The competitive advantage of Honda Corporation

The competitive good of Honda Corporation in that location are several factors that can contribute to a firms ability to be competitive in its perseverance. Building blocks of a competitive payoff overwhelm efficiency, reference, innovation, and responsiveness to customers. A firm with a competitive advantage may experience higher profits than the average profit in the attention while competing for the same customers. In the case of Honda, this is true. Honda has many distinctive competencies establish on its re seminal fluid and capabilities that allow it to have a competitive advantage in the auto manufacturing industry. Three areas that give Honda a competitive advantage in the auto industry include Hondas engineering and frame, research and development, and fault equity. In order to determine whether Hondas competitive advantage in these triplet areas is sustainable, we analyze and apply each one to the VRIO framework.Honda is unique in that its incorporated structure is made of three companies. Honda Research and Development is in burster of research and development of innovative products for the companionship. Honda Motor produces, sells, and services the all Honda products. Honda applied science develops manufacturing processes, systems and equipment used to come along all Honda products. Hondas superior design capability has enabled it to build high-quality authorized products and has overly added value to the Honda brand. Hondas efficient manufacturing processes have likewise unplowed production costs low coition to opposite automakers in the industry (Snipes 2008). In terms of value, Honda excels at using its engineering expertise and design skills to build reliable machines that simply work. This ability is quite worthful to the social club and its industry. Although valuable, Hondas engineering and design is not rare, because there are other car manufactures with excellent engineering and design capabilities. For car manufactu rers who are not already competitive with Honda in its engineering and design ability, it would be precise unwieldy to bridge the gap to competitiveness by imitating Hondas success. Therefore, Hondas engineering and design is inimitable. The final question to ask is whether Honda is organized, ready and able to take advantage of opportunities via its engineering and design. Hondas organization is unique in its management structure in that it differs from nigh public U.S corporations. A board consisting of 21 directors runs the lodge, which allows for faster decision-making and execution in new product design (Whiston 2010). All of the companys business units are line up to take advantage of design breakthroughs, which leads to a conclusion that its engineering and design are a source of sustainable competitive advantage.Hondas focus on research and development is highly valuable and places it at the forefront of technology. This allows the company to incorporate technological breakthroughs and advancements into its wide line of vehicles. Honda also has a very high level of investment in research and development, which is not putting surface in the auto industry. Hondas level of commitment to research and development is also very rare compared to its industry peers. Honda possesses a strong first doer advantage over many competitors in this area because of the advanced nature of its research. Competitors not actively pursuing their own research find it very difficult to catch up to Honda, therefore the companys RD is considered inimitable. Organizationally, Honda keeps the RD group separate from other divisions within the company giving its teams freedom to develop new technologies for the company across the board. Hondas unique structure and its level of commitment to advanced quality research make its research and development a sustainable source of competitive advantage in its industry.Hondas brand equity is an extremely valuable source of its comp etitive advantage since consumers are willing to pay a premium for Hondas vehicles because of the power of its brand and its association with quality and value. As a result, it has led Honda to have best-in-class repeat purchase rates. Honda has repeatedly been placed among the worlds efflorescence 20 most valuable brands according to a research conducted by Business Week Magazine (Ferret 2006). The Honda brand ranked 19th on the international list of one hundred most valuable brands in 2005, having a brand value of $15.8 billion. Honda has very strong brand devotion as evidenced by the strong repurchase rate for Honda automobiles relative to the industry norms. 65% of Honda customers purchase another Honda automobile compared to only 48% for the industry (Ferret 2006. While it is highly valuable, Hondas brand equity is not rare. Toyota also has strong brand equity in the same industry, but fresh recalls may have deteriorated its value. Because Hondas brand equity has been built over a long period of time, it would be very difficult for competitors to imitate. Hondas reputation for reliable cars was not earned over night, making it highly inimitable. Honda takes advantages of the benefits given by its strong brand by using it as the flagship brand for the company. By supporting its brand value with superior engineering, design, and research and development, Honda is able to swear on its brand equity as a source of continue competitive advantage.