Soichiro Hondaâ€™s Business Strategies For Growing His Small Business Into Global Corporation
How was Honda, an ordinary apprentice boy, able to create the multi billion dollars business empire that the Honda Motor Company is today? What were the strategies that he implemented that brought him success, and took his small business into every part of the world?
That is what I want to reveal to you in this article â€“ some golden secrets of business success as proven by Honda. Be aware that these strategies are still very much relevant to business success today, and you can freely apply them to your business.
Whether you are running a small, medium, or large business, these strategies are for you, and your business will definitely experience a monumental growth if you apply them â€“ Iâ€™m damn sure of that!
Hondaâ€™s Business Strategy One: Knowledge is Key To Business Success
To achieve success in business, and indeed anything in life, adequate knowledge of the thing is needed.
Soichiro Honda got himself thoroughly prepared for his business before setting out by getting the needed knowledge. As an apprentice automobile mechanic for six years, Honda was able to study the automobile industry from the basics, acquiring great deal of knowledge about the workings of machines, and the common faults in automobiles.
And when he was having difficulty making piston rings, he realized he needed a higher knowledge, and he went to get it at a technical school.
The huge knowledge of automobile machines, and the problems consumers have with their motorcycles, without doubt enabled Honda to create motorcycles that are of high quality, light, easy, fun and exciting to ride; as well as effortlessly to maintain, and affordable.
These qualities in Honda motorcycles, made possible by Mr. Hondaâ€™s knowledge of the industry doubtlessly made his motorcycles a global success.
As with Honda, your knowledge of your industry can actually be one of your strongest competitive advantages, as it will enable you to create products and services that meet and even surpass what your market want. It will also enable you to create systems to run your business efficiently and successfully.
To succeed in business therefore, it is important to have adequate knowledge of your industry, which you have to continue to update to remain abreast of modern trends.
Hondaâ€™s Business Strategy Two: Expanding Into Other Lands
Another strategy that Honda implemented in his business that made it hugely successful was to expand it into foreign lands. Hondaâ€™s coming to the US market allowed it to explore a massive market with great purchasing power. This enabled him to sell much more of his motorcycles than would have been possible if his business had remained in Japan only.
To hit success big time and grow your small business, do not restrict your operation only to your immediate environment, for your product or service may even be more valuable and needed by people in other places than you know. It is therefore important to include expansion strategy in your business plan, and determine where, how, and when to spread.
Expanding your business undoubtedly brings huge reward as your sales are enormously increased and your business firmly rooted.
Hondaâ€™s Business Strategy Three: Identifying Virgin Lands
The ability to see good business opportunities to profit before everyone else does is an asset that every successful business owner has and uses to dominate their industry.
When everyone thought the US market was a â€˜no go areaâ€™ to sell motorcycles, because of the low image of motorcycles then in the US, the Honda Motor Company thought the opposite. They saw a huge market in the US to develop and dominate.
And in just five years Honda had achieved their dream in the US. They had replaced the negative image of motorcycle with that of fun and excitement, making millions of Americans happily desiring to own theirs.
As a business owner or manager, you must develop the ability to quickly spot business opportunities that other people have not seen, and go for it. This will allow you to be first choice on peopleâ€™s minds when that business opportunity fully matures.
Hondaâ€™s Business Strategy Four: Avoiding Direct Competition
It is extremely unwise to come into a market newly with similar product or service as the market leaders. Your small business may not have the resources to knock them off the position they are already occupying in the consumersâ€™ minds. And if competition is stiff in that industry, they could easily and mercilessly over run your business.
But why go through all that trouble when what you should do is look for a niche and differentiate your business and what you are offering clearly from the competition.
That was exactly Hondaâ€™s strategy for entering the US market. They were not trying to be another large-displacement models, which were already in the US market, but a small, affordable, easy-to-live-with machine, that provided transportation and excitement.
Hondaâ€™s Business Strategy Five: Having A Business Philosophy
Hondaâ€™s success from a small business to a world giant wouldnâ€™t have been possible without their business philosophy, which everyone in the company knew and believed in.
Everyoneâ€™s work in Honda was guided by the business philosophy:
â€œMaintaining an international viewpoint, we are dedicated to supplying products of the highest efficiency, yet at a reasonable price for worldwide customer satisfaction.â€ The philosophy helped them to know exactly what kind of products they want to make and who is it for.
With this philosophy, every worker knew he or she is working to satisfy the global market and so must upgrade his or her performance to international standard, as well as to keep an eye on cost of production.
