10180459_VUDUCTAI_BS_A1.

Table of Contents
Introduction.....................................................................................................3
Major Findings................................................................................................4
Task 1: Present the business you have selected for brief............................4
1.1 Describe briefly Honda Vietnam (motorcycle industry)...................4
1.2. Vision, mission, objectives and strategic goals................................5
Task 2:.........................................................................................................6
2.1 Analysis of the company's internal climate and capabilities using
fitting structures......................................................................................6
2.2 Assess the internal environment critically......................................10
Task 3: Macro Environmental assessment................................................14
3.1. Honda Vietnam STEEP..................................................................14
3.2 Critical assessment of macro-environmental..................................16
Task 4: Analysis of industry structural.....................................................17
4.1. Five-Force Framework of Porter....................................................17
4.2. Establish suitable Honda Vietnam strategies in the future.............21
Task 5: The Company’s strategic directions.............................................23
1. Strategical preparation...................................................................23
2. Operating plan...............................................................................26
Conclusion.....................................................................................................28
References.....................................................................................................29
Introduction
In order for each company to develop further, it requires a company plan, both to
develop their strengths and to resolve their limitations. There are also long-term
strategies for their corporate targets to be accomplished. In this report Michael
Porter will be chosen as five forces to evaluate Honda Vietnam' professionalism
and repute in order to examine the external environmental impact.
Major Findings

Task 1: Present the business you have selected for brief

1.1 Describe briefly Honda Vietnam (motorcycle industry)

Formed in 1996, Honda Vietnam is a joint venture of two major goods

sectors – motorcycles and automobiles-between Honda Motor Company
(Japan), Asian Honda Motor Company (Thailand) and Vietnam Machinery
and Agricultural Machinery Corporation. Honda Vietnam has been
constantly expanding and expanding one of Vietnam's leading motorcycle
production firms after over 20 years in Vietnam and a prestigious
automotive maker on the market. Start in the automobile sector in 2006,
Honda Vietnam was successfully formed in August 2006 and launched its
first model, Honda Civic, after just over a year, successfully its factory,
dealer network, sales training programs, facilities, and safe conduction of
dealers. , Honda CR-V in December 2008 and in June 2013 Honda City. Up
to now Honda Vietnam provided 3 models to satisfy customers' diverse
needs, such as big, medium, and smaller sedans, SUVs and MPVs, for
Vietnam's automotive industry. Honda Vietnam has constantly grown to
bean, for more than 20 years, one of Vietnam's largest motorcycle
production firms and one of Vietnam's prestigious automotive
manufacturers. Start in the automobile sector in 2006, Honda Vietnam was
successfully formed in August 2006 and launched its first model, Honda
Civic, after just over a year, successfully its factory, dealer network, sales
training programs, facilities, and safe conduction of dealers. , Honda CR-V
in December 2008 and in June 2013 Honda City. Up to now Honda Vietnam
provided 3 models to satisfy customers' diverse needs, such as big, medium,
and smaller sedans, SUVs and MPVs, for Vietnam's automotive industry
(Honda.com.vn).

Honda Vietnam provides the automotive market with different models to

meet the diverse needs of consumers. In the domestic market, Honda
Vietnam is competing with other companies such as Suzuki, Ford, Toyota,
Mercedes, Mazda, etc. Because this is a subsidiary company in Vietnam, it
will only focus on analyzing the domestic market of Honda Vietnam.

1.2. Vision, mission, objectives and strategic goals.

Vision
Bring "life free, safe and comfortable", replicate everyone's joy. Leading social
development and completing the mission of improving the quality of life
(Honda.com.vn).

Mission
Aim to deliver the highest quality goods at the highest prices for consumers world-
wide, with a national context. (Honda.com.vn).

Strategic goals

Even after society switched to "Automated" times Honda Vietnam remains the
leading firm.

Objectives

Providing outstanding products:

- Technology in creativity
- Great service for customers

Security of the environment:

- Particles environmentally safe
- Works and campaigns incorporate

Improving security:
- Foster the use of casks by media
- Water fact reveals protection
Honda Vietnam has effectively a cohesive, clear and very precise vision, mission
and strategic objectives. The goal of Honda Vietnam is focused on consumption,
but consumers and employees also have a simple challenge (put their enjoyment
above). The vision of Honda Vietnam is straightforward, concisely and
comprehensible. The strategic priorities and targets of Honda Vietnam are indeed
very detailed and follow specific SMART standards that are measurable,
achievable, realistic and time-bound.

