Research Korner: Honda Motors Case Studies

Japanese Culture and Leadership: a case of Honda

Japanese Culture and Leadership: a case of Honda   Honda Motor Company, Limited or popularly labeled as Honda was established in 1948 by Soichiro Honda and tagged as the world’s largest motorcycle manufacturers and one of the leading automakers. Their present domain reports that Honda comprises of more than 400 subsidiaries and affiliates that make their global network headed by Takeo Fukui as CEO and significantly recorded a total of US$94.24 billion revenue in 2007 while employing more than 160,000 people. With visions of value creation, ‘glocalization’, and commitment for the future, they offer a wide variety range of products ranging from small general-purpose engines and scooters to specialty sports cars. Up to the present, their consistency in providing products of highest quality that creates new values and reasonable price makes them outstanding in terms of worldwide customer satisfaction. These two attributes also serve as their competitive edge – high quality and reasonable in price. Japan is considered as among the highly industrialised countries in the world, recognised as second largest business affiliate of US, leader in innovations, and uses participative leadership. Although the Japanese are considered to be quite diverse as compared to Americans in terms of cultural values, Japanese leaders appear to use an array of leadership styles (both task-oriented/autocratic and relationship-oriented/participative) in a manner similar to American leaders (Gibson and Marcoulides 1995). In most research literatures, the participative nature of leadership style is clearly employed by Japanese leaders and managers (Fukushige and Spicer 2007; Chan 2004; Jenkins 2004; Kustin and Jones 1995; Taka and Foglia 1994). The case of American leadership styles is also evident on the case of Japanese. Japanese leaders are also directed to achievement of organisational goals but not to the expense of the members of the staff (Sarros and Santora 2001). Unlike Americans, Japanese criticise themselves while Americans keep away from criticism (Robie et al. 2005; Pasa 2000). However, there are identified cultural similarities and differences in terms of other factors or aspects of leadership. In reference to Japanese culture, a degree of masculinity is high while medium on collectivism (Fukushige and Spicer 2007). This is predominantly associated on their paternalistic tradition and history. Referring to Hofstede’s research, Japan is moderate on power distance and individualism while high on masculinity and uncertainty avoidance (cited in Fukushige and Spicer 2007). The unique cultural values of Japanese include consensus decision making, loyalty to firms, and lifetime employment. However, it is argued that such values may have changed considering the various global occurrences affecting the world and different people. Amidst the extremely structured and ordered organisational design, Japanese leaders and managers give employees the freedom to achieve goals, as reflected in the phrase omasake or “I trust you, you can do it” (Sarros and Santora 2001; Kustin and Jones 1995). Japanese also establish an atmosphere of respect and obedience from their subordinates (Sarros and Santora 2001) but they do not impose more rules and laws that affect overall working relationships and conditions. Their paternalistic history emerges on the manner they manage their subordinates (Dorfman et al. 1997). While most Japanese organisations – like Americans, are highly and rigidly structured in terms of hierarchy, they have an outstanding concern for the personal lives of their subordinates (Fukushige and Spicer 2007; Sarros and Santora 2001; Wu et al. 2000). Human relationships extend beyond organisational standards as Japanese leaders tend to be caring and friendly (Sarros and Santora 2001). There is increased emphasis on harmony with others where symbol of respect, guidance and consultation is prioritised. Relationships are mainly supported by high level of respect, trust and commitment as rooted on Confucian ideology, which contains a valuable degree of respect and obedience to figures of authority. Trust plays a vital role, for example, most Japanese leaders leave their subordinates set of instructions and it is up to them to carry out the works. In terms of decision making, they similarly acknowledge the consensus of everyone particularly during extensive consultation. This is also seen on cases of working in a specific project where teamwork is high and keeping satisfaction is vital (Wu et al. 2000). Mainly most leadership studies (e.g. Chan 2004; Wu et al. 2000; Bass 1990) construe Japanese leaders as advocates of equality and group harmony. Charisma is shown by leaders when they set up overall organisational theme, develop strategy, and employ high-level outside relations (Bass 1990). Taking risk is something that is very improbable because a Japanese leader is flexible, fair, empathetic listener, active, and accountable. Accordingly, the leadership style used by Japanese leaders is effective especially in achieving superior levels of employee motivation, commitment, delegation in terms of decision making and intrinsic job satisfaction (Keys and Miller 1982 cited in Wu 2006). Like American leaders, the encouragement for collective decision making and extensive consultation among Japanese leaders towards the members of staff is highly regarded (Yukl 2002; Kustin and Jones 1995). In communication, Japanese leaders have been able to act as efficient communicators in their respective companies because they are natural lovers of harmony at workplace. Group harmony is critically acknowledged all the time (Wu et al. 2000; Bass 1990). They are bounded by human relationship as they needed to know their subordinates’ lives so as to provide understanding on the manner in which they behave and from here, leadership techniques are developed. Aside from the given traits in relation to leadership styles, Japanese are identified not to have more analytical tools to analyse workplace situations because they are much into many fields of expertise rather than specialising into single area.             On the case of Japan’s culture, Honda is the world’s largest motorcycle manufacturers and one of the leading automakers. Honda maintains their high quality through sticking to their philosophy as determined by founder Soichiro Honda. Honda’s philosophy revolves around four major specifications namely: (1) high expectations set for itself and its suppliers, (2) willingness to apply whatever resources necessary to get the job done, (3) commitment to cooperation and collaboration, and (4) unrelenting attention to detail. The leadership style of Honda reflects the performance of the company especially on the execution of its marketing and management strategies. Honda is different from other automobile companies because of the aforementioned philosophy that guides them in every decision and action at every level in the Company. With those, the success and market reputation of the brand is unquestionable.             The willingness to apply available resources to get the job done provide cost efficiency to the Company. Today, the increasing amount of raw materials is one of the most unsettled problems of business organizations. As prices increase, the suppliers also go with the flow. The supply and demand chain affects the overall conditions of the business. As Honda cling to their available materials, financial stability is guaranteed. In terms of human resources, Honda management wants multi-talented individuals that are able to work in various positions and perform activities in high expectations. Training and development opportunities are thriving. Also, the value of open communication, positive attitude and teamwork is proliferated. Honda perfected the art of cost management. The sharing of resources both at raw materials and semi-finished products leads to additional cost reduction for the Company, at least to its consolidated financial costs.  With this, benefits and incentives are far greater than the actual and potential (risks) costs of strategic alliances and FDI (Vernon 1996).             Honda’s commitment to cooperation and collaboration allows that whole company to explore wider horizons that will lead them to productive economic ventures and human knowledge acquisition. Their given importance to affiliation and networking contributes to the continuous expansion of their branches and dealers. The expansion activities of Honda can be considered as optimal strategies with greatest amount of risks (Shrivastava 1995). Optimal because economies of scale, scope and cost-efficiencies are eminent although huge investments post risks. Further, the establishment of subsidiaries, regional offices, and joint-plants made it possible for exports and licensing grants to be possible due to location advantages (Mauri and Phatak 2001).              