Major research paperthe penetration strategy of honda to vietnam market

NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED EDUCATIONAL PROGRAM MAJOR RESEARCH PAPER THE PENETRATION STRATEGY OF HONDA TO VIETNAM MARKET Student name: Dang Huu Phuoc Student ID: 11206538 Class: International Business Administration Advanced 62B Lecturer: Nguyễn Thu Ngà Abstract Honda Vietnam Company was established in 1996 as a joint venture partnership between three major partners: Honda Motor Corporation (Japan - 42%), Asian Honda Motor Co (Thailand - 28%), and Vietnam Engine and Agricultural Machinery Corporation (30%) The company targeted the Vietnamese market, a new and promising market, with motorcycles as its initial product At a time when the demand for transportation among the population was increasing, motorcycles emerged as a suitable choice to address transportation issues for the public When first established, the company merely sold products from its partner companies After two years of operation, the first motorcycle manufacturing plant began operations, promising strong growth for the company To date, the company has become a leader in the motorcycle manufacturing industry, occupying more than 60% of the motorcycle market share, with over million units sold The company has recently entered the automobile market and has already achieved impressive accomplishments The success of the company is due in part to its well-defined strategies For each stage, the company sets short-term strategies that are suitable for the current business environment In the present phase, to align with the current business environment, the company also needs to develop specific strategies As a Japanese company that has been very successful in the US and European markets before entering the Vietnamese market Honda has gradually gained market share in Vietnam in many fields, especially the market share of cars and motorcycles The experiences and lessons of Honda's business strategy in international markets, especially in the Vietnamese market, are worth considering, evaluating and learning Honda's international business strategy: Honda is a major brand in the automotive and internal combustion engine manufacturing industries With huge profits, Honda is the preeminent engine manufacturer in the world and is known to have never lost a business in its history Its profit margin from its auto business is about 5%, always leading the industry Honda's share price has nearly doubled since September 2008 when the global economy collapsed In addition, Honda is also known to be the most durable vehicle of any car company with 75% of cars and trucks sold during 25 years but still running on the market Introduction History of establishment and development 6/12/1997: The first motorcycle named Super Dream produced by the company was manufactured 14/3/1998: The company inaugurated its first motorcycle factory in Phuc Yen, Vinh Phuc with a capacity of million motorcycles per year and was considered the most modern motorcycle factory in the Southeast Asian region 2002: The company began exporting to the Philippines, marking its expansion into other countries in the region 2008: The second motorcycle factory specializing in producing high-end scooters and motorcycles with a capacity of 500,000 motorcycles per year went into operation with a total investment of $65 million 2011: The capacity of the second factory was increased to million motorcycles per year 2014: The company officially put its third motorcycle factory into operation in Ha Nam The designed capacity of this factory was 500,000 motorcycles per year October 2016: The company reached a milestone of producing 20 million motorcycles over more than 20 years of development in Vietnam As of now, with three motorcycle factories and a total production capacity of 2.5 million motorcycles per year, Honda Vietnam has become one of the largest motorcycle manufacturers in the region and the world With relentless efforts, Honda Vietnam is not only known as a prestigious motorcycle manufacturer but also a leading and reputable automobile manufacturer in the Vietnamese market Mission- Vision- Corporate Value Mission “A dynamic growth oriented company through market leadership, excellence in quality and service and maximizing export, ensuring attractive returns to equity holders, rewarding associates according to their ability and performance, fostering a network of engineers and researchers ensuing unique contribution to the development of the industry, customer satisfaction and protection of the environment by producing emission friendly green products as a good corporate citizen fulfilling its social responsibilities in all respects.” Vision Serve people worldwide with the joy of expanding their life s potential - Lead the advancement of mobility and enable people everywhere in the world to improve their daily lives – Corporate Value  The Honda Philosophy  Total Quality Management  New Honda Circles Product Lines As everyone knows, each Honda’s motorbike has different characteristics to suit all customer requirements A typical example is the Wave motorbike – a long-term motorbike in Vietnam For customers who prefer simple, unfussy designs, they choose Wave Alpha In contrast, Wave S has a more powerful design and fuel-efficient, etc Therefore, creating for users to have many choices in the same product line In addition, Honda's product lines are also aimed at people with an average income, completely suitable for every Vietnamese people Honda has motorcycles with an average price from - 20 million VND, targeting low-income people who need a means of transportation or for a living (Wave, Future, etc.) The next segment is people with stable and fairly high