
5. Increase in demand of small
vehicles
SO STRATEGY
1. Promotion of products on the
bases of environmental
friendliness and fuel efficiency.
(S1, O1), (S2, O2, O4)
2. Greater focus on the production
of eco - friendly cars. (S6,S8,
O2)
3. Availability of trained technical
staff at two S and three S
dealers. ( S15, O3 )
WO STRATEGY
1. Increase the dealership
networks all over the
country. (W1,W6, O3)
2. Availability of trained
technical staff at two S and
three S dealers. (W6, O3).
3. Introduction of flexible fuel
vehicle and going for
product diversification(W5,
O4, O5)
THREATS
1. Recession in the economy
2. WTO (World trade Order)
opening local markets for
global competition
3. Entry of reconditions cars
4. Political instability
5. Tightening monitoring
Policy
6. Energy crises
7. Depreciation of rupee
against dollar
8. Increase in Petroleum and
steel prices.
9. Inflation
10. Declining quality of the
infrastructure in the
country.
ST STRATEGY
1. Utilize research and
development to minimize spare
parts price.(S18, T1)
WT STRATEGY
1. Localization of supplies
and raw material (W9, W4,
T1, T7).
2. Downsizing ( W9, W8, T1)
3. Strict employee policies to
contain overhead and
unfavorable economic
conditions
4. Mass Production
5. Influence and coordinate
government institutes to
ensure consistent power
supply and minimum break
down time. (T6,W7)
doc_138175195.docx
Strategic Managment report ,SWOT,TOWS,IFM matics,BCG Matrix
SZABIST ISLAMABAD
HONDA ATLAS CARS.
STRATEGIC MANAGEMENT REPORT
WAHEEDULLAH JAN,MOHAMMAD SHOAIB,KHALID KHAN,ARSLAN
SADIQ
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the
contents of the document. Type the abstract of the document here. The abstract is typically a
short summary of the contents of the document.]
1
Executive Summary.
This report is as an attempt to apply the strategic management concepts that we have
learned in our course of Strategic Management. We have applied the comprehensive strategy
evaluation framework to HONDA ATLAS Cars and did our analysis by evaluating the different
stages strategy evaluation.
The information collected is through ingenious methods and all the calculations are based
on the personal judgment. However much of the attention is given to application of basic
concepts and tools of the strategic management in relation to the company.
The leaning from this report is that the strategic formulation, implementation and
evaluation are the one the key management practices that are necessary for the survival business
environment. These strategic decisions are made based on the analyzing both the internal and
external assessment.
The limitation of this report analysis conducted it did not include all the key factors while
analyzing both the internal and external evaluation. The companies generally do not share the
confidential data.
2
Contents
Executive Summary. ........................................................................................................... 1
Introduction to the Company .............................................................................................. 4
“Slogan” .............................................................................................................................. 5
Products: ............................................................................................................................. 5
“Vision” .............................................................................................................................. 5
“Mission” ............................................................................................................................ 5
“Quality Policy” .................................................................................................................. 5
Environmental Policy.......................................................................................................... 6
Management Policy ............................................................................................................ 6
Saftey, Health, and Environment ........................................................................................ 6
Operating Principles............................................................................................................ 7
Competitors ......................................................................................................................... 7
Pak Suzuki ...................................................................................................................... 7
Indus Motor Company (Inc.) .......................................................................................... 8
External Audit of the Company .......................................................................................... 8
The External Assessment: ............................................................................................... 8
Economic forces: ............................................................................................................ 9
Political forces ................................................................................................................ 9
Instability and political clashes: ...................................................................................... 9
Depreciation Allowance: .............................................................................................. 10
Technological Forces: ................................................................................................... 10
Social, cultural, demographic and environmental forces: ............................................. 11
Competitive forces ............................................................................................................ 12
Indus Motors: ................................................................................................................ 12
Suzuki: .......................................................................................................................... 13
Dewan Farooque Motors: ............................................................................................. 13
Daihatsu: ....................................................................................................................... 14
Porter's Five Forces Model: .............................................................................................. 14
Threat of new entrant: ................................................................................................... 14
Economies of scale: ...................................................................................................... 14
First Mover Advantage: ................................................................................................ 14
Access to Channel of Distribution and Relationships: ................................................. 14
Threat of Substitute Products ........................................................................................ 15
Bargaining power of buyers .......................................................................................... 15
Bargaining power of suppliers: ..................................................................................... 15
External Factor Evaluation Matrix: .................................................................................. 15
Competitive Profile Matrix (CPM): .................................................................................. 17
Internal Audit of the Company ......................................................................................... 18
Marketing of Honda: ..................................................................................................... 18
3
Honda Atlas Marketing Objective: ............................................................................... 18
Honda Atlas Marketing Mix: ........................................................................................ 18
Promotion:..................................................................................................................... 19
Place / Physical Distribution: ........................................................................................ 20
Marketing Operations/ Function of Marketing Department: ........................................ 21
Sales: ............................................................................................................................. 21
Services ......................................................................................................................... 21
Spare Parts: ................................................................................................................... 22
IFE Matrix:........................................................................................................................ 23
The Matching Stage .......................................................................................................... 23
The SWOT matrix............................................................................................................. 24
The Decision Stage ........................................................................................................... 24
QSPM (Quantitative Strategic Planning Matrix): ......................................................... 24
Conclusion: ....................................................................................................................... 25
4
Introduction to the Company
Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company
Limited Japan, and the Atlas Group of Companies, Pakistan. The company was established in
November 04, 1992 and joint venture agreement was signed on August 05, 1993. The
groundbreaking ceremony was held on April 17, 1993 and within a record time of 11 months,
construction and erection of machinery was completed. The first car rolled off the assembly line
on May 26, 1994. Official inauguration was done by then President of Pakistan, Sardar Farooq
Ahmad Khan Leghari. Mr.Kawamoto, President of Honda Motor Company Limited Japan was
also present to grace the occasion. The company is listed in Karachi, Lahore and Islamabad
Stock Exchanges.