The unrelenting attention to detail of the Company still proves to be effective. For instance, in addressing the global call of environmental friendliness in all automobile products, Honda worked hard in enhancing the environmental and safety aspect of their products. With this, it has direct impact on brand recognition and loyalty (Kotler 2003). In relation to their products, Honda implements continuous research and development, studies emerging trends and technology innovations, and at the same time plans their future products and operations.             Honda is different from other automobile companies because of the aforementioned philosophy that guides them in every decision and action at every level in the Company. With those, the success and market reputation of the brand is unquestionable. Additionally, the capability of the Company in addressing issues that concern the environment and customer satisfaction is always prompt and remarkable. The advantages in maintaining an international viewpoint are wider market scope for sales and production operations, brand awareness and development, international recognition, and ability to compete globally. The disadvantages, on the other hand, are stiff competition, diversity of location and managerial functions, and unstable economy of a region. But then again, with the proper implementation of the managerial functions, marketing strategies, and the dedication of supplying products of the highest efficiency yet reasonable prices and guaranteed worldwide customer satisfaction will make the Company more successful. Meanwhile, cost reduction is not a problem to the Company. Since it is indicative in their basic philosophy, Honda has all the necessary means to have high quality products yet cost efficient and effective. In some cases cost reduction is strictly implemented when there are economic and financial difficulties, production barriers, and onset changes in the trends of the industry. In building and sustaining supplier relationships, Honda and its management can easily refer to the existing culture of supply chain management being utilized by their Company throughout the long years of operations. Integration and acquisition are potential methods to retain good supplier relationship. Also, increase awareness to the conditions of affiliates and subsidiaries will somewhat determine the potency of the Company. With this, training and retention are deemed crucial to international success of subsidiaries (Hitt, Hoskisson and Ireland 2003). Quality improvement in Honda is crucial. In aggregate, Honda is there not only to produce quality products but also affordable, safe and environment-sensitive ones. This makes the brand competitive in both private, industrial and public utilities’ needs.  Due to this, the firm had always aspire to be approached by the society as a “must” brand to exist (Honda 2008). Improvement is seen on the implementing research-based activities of Honda. Innovation and research findings need not be strictly established in every subsidiary office (Anders 2002). Honda’s action to intensify R&D may not just suggest that it would try to personalize models in each country instead such strategy could be suitably suspected to maximize sharing of resources. The findings of one country can be applied to global operations since safety and environment issues are of general concerns. In such case, the firm had settled to invest heavily on R&D not to disqualify this claim but to prove its financial capability supported by joint-ventures. Technology improvement is linked with the environmental-friendliness of the brand. Innovations are also designed in the manufacturing, distribution and research mobile. The improved integration combines the expertise of local associates into global spectrum that will hasten improvement of technology.  For instance, the launch of “Green Factory” not only makes Honda “green” in its products but on manufacturing as well.  A global strategy suited to create value-added components and brand loyalty to customers.  In addition to this, safety is also an ingredient in its produced with the commitment of “Safety for Everyone” scheme (Honda 2008). Some of the product innovations that ultimately held local market are the introduction of flagship luxury sedan, supplying fuel cell vehicle to private companies for sub-freezing temperatures and innovation of fuel economy/ low emission motorcycle engines below government regulation levels.  Production technologies become mobile wherein the developed technology within the regional and local research facilities was transferred to a specific plant that has high requirement for such technology.

Japanese Culture and Leadership: a case of Honda

Japanese Culture and Leadership: a case of Honda Honda Motor Company, Limited or popularly labeled as Honda was established in 1948...

External and Industry Environments' Analysis Report for Toyota

A Report for Toyota Motor Corporation TABLE OF CONTENTS             1 Executive Summary                                                        2             2 Introduction                                                                       2             3 Overview                                                                            3             4 Environmental Analysis and Commentary                 4             5 Organisational Analysis and Commentary                 5             6 Gap Analysis and Strategic Alternatives                      7             7 Strategic Options and Choice of Strategies                 8             8 Implementation Plan                                                       10             9 Evaluation Plan                                                                11             10 Recommendations                                                        12             12 Conclusions                                                                    13             13 Reference List                                                                14             Executive Summary             Toyota has become the leader in hybrid cars manufacturing. The Toyota Prius has long been credited as the car which started it all.             Toyota believed in hybrids because of the superiority of the technology to the internal combustion engine. Such technology allows all powertrain improvements in diesel, gas, electric or hydrogen to incorporate into car production. Thus, hybrid powertrain has the most ability to continuously improve (2005).             As an emerged technology, software bugs are not surprising the automotive sector and even in conventional vehicles, system glitches are becoming more common.             In lieu with this, this report aims at providing the Toyota Motor Corporation the strategic alternatives and options available in the market, the environmental and organisational analysis and proposed sample implementation and evaluation plans. Introduction             A typical passenger car has 70 or more tiny but powerful computers on board that control audio systems, air conditioning, brakes, air bags and scores of other tasks. The software for an average car can have more than 35 million lines of code. Hybrid cars need to control separate gas and electric power sources and doses require a 100 times or more the code needed (2005).             Hybrid cars use multiple computers significantly compared to conventional automobiles. The Toyota hybrid cars, which have been in the global automotive industry since 1997 in Japan and 2000 in the US, are using MULTI IDE and C/C++ compiler to develop engine and transmission control software (2005).             However, many analysts and auto executives are continuously questioning the hybrid technology. Yet, still, why does Toyota continue?             Toyota believed in hybrid cars as well as continuous improvement or the kaizen. Things have changed because of competition and Toyota must always seek to improve in order to get better and thus, compete (2005). Overview             Automakers spend $2 billion to $3 billion a year fixing software glitches (2005). In October 2005, Toyota recalled 75, 000 Priuses in the United States due to a number of reports that the cars were inexplicably stalling on the highway ( 2007). Thirty-two percent of auto warranty claims in the United States are because of software or electronic-related issues (2005).             