Executive summary
Recently, motorcycles are the most popular means of transportation in Vietnam. Currently, there are more than 21 million circulated motorbikes, counting for 4 Vietnamese Vietnamese persons per motorbike on average average with some popular trade names such as Honda, Yamaha, Sym, and Suzuki …, which meets about 90% traveling demand of Vietnamese. The demand for motorbikes is more and more increasing with the development of Vietnam economy. Seeing this, the competition among motorcycles makers in Vietnam is more and more powerful. In order to attract customers as well as to satisf satisfy y custom customers ers’’ needs needs about about produc productt quality quality,, reason reasonabl ablee price, price, fashio fashion n styles… styles… motorcycles motorcycles makers makers have carried out a lot of marketing marketing strategies strategies because marketing management has the task of attracting and building relationships with customers by creating customer value and satisfaction so that organization can sell its products as many as possible, more importantly, higher than its competitors. However, it is not easy for any organization to set up a successful marketing plan because the development of the marketing plan is influenced by the situation analysis which provides a gather of relevant market information at both micro and macro environment of an organization. Among motorcycles makers, Honda Vietnam makes a huge effort to remain their brand name and ensure the quality of product with a reasonable price. And it is said that Honda motorcycles always take up the leading market shares in Vietnam making Honda to be the leading company in motorbike industry. So, this report is aimed at providing situation analysis of Honda Vietnam incl includ udin ing g comp compan any, y, envi enviro ronm nment ental al,, compe competi tito tor, r, cust custom omer er,, bran brand d and and SW SWOT OT analysis.
1. Introduction
On the global market, when the competition in international economic integration becomes more and more blazing hot, especially in the context of financial crisis and economic economic downturn, downturn, enterprise enterprisess need to create create and maintain maintain competitive competitive advantage whic which h make makess them them outs outsta tand ndin ing g comp compar ared ed with with thei theirr comp compet etit itor orss so that that organizations can be solidly based in both short- run and long-run and during their lifetime. The success of organization is based on the effort of each individual in organization, each business unit and the whole organization as well. There are many different different departments departments in an organizatio organization n like marketing, marketing, research research and development, development, financ finance, e, account accounting ing,, purcha purchasin sing g and manufa manufactu cturin ring g etc… etc… and each each departm department ent performs its own function. However, each department does not carry its task alone, it co-oper co-operate atess with with other other depart departmen ments ts within within the organi organizat zation ion so that that it not only only accomplishes its objective but also contributes to achieve the objective of the whole organization. Profit is a numerical data showing the success of the organization and it is stated that the profit of the organization is the difference between sales revenue and all incurred expenses. Thus, among these departments, marketing department seems to be the most important one contributing to the success of the organization. In this paper, a gathering of relevant market information that influence the development of the marketing plan will be provided in the circumstances of Honda Vietnam Company, particularly in the context of Honda Lead.
2. Company analysis
2.1. Company profile
Honda Vietnam Company which was established in March 1996 with charter capital of 62,900,000 million US dollars is a joint-venture of Honda Motor Co., Ltd (Japan), Asia Asian n Honda Honda Moto Motorr Co., Co., Ltd Ltd (Thai (Thaila land) nd) and and Viet Vietna nam m Engi Engine ne & Agri Agricu cult ltur ural al
Machinery Corporation. At early days, the company specialized in manufacturing and assembling motorcycles. By 2005, Honda Vietnam received the adjustment investment license in which automobile assembling was added to its business, it also provides warranty services, repairs motorcycle and automobile. Honda motorcycles and automobiles always take up the leading market shares for the high-class motorcycle range in Vietnam making Honda to be the leading company in motorbike industry.