On July 14, 1994, car bookings started at six dealerships in Karachi, Lahore, and
Islamabad. Since then the Dealerships network has expanded and now the company has Twenty-
One 3S (Sales, Service and Spare Parts), Eighteen 2S (Service and Spare Parts) and Five 1S
(Spare Parts) authorized dealerships network in all major cities of Pakistan.
Since the commencement of production in 1994, the company has produced and sold
more than 200,000 cars until July 12, 2012.All dealerships were constructed in accordance with
the standards defined by Honda World over. Percentage of local parts conforms to the
government's policy. Local vendors are continuously patronized to develop parts locally. The
quality of local parts is thoroughly checked to meet stringent international standards.
We always strive to give outstanding service to our valued customers. In addition to
providing regular service to customers, the company also regularly conducts Service Campaigns,
to facilitate customer's need for service. This has given our customers absolute confidence in our
cars, evident from the ever-increasing sale volumes.
It is the constant endeavor of Honda Atlas Cars (Pakistan) Limited to achieve No .1
Customer satisfaction. Honda Atlas Cars (Pakistan) Limited is committed to meet customer
expectations, and to provide good value for money.
Currently, we are offering Honda Accord, Honda CR-V, Honda CR-Z, Honda Civic (four
models) and Honda City (four models) in wide range of colors with advanced technological
features
5
“Slogan”
“THE POWER OF DREAMS”
Products:
“Vision”
“Striving to be a company that society wants to exist by sharing joys with people
throughout the world”
“Creating products that maximize the joy of customers, with speed, affordability and low
CO2”
“Mission”
“A dynamic growth oriented company through excellence in quality, dedication to
provide greater fuel efficiency at competitive prices, and service ensuring attractive returns to
equity holders, rewarding associates according to their ability and performance, fostering a
network of engineers and researchers ensuing unique contribution to the development of the
industry, customer safety, satisfaction and protection of the environment by producing emission
friendly green products as a good corporate citizen fulfilling its social responsibilities in all
respects.”
“Quality Policy”
We, at Honda Atlas Cars (Pakistan) Limited, strive for supplying top quality Honda Cars
to get complete Customer Satisfaction. We accomplish this by:
Honda
Atlas Cars
Accord
CR-V
Civic
City
6
o Smart Team Work
o Meeting all applicable legal and regulatory requirements
o Continually improving our strategies and goals
Environmental Policy
Honda Atlas Cars (Pakistan) Limited, being responsible member of the society considers
the preservation of the global environment as a crucial concern. Our environmental philosophy is
firmly based on the following principles:
1. Recognize the impacts of our activities, products and services on environment;
2. Formulate objectives and targets for pollution prevention, environmental impacts
mitigation and resource conservation as far as technically feasible
Management Policy
1. Respect for all – man has priority over others.
2. Man is the key in controlling i.e. machines, methods and materials.
3. Follow 3S spirit i.e. small, smart and speed.
4. Believe in 3A “Hands on Approach” i.e. be on Actual Spot, look at the Actual Spot
and confront the Actual Situation.
5. 5. Be a good corporate citizen; assume a responsible role in community
Saftey, Health, and Environment
Honda Atlas Cars (Pakistan) Limited conducts its business responsibly and in a way to make
sure health, safety and protection from environmental aspects of its associates and the society.
We implement and maintain the programs that provide reasonable assurance that the business
will do the following
1. To comply with all applicable government and internal health, safety and
environmental requirements
7
2. Design facilities and conduct operations in a way that avoids risk to human health,
safety and the environment
3. To examine and communicate the known hazards of operations with relevant health,
safety and environment.
4. To examine and communicate the known hazards of operations with relevant health,
safety and environmental protection information to potentially affected personal
protection information to potentially affected persons
Operating Principles
The companies operating principles are as under:
1. Always keep the deadline
2. Never make excuses
3. Teamwork
Competitors
Pak Suzuki
In pursuance of the terms and conditions of the Joint Venture Agreement executed
between Suzuki Motor Corporation of Japan (SMC) and Pakistan Automobile Corporation
(PACO), Pak Suzuki Motor Company Limited (PSMCL) was incorporated as a public limited
company in August 1983.The new company took over the assets, which included production
facilities of Awami Autos Limited. PSMCL started commercial operations in January 1984 with
the primary objective of passenger cars, pickups, vans and 4x4 vehicles.
The foundation stone laying ceremony of the company’s green field automobile plant at
Bin Qasim was performed by the then prime Minister of Pakistan in early 1989.On completion of
first phase of this plant in early 1990, in-house assembly of all types of Suzuki engines started.
The new plant was completed in 1992, on its completion all Suzuki products were transferred to
new plant and three box 1300cc Margalla car was also added to its range of production. In
September 1992, the company was privatized and placed directly under the Japanese
Management. At the time of privatization, SMC increased its equity from 25% to 40%
subsequently; SMC progressively increased its equity to 73.09% by December 31, 2001. The Bin
Qasim Plant further expanded its production capacity to 50,000 vehicles per year in July 1994
8
and 300,000 vehicles have been manufactured at this plant by December 2003.The most modern
automobile manufacturing plant in the country distinguishes Pak Suzuki from other automobile
plants.
Pak Suzuki always endeavors to go aggressively for the sound development of the society
by increasing motorization industrialization, creating job opportunities thus improving the
people’s living standards with the combined efforts of all the dealers, vendors and Pak Suzuki
employees.
I ndus Motor Company (I nc.)
Indus Motor Company (IMC) is a joint venture between the House of Habib, Toyota
Motor Corporation Japan (TMC), and Toyota Tsusho Corporation Japan (TTC) for assembling,
progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990.
IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd. Vehicles in
Pakistan through its dealership network.
The company was incorporated in Pakistan as a public limited company in December
1989 and started commercial production in May 1993. The shares of company are quoted on the
stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation have 25
% stake in the company equity. The majority shareholder is the House of Habib. IMC's
production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area
measuring over 105 acres.
Indus Motor Company’s plant is the only manufacturing site in the world where both
Toyota and Daihatsu brands are being manufactured. Heavy investment was made to build its
production facilities based on state of art technologies. To ensure highest level of productivity
world-renowned Toyota Production Systems are implemented. IMC's Product line includes 6
variants of the newly introduced Toyota Corolla, Toyota Hilux Single Cabin 4x2 and 4 versions
of Daihatsu Cuore. We also have a wide range of imported vehicles.
External Audit of the Company
The External Assessment:
The external audit is to develop finite lists of opportunities that could benefit a firm and
threats that should be avoided. External forces can be divided into five broad categories;
? Economic forces
9
? Social, cultural, demographic and environmental forces
? Political forces
? Technological forces
? Competitive forces
Economic forces:
The overall economic outlook of the country is not very sound and the country is ranked
D in term of overall risk assessment.In 2013, Pakistan’s growth has been driven by household
consumption. The 20% increase in civil service salaries in the last budget and transfers from
expatriate workers (mainly United Arab Emirates and United States) have contribute
considerably to the rise in consumption.Current GDP, will be insufficient, considering the large
number of people entering the job market. Indeed, 50% of Pakistanis are under 20. Growth needs
to be 7% so that the unemployment rate remains stable. Besides, the fall-off in international trade
will again dampen activity in 2013 through the decline in exports. Frequent electricity cuts as
well as the climate of insecurity will also harm production. Moreover, imports will again be
affected by energy costs, which alone accounted for the size of the trade deficit in 2012. Pakistan
has, however, some important advantages. It abounds in labor and the Baluchistan region has
rich natural resources (gas, oil). Furthermore, the country borders on Asia and the Middle East
and is a neighbor of India and Iran. The expansion of regional trade is an opportunity for the
country, which has a young population. Nevertheless, Pakistan does not exploit its advantages.
As a sign of these structural weaknesses, investment (11% of GDP in 2012) has been falling
sharply since 2007 (21%). In 2013 inflation have gone be above 10%, despite stable energy and
agricultural prices. The high level of inflation is partly explained by the funding of the sovereign
debt by the Pakistani Central Bank which leads to expectations of price rises.
Political forces
The government plays an important role in the operation and manufacturing products and
services in terms of regulations. Following are some of the factors that could cause Honda Cars
to differ materially from the expected results.
I nstability and political clashes:
Now a day’s Pakistani environment is instable due to political clashes among political
parties. Inside country war and drown attacks in north frontier areas. This political instability has
led to uncertain environment in the country, which is a threat for any business including Honda
10
Depreciation Allowance:
In order to increase sales of locally made cars and increase revenue collection the auto
industry has emphasized on need to curb undue concessions to illegally imported used vehicle
and to revise the fixed duty set under SRO 577.This will enable the local car manufacturer in
capitalize and increase their maketshare.Furher more a reduction in taxes on the hybrid cars will
encourage the local car manufactures.This will also be helpful in the minimize current problems
of shortage of CNG and increasing petrol prices.
Technological Forces:
? Advances in technology can have a major impact on business success.
? Honda cars have always followed the tradition of introducing new technology and
providing global cars of international quality to its customers, since the launch of its first
model in 1994.
? During the short span of 15 years, your company has introduced 4 new models of Honda
Civic and 4 new models of Honda City –the highest among the other car makers in
Pakistan.
? Many features and specifications were introduced first time in Pakistan. Your company
introduced the 3rd Generation Honda City on January 31, 2009. It has V-tech Engine,
Anti Lock Braking System (ABS) and Euro- 4 emission systems, which are considered to
be the strictest emission standard worldwide.
? The new City has Drive-By-Wire (DBW) control technology for fuel efficiency. It has
also enhanced G-CON collision safety which reduces the impact on passenger cabin. To
maintain the global quality standards, the Company has invested Rs 2.1 billion on
development of local parts, dies and fixtures of Honda City. However, the new features
increased its cost and so the selling price.
? Honda produces cars of highest quality with high specifications of Honda to its global
customers. Honda has the pride of providing the environment - friendly, Euro IV
compliant cars to its customers, which no other maker has in Pakistan.
? On the strength of our confidence in our products, the company with new City launch
effective February 2009, increased warranty of new City to 70,000 Km or 3 years from
the date of purchase, whichever comes earlier, increasing Joy of Buying of new Honda
City.
11
Social, cultural, demographic and environmental forces:
? Effects of the automobiles on societies:
Over the course of the 20th century, the automobile rapidly developed from an
expensive toy for the rich into the standard for passenger transport. The development of
the automobile built upon the transport revolution started by railways, and like the
railways, introduced sweeping changes in infrastructure, manufacturing and legislation.
The wide reaching effects of automobiles on everyday life have been a subject of much
controversy. Proponents on one end of the spectrum claim the car is a marvel of
technology that has brought about unprecedented prosperity, while opponents on the
other end claim it lead to a mode of urban and suburban planning that discourages
walking and human interaction, uses large amounts of polluting fuel.
? Economic changes
City Planning: The development of the automobile has caused changes in city
planning, as well as changing the roles of horses and railroads.
Industrial infrastructure: Huge industries devoted only to the automobile were
created. Others were expanded from once trivial insignificance to eminent importance.