incomes, or young people looking for their own style and showing personality This segment includes both manual transmission and auto transmission motorcycle with prices ranging from 20 -50 million VND (AirBlade, Lead, etc.) Besides, Honda also targets the high-end segment with luxurious, classy cars that also partly show their social status These cars often cost over 50 million VND, for example: SH, Vario, PCX, … Motorcycles and scooters: Honda Vietnam is a leading player in the motorcycle and scooter market, offering a wide range of models to suit various customer needs Popular models include the Honda Vision, Honda Air Blade, Honda SH Mode, Honda Lead, Honda Winner, and Honda Wave Automobiles: Honda Vietnam also sells automobiles, although this segment is smaller compared to motorcycles The company offers several models, including the Honda City, Honda Civic, Honda CR-V, Honda HR-V, and Honda Accord Power products: Honda Vietnam offers a limited range of power products, such as generators and water pumps, which are primarily used for agricultural and industrial purposes Business philosophy The Honda Philosophy consists of Fundamental Beliefs (including "Respect for the Individual" and "The Three Joys"), the Company Principle, and Management Policies This philosophy is not only shared by all associates, but also forms the basis for all company activities and sets the standard for the conduct and decision-making of all associates throughout the Honda Group Driven by its dreams and reflecting its values, Honda will continue taking on challenges to share joys and excitement with customers and communities around the world to strive to become a company society wants to exist Oriented Development The Honda Vietnam Corporation (HVN) is a joint venture between Honda Motor Company of Japan, Aslan Honda Motor Company of Thailand, and the Vietnam Engine and Agricultural Machinery Corporation With modern production lines and advanced assembly technology, Honda Vietnam is proud to contribute to the development and prosperity of Vietnam by promoting the localization process, creating jobs for workers, contributing to the state budget, and actively participating in social and humanitarian activities HVN has continuously strived to provide Vietnamese customers with Honda's globally recognized quality products that are stylish, affordable, and exceed customer expectations This has contributed to the development of Vietnam's industry through technology transfer, localization, exports, job creation, and human resource training The goals and development direction of the Honda Group by 2025 are: In the motorcycle business, continuing to consolidate the leading position In the motorcycle sector, Honda Vietnam continues to consolidate its leading position in the market by focusing on the following three points: - Expanding production and enhancing production capacity to serve the domestic and export markets through the operation of the fourth motorcycle factory, which started producing complete motorcycles in June 2015 - Maximizing sales volume with the goal of achieving million motorcycles (including exports), introducing 10 new models and versions to provide customers with more options - Boosting exports and gradually turning Vietnam into a motorcycle export hub in the region The estimated export market will be expanded to 22 countries, aiming to achieve an export turnover of about 247 million USD In the automotive business, creating new values that exceed customer expectations Always considering customer satisfaction as the ultimate goal, Honda Vietnam Automobile Company (HVA) strives to become a brand that is constantly innovating to create new standards to meet the highest level of customer satisfaction - Introducing new generations of cars with outstanding design and notable quality that meet the needs and tastes of customers, aiming to increase sales volume by 9% compared to the same period last year - Starting to apply the "EARTH DREAMS" technology (a package of solutions that improves operation and fuel efficiency at a low level, enhances combustion efficiency for internal combustion engines) from the new generation Accord to provide better fuel efficiency and increase driving pleasure - Continuing to expand the dealer network to bring genuine products and services to more customers, maximizing customer demand Continuing to implement safe driving activities towards a safer traffic society With the goal of "Safety for Everyone," Honda Vietnam will continue to strengthen traffic safety training and awareness for all ages, especially focusing on youth training activities HVN plans to increase the number of trained individuals by 8%, equivalent to nearly 1.3 million people through safety driving training activities at the Safety Driving Center HVN will continue to collaborate with the Vietnam Register and government agencies to provide driving license training for students, customers, and local residents To enhance the effectiveness of training, HVN will organize training courses to improve the skills of safety driving instructors and coordinators at the Safety Driving Center, as well as continue to improve supporting materials In addition, Vietnam will be featured on television through the "10 Years I Love Vietnam" contest By organizing this contest, Honda Vietnam aims to enhance the effectiveness of Document continues below Discover more from: Chuyên Đề Tốt Nghiệp CĐTN1 126 documents Go to course Báo Cáo Thực Tập Tốt Nghiệp Chuyên Ngành Điều Dưỡng 41 37 Chuyên Đề Tốt Nghiệp 100% (8) Báo Cáo Thực Tập Công Tác Văn Thư Lưu Trữ Cục Văn Thư Lưu Trữ Thành Phố Đà Nẵng Chuyên Đề Tốt Nghiệp 100% (3) Báo Cáo Thực Tập Tại Trung Tâm Ngoại Ngữ Tiếng Trung 38 Chuyên Đề Tốt Nghiệp 100% (3) 500+ Đề Tài Chuyên Đề Tốt Nghiệp Ngành Kế Toán Từ A-Z, Tất Tần Tật Chuyên Đề Tốt Nghiệp 100% (2) Những Lỗi Phổ Biến Trong Quá Trình Dịch Thuật Tiếng Trung 36 Chuyên Đề Tốt Nghiệp 100% (2) LUẬN VĂN THẠC SỸ HƯỚNG ỨNG DỤNG Ngành QUẢN TRỊ 106 KINH Doanh Chuyên Đề Tốt Nghiệp 100% (2) the program and actively contribute to the goal of promoting traffic safety awareness for the community Maintaining and enhancing social activities Honda Vietnam will continue to expand environmental protection activities and support education In 2015, HVN will continue to provide financial and technical support for local people to plant an additional 161 hectares of forest under the afforestation project in Bac Kan In addition, educational support activities will also be actively promoted through the expansion of the "Young Idea" competition, the continued implementation of the "Honda Award for Young Engineers and Scientists in Vietnam 2015", the awarding of more scholarships and libraries Based on listening and finding necessary needs from society to make timely and practical contributions, Honda Vietnam hopes to become an active citizen of Vietnam Motivation to enter Vietnam market of Honda Honda's motivation to enter the Vietnamese market can be attributed to several factors, including the saturation of the Japanese market and the growth potential in Vietnam In Japan, the automotive market is mature and highly competitive, with annual vehicle sales volume reaching around 4.6 million units in 2020 However, the market has been experiencing slow growth or even contraction due to the aging population and market saturation On the other hand, Vietnam presents a promising growth opportunity for Honda As of 2021, the country was among the largest two-wheeler markets globally, with annual sales exceeding million units Furthermore, the total number of cars sold in Vietnam in 2020 reached approximately 296,634 units, indicating a growing automobile market In addition to the market potential, Vietnam's demographic advantage plays a crucial role in Honda's decision Around 65% of Vietnam's population is under the age of 35, as of 2021, contrasting with Japan's aging population This younger demographic in Vietnam is more likely to purchase motorcycles and cars in the coming years Entering the Vietnamese market allows Honda to diversify its revenue sources, reducing its reliance on the Japanese market, and mitigating risks related to economic fluctuations and changing market conditions Moreover, Honda's early entry into the Vietnamese market enabled it to establish a strong presence and gain a competitive edge over other international automakers Reasons for penetration from Honda side – Thrust Market Diversification: In the fiscal year 2021, Honda's automobile business revenue in Asia made up 24.7% of the total revenue, while Japan and the United States accounted for 20.8% and 34.4%, respectively (Statista, 2021) Expanding into new markets allows Honda to diversify its revenue streams and reduce dependence on saturated or highly competitive markets Growth Opportunities: According to the International Monetary Fund (IMF), emerging and developing Asia is expected to grow by 6.5% in 2022 (IMF, 2021) This rapid growth presents opportunities for Honda to capitalize on increased consumer spending and urbanization in emerging markets Cost Advantages: Penetrating new markets with lower labor and production costs can help Honda enhance its cost competitiveness For example, the minimum wage in Vietnam ranges from 3.07 to 4.42 million VND per month, lower than in countries like China and Thailand (Vietnam Briefing, 2021) This cost advantage can help Honda improve its profitability in global markets Reasons of choosing the Vietnam market – Traction According to statistics from Honda Vietnam, the motorcycle market in Vietnam is growing rapidly, reaching 2.26 million units in 2009, an increase of about 20% compared to 2008 and becoming the fourth largest motorcycle market in the world after China, India, and Indonesia Especially, the scooter market has made a significant increase, reaching 750,000 units (a 70% increase compared to 2008) - the actual production output of four FDI companies in Vietnam, not to mention other imported high-end scooters Recognizing this demand, the company always has plans to build more manufacturing plants The motorcycle plants No and No 2, the automobile plant have been put into operation, and another motorcycle manufacturing plant is about to be built Reasons Honda can choose Vietnam as the ideal market for brand development: Growing Economy: Vietnam's GDP per capita has increased from approximately $2,342 in 2016 to $2,715 in 2021 (World Bank, 2021), reflecting a growing and increasingly affluent population Favorable Government Policies: In 2020, Vietnam ranked 70th in the World Bank's Ease of Doing Business index, with significant improvements in "starting a business" and "getting electricity" indicators (World Bank, 2020) Growing Motorcycle and Automobile Market: In 2020, Honda held a 75% market share in Vietnam's motorcycle market, with over 2.5 million units sold (Vietnam Economic Times, 2021) The demand for cars is also increasing, with Vietnam's automobile market registering a 12% year-on-year growth in 2020 (Vietnam Insider, 2021) Strategic Location: Vietnam shares borders with China, Laos, and Cambodia, and has a coastline of over 3,000 km, allowing easy access to other high-growth markets in Southeast Asia and serving as a hub for exports Honda uses a strategy of adapting products to each individual market and has been very successful with the countries that Honda has penetrated, especially Vietnam Previously, Honda's policy was to use a single technical standard for the