Task 2:

2.1 Analysis of the company's internal climate and capabilities using fitting structures

Value chain

Primary activities:

 Inbound logistics: Strong relationships with suppliers are critical as support

 for acquiring, storing and delivering the product is required. Honda faces
diverse problems in product production processes without analyzing the
integrated logistics. In-bound logistics research allows an organization to
concentrate on all facets of transition from raw materials to finished goods.
Examples of inbound logistics include the processing of raw materials, the
preparation of inputs and the internalization of raw materials and output
components.

 Operations: When the raw material is present Honda becomes able to

process and launch the raw material into the finished product, the value of
evaluating operating activities increases. For eg, machining, processing,
installation and testing are operational tasks. Repair and servicing of
facilities is also protected under this category.

It encompasses production and service activities. For enhancing

competitiveness, optimizing effectiveness and ensuring Honda's
competitive performance, it is important to evaluate the operational
activities. Honda will achieve steady financial performance, improve
profitability and provide a solid base for competitive advantages thanks to
higher productivity.

 Outbound logistics: Outbound logistics involve practices that distribute the

product through numerous intermediaries to the client. Any logistics
operations are inventory management, warehousing, arranging, sorting of
shipments, transport and distribution. To discover a strategic edge and fulfil
its market development goals, the organization should evaluate and
improve its outgoing logistics.

Because outbound operations with optimum costs and the distribution

 procedures have negligible negative impact on efficiency are handled in a
timely manner, this maximizes customer loyalty and enhances the business'
growth potential. When its offered goods are perishable and need fast
distribution to the end consumer, Honda should assign particular emphasis
to its value chain outcome activities.

 Marketing and sales: Honda would demonstrate at this point the features
and distinction of the products sold to reassure consumers that its offer is
superior to rivals. It is not until Honda engages in marketing and
promotional efforts that the production of a decent product at fair cost and
with distinguishing features generates profit. Sales managers and
advertisers play an important part in this.

Any examples of Honda's promotions and revenue are salespeople, ads,

promotional campaigns, pricing, channel selection and quoting. In order to
plan its promotion and sales operations, the firm should use the marketing
funnel approach. Depending on Honda's corporate priorities, brand
imagery, strategic dynamism and current market place, marketing
campaigns can be forced or pulled in their existence.
The brand stock of Honda can be developed and helped to emerge from the
competition by successful and wisely coordinated marketing activities.
Honda must however, resist making misleading promises on product
characteristics that the manufacturing department cannot meet. It shows the
importance of integrating the multiple operations of the supply chain.

 Services: Honda can play an important part in building customer

satisfaction through pre- and post-sales support. Post-sales services are
deemed as essential by modern clients as publicity and promotional
practices. In the present technologically advanced age, the influence of
 negative e-WOM due to inadequate support systems cannot be undermined.
To prevent negative brand credibility, the organization must evaluate their
support practices and use them as a tool to spread a good word of mouth
through fast, prompt and effective support services.

Support activities:
 Firm infrastructure: The Company’s technology applies to a variety of
operations such as quality control, regulatory concerns, accounting, funding
and planning. Effective infrastructure management will allow the whole
value chain to be optimized by Honda. To improve the strategic positioning
of the market, Honda may control infrastructure operations (or usually
called overhead costs).

 Human resource management: By reviewing various HR aspects, such as

recruitment, placement, training, awarding, performance management and
other staff management practices Honda which evaluate the management of
human resources. Honda has the ability to alleviate competitive burden
through successful HR management based on motivation, engagement and
staff skills. Through analysing recruiting and training costs with their
proportional returns, the organization will also accomplish its expense
minimization goals. This value chain support operation would enhance
Honda's deep reliance on the talent of its employees.

 Technology development: Nearly all value chain operations rely on

technical support in a new advanced technological age. Honda needs to
understand the value of technology advancement through technological
convergence in manufacturing, delivery, marketing and human resources
practices. It can be categorized into activities for product and process
application creation. For example, software for automation, customer
 relations, analysis in product design and data analytics are assisted by
technology. Honda's Department of Research and Development is known as
well.