Before the internal-combustion engine was developed, gasoline was a waste product,
often discarded. Once the automobile became common, the production of gasoline
blossomed into a matter of such importance that the governments took action to secure a
steady flow of oil. The steel industry was already established, but the coming of the
automobile created huge amounts of business for it. The chemical, rubber, and petroleum
industries were remade to suit the needs of the automobile and industries sprang up, such
as service stations, motels, and automobile insurance, that were completely reliant upon
the automobile for their livelihood. Infrastructure: Aside from industries, one of the most
visible effects the automobile has had on the world is the huge increase in the amount of
surfaced roads.
? Social status
The automobile signifies much more to many than simply a mode of
transportation. Henri Lefebvre called the automobile "the epitome of possessions". In the
early years, the car served as a mark of distinction above all others. The automobile
rapidly became a symbol of social status, and in some cases, a fashion item. The
automobile, more than any other possessions, allowed people to show off wealth. Not
12
only was the ownership of an automobile demonstrative of a certain level of income and
prestige (and still is, especially in poorer nations), it is also highly visible.
? Safety
Automobile accidents caused many deaths and injuries, especially before
automobile safety laws were implemented. To this date, automobiles remain a major
cause of accidental death and injury, not to mention emotional stress.
? Vehicle Air Pollution:
Air pollution is viewed as a serious problem in many cities in South Asia. Many
city governments say that transport is mainly responsible for air pollution and have
adopted, or are considering adopting technological measures to reduce vehicle emission.
This situation demands selection of appropriate measures in the sector.
The impact of outdoor air pollution on public health and lost productivity should
be seriously taken as toxicity and ambient concentrations are the most damaging health
impacts. The particulate matter causing serious respiratory illnesses and premature deaths
throughout South Asia, and airborne lead, which retards intellectual development of
children in Pakistan and Sri Lanka is a common phenomenon, where leaded gasoline is
still used.
Competitive forces
Honda faces competition in the international markets from a number of brands such as
? Toyota
? Mitsubishi
? Mercedes
? BMW
However, Honda cars in Pakistan that had started its operations in Pakistan 1994 under a
joint venture with Atlas have been is enjoying the key position in 1300 c.c and above.
The main competitors of Atlas Honda in Pakistan are:
I ndus Motors:
Indus Motor Company (IMC) is a joint venture between the House of Habib, Toyota
Motor Corporation Japan (TMC) and Toyota Tsusho Corporation Japan (TTC) for assembling,
progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990.
13
IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd. Vehicles in
Pakistan through its dealership network.
The company was incorporated in Pakistan as a public limited company in December
1989 and started commercial production in May 1993. The shares of company are quoted on the
stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation have 25
% stake in the company equity. The majority shareholder is the House of Habib. IMC's
production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area
measuring over 105 acres. Indus Motor Company’s plant is the only manufacturing site in the
world where both Toyota and Daihatsu brands are being manufactured.
Suzuki:
Suzuki is the leading name in small commercial vehicles and passenger cars. Suzuki
commenced its operation by assembling small 800 cc cars. Suzuki has so far a sole leader in
800cc and 1000cc passenger cars as well as 1000cc jeep Potohar. But the emergence of so many
competitors in the market will definitely trigger a very hard time to Pak Suzuki. Suzuki has
launched Mehran 800cc, Cultus 1000cc, Baleno 1.3 & 1.6 Eli and Gxi, Bolan van & Ravi pickup
800cc and Potohar jeep. The total production capacity of Suzuki Motors is about 50000 units and
the total actual production in 1999 is 32,805. The sales volume of Suzuki is highest among the
competitors with 31,296 cars as per June 30, 2000. According to Pakistan Association of
Automotive Parts and Accessories Manufacturers (PAAPAM) , Suzuki has achieved the 60 per
cent deletion status in 800cc Mehran car. Localization in other products like 1000cc Khyber 42
per cent, 1300cc Margalla/Baleno 32 per cent, 800cc pickup 50 per cent 10 passenger pickup 47
per cent and 1000cc Potohar jeep 40 percent.
Dewan Farooque Motors:
It is the major competitor which has commenced its operation with a wide range of
products in domestic automobile market. Dewan Motors is basically a collaboration with
Hyundai and Kia, two Korean auto manufacturers. The initial response to Dewan's offering in the
market with record company booking of its Santro Plus. It has launched its Kia classic 1300 cc
car with sophisticated features. In future wide range of models like Kia Shuma 1500-1800cc car,
Kia Sportage 2000 cc sports utility are expected to launch in the market. Dewan has also
launched its 1.5 tons Shehzore, the assembly of Hyundai light commercial vehicle has already
started at the Sindh Engineering Plant in Karachi under contractual agreement.
14
Daihatsu:
Daihatsu, another new player in the market with its Cuore 850 cc, increased the
competition in the market. Daihatsu and Indus Motor signed an agreement to launch the Coure in
market. The project worth Rs 750 million was developed at Port Qasim between Daihatsu and
Indus Motor to produce Coure. Daihatsu also heated up the competition in small car segments.
Porter's Five Forces Model:
Michael Porter identified five forces that influence an industry. These forces are:
(1) degree of rivalry; (2) threat of substitutes; (3) barriers to entry; (4) buyer power; and (5)
supplier power. Like other industries operating under free market, capitalistic systems, viewing
the automotive industry through the lens of Porter’s Five Forces can be helpful in understanding
the forces at play.
Threat of new entrant:
Although Pakistani Market is dominated by protectionism but because of financial crisis
a lot of Automobile companies have their eyes on South –East Asia as a dumping site Honda
motors company must gear up for fierce competition. These new Entrants have sufficient capital
and guts to start a price war among the local industry.
Economies of scale:
Economies of scale no doubt reduces the cost of manufacturing but now days Customers
are Saving Oriented Rather Consumption Oriented low price in this period of recession will not
attract customer the best way is to go for fuel efficient cars.