2.2 Mission statement
With the mission statement "to become a company that the society wants to exist", Honda Vietnam's activities have been oriented toward the community since establishment. HVN has strived for both the happiness and safety of the Vietnamese people, as well as the development of the country. The company has always made great efforts to apply modern and advanced equipment and technology in production, to develop its domestic supplier network to increase the localization ratio, to transfer technology, to research and develop new models, to recruit local employees, to train and improve the skills of our labor force, and to actively contribute to the national budget. Although Honda Vietnam has provided a variety of range of motorcycles like SH 125cc, Air Blade F1, Lead, Click play, Click, Future NEO F1, Future NEO, Wave 110RSX , Wave 110 RS, Wave 110S, Super Dream, Wave alpha, it was unable to scale up production as its factory in Vinh Phuc was running at full capacity. So, in order to meet the increasing demand, Honda Vietnam Company formally held an Opening ceremony for its second motorcycle plant in Vinh Phuc province in August 29, 2008 with the key features of "Environmental and human friendliness" to fulfill the customers’ orders, especially for the Lead scooter. This is the proof for Honda Vietnam's effort to satisfy more increasing and diversified demand of Vietnamese customers.
Besides, Honda Vietnam has been always taking part in social activities with the wish of becoming a Company that the society wants to exist. The Company has paid special attention to traffic propaganda & safety driving instructions, education
development support, culture, arts & charity… Especially, the campaign “I love Vietnam” with the message: safety, environment and Social Activities prove Honda Vietnam’s effort to contribute actively to the development of Vietnam.
2.3. Company objective
In accordance with the mission statement, company sets up its corporate objectives guiding the present and future development of the company over the next 12 months as follows: Expansion of market share in existing and new markets; Development of new product lines to satisfy different consumer preferences; especially, providing high quality scooter like SH for high class in the society Building closer relationship with young consumers in Vietnam based on appreciating life styles and thinking of the young generation who always pursue the continuous development for a better life and for the development of Vietnam. Maintaining the best quality with a suitable price Keeping up with modern technology and applying the latest technology in manufacturing product
2.4 Overview about LEAD scooter
Currently, Honda Vietnam has twelve kinds of motorbikes which are being offered in the market. SH 125cc is the newest one entering Vietnam market from the beginning of November in 2009. Among various types of Honda Vietnam motorcycles, we intended to choose Honda Lead to deeply analyze specific situation because of some reasons. Firstly, Lead is similar in design to the Honda SCR scooter that has been imported from China for sales on the local market over a year now. Secondly, from the first day appearing in Vietnam market at the beginning of year 2009, the model of the vehicle 110 Lead Honda Vietnam has caused "shock" to all
customers due to the much higher price that it was listed. It is derived from the high demand and scarcity supply for Honda Lead. Actually, when we searched information about Honda, we saw a lot of negative and bad news about Lead as well as Honda reputation. It is the reason why we want to concentrate more about this scooter to understand thoroughly marketing strategy of Honda Lead . Lead was firstly introduced to market on December 24, 2008 and sold on January 2, 2009 at all HEAD ( Honda Exclusive Authorized Dealers). Honda LEAD is the third type of scooters manufactured by Honda Vietnam; the others are Air Blade and Click scooters. Lead is high – class and luxury scooter for those who have high living standard and modern lifestyle. The slogan for this scooter is “Lead to the next stage”, which shows pioneer stuff of the users. Like other products of Honda, Lead is also a saving energy and user – friendly scooter and it follows the long – term objective of Honda toward Vietnam market that “Honda is always trying to bring Vietnam customers more joy with high quality, safe products and reasonable price” Honda LEAD is featured with a four-stroke, 108cc engine, built-in liquid cooled radiator and computerized fuel injection system to be more fuel efficient and environmental friendly meeting the Euro 3 emission standard. Additionally, many safety features are installed into the LEAD, such as Combi Brake; and the bright Halogen Light. Beside that LEAD is perfectly designed to deliver the most additional valuable benefits to customers such as: The super large U-Box; Conveniently Fuel Center Lid; comfortable seat; Tubeless tire. Also, customers have many choices when coming to LEAD Honda Vietnam because of various colors of black, white, red or silver. Especially, the very first time appearance of 2 newly EZ Flip colors: Gold and Pink that offers color transformation in changing brightness conditions is expected to bring about a fresh and active style for riders. Furthermore, the suggested retail price of the LEAD will be at VND 30,990,000 VND for standard colors and 31,490,000 VND for special colors (VAT included).
