Honda Motor Co. wished to enter the motorcycle market in the United States. The Japanese executives visited Los Angeles in 1959 to establish a subsidiary here, expecting to focus their marketing on the sales of full-size 250cc and 350cc bikes to motorcycle enthusiasts. They shied away from pushing the less powerful 50cc Honda Cub model, which was popular in Japan.
This was Honda's intended strategy, or planned strategy.
But a funny thing happened on the way to earning profits. Sales of the more luxurious bikes in America were sluggish, and many of the bikes suffered mechanical deficiencies.
At the same time, the Japanese executives on errands were motoring around LA on their little Honda Cubs. One day, a call came in from a buyer from Sears, Roebuck and Co. who saw a market for the 50cc bikes and wanted Sears to be able to offer them for sale.
This suggestion ran counter to the motorcycle company's plans, and executives felt sales of the Cubs might affect the image Honda wanted to portray to motorcyclists. Eventually, because the larger bikes weren't selling well and were plagued with problems, Honda agreed to sell the Cubs and market its name to Americans as affiliated with a motorbike for first-time buyers.
This emergent strategy was one Honda had considered but tossed aside as wrong for its entry into the market. Along the way, the company tested a new means of distribution -- general retailers instead of specialty motorcycle shops.
Within five years of Honda's entry in the market, one of every two motorcycles sold in the United States carried its imprint.
Copyright © Marilyn Shaw and Merri Incitti
This page last updated November 1995
Mention of this case appears on pages 5-7 in "Strategic Management An Integrated Approach," Third Edition, by Charles W. L. Hill and Gareth R. Jones, published by Houghton Mifflin, 1995.
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