The owners of the cars were asked to take their vehicles to their dealer in order to fix a potential software glitch. “If the gasoline engine stalls, the electric motor in the vehicles will have enough power to allow the driver to pull the vehicle over and away from the traffic”, according to Toyota.             A “programming error” was found in the computer systems of 23, 900 Prius cars sold. The Prius hybrid cars urge a software upgrade in order to fix a few lines of buggy code. Apparently, the computer system of the cars is needed to be reset. After the procedure, hybrid car drivers complained of the reduced mileage ( 2007).             The software update was provided free-of-charge. Such update is intended for 2004 and 2005 Prius models. The US National Highway Traffic safety Administration investigated the incident. There have been no injuries or accidents reported due to potential software problem. However, potential buyers for the Prius made leery of the car (2005).                Environmental Analysis and Commentary             The mission of Toyota is to attract customers for life. Their ambition – to become the most admired sales finance company for all stakeholders. The vision of the company is not to be no. 1 instead to become the most successful and respected car company in the world.             Externally, the Toyota belonged to the transportation equipment industry and its market is the public companies trading. There are a total of 26 competitors for Toyota. The top three are: Ford Motor, general Motors and Honda. These competitors are also offering a wide array of hybrid cars. By this, we can analyse the hybrid system and environment as below: Remote Environment (factors that originated beyond Toyota company’s operating situation) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids have complicated technology that is difficult or expensive to fix</li> </ul>      Every car today has packed with complicated electronics and computer chips. Working on a hybrid cars requires a specialized training for the mechanics. Dealership may only have one or two mechanics trained on hybrids      Expenses-wise, hybrid-specific components have extremely long warranties. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids have technical problems like stalling and sputtering</li> </ul>      Such concern stems from the case of the recalled Priuses. The gasoline would sometimes shut-off at the most unexpected times. The problem was pointed as faulty program logic ( 2007). Industry Environment (factors that affect Toyota company’s prospect) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids do not pay for themselves to justify their premium cost</li> </ul>      According to Consumer Reports, it would be difficult to justify the process of purchasing a hybrid car for economic reasons. As the report states, for a five-year ownership period, only the Honda Civic Hybrid and Toyota Prius could save the money.      The higher initial cost and fast depreciation were the reasons that hybrid cars don’t save owners money. However, some vehicles will save enough to pay for extra cost as indicated by the new tax incentives.      Through simply accelerating and braking more gently drivers can save more. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids do not offer the driving performance needed</li> </ul>      Compared to non-hybrid cars, hybrid powertrains are more fuel-efficient. Such efficiency could mean getting more power out of the same amount of fuel or using a same-sized engine more efficiently while also gaining extra power and quickness.      This can be provided by Honda Accord Hybrid and Toyota Highlander Hybrid only the latter offer more responsive acceleration.      In contrast, the Toyota Highlander Hybrid cannot save as much fuel as they could with smaller gasoline engines unlike Ford Escape Hybrid and Honda Civic Hybrid. These two models offer power that is more adequately for daily use. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids will not hold a resale value</li> </ul>      Toyota Priuses have high resale value but are not sold on near-new prices as stories claimed. The factors which affect the high value are the unique, hybrid-only vehicle with eye-catching design and Priuses are produced and sold in low volumes. As a used car, the Prius has more in common with the Mini Cooper than a Ford Escape Hybrid SUV in terms of holding such value ( 2007). Operating Environment (factors that influence Toyota company’s competitive situation) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids have limited battery pack life</li> </ul>      Hybrid batteries function without ever being fully charged or discharged. A regular gasoline-powered engine assisted by an electric motor run the hybrid vehicles. During braking and idling, the battery is charged by the gas engine.      Toyota and Ford claim fleet use of hybrid vehicles lasting over 100, 000 miles --- Toyota claims over 200, 000 miles for a few vehicles.      Besides, hybrid components including batteries have extremely long warranties. Toyota guarantees 10 years or 100, 000 miles for all hybrid-specific components on their vehicles. Ford and Honda both guarantees hybrid user with 8 years with 800, 000 – 100, 000 miles. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Hybrids do not get the level of mileage promised</li> </ul>      All vehicles could have 15 % fewer miles per gallon than the EPA estimate. At any rate, calculating gas spending based on EPA estimates actually underestimating a wide margin ( 2007).   Organisational Analysis and Commentary             The Toyota company is a public company with $202, 864 million 2007 total sales and 299, 394 employees. Toyota is below industry average in both sales satisfaction and customer satisfaction.  There is a need to focus on plant quality and flexibility. This reflects the unusually high number of product recalls over the past couple of years.              Toyota Motor outsold General Motors in the first quarter of this year. Toyota sold almost eight million cars in the world. Toyota’s stock market value is roughly 30% of the value of all global carmakers combined (2007). The target of selling by 2010 is 10.3 million. The Japanese carmaker is currently expanding production throughout Asia, Europe and US (2006). The Toyota’s organisational ethos had helped in penetrating the #1 position:   Strengths <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> High level of research and development</li> <li class="MsoNormal" style="text-align: justify"> Firmly committed to hybrid powertrains</li> <li class="MsoNormal" style="text-align: justify"> Committed in launching new products and to lean manufacturing and quality</li> <li class="MsoNormal" style="text-align: justify"> Kaizen, jidoka, muda, munuzukuri and genchi genbutsu as key principles</li> <li class="MsoNormal" style="text-align: justify"> A culture of teamwork, respect, challenge and just-in-time</li> <li class="MsoNormal" style="text-align: justify"> Competitive service price-wise to dealers</li> <li class="MsoNormal" style="text-align: justify"> Very focused segmentation, targeting and positioning</li> <li class="MsoNormal" style="text-align: justify"> Diversified product range</li> <li class="MsoNormal" style="text-align: justify"> Consensus management style</li> <li class="MsoNormal" style="text-align: justify"> Constantly re-engineering and redesigning models (2006)</li> </ul>   Weaknesses <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Retail operations</li> </ul> Ø  Selling approach <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Dealerships ( 2006)</li> </ul> Ø  Poorly-designed showrooms ·         Expensive costs investments on car plants ·         High costs of training and retaining labour ·         Time to accommodate ·         Faulty front suspension systems ·         Software/programming glitches ·         Tend to not wanting to admit a problem publicly ·         Stretched management resources or training new hires to understand Toyota Production System (TSP) ·         Difficult defect-tracking procedures Opportunities <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Emphasis on the importance of quality over cost-cutting or pure design</li> <li class="MsoNormal" style="text-align: justify"> Improve customers’ buying experience</li> <li class="MsoNormal" style="text-align: justify"> Utilize the Internet in making attractive offers</li> <li class="MsoNormal" style="text-align: justify"> Explore to be a one-stop shop for customers’ financial requirements</li> <li class="MsoNormal" style="text-align: justify"> Investment in hybrid R&D ( 2006)</li> <li class="MsoNormal" style="text-align: justify"> Revisit quality measures</li> </ul> Threats <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Cars can be replicated by competitors almost immediately</li> <li class="MsoNormal" style="text-align: justify"> Heavy competitions from traditional banks</li> <li class="MsoNormal" style="text-align: justify"> Fluctuating economic and political conditions</li> <li class="MsoNormal" style="text-align: justify"> Exchange rates movements narrow margins</li> <li class="MsoNormal" style="text-align: justify"> Exposure to any movement of raw materials</li> <li class="MsoNormal" style="text-align: justify"> Product recalls </li> <li class="MsoNormal" style="text-align: justify"> Economic disturbances</li> </ul>                 Gap Analysis and Strategic Alternatives             The global automotive sector has a deepened, growing concern regarding the inadequacy of developing and implementing software models. It is necessary for every automaker to produce efficient softwares for hybrid vehicles’ mission-critical systems.  