3. Environmental analysis 3.1 Natural
Environmental pollution is a serious problem in Vietnam nowadays. There are many types of environmental pollution like water pollution, land pollution, noise pollution…among them, air pollution is a hot issue for not only Vietnam but also other countries all over the world because air environment has many changes affecting badly to people and creature. Air pollution is caused by many factors such as exploring and using natural resources: coal, oil..., emission from factory, vehicles…it is said that air pollution, especially in big cities, is mainly caused by vehicles. Environmental experts say that vehicles, especially motorcycles, cause 70 per cent of all air pollution. Therefore, producing friendly- environment motorcycles is encouraged and is concerned a lot, especially; a standard on motorbike exhaust fumes was set up in 2007. In the absence of a control standard for motorbike fumes, the best solution at present is to find a way to minimize fumes from all engines to save the environment. Seeing this, Honda Vietnam has tried to apply new technology in producing motorcycles which is friendly to environment. With all features above, Honda Lead saves energy and environmental friendly meeting the Euro 3 emission standard.
3.2 Social/ cultural
When traffic jams situation happens more and more frequently, in addition to government legislation requires every one on motorcycles to wear helmet, scooters become favorite means of transportation nowadays because scooters express some advantages compared to motorbikes as follows: Firstly, scooter is more convenient for driving in small roads or rush hours, traffic jams than motorbikes because scooter does not need much adjustment for gear as motorbike. Secondly, scooter has a large box for bags and helmets. Most of all, the line Scooter is currently circulating in the market are designed relatively consistent with the appearance of Vietnamese people as relatively low saddle. Moreover, many people perceived that scooter will take more petrol than motorbike, so average income class will have tendency to buy motorbike but now, which is improved so much. In addition, with the development
of economy, people have higher income; they have more demand for scooter which is better fit with modern life style and fashion. In short, scooter is more and more popular with Vietnamese consumers, so Honda decided to launch Honda Lead scooter to satisfy customers’ demand.
4. Competitor analysis
Currently, motorbike market is quite attractive. There are a large number of the companies focusing on this field. So, since Honda launched LEAD into the market, it has met both internal competitors like Air-Blade, Click… and many external direct opponents such as Smash, Mio classical, Nouvo, Suzuki amity 125, Attila Victoria, Honda SCR China, ….Besides, a lot of the companies producing cars: Toyota, Ford, Huyndai, BMW…are considered as indirect competitors of Lead.
Among direct
competitors above, Attila Victoria and Honda SCR imported from China will be selected to assess their strengths and weaknesses relative to Honda Lead. As we can see that SYM is the first adversary which competes with Honda. SYM is associated with reliability and genuineness. SYM, with line of diverse motorbike products such as Attila, VS Exel, Magio 110 RS, Bonus 110…created a new wave on the Vietnam market and has competed strongly with Honda. Specially, SYM introduced original Attila to the Vietnam market in 1998, Attila Victoria, a new version to the market in August 2008 before introduction of Honda Lead at the end of 2008, which made Attila Victoria coming to customers earlier. It has not only new shape but also cheaper price than Lead (28 million VND- Attila Victoria, and 31 million VND – Honda Lead). In addition, SYM has provided services more attractively for users as they buy this product than Honda. For example, guarantee period of Attila Victoria is 2 -year warranty like Lead and one more option is 30000km comparing with 20000km of Honda. In general, Attila is one of the competitive and powerful motors which Honda needs pay attention to make Lead more perfect.