 Procurement: The supply chain manufacturing relates to processes involved

in the acquisition of inputs, ranging from tools, machines, commodities,
raw materials and other items used to manufacture the final product. Owing
to its association with many operations in the value chain, Honda must take
into account its sourcing activities in order to maximize the intake, service
and outbound value chain.

On the basis of the aforementioned activities, it is evident that the main activities
will be accompanied by each secondary activity. This connection is required in
order to perform in a smooth manner. Next the procurement has substantial
funding for incoming practices and operations for the fierce rivalry in the car
industry. The operations will only be arranged promptly if the acquisition is
efficiently performed and ordered details submitted to inbound logistics.
Moreover, strong feedback is also a consideration allowing Honda to sell more
competitively priced goods than rivals. Secondly, the advancement of the
technology in the automotive sector has always been a race among car producers
on the market. Products with innovative technologies would draw buyers.
Technological growth also still plays a leading role in marketing and sales.
Thirdly, employees play a very critical role in order to increase the level of service
and deliver value to their clients, so employees are recruited and educated (human
resource management to improve their jobs.
In the current sense, the effect of the Covid-19 causes issues for Honda throughout
the development period. Moreover in Vietnamese markets the company faces
strong rivals in the same segment.  In addition to this, Honda thus has to
concentrate on inbound logistics, marketing and sales
As mentioned above it depends on understanding the relevance of all activities that
Porter value chain model is implemented. Honda can highlight areas in which
value can be added, cost savings achieved, separation bases set or processes can be
optimised, until its understanding of the relative significance of the defined value
chain activities is known.
2.2 Assess the internal environment critically

VRIO analysis
 Financial resources: The Honda VRIO Analysis demonstrates that Honda's
financial capital are very useful in helping to invest in external
opportunities. Honda is also assisting in the war against global challenge.
However, Honda's financial resources are rare and very expensive. Honda's
financial resources are structured to capture value, which gives Honda a
special advantage
 Distribution network: The distribution network of Honda is seen to be a
useful resource. This helps to reach growing numbers of consumers. This
provides Honda with increased margins. It means, since the products are
readily available, that promotion efforts convert into sales. But this
distribution network is not easy to imitate so this doesn't stop at rare
sources but stops at organisation source as it is well organized.
 The employees: Employees are a useful resource for the enterprise. A
substantial part of the workforce is highly educated, contributing to more
positive outcomes for the company. The personnel are also committed to
the company and retention levels are high. For buyers of Honda's products,
all this reflects a greater benefit. Honda employees are an uncommon and
cheap resource to emulate, which gives Honda employees a temporary
competitive advantage.
 Local food products: Their local food products are a valuable resource
 because they are so diverse. This gives consumers high expected value.
Owing to distinction of these goods, these are often appreciated rather than
customer rivalry. Local food products are not rare and not costly to imitate,
meaning that Honda provides only a temporary competitive advantage that
rivals can gain on a long-term basis.
 Patents: Its patents are a coveted resource, because they allow the company,
without competitive intervention, to market its goods. This leads Honda to
higher sales. These patents also provide Honda licensing income if these
patents are granted to other producers. Furthermore the patents of Honda
can also be considered a rarity and complicated resource to imitate, but not
fully exploited its potential.
 The cost structure: It has no useful resource in its cost structure. This is how
manufacturing practices contribute to higher prices than competition, which
reduces the company's total earnings. Its cost structure thus poses a
business vulnerability to be tackled.
 R&D: Research and development in Honda has been found not to be a
valuable resource. This is because research and development is more costly
than the advantages that creativity offers. Very few ground-breaking
features and specialized goods have been present in recent years.
Consequently, R&D for Honda is a strategic drawback. The research and
development departments should be strengthened and their budgets
reduced.