However, the industry has no solid means of blending the disciplines of car manufacturing and software development (2005).             The repetitive process of recalling Toyota hybrid cars with software glitches is an indication that there might be something wrong with the quality control of the products company-wide. Toyota did their own software development in-house and thus, having control over upgrades as a clear advantage ( 2005). Further, the prevailing business operation can be described:                               In lieu with the consistent recalls, the Toyota must: a) focus on software quality, b) have an in-house software assessment task force/department, c) facilitate a specialized training for hybrid cars mechanics, d) maximize control over upgrades, e) if necessary, conduct routinely quarter or mid-year software assessment of newly-installed softwares and f) initiate an industry-wide higher-level software standards.             Toyota hybrid vehicles recalls set a basis for building software standards and elevating software quality through the use of off-the-shell requirements and standardized software implementations as a commodity (2005).   Strategic Options and Choice of Strategies             Since the recalls are identified as software glitches, then the solution must focus on developing software programs that are powertrain-specific. The systems affected are engine control and transmission, body chassis and safety systems and infotainments.  For hybrid cars, applications include: 1) engine management software – to coordinate fuel, spark and other subsystems, to meet the legislative exhaust emissions regulations and to provide greater fuel economy; 2) electronic transmission control software – to monitor engine and car speed and to change engine ratios for an easier and smoother driving experience and 3) diagnostics software – to enable carmakers and engineers to test and correct engine management and transmission systems (2005).             The Toyota Motor Corporation, in order to cope up with the costs of recalls, instead of doing all the researches regarding software development in-house, the company could: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> have an in-house automotive software developers, implementers and assessors,</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> came up with a driver-friendly do-it-yourself manual on automotive software upgrading, if possible,</li> </ul> <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> outsource/hire a company specializing in embedding automotive software and/or even</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> divert in a partnership with an automotive software developing companies that can: overcome severe memory limits, ensure fastest execution and build bug-free applications:</li> </ul> A)   Processors in powertrain application experienced severe memory constraints. The automakers, including Toyota, must avoid buying bigger and more expensive memory parts. The software must add more features with less memory, thus, gaining a competitive advantage in complying with heavy emission requirements. Such software must have small code sizes to allow advanced compilers to shrink an application’s code size. B)   To ensure a faster execution, the software developers must increase complex software algorithms which require more processor speed. The requirements include stringent emissions regulations, advanced cruise control, better fuel-efficiency and anti-knock algorithms among others. C)   Bug-free applications include run-time error detection, mature compilers, MISRA support and automated module testing ( 2005) Implementation Plan             Most Japanese automakers, including Toyota, do their own software development. Japanese always tended to do things on their own. Other automakers like BMW, Mercedes Benz and General Motors do some in-house software development and portion-out the rest of the work (2005).             In effect, the Toyota must admit that the company faces difficulty in addressing recalls. Car manufacturing is the company’s specialty and not software development. So, it is best to have an IT company to do development task and focus on quality of the cars produced.             This could mean an extra cost for the Toyota company since they have to pay rights to use the software ( 2005). More practically, the company would benefit if highly-developed, high-performance automotive softwares will be available. The partnership will be of mutual benefit because softwares can be tested and retested on the hybrid cars. Thus, avoiding the reoccurrence of car recalls due to software breakdowns and the capability of embedded automotive softwares could be maximized since the development is accompanied by actual testing on reliable cars.             Practically, the plan must include the history of partnership, composition and linkages, legal framework and working processes and the process of limited partnership will begin by sourcing and choosing potential business partners, securing partnership requirements/documents, complying with partnership regulations and laying financial concerns including taxes. The key indicators are risk management, output, funding and workforce for both companies. The actual process of development will culminate after the partnership materializes, to illustrate: TOYOTA MOTOR CORPORATION PARTNERSHIP WITH XXX EMBEDDED AUTOMOTIVE SOFTWARE COMPANY What Who When Adopting industry-wide standards Toyota and Company XXX Week 1 Model-based Software development -do- Weeks 2-8 Code-generation Tools and Techniques -do- Weeks 9-16 Automotive Software Architecturing -do- Weeks 16-20 Automotive Software Designing -do- Weeks 21-24 Automotive Software Engineering -do- Weeks 25-28 Quality Assurance, test Strategies, Verification and Compatibility -do- Weeks 29-35 Provisions for Re-testing -do- Following weeks   Evaluation Plan             We can practically say that there will be two evaluation plans: for the partnership and automotive software development. The partnership can be evaluated through needs, outcomes, processes and frameworks: Evaluation Indicator How the Indicator is met Assessment Score Needs (the basis of entering a partnership) ü  Identified gaps ü  Workforce initiatives/demand ü  Specific outcomes that can be delivered ü  The partner is the best placed organisation to deliver the service ü  Service level Agreement           Framework (for working in partnership) ü  A signed SLA ü  Clarity in expectation/outcomes, length of contract/agreed review schedule, where responsibility lies and monitoring requirement ü  A clear work plan ü  Outcomes of the work plan ü  Development of partnerships           Partnership Process (effective maintenance of partnership) ü  Clear demonstration through regular reviews ü  Clear guidance in place ü  Meeting the agreed outcomes and performance ü  Adequate financial management systems in place ü  Meeting the agreed requirements as expressed in code of practice on funding and procurement           Assessing the Internal and External Impact & Outcomes ü  The original partnership objectives are being met ü  Quality of service being delivered as evidence of effective partnership ü  Meeting the wider corporate priorities and community aspirations ü  The cost and resource does not outweigh the benefits ü  Outcomes are promoted and demonstrated to the local community           (Based on: The Partnership Evaluation Tool)               The program should be assessed based on the objectives of adopting industry-wide standards, coding techniques and tools, software architecture, design and engineer and quality control, testing and verifications. The automotive software development program can be evaluated through:                               Recommendations             The abovementioned alternatives, solutions and options are automotive software-specific. Company-wide, the Toyota must also develop clear customer service standards, sustainability strategies and policies-targeted at core products or services. In addition, the preparation of a target-based timeline where performance can be judged and held accountable must be a priority (.).             