First Mover Advantage:
Honda motors have the First Mover advantage in case of Fuel efficient Cars. Honda R&D
Department already achieved so much in this field depleting oil sources is a major problem for
every country now Toyota is looking for different options such as: Bio Fuels, Hydro Electric
power Cars, Electric powered cars & Cow Dung.
Access to Channel of Distribution and Relationships:
Honda motor has the advantage of customer satisfaction and distribution channels. Honda
motor conducts workshops and seminar for Dealer Staff so that the interaction with the
customers shall be a pleasant one. This Customer care leads to Customer Loyalty.
15
Threat of Substitute Products
The emerging new technologies and auotomobiles are a considerable threats for the
company.The Mass tansport systems like Metro buses and fast moving trains can potential
factore for furture oulook of the auto-mobile industry.The dumping of the autos in the
developing counties have also affected the local car manufactures.
Bargaining power of buyers
Buyers are price sensitive because products are little differentiated and switching cost is
lower. The buyers hence have greater power to bargain on the finished good, i.e. vehicle. The
switching cost is very low for the customers. However the automobile industry remains
marginally strong due to the large buyers to producer ratio
Bargaining power of suppliers:
Honda motors almost produces 98% of car in Pakistan but Most of the Raw material is
imported through Toyota Japan so Suppliers is the parent company that is why importing
material is not a big issue for Honda. The automotive industry is a dynamic place. With the
forces above at play, and with history as a guide, it is safe to say that the automotive industry
will continue to change, evolve, and adapt.
External Factor Evaluation Matrix:
An external factor evaluation matrix allows the strategists to summarize and evaluate
economic, social, cultural, demographic, environmental, political, governmental, legal,
16
technological, and competitive information. The threats and opportunities of Honda Company
have been identified in the PEST analysis and the ratings of the factors (1-4) have been done
from the brain storming and the facts and figures that have affected the company.
Following is the EFE matrix:
From the above matrix calculation, we can see that the total weighted score for Honda
Motors is 2.49 which is 0.01 points lower than 2.50 i.e. the midpoint a and is below the average.
This shows that the company is not performing that well due to the bad economic and political
conditions of the country.
External factors Wght Honda Atlas
Opportunities Rating Wgtd.Score
1. People’s awareness about Global Warming
.05 2 0.10
2. Customer desire for hybrid and fuel efficient
vehicles
0.08 3 0.24
3. Increase in technology in automobiles forces customers to
return to dealer for service 0.1 4 0.40
4. Introduction of ethanol fuel in Pakistan 0.02 1 0.02
5. Increase in demand of small vehicles 0.05 3 0.15
Threats
1. Recession in the economy 0.05 1 0.05
2. WTO (World trade Order) opening local markets for global
competition 0.02 1 0.02
3. Entry of reconditions cars 0.13 2 0.26
4. Political instability 0.05 1 0.05
5. Tightening monitoring Policy 0.06 2 0.12
6. Energy crises 0.1 3 0.30
7. Depreciation of rupee against dollar 0.1 4 0.40
8. Increase in Petroleum and steel prices. 0.09 2 0.18
9. Inflation 0.07 2 0.14
10. Declining quality of the infrastructure in the country. 0.03 2 0.06
Total 1 2.49
17
Competitive Profile Matrix (CPM):
The competitive profile matrix (CPM) identifies a firm’s major competitors and its
particular strengths and weaknesses in relation to the sample firm’s strategic position.
Honda Atlas Indus Motors Pak Suzuki
Critical success factor Weight Rating Score Rating Score Rating Score
Product Quality .14 4 0.56 4 0.56 2 0.28
After Sale Services .10 4 0.40 4 0.40 3 0.30
Price Competitiveness .13 4 0.52 4 0.52 4 0.52
Technology
.10 4 0.40 4 0.40 3 0.30
Dealership Network .12 2 0.48 4 0.24 4 0.48
Market Share .10 2 0.20 3 0.30 4 0.40
Spare Parts .12 2 0.36 3 0.24 4 0.48
Environment Friendly .09 4 0.27 3 0.36 2 0.18
Customer Loyalty .10 4 0.40 4 0.40 2 0.2
Total 01
3.32
3.69
3.94
From the above matrix we can observe that the most important factor for the automobile
industry is the product quality, followed by price competitiveness and then the dealership
networks and the availability of the spare parts. Suzuki is the strongest of all the three companies
as it is proven from the matrix and also from its market share in Pakistan that is the highest
among all. Honda is the lowest and the weakest of the companies.
18
Internal Audit of the Company
Marketing of Honda:
Honda Atlas Marketing Objective:
Honda Atlas Pakistan Limited as well established automobile companies in Pakistan they
always keep focus on that mission and vision in the same direction HACPL does target of goal
achievement. The standard of the HACPL according to marketing is very high. HAPL existence
and central point of Honda Atlas to sell dream Car because in Honda point of view “Power of
Dreams” itself attracting the customer for that need to build unique product.
HACPL marketing objective has been targeting in terms of provide satisfied customer
service, make possible to keep in reach the product, and strive to give outstanding service to
valued customers. In addition to providing regular service to customers, the company also
regularly conducts Service Campaigns, to facilitate customer's need for service. This has given
company customers’ absolute confidence in their cars.
In the constant endeavor of Honda Atlas company to achieve No .1 Customer
satisfactions with respect to loyalty of brand. Honda Atlas Company has been committed to meet
customer expectations, and to provide good value for money.
Honda Atlas Marketing Mix:
Marketing mix elements or 4p’s strategy of marketing is the essence of any business
same like this strategy of marketing mix apply in top listed automobile company overall the
world Honda atlas these key elements of marketing mix make the difference between Honda
atlas and other automobile companies, Honda atlas also comes up with a strategy to figure out
which strategy is best for them given the objectives and resources. They must also consider the
strengths and weaknesses of the company as well as opportunities and threats. To enhance the
aptitude of the companies, a marketing mix strategy is introduced. The marketing strategy will
create lucrative marketing mixes for defined target markets. Honda atlas has been enhancing
their outcomes and marketing value by implementing the right combination of the four P’s.