Having a business philosophy is a must if you want your work force to be galvanized into a winning team, working with a singular motive.
Hondaâ€™s Business Strategy Six: Defining Your Target Customers
A business owner who is crystal clear about who their customers are will surely be successful. It will enable him or her to concentrate his or her resources in understanding the needs of the customer, and to look for how best to satisfy them.
Naturally, the customer will pick such businesses first before others, because they know, and meet the needs of the customer more than other businesses.
Applying this strategy, Honda was very clear about who their customers were: people who wanted small, light, easy to handle and maintain two-wheeled vehicles.
Know that it is not possible for you to sell your product or service to everybody in your market. Donâ€™t even attempt it because there is no such product that everybody needs!
You must have a clear understanding and definition of who your product or service is exactly for. That way, you will be focused at really satisfying those people. And consequently, you will also reach success just like Honda did.
Hondaâ€™s Business Strategy Seven: Setting Big, Achievable Goals
The Honda Motor Company was out to sell a staggering 12, 000 motorcycles a month even though they were then new to the US market. Although they did not achieve this immediately, they were however motivated by this goal, and four years later they had even surpassed it.
Donâ€™t limit yourself, but set big and achievable goals. This will give you the purpose and the motivation to work harder. You will be amazed to see how much more you can achieve if you sought more. There is a wise saying that says, â€œAim at the moon, if you miss you will land on one of the stars.â€ Apply this strategy and see your business jumping to greater heights.
Hondaâ€™s Business Strategy Eight: Preparing For Delayed Success
Though the ultimate desire of any business owner, be it small or large, is to be successful quickly, the success however may not come that soon. There may be initial set back, but if you keep pushing, you will get there.
The Honda Motor Company was not discouraged for venturing into the American market even though they made a loss in their first year of operation because they had a strategy in place to expect initial loses, with their eyes fixed on the possible future gains.
Hondaâ€™s Business Strategy Nine: Giving Your Customers Great Quality And Service
Giving their customers high quality products complemented by great service have been one of Hondaâ€™s most effective strategies in taking their business to the pinnacle of success in their industry.
Mr. Honda himself revealed this strategy in his business when, while addressing his dealers from the US in 1961, he said, â€œDealers must give their customers the very best service. Quality and service are like the two wheels of a motorcycle, with one, the vehicle will failâ€¦. This is the reason we have been able to draw away from our business rivals.â€
Whatever business you are in, and whether itâ€™s a small business or big, this is a strategy you must never fail to inculcate in it if you desire success.
Hondaâ€™s Business Strategy Ten: Demonstrating The Efficiency Of Your Product To Consumers
It is not enough to state what your product can do in an advertisement; publicly showing proof of its strength and abilities is a more effective advertisement.
The Honda Motor Company realized this strong marketing strategy and took advantage of it to clear American consumersâ€™ minds about Japanese products being inferior when in 1962 three Hondaâ€™s motorcycles survived a week-long-24-hour-per-day Maudes Trophy endurance test in England.
If you really want people to give you attention and buy your product or service, you have to find a way to show them, or to demonstrate to them how effective and efficient it is, rather than just saying it.
Hondaâ€™s Business Strategy Eleven: Advertising, A Major Key To Success
The impact of advertisement to business success cannot be over emphasized. People need to first be aware of what you are offering before they can decide whether to patronize you or not. It should therefore be of top priority in your plans and budget to advertise your business exhaustively.
However, it is important to come up with strategies that will make your advertising efforts effective and worth the money you expend. For example, you will need to be sure how much impact the media you are choosing for any campaign will have, and the message you are communicating to the public.
Hondaâ€™s advertising strategy in the US was to use media, such as general interest magazines, that could reach a huge number of the population, and to change their unfavorable mindset about using motorcycles by making them see motorcycles as a fun and exciting thing to have.
And when the opportunity to reach even greater number of their target customers presented itself during the 1964 Academy Awards telecast, American Honda didnâ€™t fail to seize it, even though at a very high cost, because it fell right on their strategy to reach a massive audience with their message.
As a small business owner, you may not have enough advertising budget to hire an agency to help you design your campaigns, and to advertise on big platforms like the Academy Awards, but there are lots of smaller and far cheaper platforms you can advertise your product on.
Sometimes, you may be able to get free advertising for your business. I have written about how to get free advertisement before, you can read it here: How To Get Free Advertisement.
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