There should be a progress on external reporting. The company leadership must be vocal and committed. The Toyota can also purport on stakeholder consultations and publication of results. Stakeholders must participate to meet environmental and societal needs related to core business (rady, n.d.). Conclusions             As automobiles become more technologically-advanced, an issue of interest would be the tolerance for the new technology. The hybrid cars performance has been remarkable and predicted by analysts as ‘here to stay’. Currently, the hybrid system was dubbed as the technology of the millennium.             First, the Toyota has to admit that something went really wrong along the process. Software glitches are not a problem solely for the company. It is an industry-wide dilemma that is needed to address immediately. Somehow, it had open opportunities of exploiting the hybrid technology. , Chairman of Embedded Software Standards, believes glitches are of similar features and software quality must be ensured industry-wide (2005).             Second, the Toyota hybrid cars have a pre-existing reputation.  Its presence on the global automotive sector is building intangible brand value. The company has strategized in a long term focus and the Prius is making money for Toyota.             Third, the Toyota has an image that can be easily maintained. Technology can be replicated quickly. General Motors or DaimlerChrysler cal always attempt at counter launching a competing product. The Toyota knows have a counter-relaunch of a more advanced versions and sell more (2005).             Finally, the Toyota company acknowledges shortcomings and work on it privately as much as possible. Such shortcomings are identified and analysed quickly and then communicated with the customers on the basis of time quality.             Quite simply, the Toyota company fosters responsibility and accountability or sustainability aspects in a holistic and principled-approaches ( 2006).

External and Industry Environments' Analysis Report for Toyota

A Report for Toyota Motor Corporation TABLE OF CONTENTS 1 Executive Summary ...

BUSINESS PLAN OF HONDA COMPANY

The focused company for the business plan proposal is Honda Company as there shows market growth and stability in terms of business operations and management, implying assumptions for better finances for balancing sales and profits and adopting to a suitable and conducive business milieu for Honda’s management board, employees, target groups as well as customer base ranges.   Target Market and Customer Base   The target market and customer base of Honda is actually diverse as the company has various business operations not just in one country but several of them. Thus, for instance in Japan in which their customer base is high, the company have its plans to integrate the company’s three existing domestic automobile sales channels – Primo, Clio and Verno into one Honda channel last March 2006. This integration enabled the Honda customers to purchase and service any Honda brand automobile at a single Honda dealer and to maintain a continuous relationship with the same dealer for future sales and service needs as a means to achieve a high level of satisfaction.  In addition, Honda announced plans to introduce its luxury brand, Acura, in Japan, by fall 2008.  The Acura brand will offer distinctive products with a core focus on advanced, leading edge technologies that are always ahead of the times.       The goal of sales channel strategy are to maintain Honda’s ability to respond to changes in society and the automobile market and to continue to provide the diverse values desired by customers and meet increasingly sophisticated customer needs.  In turn, this will enable Honda to maximize the joy and satisfaction of existing customers earned through the three channel structure in Japan as Honda aims to restructure and strengthen its domestic automobile dealer network by creating new value for the customer through Acura brand products and through efforts, Honda steadily increased the number of Honda customers and made significant progress in achieving the autonomy of its dealers. The Japanese automobile market has now entered a stage of increasing maturity, and the surrounding society and marketplace are in a transition stage as well. In this increasingly competitive environment, the most important factor is to always continue improving the lifetime satisfaction level for the customers who have already chosen the Honda brand. Honda decided to integrate its existing channels into one Honda channel where customers will be able to purchase and service any Honda brand automobile and to continue receiving high quality sales and service from the same dealer for future needs whether that be replacing their current vehicle or adding another one. Honda also aims to build a dealer network that places the Honda brand at the forefront by maximizing use of existing facilities and manpower and by optimizing the location of sales facilities.         Aside, introducing Acura to create new value for the customer and to continue to achieve further growth and to take a big step forward in Japan Recently, the values desired by the customer have become even more diverse and customer needs are becoming increasingly sophisticated in the automobile market and will enable Honda to achieve further growth and take a big step forward in its home market of Japan as well as accelerate its effort to maximize customer joy and satisfaction and by challenging, Honda will pursue the goal of consistently achieving annual sales of more than 800,000 units.         Corporate December 14, 2005 Honda Announces New Automobile Sales Channel Strategy and Introduction of Acura(*1) Brand to Japan -- Focus will be on maximizing customer joy and satisfaction and creating new value --         Source of Competitive Advantage   Honda conducts its operations in Japan and throughout the world, including North America, Europe and Asia. A continued economic slowdown, recession or sustained loss of consumer confidence in these markets, which may be caused by rising fuel prices or other factors, could trigger a decline in demand for automobiles, motorcycles and power products that may adversely affect Honda's results of operations. Prices for automobiles, motorcycles and power products in certain markets may experience sharp changes over short periods of time. This volatility is caused by many factors, including increasingly fierce competition, short-term fluctuations in demand from underlying economic conditions, changes in import regulations, shortages of certain supplies, high material prices and sales incentives by Honda or other manufacturers or dealers. There can be no assurance that such price volatility will not continue or intensify or that price volatility will not occur in markets that to date have not experienced such volatility.           Overcapacity within the industry has increased and will likely continue to increase if the economic downturn continues in Honda's major markets worldwide, leading to further increase price pressure. Price volatility in any or all of Honda's markets could adversely affect Honda's results of operations in a particular period. Honda has manufacturing operations throughout the world and exports products and components to various countries. Honda purchases materials and parts, and sells its products in foreign currencies. Therefore, currency fluctuations may affect Honda's pricing of products sold and materials purchased AS currency fluctuations have an effect on Honda's results of operations and financial condition, as well as Honda's competitiveness, which will over time affect its results. Thus, regulations regarding vehicle emission levels, fuel economy, noise, safety and noxious substances, as well as levels of pollutants from production plants, are extensive within the automobile, motorcycle and power product industries. These regulations are subject to change and are often made more restrictive. The costs to comply with these regulations can be significant to Honda's operations.               