Product:
Honda Atlas has competitive edge to other automobile Companies in term of product
quality.
Accord:
Witness the debut of the astonishing new Honda Accord: the outcome of our all-out
19
pursuit of sedan excellence, successfully uniting all contradictory elements. A bold exterior
presence with a luxury air, yet a sporty youthful feeling. An expansive upper-class cabin with
comfortable travel space for five adults and panoramic visibility. A larger body with sportier
performance than ever before and powerful I-VTEC engines designed for high fuel economy. A
renowned global car with all advanced Honda technologies for driving command, plus eco-
performance for increased recyclability.
And, Honda's world-leading safety protection, which even extends to pedestrians and
those in other vehicles. Experience its overall quality, riding comfort, and details for yourself,
and you'll know why the new Accord represents a distinct "status upgrade" for the sedan.
Civic:
What moves you? What drives you? What excites you? Honda seeks the pinnacle of
technology in pursuit of answers. Now, we present a bold way to stir the body and soul, designed
to quicken the pulse at first glimpse, and stimulate the senses with each and every encounter. The
sporty new Honda Civic possesses rare spirit, and so do you. See, touch, feel, drive and discover.
City:
See it coming, like an arrow. Striking good looks, cutting-edge design, sharply focused
tension. See it shoot straight ahead. What is it? Discover the compact sedan breakthrough with
strength to open a new era and outlast fleeting trends. Sleek styling and strong performance, with
swift, gutsy response to the driver's pedal action. Class-leading* spaciousness and relaxing ride
for outstanding comfort. Imagine the pride of driving and owning this distinctive new-generation
standard. Get ahead in the new City. People will be watching.
CR-V:
Dynamic styling appeal. Elevated SUV outlook. Premium driving refinement. And an
exhilarating yet stable feeling. The new Honda CR-V has all you want, and more. A spacious
cabin and utilities, due to packaging innovation. Plus superb i-VTEC response, quietness, and
safety. Discover delightful CR-V driving. Now, all roads are exciting.
Promotion:
Honda Atlas (Pakistan) always strives to give outstanding service to valued customers. In
addition to providing regular service to customers, HONDA also regularly conducts Service
Campaigns, to facilitate customer's need for service. This has given to customers’ absolute
confidence in Honda cars. Honda also participates in promotion of that product. Honda Atlas has
a rapidly and quickly promote products more than its competitors.
20
Place / Physical Distribution:
Honda Atlas Network of dealership has expanded and now company has twenty one 3S
(Sales, Service and Spare Parts) and thirty 2S (Service and Spare Parts) Pit shops network in all
major cities of Pakistan.
LOCATION 3S DEALERS 2S DEALERS
KARACHI 6 4
HYDERABAD 1 -
LAHORE 4 7
ISLAMABAD 1 1
RAWALPINDI 1 2
MULTAN 1 1
FAISALABAD 2 2
SARGODHA 1 1
GUJRANWALA 1 -
SIALKOT 1 -
MIRPUR 1 -
PESHAWAR 1 -
ABBOTTABAD - 1
BAHAWALPUR - 1
BUREWALA - 1
AZAD KASHMIR - 1
GUJRAT - 1
MARDAN - 1
OKARA - 1
RAHIMYARKHAN - 1
SAHIWAL - 1
SUKKUR - 1
VEHARI - 1
Total 21 30
21
Marketing Operations/ Function of Marketing Department:
Marketing operation functions is the very essential tool and it is excellent essence of any
business same as this strategy imply by Honda Atlas Company to its authorized Dealer. It is
dealing with brand loyalty of Honda products my concern exists between dealers and customers.
Honda Atlas also depends on 3S but also facilitating with separately 2S as well (Service and
Spare Parts). This offer of facilities Honda Atlas Motor compares to the Total Quality
Management style of Honda Atlas Itself. These 3S and 2S always monitor by Honda Atlas itself
that what’s going on in which Direction? These 3S and 2s has been facilitating through Dealers.
Let we discuss these three elements simultaneously:
Sales:
The HACPL’s Sales Deals by its authorized Dealers. The dealers engaged in providing
facilities the customer to buy Honda Brand(s). Honda Atlas Company has given dealership
authority approximately sixteen Dealers (cars) all over Pakistan. All of the sales strategies
followed by Honda Atlas Itself and it are directly involve and time by time Honda Atlas keep
attached with each sector, do analysis the sales, performance of the dealers most importantly
after sales, customer satisfaction report. Sales facilities part of Honda Atlas is to facilitate its
loyal customer and overcome customer’s ambiguity, buying conflict and provide them maximum
information before purchase. Honda Atlas is also very conscious in sales as well as Customers
Satisfaction.
All the authorized dealerships in Pakistan are a source of customer satisfaction. The after
sales are supported by the immaculate service and the availability of spares at competitive prices
for every car sold. To facilitate the customers for any assistance they require, Honda Atlas has a
separate department, called Customer Relations, at the head office. This department is supported
by the subsequent Customer Relations Officers at all dealerships. The purpose of Customer
Relations Department and Customer Relations Officers is to enable our customers in getting any
sort of help required by them.
Services
The product sold is not means that close the window for customer now, it is beyond that
further after sales customer has largely engaged to deal in service and Spare parts aspect.
HACPL is a customer service conscious company, for which it is always looking for avenues to
develop further relations with the customers who have already purchased the Product. Honda
Atlas considers purchase of any product as the beginning of relations with customers. To prolong
22
this relationship and encourage the customers to keeps on coming to the dealers, providing
customer service the reason for this facility is to stress on the importance of periodic
maintenance. Periodic maintenance is essential for every existing if this is performed regularly as
per the maintenance schedule the car is trouble free and life of car increases by many years. For
these free services the labor is not charged, where as the customer has to pay for only the
consumable like engine oil, oil filter, etc.