Secondly, SCR which has been produced by Honda China is also a strong competitor of Lead. In general, Lead and SCR are nearly similar about the shape, engine, but the price of Lead (31000000 VND) is cheaper than SCR (33000000 VND) and the color of Lead is younger and more various. SCR has only two colors for customers to choose: yellow and pink but there are four colors for Lead. When Honda launched Lead to the market, SCR is very popular to users and receives much more attention from customers because of good features such as big box, fuel injection engine PGM-FI…. These features are also included in Lead. The difference between them is that Lead is equipped without the sub-foot drum motor, which creates difficulty for users especially female. At this point, SCR can be evaluated more highly than lead. However, the operation of Lead is quite humid and smooth, which makes customers more comfortable and the guarantee period of Lead is longer than SCR (six months to one year). To sum up, with appearance of Lead in 2008, it attracted more attention of many people and has reduced a large number of SCR bought. With evaluation above, it is clear that Lead stands the second position comparing with Attila Victoria and SCR. Up till now, with the reasonable price Lead is a good choice for those having average or high income. The positioning of Lead and its two direct competitors can be defined at the following map: Quality
Lead Attila SCR Low
price
A positioning map 5. Customer analysis
In the Vietnam motorcycles market, there are four customer segments divided for those who use Honda Lead.
Customer segments Geographical
Characteristics
Currently, Honda has about 400 retail stores in all the country. Like other kind of motorcycles, Honda Lead has been distributed to HEAD (Honda Exclusive Authorized Dealers)
from the North to the South,
however it has still been consumed mostly in big cities in which have dense populations and high living standards such as Hanoi, HoChiMinh city, Hai Phong, Da Nang, Hue, Can Tho, etc.
Because Lead is a high – class and luxurious scooter product, it is not much sold in rural areas.
Demographic
With opulent and superior design as well as various colors, Lead can be used by both male and female
Its price is acceptable for workers who have at least above the average income as well as students having good economic ability.
It is also suitable for the whole families with parents and children who are students needing motorbike to
go to school.
It is also always available for everyone with needs in any occupation
Psychographic
Actually, Honda Vietnam designed Lead for specific socioeconomic classes in term of economic ability. It focuses on those who have high living standards, in other words, who can afford for this luxurious product.
Lead is a preferable motorcycle to those who are keen on scooter because of its style which makes drivers feel proud of them as well as brings luxury and modernity to its owner.
Behavioral
Lead is firstly launched in Vietnam market at the beginning of year 2009. It is a time near Tet holiday, therefore consumers want to have a new motorbike at this time in order to make ready for Tet. This leads to the increase demand for this scooter.
Nowadays, a motorbike is not simple as a means of transportation. It also shows the socioeconomic status of its owner, so consumers want to choose motorbike which represents their high rank because of its luxury.
Consumers
also
choose
Lead
because
of
its
advantages compared with the other scooters such as: saving energy; light, simple and user – friendly design; advanced, powerful and mild engine; cheap stated price and brand familiarity.
Honda Vietnam is the leading company in motorbike
industry, therefore the products of Honda like Lead is often the priority choice come to the customers’ mind.
The buyers using Lead – a product of Honda are somewhat loyal. They are loyal to the motorbikes manufactured by Honda Vietnam. They believed that Honda will create value and satisfaction for them.
Most customers in big cities and urban areas are aware of the Lead brand because of its repetitive advertisings on television as well as monumental show for the first appearance of this scooter. However, many potential users in the rural areas are unaware or not informed about this kind
of
motorcycle because Honda has not focused on this market segment.
Decision type for the Honda Lead
Actually, scooter like Honda Lead is still an expensive and infrequently purchased product for Vietnam customers; therefore before making decision to buy a new one, they highly involved in a purchase by searching a lot of necessary information about its price, quality and characteristics. Moreover, there are significant differences among brands such as Honda, Yamaha, Suzuki and SYM as well as other motorcycles products coming from China. For example, Honda products are saving – energy and user – friendly, while Yamaha products normally look so sporty and powerful. It is the reason why consumers always compare among brands to choose the best one. These features show us that it is complex buying behavior.
6. Brand analysis
6.1 Product life circle (PLC) stage
Up to now, Honda Lead has been appearing in Vietnam market for about one year. Like other new products, it also progresses through a range of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix. As can be seen from “price storm” of Honda Lead, this product came over the introduction stage and begins with the growth rate showed through the high demand and quick sale. However, it can be predicted that it may enter the maturity stage and whether it can back into the growth stage or not depends on the way the company changes one of the marketing mix of the product - price. In this report, we will focus on the introduction and growth stage as well as maturity stage.