Honda's financial services business offers customers various financing plans designed to increase the opportunity for sales of its products. However, customers can also obtain financing for the lease or purchase of Honda's products through a variety of other sources that compete with its financing services, including commercial banks and finance and leasing companies. The financial services offered by us also involve risks relating to residual value, credit risk and cost of capital. Competition for customers and/or these risks that are specific to the financing business may affect Honda's results of operations in the future. Honda purchases raw materials and certain components and parts, from numerous external suppliers, and relies on some key suppliers for some items and the raw materials it uses in the manufacture of its products. Honda's ability to continue to obtain these supplies in an efficient and cost-effective manner is subject to a number of factors, some of which are not within Honda's control. These factors include the ability of its suppliers to provide a continued source of supply and Honda's ability to compete with other users in obtaining the supplies. Loss of a key supplier in particular may affect our production and increase our costs. Honda conducts its businesses worldwide and in several countries through joint ventures with local entities, in part due to the legal and other requirements of those countries.       These businesses are subject to various regulations, including the legal and other requirements of each country. If these regulations or the business conditions or policies of these local entities change, it may have an adverse affect on Honda's business, financial condition or results of operations. Honda conducts its businesses worldwide, and its operations may variously be subject to wars, use of force by foreign countries, terrorism, multinational conflicts, natural disasters, epidemics, labor strikes and other events beyond its control which may delay or disrupt Honda's local operations in the affected regions, including the purchase of raw materials and parts, the manufacture, sales and distribution of products and the provision of services as delays or disruptions in one region may in turn affect Honda’s global operations and Honda's business, financial condition or results of operations may be adversely affected.     Configuration of resources   Business organizations have been subject to enormous pressures over the past few years, with major underlying structural changes in industry sometimes concealed behind the short-term issues of recession. There will be no simple solutions and success will depend on the soundness of the strategic decisions taken by top management and the ability of the organization to implement those strategies and would push the human resource aspects of the business to the fore, even without the added complication of continued change and the pressures that this brings.       Honda Motor Co., Ltd. operates under the basic principles of "Respect for the Individual" and "The Three Joys", commonly expressed as The Joy of Buying, The Joy of Selling and The Joy of Creating. Respect for the Individual" reflects our desire to respect the unique character and ability of each individual person, trusting each other as equal partners in order to do their best in every situation. Honda Motor Ltd. has remained on the leading edge by creating new value by providing products of the highest quality at a reasonable price for worldwide customer satisfaction. The Company has grown to become the world's largest motorcycle manufacturer and one of the leading automakers. Honda develops, manufactures and markets a wide variety of products ranging from small general purpose engines and scooters to specialty sports cars, to earn the Company an outstanding reputation from customers worldwide. Honda has introduced an operating officer system, aimed at strengthening both the execution of business operations at the regional and local levels and the supervision by the Board of Directors. The term of office of each director is limited to one year, and the amount of remuneration payable to them is determined according to a standard that reflects their performance in the Company. The goal in doing this is to maximize the flexibility with which directors respond to changes in the operating environment. With respect to business execution, Honda has established a system for operating its organizational units that reflects its fundamental corporate philosophy. For example, separate headquarters have been set up for each region, business and function and a general manager from the Board of Directors or an operating officer has been assigned to each headquarters and main division. In addition, the Management Council deliberates important matters concerning management, and regional operating councils deliberate important matters concerning management of their respective regions. Honda's basic policy emphasizes the appropriate disclosure of company information, such as by disclosing financial results on a quarterly basis and timely and accurately giving public notice of and disclosing its management strategies. Honda will continue raising its level of transparency in the future.       Market Research   Creating advanced new technologies and products Through leading-edge research and development, Honda continuously creates original technology that opens up new possibilities in mobility. Honda is always tackling new challenges for the current and future benefit of individuals, society and the environment.   Research and Development for the future Honda is constantly involved in the research and development of technology that will benefit people in the future. These technologies range from new materials and new sources of energy, including mass-produced solar panels, to new power trains that maximize joy while minimizing environmental impact. They also include advances in biotechnology, such as Honda's work in decoding the rice genome for application in various fields. Honda is studying human anatomy and physiology, as well, in its efforts to produce innovative products that enhance safety in various ways.   ASIMO lends a hand In 1986, Honda began conducting original research and development toward the creation of biped humanoid robots that will serve society in harmony with humans. The latest ASIMO, introduced in 2005, employs new posture control technology that allows it to run and move in concert with a human partner. Able to carry objects, it can also handle various reception and delivery tasks. ASIMO continues to evolve and will soon acquire the abilities to turn around and run 6km/h, making it an even better partner for humans.   Reaching for the skies One of Honda's earliest dreams was the development of jet planes. In pursuit of this dream, Honda recently established Honda Aero Inc. and developed a compact jet engine that has passed the experimental stages. The manufacture and procurement of components for this jet engine will be handled by a joint venture between Honda and General Electric.   Next-generation power trains Honda's Automobile Research and Development Center in Japan includes research facilities dedicated to the development of next-generation power trains. Here, Honda engineers are developing new means of propulsion that may one day contribute to human mobility. Consistent quality worldwide Honda is a global company with manufacturing operations and sales networks all over the world. Furthermore, our products are enjoyed by people in numerous countries. This global success is built upon the renowned quality of Honda’s products and made possible by the passion and dedication of Honda associates everywhere. Wherever you are, you can always count on the quality of Honda products. Localizing production to meet local needs Honda began manufacturing motorcycles in Belgium and became the first Japanese automaker to produce passenger cars in the U.S. Since then, Honda has established independent local operations around the world for research, development, marketing and production. Through the introduction of Honda's flexible manufacturing system, Honda continues reducing the time and resources necessary to launch new models into production and improving the efficiency of manufacturing operations that meet regional needs. Moreover, the grouping of production processes into cohesive units has improved the working environment, raised product quality, and further accelerated production. In the future, Honda plans to further localize the production of engines and key components for automobiles, motorcycles, and power products, while simultaneously raising quality and efficiency and accelerating our response to the dramatically changing world.     