Valu Rarit Imitabilit Organizational Competitive

e y y capability implications
1 Financial resources Yes Yes Yes Yes Sustainable
competitive
advantage

2 Distribution Network Yes Yes Yes Yes Sustainable

competitive
advantage

3 Local food products Yes Yes Yes No A Competitive

Parity

4 The Research and Development No No No No Competitive

disadvantages

5 Patents Yes Yes Yes No Unused Competitive

Advantage

6 Cost structure No No No No Competitive

disadvantages

7 The employees Yes Yes No No Temporary

competitive
advantage

Benchmarking
Strategic importance (1-10) Relative strength (1-10)
Honda Toyota
1 Financial resources Strong financial resources. (7) Strong financial resources. (8)
2 The Research and Not invest much in R&D. (3) Spend money on R&D. (9)
Development
3 Distribution network Over the country. (9) Over the contry. (9)
4 Cost structure Not very well (3) Very well. (10)
Strength and Weakness:

Strengths:
 Have tremendous financial resources suitable for investment and strong
development.
 Has an extensive distribution network and stretches the country.
 Have local food products that are rare and difficult to imitate.
Weaknesses:
 Production methods lead to greater costs than competition, affecting the
overall profitability of the company.
 Research and development costs more than the benefits it offers in the form
of innovation. There have been very few innovative features and
breakthrough products in the last few years.

Task 3: Macro Environmental assessment

3.1. Honda Vietnam STEEP

Political-Legal Factors

In accordance with the Law on Special Consumption Tax, cars with 24 seats or
less are subject to special consumption tax but automobile components are not
subject to SCT. For imported cars subject to tax in accordance with the Law on
Export Tax, Import Tax, SCT and VAT, import tax, SCT (applicable to seat
vehicles of 24 seats or less) and VAT. Because of this, imported cars and
components taken from Honda Vietnam's parent company will not be taxed too
heavily. Not only that, the government has also had policies in support of
supporting automobile production. For example, Decree No. 125/2017/ND-CP has
added a tax incentive program for imported automobile components to produce
and assemble automobiles with the main objective of encouraging the production
and assembly of domestic vehicles, increasing the size and market capacity for
assembled cars in the country, while contributing to reducing the cost of domestic
production and assembly of vehicles. Moreover, the government also has policies
and laws that support the development of the automotive industry. It can be seen
that this is a strong development opportunity for one of the automotive big men in
Vietnam is Honda.
Economics

According to The World Bank of Vietnam, from 2002 to 2018, GDP per person
increased by 2.7 times, reaching over 2,700 USD in 2019, with more than 45
million people escaping poverty. The poverty rate plummeted from more than
70% to less than 6% ($3.20 per day at purchasing power parity). The majority of
the remaining poor in Viet Nam are ethnic minorities, accounting for 86%. This
shows that people are making more and more money and this has created
opportunities for the automotive industry to produce and trade in the Vietnamese
market. For example, Honda Vietnam (HVN) therefore reached 1,867 vehicles,
decreased 34% compared to the previous month and increased 12% compared to
the same period last year. In particular, the best-selling car of the month is area,
with 664 vehicles, increased 36% of total sales of HVN; CR-V with 482 vehicles
sold, accounting for 26% of HVN sales in August 2019. Thanks to this, the brand
and diversified models were taking advantage of to accomplish its objectives
(General, 2019). Due to the development of the economy and the income of the
people, their needs will increase as well. Not only that, but the majority of people
will want to own an affordable but still quality car, so Honda will need to focus on
cost leadership strategy to meet their needs.

Social
Vietnam has reached nearly 96.5 million people by 2019 (from about 60 million in
1986) according to the World Bank in Vietnam and is estimated to reach 120
million by 2050. 70 % of the population is actually under the age of 35 with an
estimated lifetime of almost 76 years greater than similar areas. However, the
population is aging quickly. It is 13% of the population currently in the middle
class and is projected to hit 26% by 2026. This illustrates that Vietnam is in a
golden majority population of working age. From there, it can be shown that older
and lesser employees appear to rely on employees. This will give Honda Vietnam
opportunities to concentrate on growing its sales in this age. For this factor,
because vietnam's population is a golden population, they will definitely want to
own a car when the government is also having an impact on street upgrades as
well as the automotive industry. That's why the company's focus on cost
leadership strategy will create an advantage over the rest of its competitors.