6.1.1 Introduction and growth stage:
Actually, Honda Lead has very quick introduction stage, so it moves to the growth stage immediately. Firstly, as the product is introduced into the market, the demand for it was so high that sale goes up rapidly instead of slow sales growth as predicted for this stage. Moreover, according to Mr Shinichi Shimada, Senior Manager of Customer Service Department, Honda Vietnam affirmed that this company is suffering loss of prestige when Head himself push price up and benefit from the difference between the listed and selling price, meanwhile the company do not benefit from the price increase.
6.1.2 Maturity stages
Currently, the “price storm” of Honda Lead has not been solved appropriately by Honda Vietnam Company and it’s HEAD. Consumers have been disagreeing with what Honda managers explained for their irresponsible action in term of controlling price. In addition, they no longer believe Honda reputation and they may boycott Honda products including Lead. In recent time, the sales of Honda Lead slow down, which make profits drop. This report forecasts that Honda Lead may have chance to
return the growth stage if the company changes the marketing strategy in term of price to make customer trust the company reputation again. In contrast, if Honda Company do not act correspondently with the customers’ opinion, they are likely to loose the motorcycles market to other competitors.
Honda Lead
6.2. Current marketing strategy using 4Ps framework
It is very important to the Honda Company to determine 4Ps which stand for Product, Place, Promotion and Price with the purpose of changing customers’ negative mind about Honda Lead. Product
Honda Company is trying to increase Lead output to meet the customers’ demand and avoid the increase price due to the scarcity of this scooter. Moreover, the company also improves the product quality to make customers feel satisfaction
Place
Honda Lead has been distributed through HEAD in all the country. HonDa Company has still used HEAD as their main channel of product distribution.
Promotion
Honda continues their promotion campaigns through two main communication elements namely advertising and public relation. Because of the large market share of motorcycles lines, Honda is utilizing both PUSH and PULL strategies. In term of public relations, Honda is always trying to build good relationships with the Vietnamese customers by involving in the community as well as investing in social portfolio with the purpose of proving their efforts toward Vietnam society. Price
Recently, Honda often makes customers dissatisfied with the pricing decision because of the much higher difference between the listed and selling price. Honda Company clearly knows about this issue from the “price storm” of Lead and Air Blade, but they have not solved this affair appropriately yet. This brings HEAD chance to push price up whatever they like to make profits.
7. SWOT ANALYSIS 7.1. Strengths
Honda has been a well-known brand in the world before entering to Vietnam in 1996. People know about Honda Japan, Honda Thailand and now Honda Vietnam. Over 10 years of long existence and development, Honda Vietnam now becomes a part in the Vietnamese people’s life. Moreover, taking part into social activities, especially makes Honda become the friendly motor brand with people. Thus, Honda Vietnam is one of the most prioritized brands for choosing motorcycles of domestic customers. LEAD, firstly launched in Vietnam market on 24 December 2008, is one product of Honda Vietnam after 12 years since company’s establishment, so it will also have full fame and take advantages of its brand. It makes one of the strongest points of this scooter.
