SWOT analysis of Honda Canada Relaunch

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University of Ottawa *

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MKT0018

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Marketing

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Feb 20, 2024

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SWOT analysis of Honda Canada Relaunch- STRENGTHS OF HONDA CANADA: RELAUNCHING HONDA FIT Diverse Revenue models - Over the years Honda Canada: Relaunching Honda Fit has ventured into various businesses outside the Sales & Marketing sector. This has enabled the company do develop a diversified revenue stream beyond Sales & Marketing sector and Sales & Marketing segment. Track record of innovation - Even though most players in the Sales & Marketing strive to innovate, Honda Relaunch has successful record at consumer driven innovation. First mover advantage in the increasingly crowded market place. The new products are rapidly increasing Honda Relaunch market share in the Sales & Marketing industry. Strong financial position and health can allow the firm to make further investments. Access to the suppliers that offer raw material at a lower cost can improve the overall business efficiency. WEAKNESSES OF HONDA CANADA: RELAUNCHING HONDA FIT High cost of replacing existing experts within the organization. Few employees are responsible for the Honda Relaunch's knowledge base and replacing them will be extremely difficult in the present conditions. Extra cost of building new supply chain and logistics network - Internet and Artificial Intelligence has significantly altered the business model in the Manufacturing, Marketing industry and given the decreasing significance of the dealer network Honda Relaunch has to build a new robust supply chain network. That can be extremely expensive. Declining per unit revenue for Honda Relaunch - competitiveness in the industry name industry is putting downward pressure on the profitability. A starting guide to manage this situation for company name is – objectively assessing the present value propositions of the various products. Lack of organisational commitment and high employee turnover can increase recruitment costs and reduce organisational productivity. High job stress and consequent low workers’ morale makes the workforce less productive. OPPORTUNITIES - HONDA CANADA: RELAUNCHING HONDA FIT-

Lowering of the cost of new product launches through third party retail partners and dedicated social network. Honda Relaunch can use the emerging trend to start small before scaling up after initial success of a new product. - Lower inflation rate - The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Honda Relaunch. This will increase the consumption of Honda Relaunch products. - Accelerated technological innovations and advances are improving industrial productivity, allowing suppliers to manufacture vast array of products and services. This can help Honda Relaunch to significantly venture into adjacent products. - Increasing government regulations are making it difficult for un-organized players to operate in the Manufacturing, Marketing industry. This can provide Honda Relaunch an opportunity to increase the customer base. - Opportunities in Online Space - Increasing adoption of online services by customers will also enable Honda Relaunch to provide new offerings to the customers in Manufacturing, Marketing industry. - Customer preferences are fast changing - Driven by rising disposable incomes, easy access to information, and fast adoption of technological products, customers today are more willing to experiment / try new products in the market THREATS IN HONDA CANADA: RELAUNCHING HONDA FIT CASE STUDY - Saturation in urban market and stagnation in the rural markets - For Honda Canada: Relaunching Honda Fit, this trend is an ongoing challenge in the Sales & Marketing segment. One of the reasons is that the adoption of products is slow in rural market. Secondly it is more costly for Honda Canada: Relaunching Honda Fit to serve the rural customers than urban customers given the vast distances and lack of infrastructure. - Commoditization of the product segment - The biggest challenge for Honda Relaunch and other players in the industry is the increasing commoditization of the products in Manufacturing, Marketing industry. - Changing political environment with US and China trade war, Brexit impacting European Union, and overall instability in the middle east can impact Honda Relaunch business both in local market and in international market. - Growing technological expertise of local players in the export market - One of the biggest threat of tie-up with the local players in the export market for Honda Canada: Relaunching Honda Fit is threat of losing IPR. The intellectual property rights framework is not very strong in emerging markets especially in China.

- Changing demographics - As the baby boomers are retiring and new generation finding hard to replace their purchasing power. This can lead to higher profits in the short run for Honda Relaunch but reducing margins over the long run as young people are less brand loyal and more open to experimentation. - Competitors catching up with the product development - Even though at present the Honda Relaunch is still leader in product innovation in the Sales & Marketing segment. It is facing stiff challenges from international and local competitors. There are four major elements / components of SWOT analysis - Strengths, Weaknesses, Opportunities, and Threats. Honda Relaunch can divide these four elements into two broad categories - Internal Factors and External Factors. Opportunities Threats Strengths Strength Opportunities (SO) Strategies Leveraging brand recognition in new segments Strength Threats (ST) Strategies Investing into R&D to thwart Sales & Marketing industry disruptors. Weaknesses Weakness Opportunities (WO) Strategies Investing into customer oriented services and supply chain Weaknesses Threats (WT) Strategies Get out of the business and focus on growth areas Research Problem/Objective : Explanation: The research problem or objective for the potential marketing plan for Honda Fit is to determine the most effective strategies to relaunch the Honda Fit in Canada and increase its market share. The objective is to identify the target market, understand customer preferences and needs, and develop a marketing plan that positions the Honda Fit as a desirable and competitive choice in the Canadian automotive market. Information Needed for Marketing Plan: To create an effective marketing plan, the following information is needed: Explanation: 1. Market analysis: Understanding the current state of the Canadian automotive market, including trends, competitors, and customer preferences. 2. Customer analysis : Identifying the target market segments, their demographics, psychographics, and purchasing behavior.

