In the 1960s, the Japanese market could have been defined as fragmented, where sources of competitive advantages were numerous but was easily imitable.
Barriers to the entry are low and market positions are unstable. Indeed within 5 years, Yamaha managed to dethrone Honda Tohatsu. With the high debt that financed its expansion, Honda has benefited from the strong market growth and thus increased its market share.
Honda has indeed been investing heavily to increase its production capacity to meet the market demand that results from strong growth (+40% per year), which its competitors have been unable or unwilling to do.
This success and the distancing of its competitors allowed Honda to clean up its financial structures.
Tags: Yamaha and Honda rivalry, success of Yamaha, Honda's financial structures
[...] Indeed Honda products are sold at unbeatable prices. Meanwhile, the range renewal is provided continuously, constantly offering customers new lines. The strategy for Yamaha with objectives suited to the life cycle of the industry Yamaha took the wait-Honda to increase its share in the Japanese motorcycle production. At the country level, Yamaha as well arrives at 37% market share, almost the same level as Honda which is 38%. In 1981, Yamaha introduces all new Honda models. However its R & D are much lower than than Honda over the same period. [...]
[...] The company plays on the similarities of knowledge and resources between the motorcycle industry and the automotive industry, which gives it a competitive advantage. The leading position in the motorcycle market allows him to adopt a wait position in this market, while maintaining a competitive intelligence. The war against Yamaha In the '80s, the motorcycle industry was in a phase of maturity. Faced with the rise of a new competitor, the best strategy is to leverage all the capabilities of innovation and development. [...]
[...] The war between Honda and Yamaha I. Honda's strategy: a perfect adaptation to the life cycle of the industry A. The conquest of the Japanese motorcycle market between the early 1950's and mid 1960's Showing competitive Honda system early in its development: At that time the Japanese market can be defined as fragmented sources and the competitive advantage are numerous but easily imitable. The barriers to entry with respect to competitive positions are low and unstable. In five years, Honda managed to dethrone Tohatsu. [...]
[...] Honda had understood a change of rules of the game before the longevity of a product, and now consumers are attracted by the novelty it was looking (the life cycle of a product is greatly reduced). Constant innovation is therefore required and the R & D must have significant resources. That Yamaha did not have. One can also think that Yamaha has invested heavily as the market has matured, while Honda did while it was growing, which allowed it to enjoy a high leverage. Yamaha therefore did not have such an ROI. [...]
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