Journal Entry (Week 21)- Honda Case study

Questions:

1. What are the benefits and drawbacks of taking an emergent approach to strategy making? 

2. Did Honda’s entry strategy demonstrate the characteristics of logical incremental-ism? (slide 12 will be helpful) 

Emergent strategy:

A set of certain consistent actions that form an unintended pattern which was not initially anticipated or intended in the initial planning phase. Although unintended, adopting an emergent strategy might help a business adapt more flexibly to the practicalities of changing market conditions. – Business dictionary

For example, adopting a social website to market product may be a part of comprehensive marketing program but if it becomes a massive success then it becomes an emergent strategy. 

However, Emergent strategy too has its own pros and cons. Some of them are listed below: 

Pros

• Unforeseen benefit: Let us take the example of the case study of Honda. The two Honda executives were out selling bikes of 250cc and 350cc to American markets. However, once it started selling its 50cc bike with a tag “ You meet the nicest people on HONDA”, it became an instant Hit. It had not foreseen that its 50cc light bike would have made HONDA more successful in America. 
•  It encourages the use of informal communication networks increasing innovation and creative thinking 
• It allows organizations to experiment and develop logical solutions to problems that are otherwise not expected in the long term plan. 
• Changes are implemented by project teams and task forces. 
•  Encouragement of informal communication networks within organizations to improve the flow of ideas and encourage innovative thinking 
• The use of temporary structures such as task forces and project teams to implement change

Cons: 

• Without a blueprint (a long term strategy), an organization is bound to stray in this competitive world of today. Emergent strategy is not enough in itself. A company needs a fixed plan to move towards its goal. Emergent strategy however can be used as a measure to curb hindrances and identify opportunities on the path that would otherwise not be efficiently tackled. 
• Some companies are not well capable of planning for emergent strategies and therefore damage may be done to its organizational structure. 

Case study 

1)  Was Honda’s entry strategy in the US more deliberate or emergent? 

Honda’s strategy was more of Emergent strategy. According to the interview taken of the two Honda executive, which seems more realistic and accurate, they stepped toward success one move at a time. From entering into the market, to unsuccessful year in macho bike, to selling 50cc light bike to decent American had not been a journey mapped out but something that happened one after the another as in the emergent strategy. 

2) Which of the accounts seems more accurate and why? Why do you think the two accounts differ so much? 

I believe that the interview section demonstrated more of the real encounters that Honda experienced. The two encounters differ so much because the first one is probably a perspective story of a journalist however the second one is a interview session with the two Honda executives that LIVED the moments and created the HONDA journey into AMERICA. 

3) Did Honda’s entry strategy demonstrate the characteristics of ‘logical incrementalism’? 

Yes, I believe Honda’s struggle story demonstrates the characteristics of Logical incremental. As demonstrated by the Honda executives, they had to keep in view their financial limit, scan for potential opportunities (test their 50cc light bike in a country where people ride macho bikes). 

4) Do you think Honda would have been more or less successful if they had adopted a more formalized strategic planning approach to the launch? 

I believe it is essential for organizations to have a long term plan mapped out according to their vision and objectives. However, they should also be flexible at times to bend and experiment with the opportunity at hand. 

Therefore, I believe only following a formalized strategic plan would not have given Honda the success that it reached at that time.

References:

Emergent strategy. business dictionary [Online] Available at: http://www.businessdictionary.com/definition/emergent-strategy.html [Accessed on: 17 April 2013]

Honda. [Online] Available at: http://avih.github.io/images-specific/honda_c50-2_ad.jpg [Accessed on: 16 April, 2013]

Pascale, R. (1984) „Perspectives on Strategy: The Real Story Behind Honda's Success‟, California Management Review , Vol. XXVI, No. 3, Spring 1984

Rumelt, R. (1996) „The Honda Effect: Revisited‟, California Management Review , Vol. 38, No. 4, Summer, pp103-111