For creating a healthy and sustainable environment, it is important to fully understand corporate operations culture and industrial competiveness. Honda is unable to penetrate Europe despite its successes in North America. Since it damaged Honda’s reputation, the decision by the company to access Europe via Rovers proved ineffective (Hill 2002). The firm should invest in market research to understand the market and create goods to fill that niche, even though it is in danger of its survival.
Summary of key issues
Honda Europe’s ability to stay viable has been affected by the three main challenges highlighted in this case study. Market entry strategy, competition and dynamic competitiveness are all issues. Cultural considerations also need to be considered. Honda entered Europe through a partnership agreement with Rover. The partnership with Rover was unsuccessful due to Rover’s poor image and insufficient market knowledge. It is more difficult to get into new markets if you don’t understand market dynamics. Another concern is the effect of increasing competition on corporate sustainability (David and al., 2020). Honda is facing operational challenges in Europe as a result of the saturated market for automobile makers and automotive goods. Many European cars, including BMW, Audi and Land Rover have significant brand equity. Honda’s plans to penetrate the market were hampered by fierce market competition. Another problem is how culture affects business sustainability. In order to be able to compete in the global marketplace, institutions must improve their cultural competency by understanding the consumer and market dynamics in their target markets. Honda failed to understand the differences in cultural contexts across European markets and was therefore unable to represent the European market.
Core concepts applied
Institutions use different strategies to enter new markets. Entry strategies include strategic partnerships, joint ventures, franchising, acquisitions, licenses, mergers, and licensing. This model of strategic alliance allows the organization to distribute risks between different institutions. It also permits smaller partners greater financial returns. Strategic alliances allow companies to leverage market hierarchy and corporate connections to create price mechanisms that increase profits and sales volume. Joint ventures are formed when two companies form a partnership, which results in the creation of an independent third management institution. Companies that want to share the market entry risks and costs can use joint. A joint venture strategy allows firms to bring together their resources and achieve the same goal. Honda’s decision to create a joint venture was feasible and would enable the institution to achieve greater market sustainability. The firm was unable to succeed because of its partnership with an institution which did not understand the European market and had a poor reputation.