Technological

Automobile is a late birth industry (1992) in Vietnam, after 30-40 years in the
region. In 2017, there were 12 joint venture, 160 automobile assembly and repair
enterprises were born. Because of this, most businesses only import components,
then assemble with the technology line of the parent company. This also means
that domestic automotive technology has not really been focused. Not only that,
localization only stops at simple stages in the production and assembly process
(using low-value domestic components such as pipes, tires, batteries, wires,
seats ...). Partly because the number of enterprises involved in manufacturing
components is very limited, mainly through the parent company, so it still depends
a lot. This can be considered as a big challenge for Honda Vietnam to be able to
develop further in the automotive market. In terms of technology, Honda is quite
weak in this field, so to meet the awareness of people about environmental
protection, Honda should invest in vehicles that reduce emissions and consume
less fuel. This leads to the fact that in the future Honda will probably change its
strategy instead of Hybrid between cost leadership and differentiation to be able to
get the support of more people.

Environment

Currently, global warming and air pollution are still a significant concern for the
world and especially Vietnam, so for Honda Vietnam, this can be a big challenge.
Despite the big challenge, Honda always tries to reduce the amount of CO2
released from its product lines and models to improve the air for people. In
addition, Honda Vietnam also focuses on contributing to protecting Vietnam's
environment for future generations. In the coming time, Honda Vietnam expects to
implement many meaningful community activities with the aim of raising
awareness of environmental protection with Vietnamese people every day.
Listening to the needs of society to create and directly implement to the
community the appropriate programs is the path that Honda Vietnam steadfastly
pursues. As mentioned, people's sense of environmental protection is increasing,
the change of cars in favor of the environment will help the company make a
difference and make a good impression. Therefore, Honda in the future may
consider changing its strategy to better suit the needs of people and strengthen its
position in the automotive market in Vietnam.

3.2 Critical assessment of macro-environmental

Since they want to deliver high-quality goods but are still nice, and to build a
sense of protection for purchasing, looking back at Honda Vietnam's vision
statement. From that moment on, we can see clearly that the current strategies of
the company are very well established and accomplished. However, because of the
changing customer behavior as the environment is a matter for many customers.
This allows businesses to adapt by manufacturing goods and services that are
environmentally friendly. However the firm has to spend a great deal in R&D to
deliver this kind of operation. Then Honda Vietnam's low cost strategy would not
succeed, but it probably changes soon, as I mentioned earlier, particularly
automotive industry, so R&D feedback can be very difficult and cost a lot of
money. In addition, due to the economic growth condition of the country, people
do have some improvements in customer behavior but not powerful enough to
impact Honda's company as they still have medium sales but need a high degree of
ownership. The organization can also retain its current business strategy, but its
influence will grow in the near future. At future, Honda Vietnam should use a
hybrid approach to completely resolve consumers and markets requirements
(including the low cost strategy and differentiation strategy).

Task 4: Analysis of industry structural

4.1. Five-Force Framework of Porter

The five forces of Porter are a model created by Micheal E.Porter in 1979,
which aims to recognize and evaluate five strategic forces in a market, these
five forces also contribute to the shape and the power of the market. The
five-force Porter model can be used in any sector of the market to consider
the degree of competitiveness in the market and boost business profit over
the long term. These five powers are: Buyer power, supplier power, new
entry threatening, substitution threats and rivalry. In Honda's case on the
automotive industry, the Five Forces model will be applied to point out
factors that could affect the company.

Threat of new entrance (Medium- High)

The new threat to the automotive market is from mid-to-high range because there
are many different problems. The first problems come from government policies
although in recent times, the government has given the automotive industry quite a
lot of incentives with the reduction of the tax on imported automotive components
for assembly, etc. Not only are that but policies to support automobile production
also put in place to encourage domestic and foreign automakers. Because of this,
there will be many automakers easier to join the industry than that but because
there are too many automakers appearing in Vietnam both domestic and foreign
such as Mercedes, Mazda, Honda, Toyota,... Because of these, although the
barriers to joining the industry are low, but with the appearance of many diverse
automakers, the new threat to the market can be classified from mid-range to high.

