Abstract
In the 1990s, emerging markets experienced significant growth, driven by trade liberalization and globalization. Previous studies on emerging market strategies have primarily focused on innovations originating in these markets and their generation mechanisms, assuming heterogeneity between developed and emerging markets. However, these studies have several limitations: (1) they approached developed and emerging markets based on the dualistic perspective of heterogeneity and homogeneity; (2) they overlooked the diversity of demand within emerging markets; (3) they inadequately examined the dynamic nature of firm behavior in specific contexts. Therefore, this study aimed to explore the heterogeneity and homogeneity of emerging markets, demand characteristics, and the dynamic strategies and actions employed in these markets. Using an inductive research approach, this study examined the Honda motorcycle business in emerging markets from the perspective of strategy formation theory. This study's findings indicated that Honda demonstrated flexibility by focusing on the heterogeneity and homogeneity of emerging and developed markets to guide its strategic actions. Honda strategically allocated its technology and management resources to address the diversity in emerging markets. Consequently, Honda’s global concentration and localization strategies became complementary, and markets and strategic actions co-evolved over time. The theoretical contributions of this study were as follows. It demonstrated that developed and emerging markets possess both familiar and distinct aspects. Further, it unveiled inherent diversity in emerging markets, presented a dynamic perspective on the strategic behavior of MNCs in emerging markets, and highlighted their evolutionary processes. Additionally, the study expanded the theory of strategy formation processes into international management.
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Notes
- 1.
Note that theoretical reasons take precedence over statistical reasons for case selection in a inductive research approach, such as this paper (Eisenhardt 1989).
- 2.
References were made to Yamaha Motor's 2002 corporate presentation materials.
- 3.
The selling price of small-displacement motorcycles (approximately 100 cc), which are commonly used in emerging countries, varied from $2,000 to $3,000 until the 1990s but decreased to approximately $1,000 in the 2000s. Furthermore, in many emerging economies, sales financing options for motorcycle purchases became widespread. Consequently, it is now possible to buy a motorcycle with no down payment and make monthly payments of approximately $30 for 60 months. In emerging economies, motorcycles are typically owned by individual households, and each household is often responsible for making the payments (Mishima 2010a).
- 4.
According to OICA’s website (https://www.oica.net/).
- 5.
Eisenhardt (1989) primarily focused on studies involving multiple cases, while Dyer and Wilkins (1991) highlighted the significance of single-case studies for their ability to provide a comprehensive understanding of individual cases. Eisenhardt (1991) criticized single-case studies, as noted by Sato (2009). Considering these methodological debates, this paper has concluded that using a single case study would not present any obstacles in clarifying the research question, particularly given Honda’s dominant position in the motorcycle industry as an oligopoly and that the analytical perspective of this paper is based on the strategy formation process theory, which employs a single company as its case study.
- 6.
According to Honda Motorcycle Business Presentation, September 13, 2022.
- 7.
Given the diverse view of innovation in this paper, technology will be examined as a broad term encompassing production management, procurement methods, and business management, in addition to technology itself.
- 8.
Honda’s website (https://www.honda.co.jp/guide/philosophy/) was referenced.
- 9.
Honda’s website (English: https://global.honda/about/philosophy.htm; Japanese; https://www.honda.co.jp/50years-history/challenge/03_marketingglobaly/#:~:text=%E3%82%A2%E3%82%B8%E3%82%A2%E3%83%BB%E5%A4%A7%E6%B4%8B%E5%B7%9E%E3%81%AE%E4%B8%BB,%E3%82%92%E5%B1%95%E9%96%8B%E3%81%97%E3%81%A6%E3%81%84%E3%82%8B%E3%80%82) was referenced.
- 10.
According to Honda Motorcycle Business Presentation, September 13, 2022.
- 11.
References were made to Yamaha Motor's 2002 corporate presentation materials.
- 12.
- 13.
For Indian firms, we refer to Mishima (2020b); for Chinese firms, we refer to Automotive Industry Department, Ministry of Machinery Industry, and China Research Center for Automotive Technology (various annual editions).
- 14.
The importance of “producing where there is demand” has been emphasized every time I have visited Honda’s overseas bases since 2002.
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Acknowledgments
This work was supported by JSPS KAKENHI Grant Numbers JP21KK0025, JP19K01841, JP16K03884.
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Mishima, K. (2024). How Strategy-Making Shapes Honda’s Future in Emerging Markets?. In: Makino, S., Uchida, Y., Kasahara, T. (eds) Transformation of Japanese Multinational Enterprises and Business. Springer, Singapore. https://doi.org/10.1007/978-981-99-8616-3_7
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