Assignment 2 External and Internal Environment Honda Motor Co

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Assignment 2 External and Internal Environment--Honda Motor CoChoose an industry you have not yet written about in this course, and one publicly traded corporation within thatindustry. Research the company on its own Website, the public filings on the Securities and Exchange CommissionEDGAR database (http://www.sec.gov/edgar.shtml), in the University's online databases, and any other sources youcan find. The annual report will often provide insights that can help address some of these questions.Write an eight to ten (8-10) page paper in which you:1-Choose the two (2) segments of the general environment that would rank highest in their influence on thecorporation you chose. Assess how these segments affect the corporation you chose and the industry in which itoperates.2-Considering the five (5) forces of competition, choose the two (2) that you estimate are the most significant for thecorporation you chose. Evaluate how well the company has addressed these two (2) forces in the recent past.3-With the same two (2) forces in mind, predict what the company might do to improve its ability to address theseforces in the near future.4-Assess the external threats affecting this corporation and the opportunities available to the corporation. Give youropinions on how the corporation should deal with the most serious threat and the greatest opportunity. Justify youranswer.5-Give your opinion on the corporation’s greatest strengths and most significant weaknesses.Choose the strategy or tactic the corporation should select to take maximum advantage of its strengths, and thestrategy or tactic the corporation should select to fix its most significant weakness. Justify your choices.6-Determine the company’s resources, capabilities, and core competencies.7-Analyze the company’s value chain to determine where they can create using the resources, capabilities, and corecompetencies discussed above.8-Use at least three (3) quality references. NOTE: Wikipedia and other Websites do not qualify as academicresources.Choose the two (2) segments of the general environment that would rank highest in theirinfluence on the corporation you chose. Assess how these segments affect the corporationyou chose and the industry in which it operatesSolution:Honda Motor Co.is a Japanese public multinational dealing in automobiles, motorcycles andpower equipment.The general environment means elements of the society affect industries and the firms thatoperate within those industries. The Company cannot directly control these elements. Thegeneral environment is consists of the following segments: demographic, economic, political/legal, sociocultural, technological and global segments.The demographic segment denotes the characteristics of population in an area, district, andcountry in the world. It includes factors such as age, income, education etc. These data are usedto understand the trend and pattern of consumer behavior.The economic segment refers to the nature and direction of the economy in which a companycompetes or may compete. Important characteristics include inflation and interest rates, trade

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deficits / surpluses, budget deficits / surpluses, individual and business savings and investmentrates, and gross domestic product.The political/ legal segment refers how firms and other organizationsto influence governmentand how governmental entities in turn influence them.The sociocultural segment is concerned with the social attitudes and cultural values of differentsocieties.The technological segment is made up of the institutions and activities involved with creatingnew knowledge and translating that knowledge into new outputs, products, processes, ormaterials.The global segment includes new global markets and existing ones that are changingandimportant international political events.This segment recognizes that firms now compete in acompetitive landscape where both competitors and customers are global, due in part to the rapiddiffusion of both information and technology.For Honda Motor Company economic and global environment is highly risky:EconomicEnvironment:Raw material procurement: Honda is purchasing raw materials and other parts fromoutside suppliers which are beyond their control. Any increase in raw material price willaffect production and cost of product also.Interest rate: Honda is using hedging policies to reduce interest cost.These instrumentsinclude foreign currency forward contracts; currency swaps agreements and currencyoption contracts. Any default by counterparties might have an adverse effect on Honda.GlobalEnvironment:Honda is operating all over world.Regulations regarding vehicle emission level, fueleconomy, noise safety are extensive within the automobile industries and powerproduct industries. Due to globalization, many countries are changing their policiesvery frequently which are affecting company’s operations.Impact on industry:Economics Environment:Pricesof automobile are increasing due to inflation. Automobile industry is the basisindustry of the economy. The major external factor is oil dependency which influences priceelasticity. Some other factors which affect the price elasticity are as follows:Government Taxed on manufacturer

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