The prediction in the future: because the Government of Vietnam has made moves
to support the development of the automotive industry, this also creates
opportunities for other companies to actively produce and trade in the market
more. This has led to the threat of future new entrance increasing from Medium to
High

Threat of Substitute (Low-Medium)

Currently for the automotive industry, the alternative threat is low because the
alternatives to cars can be mentioned here are public transport such as buses and
over-the-top rail trains. But cars are personal vehicles, which means that people do
not need to wait for public transport to be able to move to where they want. Not
only that, but public transport is overcrowded, this can cause uncomfortable and
the theft rate on passenger cars is also quite high with more than 1000 cases
occurring across the country. It is because of this that the majority of people will
choose cars over buses. In addition, while Vietnam has already been operating the
high-altitude rail line, the rail line only appears in two major cities, in HCM, and
in Hanoi. It is because of this that the alternative threat is low but in the future it is
possible that this level will increase to the mid-range as the elevated railways will
be more and more invested in the future.
The prediction in the future: it can be seen that in the future with the development
of public transport and high-altitude trains in order to reduce the lack of pollution
and the number of vehicles on the road, the threat from substitute will increase
from Low to Medium

Buyer power (Medium-High)

In the car industry, buyer power is medium to high. The first explanation is that
consumers have strong negotiation leverage with car suppliers, since there are so
many major car producers with different divisions. Furthermore, consumers'
switching costs are low since several car suppliers are present on the market and
provide similar offerings for several different versions. The other explanation
why the power of the buyers is between medium and high is because of the fact
that consumers are unwilling to use this car company at the same or cheaper
price.

The prediction in the future: the threat from likely buyers remains Medium as
many business models have yet to really put customers at the center, taking
customers as the first point to grow and shape their business. Especially in the era
of a competitive economy, all businesses need to improve the quality of service to
satisfy customer satisfaction and attract more new customers to make the power of
buyers more and more.

Supplier power (High)

Since there are very few suppliers of Honda Vietnam parts, most suppliers of
Honda Vietnam's products are international firms. Honda Vietnam would also
have no leverage to bargain with this enterprise. We may assume that suppliers'
influence is high, so Honda Vietnam is subject to tremendous pressure if those
companies avoid providing parts.

The prediction in the future: Currently, although there are not many suppliers of
raw materials for the automotive industry, in the future, there will be more
suppliers to help automotive companies have more choices and not depend too
much on the few companies as at present. So in the future, the threat level from
suppliers may decrease from High to Medium

Rivalry (High)

Competition is very strong on the car industry. The first is that it costs a lot of
investment to enter the automotive industry and firms always have enough
vehicles and huge capital to secure their models. Moreover, the market should be
left very large by the investments the business spends, such as maintenance,
components and vehicle models. When the company reaches the market, it must
do its utmost to succeed. Secondly, there are a number of car suppliers on the
Vietnamese automobile industry, meaning that if consumers are happy with a
particular carmaker, the car may be transformed into another because nothing
tying them to the fixed car manufacturer. The second is the low cost of consumer
transfer. The third is the federal strategy to help the manufacturing and
manufacturing sectors. This adds more rivals to the car industry in Vietnam and
also helps buyers to select which models to purchase.
The prediction in the future: As analyzed and witnessed by the data, we can see
that the competition between companies in the industry is quite fierce and there is
no sign of decline. This also means that in the future, the chances of this
competition being reduced are very few, so the threat of rivalry will still stop at
High

Current
Radar Plot
Future Threat of new entrant

2
Competitive rivalry Threat of substitute

Supplier's power The buyer power

4.2. Establish suitable Honda Vietnam strategies in the future

After applying the 3 generic strategies for analysis, it is clear that Honda is
applying cost leadership strategy. Honda took advantage of this strategy because
Honda has moved to import whole units from abroad to Vietnam to sell instead of
producing in Vietnam as before. This has reduced a large amount of money
because the Government has decided to remove administrative barriers with
imported vehicles, customs procedures are very clear, vehicles imported from
ASEAN are entitled to preferential tax of 0%. Honda has moved to import the
whole car from Thailand and then sold in Vietnam and closed one of the factory in
Vietnam. This helps the company take advantage of a large fee because the cost of
production in Vietnam will be quite high because it has to compete with other
competitors. Another way to reduce Honda's costs is to stop producing and
assembling B-segment sedans and instead retaining city models in Vietnam. City
was retained assembly in Vietnam due to the stable sales in Vietnam because at
that time, this is Honda's most popular model, and the demand of customers for
this car is still very large. As for the remaining Honda cars on sale are imported
from countries such as: Thailand (Jazz, Civic, HR-V, CR-V, Accord) and
Indonesia (Brio). This makes it possible for Honda to reduce production costs and
focus on a domestic production vehicle, City, so that it can compete with other
automakers.