Inspiring their customers By creating products and services that highlight the core values that make Honda unique, we would like to provide our customers with joy and excitement beyond their expectations. Honda will continue to create such inspiring experiences for our customers by offering mobility that is always ahead of the times. In this way, Honda products will be loved and enjoyed by customers of all generations. Expanding New Values for customers worldwide The ultimate goal of Honda’s sales activities worldwide is to satisfy our customers so that they will continue to come back for more Honda quality products. That's why they put heartfelt effort into our services, responding to changing values and increasingly sophisticated needs. They’re always working to improve the quality of our customer relations providing friendly and attentive sales, responsive service support, thorough maintenance and repairs so customer satisfaction constantly grows. Honda also continues to develop sales and service systems best suited to community needs. In that way, "life with a Honda" brings new joy to people and places worldwide. Starting in Japan in 2006, Honda will unify our multiple car-dealership channels into a single Honda sales channel seeking to strengthen the Honda brand, enhance customer satisfaction and help ensure lifetime customer loyalty.     Business Format and Structure   Considering that Honda is encountering a number of organizational issues, changes in its operations should be done to overcome them. In order to carry these out, change management should be done. This concept is defined as the development and integration of organizational change in a systematic process. Change management can also be defined as the response of different business to various pressures brought about by environmental influences in which organizations have minimal or absolutely no control over. The main purpose of conducting organization changes is to introduce innovative means and systems in the organization. This can similarly be compared to the application of certain information technologies in the company or the adoption of new marketing strategies. Businesses must normally undergo change in order to evolve to a higher level of stability, management or production. While change is induced to bring better business outcomes, introducing change is a challenging task. This is due to the number of factors that could hinder its successful induction. One of which is the hesitance of some employees and managers in considering change within the company. Among various reasons, the most common of which is that some employees are afraid of risks and are already comfortable with their current status. Other managers on the other hand, feared the lost of control over the changed management and the responsibilities it will entail.         Management Organization of the Company's Corporate Governance for Decision-Making, Execution, Supervision and Others       SOURCE:  (2006)     There are approaches that are more focused on what is needed to be changed; others emphasize on how change can be accomplished. Leavitt had defined three approaches to organizational change management, which includes structure, technology and people ( 1964). New formal guidelines and procedures like organization chart, budgeting methods, rules and regulations can be considered as structural approaches on inducing change. On the other hand, rearrangements in work flow through new physical layouts, work methods, job descriptions and work standards are examples of technological approaches. Some organizations stress on inducing organizational change through the people approach which includes alterations in attitudes, motivation and behavioral skills. This can be done through new training programs, selection procedures, and performance appraisal schemes. Other approaches to manage change had also been introduced.  These approaches had been categorized into three: the unilateral power, which focuses on changing a component of the organization; shared power that emphasizes on addressing change through group discussion and agreement; and delegated power in which certain change catalysts or agents are in charge of disseminating change. It has been mentioned that change management is done order to improve specific organizational aspects.                 In the case of Honda, strategic innovation is necessary in order to help the company adapt to various environmental pressures and to improve its human resources. The need for the retailer to implement changes is the same reason for implementing a change concept known as reengineering. Reengineering is a strategy for organizational change done for a number of reasons. Higher performance, acceptance of new techniques, greater motivation, more innovation, increased cooperation and better employee relations are some of the common purposes for organizational reengineering. However, the conduction of reengineering in a company has two main goals as organization management cannot entirely control its environment, they constantly induce internal changes to enable them to overcome new challenges including competition, advances in technology, new government legislation, and pressing social demands. Organizations do not operate through computers but through people who can make decisions and every organization has its unique patterns of decision-making behavior. These patterns stem from both formal and informal ground rules which indicate how an effective manager or employee should behave in dealing with others and in making decisions. The learning experience of the personnel also helped the company in improving its image to the consumers. With improved services, competent staff and more organized systems, customers are able to recognize the efforts of the business to serve its targets better. As a result, the employees were able to help out the company’s profit growth.       Management/ Personnel qualities and experience   The romantic image of the founder-millionaire wearing overalls. tinkering visibly with some mechanical marvel in workshop or lab, is often reality. So it was with Soichiro Honda, in many ways the least typical of the post-war Japanese economic victors: but simultaneously the most visible archetype of the success of Japanese business culture, though an eccentric one. 'Mr Honda', said one baffled journalist, ' is a management executive who always wears red shirts and tells naughty stories when drinking.' The drinking was important to Honda. In his early sixties, the great man admitted that he didn't understand computers. The fact that he couldn't keep up with the technology was only one factor in his decision to take relatively early retirement. Five years later, Honda came of technological age with the Japanese market in recession, Honda invested in German, Swiss and American machine tools, reckoning that they were the best in the world. He then 'reverse-engineered' the European bikes he was copying - taking them apart to see how they were made: and discovering that their best was simply not good enough. European manufacturers believed it was impossible to run motorcycle engines with even faster bursts. Honda not only proved that you could, but also started to win Grand Prix races all over the world. Super-design went with super-efficiency in production engineering. At Honda's motorcycle plants not a single storeroom existed for parts, raw materials, or finished machines; deliveries went in at one end, and finished bikes, up to one every seven seconds, moved straight on to double-decker trucks at the other.   There are few places where an organization can shelter from competitors, and many industries have been shaken up because their competitors have taken a global view of their markets. The demise of the motor cycle industry was in a large part due to the inability of the firms to imagine that anyone could gain great production advantages by thinking of manufacture for a global market, instead of the traditional approach of producing for the local market and the exporting of any surplus where there was a protective customs tariff. More organizations are compelled to think of Honda’s business in global terms and most others are subject to ever increasing intensities of competition. Aside, technology advances bring opportunities as well as threats. One example close to the hearts of managers is the new opportunities offered by advances in computer technology, making e-learning a real option and providing opportunities.                       Financial Forecasts   Honda Motor Co., Ltd. announced that in the third quarter of the current fiscal year, it realized an all-time record for consolidated net sales and other operating revenue for any quarter due to increased sales in all business areas. Honda also realized an all-time record for consolidated operating income for the fiscal third quarter, mainly because of increased revenues, cost reduction effects, positive effects from the depreciation of the Japanese Yen. Income before income taxes decreased by 11.6 percent due to a negative effect from rapid depreciation of the Yen which caused difference in the exchange rate applied for transactions rate and sales rate, and a change in fair value of convertible bond and others. Net income for the period decreased by 11.7 percent, although an all-time record for any quarters in income of affiliates was realized.                       