HACPL is providing regular trainings to the dealers' technicians. The trainings cover all
aspects of the cars and related Products including the periodic maintenance, diagnostics, trouble
shooting and repairs according to HONDA standards. From this we want to facilitate the
customers in maintaining their cars in top-most condition and enjoying the comfort and
performance of the luxury vehicles they own. It is our endeavor to have uniform service
standards made available at all dealerships in accordance with the international Honda standards.
We consider the properly maintained vehicles not only to be a source of satisfaction to our
customers; they also increase the sale value of their car.
Spare Parts:
The Spare parts element is heavily concern and involved with brand loyalty of Honda
cars because cost of spare parts also consider when customer want to buy the car, customers are
also price conscious, availability of spare parts and as well as quality of spare parts. Honda spare
parts are expensive because they have to import those form Malaysia.
Honda Atlas always follow those strategies which they can gain customer most attention
to its brands. Honda Atlas always make possible to be genuine and look genuine. Honda attract
its customer in under the statement that “Buy Honda genuine parts from Honda dealers and enjoy
6 month's Honda Warranty, the Honda warranty can vary product to product and contribute to
the country’s economy and enjoy the satisfaction of using 100% genuine Honda Parts. But if
customers buy the parts from open market; most probably is that customer may be buying
smuggled parts and thus committing a moral crime and robbing your country from precious
revenue, customer may unable to claim but if customer buy from Honda authorized Dealer so the
part will be 100% genuine, customer has no need to buy from open market, the trust between
customer and Honda Dealers become long lasting etc. It is the Honda Atlas’ aim to be No.1 in
customer satisfaction in all three S, Sales, Service and Spare Parts and two S in the same time.
23
IFE Matrix:
Key internal factors Weight Rating Weighted score
STRENGHTS
Brand Image 0.05 4 0.2
Advance Technology .1 4 0.4
Customer Loyalty 0.06 4 0.24
Strong R&D 0.08 4 0.32
Greater Fuel Efficiency 0.08 4 0.32
Environment Friendly Cars 0.05 4 0.20
Safety 0.03 4 0.12
Smoother Drive 0.02 4 0.08
TQM 0.06 4 0.24
Global Models 0.03 3 0.09
WEAKNESS
Dealership Network 0.1 1 0.1
Costly Spare Parts 0.07 1 0.07
Limited Product Line 0.04 2 0.08
Lack Of Utilization Of Capacity 0.06 1 0.06
Shortage Of Trained Technicians Due To
Complex Sensor Technology
0.03 2 0.06
High Cost Of Production 0.04 1 0.04
Maintenance Cost 0.05 1 0.05
Resale Value 0.05 2 0.10
TOTAL 1 2.77
The Matching Stage
The strategy is defined as the match an organization makes between its internal resources and
skills and the opportunities created by its external factors. The matching strategy formulation
framework consists of five techniques that be used in any sequence:
? The SWOT matrix
? The SPACE matrix
? The BCG matrix
? The IE matrix
? Grand strategy matrix.
24
These tools rely upon information derived from input stage to match the external
opportunities and threats with internal strengths and weaknesses.
In this project, we will be using only the SWOT matrix for the determination of the
alternative strategies.
The SWOT matrix
A scan of the internal and external environment is an important part of the strategic
planning process. Environmental factors internal to the firm usually can be classified as strengths
(S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or
threats (T). Such an analysis of the strategic environment is referred to as a SWOT.
The SWOT analysis provides information that is helpful in matching the firm's resources
and capabilities to the competitive environment in which it operates. As such, it is instrumental
in strategy formulation and selection. The following diagram shows how a SWOT analysis fits
into an environmental scan:
The Decision Stage
QSPM (Quantitative Strategic Planning Matrix):
In order to reach a decision based on objectivity and priority-based analysis, one of the
most frequently used techniques is the QSPM. This technique enables us to measure the
attractiveness of feasible alternative actions. QSPM objectively indicates which alternative
strategies are the best
QSPM uses input from stage 1 and matching results from stage 2 analyses to decide
among alternative strategies. Like other strategy formulation analytical tools, QSMP requires
good intuitive judgment.
In the stage three of Honda Atlas Cars, there were three alternative strategies that we
found very attractive. The data collected from the external and internal audit, and the matching
done from the opportunities, threats, weaknesses and strengths brought us to consensus of
selecting these alternative strategies. We selected three strategies in total
1. Increase in the number of Dealership network
2. Product Diversification
3. Attaining economies of scale
25
The increase in the number of dealership network is chosen because; Honda had a
smallest dealership network against his competitors Indus motors and Pak Suzuki. Honda is
unable to access a number of potential customers due to a small dealer ship network.
The next alternative strategy that is built with a consensus was to do product
diversification. Honda has a small market share as compared to Indus motors and Pak Suzuki.
One of the major reasons was the product diversification by its competitors. If Honda is able to
do product diversification, it can increase its sales; capture the market share on the bases of
strong brand image and customer loyalty.
Attaining the economies of scales was another highly preferred alternative strategy that
could help the company to increase its income and improve its performance. Honda has done
expansion of its company, but it has not been using its plants up to its required optimal capacity.
Due to this, the company is facing high cost as well. So if the company mass produces the cars
and use the plants to its maximum capacity, it will be able to decrease the cost. The only
variables affecting this strategy are the marketing promotions done by the company, and sale of
the manufactured cars.
Conclusion:
? The weights taken for the following factors were from the EFE matrix and IFE matrix.
? The rating is done on the bases of intuition, brainstorming and consensus at the end
among the group members.