The analysis of the five strength structure reveals that the two major factors
influencing Honda's market operation are the challenge of new entrants and a
strong competitive level among cars industry competitors.
First, there are more automakers entering the car industry in Vietnam in
conjunction with the recent entry and they also strive to manufacture and reduce
capability in Vietnam in order to mitigate other costs and to cope with those on the
market. As a result, Honda is urged to consciously concentrate on the feedback for
manufacturing installations and discourage supplier over-registration to reduce
governance.
Moving on to the rivalry part, from the analysis you can see that this battle is
becoming increasingly fierce. Honda could also continue to use low-cost tactics in
order to achieve its strategic advantages during this battle. Companies should keep
engaging in what is useful for the operation of these prices. But Honda will
employ more and more new tactics to make a difference for the company as more
and more product offerings are different to draw more clients and raise revenues.

After applying the 5-forces model, it can be seen that Honda's low-cost strategy
has been used to be able to compete with strong forces such as New entrance and
Rivalry. Honda uses a low-cost strategy to cope with 2 forces because it can create
a significant competitive advantage with the automakers available in the market as
well as automakers intending to join. Honda can cut unnecessary costs and invest
in parts that need improvement such as the R&D outlined above. This strategy will
also help Honda optimize the amount of money poured into its vehicles so that
there is still a profit and not lose too much compared to other competitors.
Suggestions related to competitive/business strategy will be presented in task 5
below.

SWOT
The SWOT model is used to sum up the principal factors that influence the
company after evaluating both internal and external factors.
Strengths: Weaknesses:
 A wide demand for cars and staff  Concentrate too much on
recruitment. motorcycle development and
 Focuses on innovative research, so they can't waste too
technologies, high quality and much time on cars.
leading class safety.  Only 2 cars manufactured by
 Honda cars are fast and efficient Honda Vietnam, Honda Civic
but consume low fuel so it is and Honda CRV have fewer
ideal for traffic in Vietnam with options for buyers than other
loads of traffic jams. brands.
Opportunities Threats
 Honda also has the opportunity  In Vietnam, there are a range of
to improve fuel efficiency as the rivals, including: Toyota, Nissan,
energy price rises. CuuLong etc. Therefore, Honda
 Brand of Honda was created in a cannot dominate the market, it
Pass because Honda's seeks to draw and include buyers.
motorcycle is popular in  Honda's corporate status is
Vietnam and so it does not take a directly impacted by the global
lot of time to develop a brand, so downturn. It is really grave when
consumers will have more it hurts the faithful buyers of
interest in this brand when Honda as the recession makes
Honda Vietnam cars have been poor business.
 manufactured and go to the
market.
 Honda will concentrate on
producing and implementing
higher-quality competitive prices
and low fuel goods in the future
by good technologies.

Task 5: The Company’s strategic directions

1. Strategical preparation

 Objective and goal

Honda still aims to master its leadership by targeting its mid-range segment so that
it can benefit constantly each year. Furthermore in Vietnam and all over the world,
Honda has been trying to improve its car and become a widely-used vehicle.
Moreover, Honda tries to reduce the negative environmental impact by reducing
customer fuel in the car, which contributes partially to environmental protection.
 Competitive strategies

Here, Honda Vietnam can retain their start-ups and also use the low cost as a
competitive strategy while considering internal and external advice. To optimize
this approach, Honda should do a variety of things such as: sustaining and
improving Honda's performance in cost reduction management. The question is
what we should do to lower the price of low fuel vehicles, which also meet
customers' requirements such as City, CR-V, etc. Honda also has a significant pool
of income for manufacturing these cars with a good coordination network.
Furthermore, maintaining good ties with manufacturers of parts allows the
business to minimize costs of imports for assembly and production.
 However, Honda can think about implementing a hybrid strategy to increase profit
in the future under the threats referred to above. Honda is thus simultaneously
applying the cost leadership approach and using the differentiation strategy to
deliver fresh experiences and the same price to its consumers. Honda will be able
to accomplish the success of Toyota with its Lexus line by differentiating its
products in the future. Honda is identifying itself with a highlight that produces a
name recognition that is entirely distinct from other manufacturers. This will add a
large number of clients and a big profit to the company. Honda can still afford to
invest in fuel-efficient environmental vehicles and growing numbers of people
understand this.