Another strength of LEAD Honda which plays a part in the firm’s way to become popular is the excellent characteristics of products- a scooter designed with concept of “Premium and Modern” and takes in the international trend of big scooters. LEAD is the perfect match with modern and premium lifestyle and is the “new standard scooter” to the people living in the cities. Beside the features of a modern scooter’s engine, such as, 4 stroke, 108cc radiator built-in liquid cooled engine, LEAD is also computerized Honda PGM-FI( electronic fuel injection ) system that providing LEAD as the best fuel efficiency in its class and offers environmental friendliness meeting the strictly Euro 3 emission standard. This advanced point is not applied for lots of scooters in Vietnam, for exampl e, Click Play (Honda), Nouvo( Yamaha)… Additionally, many safety features are installed into the LEAD, such as Combi Brake. Beside that LEAD is perfectly designed to deliver the most additional valuable benefits to customers ,namely, LEAD has a super larger U-Box than other scooters’, for instance, Nouvo or Air Blade… so it is very convenient for driver to store a lot of things. Also, customers have many choices when coming to LEAD Honda Vietnam because of various colors of black, white, red, silver, gold and pink that offers color transformation in changing brightness conditions is expected to bring about a fresh and active style for riders. While Air Blade has black, white, red; or Nouvo has more dark blue. Furthermore, the suggested retail price of the LEAD will be at VND 30,990,000 VND for standard colors and 31,490,000 VND for special colors (VAT included). It is the suitable price for a modern and high graded scooter. . 7.2. Weaknesses
Everything has two faces: strengths and weaknesses; and LEAD Honda Vietnam is not an exception. Besides its strengths, LEAD has a number of weak points. First of all, that is the weakness concerning with HEAD manage ment. During the last period of the economic recession, Honda Vietnam has offered customers many promotion programs such as gift vouchers, discount prices in order to stimulate the motor demand. However, HEAD does not inform customers about those prices. In
addition, HEAD pushes the prices up because of the escalation in scooter demand due to higher average income of consumers. This brings HEAD lots of money from the discount prices and from the difference between the original prices and the increasing prices. The motor prices at HEAD are obviously higher than those at others small motor shops. Partly, the listed retail price of the LEAD is at 30,990,000 VND for standard colors and 31,490,000 VND for special colors (VAT included), but in fact that the customers must buy LEAD higher three- four millions and even when its price goes up 39,000,000 VND. But Honda Vietnam did not have any effort to solve this problem. They just told via the media that HEAD could sell motors at any price that they wanted. This means Honda Vietnam denies being responsible for this affair. Another result from the “prices storm” is that the motor prices being pushed up would let consumers down. On the Internet, there are some forums calling the consumers to boycott LEAD Honda Vietnam. Moreover, the “prices storm” helped HEAD to be tax dodgers because they sell motor to the customers at high prices but pay tax at listed prices, meaning the low prices. Therefore, they can have more money from the difference between the two prices. The last weakness is about Honda Vietnam services such as sales service, maintenance service. At HEAD, when customers complain about the highly increasing prices of Lead, no one gives them suitable explanation or intends to convince them to buy. Generally, attitude of sales persons are not helpful and that makes a lot of buyers dissatisfied. Another example is concerned with the guarantee’s maintenance of Lead. When the customers go to HEAD to have warranty, they often wait for long time or receive unfriendliness of staff. 7.3. Opportunities
It cannot be denied that some factors and forces of the external environment bring the Honda Lead great opportunities. The first important one is from Vietnamese customers. Organization exists to meet the needs of customers. If it creates great customer values and satisfaction, it is
successful. As stated in the website
www.state.gov,
Vietnamese per capita income
(2008) is 1,024 dollar per year. That level of income explains why customers in Vietnam prefer a motor with a reasonable price. However, nowadays, a lot of people have higher average income, so they want their vehicles not only to travel but also to represent for their socioeconomic status. Thus, the tendency to buy scooter instead of motorbike gradually increases. LEAD helps its customers have both requirements in a scooter- convenience and style. In addition, there is a significant rise in the customers’ demand for motors, especially motorcycles (scooters and motorbikes) at 90% in big cities (www.honda.com.vn). These characteristics of Vietnamese customer market give products of Honda Vietnam Company, including LEAD, a chance to enhance the performance remarkably. In reality, being aware of this opportunity, the company has expanded the scale of production of LEAD to satisfy customers’ needs. The second opportunity which the external environment offers is socio - cultural conditions. It is evident that air pollution is one of the country’s most alarming issues caused mainly by motor vehicles as Vietnam expects to have 31 million motorbikes and 3 million cars by 2015 (http://english.thesaigontimes.vn). This problem causes serious harm to people and nature. Therefore, the whole society becomes more aware of the importance of protecting the environment. They intend to use emission-limiting and fuel-saving vehicles. Taking advantage of this opportunity, the Honda Vietnam Company has issued a mass of hi-tech and eco-friendly products, accompanied by environmental protection activities. Honda Vietnam has obtained many advanced achievements in the motor industry and LEAD is on e of the best ones. The last but not least is the opportunity due to globalization. Like many other companies, in Vietnam in Post-WTO time, LEAD has great opportunities from this important event. When our economy integrates completely to the world market, the company is in front of the chance to have much wider customer market without any trade barriers. Also, it can adopt modern technology, foreign investment and effective management methods more easily.