Results for third quarter ended Dec. 31, 2005     Yen ( billions )     3rd Quarter ended Dec. 31, 2004 3rd Quarter ended Dec. 31, 2005 Difference (% change) Net sales and other operating revenue 2,133.8 2,472.0** + 338.1 (+15.8) Operating income 157.6 194.9* + 37.3 (+ 23.7) Income before income taxes 187.9 166.0 - 21.8 (- 11.6) Equity in income of affiliates 29.3 29.6** + 0.2 (+ 1.0) Net income 150.7 133.1* - 17.6 (- 11.7)   Basic net income per common share JPY 161.78 JPY 144.81 JPY -16.97 (- 10.5)   ( Honda’s average rates:  JPY 117 = U.S. dollar 1    JPY 140 = Euro 1 )                     Motorcycles: 2.788 million units (+12.3%); mainly due to an increase in sales of parts for overseas production bound for affiliated companies in Asia and finished products in North America. (Approximately 600,000 motorcycles with local procurement rates of 100% which were procured and sold by affiliates in China and India are not included in the financial results, in conformity with Generally Accepted Accounting Principles in the U.S.) Automobiles: 816 thousand units (-0.1%); almost the same level as the corresponding period in 2004 was realized by the increase in the overseas sales which offset the decrease in the domestic market. Power Products: 1.134 million units (+8.6%); the increase was due primarily to sales growth in Europe and Japan.   Consolidated net sales and other operating revenue increased to JPY2,472.0 billion (+15.8%) , an all-time record for any quarter, and a sixth consecutive all-time record for the third fiscal quarter were attributable to the increase in all business areas.             Consolidated operating income totaled JPY 194.9 billion (+23.7%), an all-time record for a third quarter, mainly consisting of increased revenues, cost reduction effects, and positive effects from the depreciation of the Japanese Yen. These factors offset an increase in selling, general and administrative (SG&A) expenses and research and development (R&D) expenses. Income before income taxes decreased to JPY 166.0 billion (-11.6%), primarily due to a negative effect from difference in the exchange rate applied for transactions and the sales rate, and a change in fair value of convertible bond, held by Honda for the purpose of onboard telecommunication services. Equity in income of affiliates increased to JPY 29.6 billion (+1.0%), an all-time record for any quarters, and fifth consecutive all-time record for the third fiscal quarter.   Forecasts for Fiscal Year Ending March 31, 2006   A sixth consecutive all-time record is forecast for consolidated net sales and other operating revenue based on the unit sales plans of 10.38 million motorcycles, 3.425 million automobiles and 5.73 million power products. (Unit sales of motorcycles, with local procurement rates of 100% which are produced and sold by affiliates in China and India, are expected to increase by 1.69 million units to a total of 2.69 million units, but are not included in the sales plan total and financial forecasts to be in conformity with Generally Accepted Accounting Principles in the U.S.)     Honda aims to set an all-time record for operating income, income before income taxes, equity in income of affiliates, and net income.   The consolidated forecast for the fiscal year ending March 31, 2006 is as follows:   Yen (billions)     Year ended March 31, 2005 Current forecast for year ending March 31, 2006 Difference (% change) Oct 27, 2005 forecast Net sales and other operating revenue 8,650.1 9,740.0 +1,089.8 (+12.6) 9,600.0 Operating income 630.9 860.0 +229.0 (+36.3) 675.0 Income before income taxes 656.8 825.0 +168.1 (+25.6) 655.0 Equity in income of affiliates 96.0 99.0 +2.9 (+ 3.1) 94.0 Net income 486.1 605.0 + 118.8 (+24.4) 490.0   (Honda’s average rates for the FY2006: JPY 112 = U.S. dollar 1 JPY 136 = Euro 1) (Honda’s average rates for the fourth quarter of FY2006:     Corporate January 31, 2006 Consolidated Financial Summary for the Fiscal 3rd Quarter Ended Dec 31, 2005 & Revised Forecast for Fiscal Year All-time quarterly records for net sales and other operating revenue and net income, and equity in income of affiliates. Record as a third quarter for operating income. Fiscal year forecast revised upwards.       Appendices     According to the company’s annual report of 2006, it says that Honda operates under the basic principles of Respect for the Individual and The Three Joys, expressed as The Joy of Buying, The Joy of Selling and The Joy of Creating.  (, 2006: ) Honda has remained on the leading edge by creating new value by providing products of the highest quality at a reasonable price, for worldwide customer satisfaction. In addition, Honda manufactures and market products ranging from small general-purpose engines and scooters to specialty sports cars, to earn an outstanding reputation from customers worldwide. Honda is a global company with manufacturing operations and sales networks as Honda products are enjoyed by people in numerous countries as this global success is built upon the renowned quality of Honda’s products and made possible by the passion and dedication of Honda associates everywhere. (, 2006) The company as a whole defines and clearly communicates to every employee what it wants to be the basis of the customer relationship like acquiring and updating knowledge about customer needs, motivation and behavior drive Honda’s approach toward customer excellence. (, 2006)                 Annual Report 2006 Financial Highlights: Financial Data   The information above pertains to shares and earnings per share has not been restated in the accompanying consolidated financial statements and notes to the consolidated financial statements to reflect this split as the information will be presented effective after the stock split is made   Source of the above data: , 2006 Available at:   Operating Data     Source of the above data: , 2006 Available at:                       It was said that throughout Honda’s annual report, the United States dollar amounts have been translated from Japanese yen solely for the convenience of the reader at the rate of ¥117.47=U.S.$1, the approximate exchange rate prevailing on the Tokyo Foreign Exchange Market last March 31, 2006.   Source of the above data: , 2006 Available at:         Honda strives to carry out its operations from a global perspective and to increase its corporate value. (, 2006) Honda will also acquire its own shares at the optimal timing with the goal of improving efficiency of the company's capital structure. (, 2006)   Honda's Stock Price and Trading Volume in Tokyo Stock Exchange   Source of the above data: , 2006 Available at:                 The information above relates to shares and earnings per share have not been restated in the accompanying consolidated financial statements and notes to the consolidated financial statements to reflect this split. This information will be presented effective after the stock split is made. (Honda Annual Report, 2006 According to the financial report, Honda is a party to derivative financial instruments in the normal course of business to reduce their exposure to fluctuations in foreign exchange rates and interest rates. Currency swap agreements are used to convert long-term debt denominated in a certain currency to long-term debt denominated in other currencies. (, 2006) Foreign currency forward contracts and purchased option contracts are normally used to hedge sale commitments denominated in foreign currencies. Foreign currency written option contracts are entered into in combination with purchased option contracts to offset premium amounts to be paid for purchased option contracts. Interest rate swap agreements are mainly used to convert floating rate financing to fixed rate financing in order to match financing costs with income from finance receivables. (, 2006) Foreign currency forward contracts and currency swap agreements are agreements to exchange different currencies at a specified rate on a specific future date. Foreign currency option contracts are contracts that allow the holder of the option the right but not the obligation to exchange different currencies at a specified rate on a specific future date. (, 2006)   Fiscal 2006 – Results     Source: , 2006   Available at:         REFERENCES

BUSINESS PLAN OF HONDA COMPANY

The focused company for the business plan proposal is Honda Company as there shows market growth and stability in terms of business o...