? After the comparison of above-mentioned strategies and their total attractiveness score, it
is more appropriate and feasible for an organization to follow the product diversification
strategy.
? In this context, the company will ha to put new production plants in order to produce new
cars. This will include the arrangement of heavy budget and extensive marketing of the
new products. Since the monetary policies of the country are tight at present, the
company should arrange the capital in form of equity by floating the shares in the market
or wait for the interest rates to fall down as the economic and inflationary situation of the
country stables.
? The products will contain product line of small cars i.e. 800 c.c. and below.
26
27
Alternative strategies Increase in the number of
Dealership network
Product diversification Economy of scale
External factors W
ght
AS TAS AS T
AS
AS TAS
Opportunities
6. People’s awareness about Global Warming 0
.05
1 0.05 4 0.20 2 0.10
7. Customer desire for hybrid and fuel efficient vehicles 0
.08
3 0.24 4 0.32 2 0.16
8. Increase in technology in automobiles forces customers
to return to dealer for service
0
.1
4 0.40 3 0.30 1 0.10
9. Introduction of ethanol fuel in Pakistan 0
.02
3 0.06 4 0.08 2 0.04
10. Increase in demand of small vehicles 0
.05
3 0.15 4 0.20 2 0.10
Threats
11. Recession in the economy 0
.05
2 0.10 3 0.15 1 0.05
12. WTO (World trade Order) opening local markets for
global competition
0
.02
2 0.04 4 0.08 3 0.06
13. Entry of reconditions cars 0
.13
-- -- -
-
-- --
14. Political instability 0
.05
-- -- -
-
-- --
15. Tightening monitoring Policy 0
.06
4 0.24 3 0.18 2 0.12
16. Energy crises 0
.1
4 0.40 2 0.20 1 0.10
17. Depreciation of rupee against dollar 0
.1
3 0.30 4 0.40 2 0.20
18. Increase in Petroleum and steel prices. 0
.09
1 0.09 3 0.27 4 0.36
19. Inflation 0
.07
2 0.14 4 0.28 3 0.21
20. Declining quality of the infrastructure in the country. 0
.03
- -- -- -
-
-- --
Total 1
STRENGHTS
1. Brand image 0
.1
4 0.40 3 0.34 2 0.20
2. Advance technology 0
.1
2 0.20 4 0.40 3 0.30
3. Safety 0
.08
1 0.08 4 0.32 2 0.16
4. Environmental friendly 0
.07
1 0.07 4 0.28 2 0.14
5. Customer loyalty 0
.06
4 0.24 3 0.18 2 0.12
6. Strong R&D 0
.1
1 0.10 4 0.40 3 0.30
7. Fuel efficiency 0
.09
1 0.09 4 0
.36
2 0.18
8. Total quality management 0
.05
3 0.15 4 0
.20
2 0.10
9. Timely new models 0
.06
4 0.24 3 0
.24
1 0.06
WEAKNESS
1. Dealership network 0
.08
4 0.32 2 0
.16
3 0.24
2. Costly spare parts 0
.05
1 0.05 3 0
.15
4 0.20
3. Market share and profitability 0
.08
3 0.24 4 0
.32
2 0.16
4. Limited product line 0
.03
1 0.03 4 0
.12
2 0.06
5. Shortage of trained technicians due to Complex sensor
technology
0
.05
3 0.15 2 0
.10
1 0.05
TOTAL 1 4.57 6
.19
3.87
28
SWOT Analysis of
HONDA Atlas Cars
STRENGHTS
1. Brand image
2. Offering Global models
3. Smoother drive as compare to
its competitors
4. Timely new models
5. Decentralized environment
6. Advance Technology
7. Safety
8. Environment Friendly
9. Customer loyalty
10. Highly loyal, committed and
motivated employees
11. Greater fuel efficiency
12. TQM
13. Friendly working environment
14. Advertisement
15. Strong human resource
16. Reliability
17. CSR
18. Strong R & D
WEAKNESS
1. Dealership Network
2. Resale value
3. Maintenance cost
4. Costly Spare parts
5. Limited product line
6. Shortage of trained
technicians due to Complex
sensor technology
7. Lack of utilization of
capacity
8. Market share and
profitability
9. High cost production.
OPPURTUNITY
1. People’s awareness about
Global Warming
2. Customer desire for hybrid
and fuel efficient vehicles
3. Increase in technology in
automobiles forces
customers to return to
dealer for service
4. Introduction of ethanol fuel
in Pakistan
5. Increase in demand of small
vehicles
SO STRATEGY
1. Promotion of products on the
bases of environmental
friendliness and fuel efficiency.
(S1, O1), (S2, O2, O4)
2. Greater focus on the production
of eco - friendly cars. (S6,S8,
O2)
3. Availability of trained technical
staff at two S and three S
dealers. ( S15, O3 )
WO STRATEGY
1. Increase the dealership
networks all over the
country. (W1,W6, O3)
2. Availability of trained
technical staff at two S and
three S dealers. (W6, O3).
3. Introduction of flexible fuel
vehicle and going for
product diversification(W5,
O4, O5)
THREATS
1. Recession in the economy
2. WTO (World trade Order)
opening local markets for
global competition
3. Entry of reconditions cars
4. Political instability
5. Tightening monitoring
Policy
6. Energy crises
7. Depreciation of rupee
against dollar
8. Increase in Petroleum and
steel prices.
9. Inflation
10. Declining quality of the
infrastructure in the
country.
ST STRATEGY
1. Utilize research and
development to minimize spare
parts price.(S18, T1)
WT STRATEGY
1. Localization of supplies
and raw material (W9, W4,
T1, T7).
2. Downsizing ( W9, W8, T1)
3. Strict employee policies to
contain overhead and
unfavorable economic
conditions
4. Mass Production
5. Influence and coordinate
government institutes to
ensure consistent power
supply and minimum break
down time. (T6,W7)
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