 Strategic direction: Ansoff matrix

Market penetration Product development

The activity for introducing existing goods on Product development is the technique for
existing markets is market penetration. In this introducing new goods on existing markets within
respect, Honda has established different an enterprise. Honda's key approach in this matter
techniques. The company's first approach is to is to develop new design versions. New vehicle
sell its goods consistently across multiple and motor models are included. Depending on
marketing platforms. It also encourages buyers form, features and efficacy, current models vary
to reach the showrooms and inspect the cars from previous ones. They are designed to take
for an appreciation of what the car provides. account of consumer demand and growth in
Different discounts to boost profits are also technology. The company also uses a strategy to
given at various periods. In its showrooms or improve its existing products by offering changes
through car dealers, Honda also issues to those products. These variations differ slightly
installation and other payment options for the from existing products and target specific needs of
customers to buy their cars. Current Honda certain users. Every new product is being
products owners are inspired to buy new developed in various product slopes. The costs of
versions of their products. The different goods research and development are a major part of the
sold by the organization can also be improved budget for Honda. Before launching and
over time to suit the demands of customers. marketing, each product undergoes strict quality
The organization now controls a substantial controls. This ensures the successful development
share of the diverse sectors it works to create a of the product.
tough competition climate. These activities
lead to continued revenues.
Market development Diverification
This practice includes the selling in new or old
markets of existing goods. The first solution of
Honda in this field was the development of
new geographical locations for manufacturing
and showroom sales. As automotive
production facilities exist in Vietnam, these
facilities contribute to removing the need to
import Honda goods into the country and
helping to lower costs, as they are locally
assembled. Honda has now initiated a range of
subbrands to reach different parts of the
industry. This can be in the form of cheap
brands or luxury brands that aim to build
consumer segments. Few Honda products are
also available to certain countries in limited
sizes to satisfy customer specifications. Some
Hondas, for instance, have four door and two
door versions to accommodate various needs
of the customer. This often results in a
consumer division dependent on costs. Each
approach leads to increasing the company's
profitability.
 2. Operating plan

To implement this low-cost strategy, the company should pay attention to the
following for providing customers with more environmentally friendly service:

 R&D: In order to come up with more cost saving ideas, the organization
must continue its study. Not only can the organization look for resources in
the company to find the best resources to help the company build a strategic
edge, but it will also analyse shifts in external conditions to see how they
affect the business. Furthermore, this is also a vulnerability that should be
based on the above-mentioned solution.
 Sales and marketing department: The Company is seen as a major part of
the creation of a brand image and the development of publicity programs
that attract more customers. As already mentioned, Honda wants to build an
environmentally-friendly, mid-range car brand recognition on the market,
and therefore more social activities are needed and improvements to low-
carburet vehicles can be made.
 The financial department: This is the department responsible for managing
the administrative, capital and asset usage of the company. In order to
reduce threats, this department will take part in the supervision of all the
remaining pieces in general and all the operations of the organization. Since
Honda Vietnam has used the pricing approach for the management scheme
and the prices for short- and long-term optimisation. Furthermore each
approach and proposal needs to be closely considered in the proposals for
the utilization and distribution of funds for each departments.
 The human resource department: shall better appoint each activity's
employees. This group works to prepare and execute employee success
plans that help the business expand sustainably. As it offers human capital
for all facets of the various functions of the Organization, this department
 has to address a wide range of different sectors, such as recruiting, training
and rewards and policy. Honda has drawn many professional human capital
from everywhere in the world by providing a strong strategy (high sales,
good jobs, good incentives and high quality workforce training). The
workers must strictly prepare for each job to ensure quality of service and
safety.
 The operations department: It is the agency that provides clients with the
operation. This is why this department must be carefully watched and
educated, for this can be seen as the face of the business. This department
also complies with other departments' plans to achieve the company's goal
and objective.
Conclusion
In general, the internal and external situation in this study was expressed in Honda
Vietnam's business strategy. In the review, this report also highlights some
suggestions concerning the plan to sustain the company's long-term growth.
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