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3. Competitive analysis : Evaluating the strengths and weaknesses of competitors in the small car segment and identifying opportunities for differentiation. 4. Product positioning: Determining the unique selling proposition (USP) of the Honda Fit and how it can be effectively communicated to the target market. 5. Marketing strategies : Developing strategies for product pricing, distribution, promotion, and branding that align with the target market's preferences and needs. Secondary Research Plan: Secondary research can provide valuable information for the marketing plan. The following secondary research methods can be utilized: Explanation: 1. Market reports and industry publications : Analyzing existing reports on the Canadian automotive market, small car segment, and consumer trends. 2. Competitor analysis: Studying publicly available information on competitors' marketing strategies, product offerings, and market share. 3. Online surveys and customer reviews: Gathering insights from online surveys and customer reviews to understand customer perceptions and preferences. 4. Government data : Utilizing data from government sources on car sales, market trends, and consumer behavior. Primary Data Requirement: Explanation: Primary data may be required to gain specific insights into the target market's preferences and needs. A primary research study, such as surveys or focus groups, can provide in-depth information about customer perceptions, buying behavior, and desired features in small cars. Step 3/3 Unique Selling Proposition (USP): Explanation: The unique selling proposition of Honda Fit can be its combination of versatility, fuel efficiency, and advanced safety features in a compact size. It offers ample cargo space, excellent fuel economy, and innovative safety technologies, making it an ideal choice for urban dwellers and small families. Target Market:

Explanation: The target market for Honda Fit can include urban dwellers, young professionals, small families, and individuals seeking a practical and efficient small car. This target market was chosen based on their preference for compact cars with good fuel economy, versatility, and safety features. Segmentation, targeting, and positioning (STP) are crucial for identifying and evaluating market opportunities as they allow for a focused approach to understanding customer needs, tailoring marketing efforts, and positioning the Honda Fit as a compelling choice within the competitive small car segment. Final answer In conclusion, the research problem or objective for the potential marketing plan for Honda Fit is to determine effective strategies to relaunch the Honda Fit in Canada and increase its market share. To create the marketing plan, information is needed regarding the market analysis, customer analysis, competitive analysis, product positioning, and marketing strategies. Secondary research methods such as market reports, competitor analysis, online surveys, and government data can provide valuable insights. Primary data may also be required through surveys or focus groups to gain specific insights into the target market's preferences and needs. The unique selling proposition of Honda Fit lies in its versatility, fuel efficiency, and advanced safety features. The target market can include urban dwellers, young professionals, small families, and individuals seeking a compact and efficient vehicle. Segmentation, targeting, and positioning (STP) are crucial for identifying and evaluating market opportunities for Honda Fit by understanding customer segments, selecting the most attractive target market, and positioning the product effectively. The case study investigates the challenges faced by Honda Canada in relaunching the Honda Fit, an entry-level car, in 2014 with millennials as the primary target customer segment. The study sharply contrasts millennials with older generations concerning their spending habits, preferences, and intrinsic valuation of vehicle ownership. The case identifies major problems regarding the development of an effective marketing strategy and communication medium to connect and resonate with millennial age group.

**SWOT Analysis:** **Strengths:** 1. Strong global brand recognition and reputation for safety, quality, and reliability. 2. Wide product range, including both motorcycles and cars. 3. Extensive manufacturing capabilities and global presence. **Weaknesses:** 1. Perception among millennials as a "boring brand for old people." 2. The general reluctance of millennials to own a car as they value experiences over possessions. 3. Honda Fit's sales growth was negative for five out of six years since its 2008 launch. **Opportunities:** 1. Growing millennial market segment which is becoming a compelling target for car manufacturers. 2. Technological advancements enabling better and more targeted marketing approaches. 3. Growing market for energy-efficient and smaller cars, which suite the millennials' preferences. **Threats:** 1. Intense competition in the auto industry. 2. Economic uncertainties affecting car ownership, especially among debt-ridden millennials.

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3. Shifts in societal norms and expectations, with expanding popularity of ride-sharing services. **Issues in the Case:** The major issues observed in the case study are: 1. The Honda brand's perception among millennials as old and boring, which poses a challenge in engaging this market segment. 2. Since the millennials have demonstrated a general reluctance to own a car, so persuading them into a significant purchase like a car is considerably difficult. 3. Deciding on the right advertising and promotion mediums to effectively reach and connect with the millennial cohort. **Proposed Solution:** A feasible solution might reside in three central spheres: 1. **Product Positioning**: Reinvent the Honda Fit as not just a car but a tool for experiences. Highlight features like fuel efficiency, tech-savviness, affordability, and versatility, which hold appeal for millennials. 2. **Brand Image Revitalization**: Launch campaigns that align Honda with youthfulness, adventure, and sustainability. Collaborative partnerships with influential figures admired by millennials could help alter perceptions. 3. **Marketing Tactics**: A strong digital presence is crucial, given millennials substantial reliance on the internet.

SWOT analysis of Honda Canada Relaunch

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