7.4. Threats
Beside opportunities, LEAD Honda Vietnam faces some threats as follows: Firstly, threat is set up by the bargaining power of customers. It is the fact that the more the society has developed the more trends towards modernization and diversification has been popular. It makes the number of industries appeared, including motorcycles industry. Among Vietnamese scooters market, there are lots of different brands with various and innovative products such as Mio, Nouvo (YAMAHA), Zip, LX, Fly 125 (PIAGGIO), Attila, Joyride (SYM), Bella, and Amity (SUZUKI) … Therefore, the customers have more choice to select the best one that suits with their preferences. To meet the demand of customers, LEAD Honda Vietnam continues to make sustained efforts to improve their product in terms of price, style and function as well as services day by day. They are trying their best to launch scooter that fits well with Vietnamese people’s needs and at the same time reduce negative effects on environment. Secondly, the bargaining power of suppliers is mentioned. It is clear that Honda has established a close relationship with its suppliers mainly in Japan. They are trying to persuade their suppliers to reduce the price of some components. Because of the limitation of domestic market in manufacturing car’s component, Honda has to import the component from foreign country like Japan, China and assemble in Vietnam. Those causes manufacturing Lead depend on foreign suppliers in terms of price and quantity. Next, threat is caused by new entrant. Since Viet Nam is a member of WTO, Vietnamese customers have more choices to own suitable scooter. There are more famous foreign brand names than ever before in domestic market such as Piaggio, CPI … with good quality and appealing appearance. They attract a large amount of customers especially ones who have high income and desire to show off their status. Additionally, Vietnam permit motorcycles importing business not only new but also old ones with efficient quality standard and expiry date rules. Moreover, according to
Mr Do Huu Hao, vice prime minister of Ministry of Industry, the import tax of motor is reduced considerably in the next 3 years at the rate of at least 15 % in comparison with the current price. Thus, Honda now is in the edge of losing market share in Vietnamese market. Finally, it comes from rivalries. Yamaha, Suzuki, two strong competitors of Honda Vietnam, now keep innovating their products, including scooters, and having longterm goal to become the leading producers. Evidently, Yamaha has scooters, such as, Mio, Exciter, Nouvo with various prices from 20,000,000 to 32,700,000 VND; while Suzuki also has Suzuki Hayate with lower price, good quality, fashion. In addition, Lead now has to struggle against the scooters flood from China which cheap price is a competitive advantage of these products to compete with Lead. From SWOT analysis, some suggestions are mentioned to help Lead scooter continue to be the best option for Vietnamese customers. Strengths Long term brand
Possible actions Continue developing marketing strategies, such
Technology
as promotion programs, doing charity … to raise the company’s image and brand name of LEAD in the market Update
advanced
and
modern
machinery
technology all over the world Weakness Control selling price
Control to stabilize price, avoid big difference between listed and selling prices
Sale
and
maintenance
service
Manage,
train
and
motivate
(
reward
or
punish)staffs Be able to use mobile repairing service
Opportunities Vietnamese customers
Do research about
Socio- cultural conditions
international customers and society to innovate
Globalization Threats
LEAD and expand market for this scooter
demand of domestics and
Bargaining
power
of
customers Bargaining suppliers New entrant Rivalries
Innovate continuously product with high quality and suitable price for customers
power
of
Look for domestic suppliers to make lower price and assemble actively