worldwide market, but now has been replaced by a policy of product localization That is true to the definition of international marketing “Think Global, Act Local” Just a few years ago, Honda was hailed as a manufacturer of the best motorcycles in the world and as such has always won a permanent position in the hearts of customers Vehicles sell in any region will be designed to suit only that region Honda has been present and successful in more than 30 countries with its international marketing objectives, typically countries such as Canada, the United States, and Vietnam With a developing country like Vietnam, a traffic system as well as a habit of traveling mainly by motorbike, Honda is the most successful Japanese company here producing both motorbikes and cars The name Honda has gone deep into the minds of consumers as a brand that provides a diverse and durable means of transport that can be used for many purposes by Vietnamese people Besides, the cost of marketing Honda's motorcycles is also insignificant because people have been used to thisprestigious brand for a long time Honda's objectives in the coming years are to continue to launch motorcycles that are not only durable but also fashionable, constantly changing designs, creating more new hot colors for motorcycles, creating a unique personality for each motorcycle design While other motorcycle brands focus on stylish design or quality for their vehicles, Honda has always been a pioneer in creating the best gadgets to serve its customers Some examples include always being at the forefront of saving fuel, not being able to start the engine without pushing the kickstand, automatically turning off the engine when stopping for seconds, or locating a motorbike It is clear that these utilities bring safety to users, friendly to the environment, and the result of those marketing goals is consumer acceptance various fields Honda Vietnam has a business philosophy that is closely linked to social safety and has achieved many successes in traffic safety activities as well as supporting other social activities such as education, culture, arts, and charity  The company has a team of highly skilled technicians Honda Vietnam places great emphasis on training and developing its workforce through regular in-house courses and training programs abroad The company regularly organizes skill competitions to enhance knowledge and experience for its technicians Honda Vietnam focuses on finding suitable positions for each employee and nurturing talent while using young researchers to develop new products and adapt to the market  Product quality Honda Vietnam is a beloved company among consumers not only for its corporate culture and social contributions, but also for its products Since the first appearance of Honda's motorcycles, they have left a good impression as quality, durable, and especially suitable for Vietnam's terrain and physical characteristics The company's products are diverse in types and models Honda Vietnam introduces to the market the Wave 110, Air Blade, Wave RS, Wave S, using electronic fuel injection technology, saving energy, and environmentally friendly In particular, at the end of 2009, HVN introduced the most high-end SH model to meet the needs of customers Since its presence in Vietnam, Honda has introduced many new motorcycle models, improved existing ones, and always leads in sales in this product category in the Vietnamese market  A proper pricing strategy Honda's success in capturing the market not only relies on the design and quality of their products but also on the company's pricing strategy Honda's products are priced to suit their customers, from affordable products that meet basic transportation needs to high-end products with high prices to satisfy the needs of users and demonstrate their social status Currently, only the high-end imported Honda motorcycle models, such as the @, SH, PS, and Dylan, have high prices on the market Most of Honda Vietnam's product lines are affordable and suitable for the needs and payment ability of the majority of Vietnamese people  Honda's distribution system is widespread throughout the country and always aims to protect the environment Honda Vietnam distributes its motorcycle products through a network of authorized Honda dealerships and service centers (referred to as HEAD) All HEADs use exhaust gas suction machines for motorcycles, oil waste recovery systems during repairs, and waste sorting for household waste, industrial waste, lubricating oil, and other types of waste Honda's authorized automobile dealerships are equipped with waste treatment devices such as oil separation tanks for wastewater, refrigerant recovery devices for air conditioning, waste sorting and recovery systems for waste, airbag recovery, waste oil, chemical waste, and airbags to ensure a clean environment Weaknesses Due to the company's reputation, the situation of product flickering and duplication of designs still occurs because there are still some shortcomings in regulations on intellectual property rights Quality products combined with many innovative features in technology, so the price of the product is higher than other models on this general market This makes it more difficult for the customer to own the product The recent pandemic has reduced demand for non-essential items The company's sales revenue reached more than 3.2 million vehicles, down about 3.1% compared to the previous period Opening the market to attract foreign investment, leading to the birth of cheap Chinese cars This significantly affects the development of Honda's market share Opportunities Honda is a famous brand that always puts product quality first, and is trusted and greatly interested by Vietnamese consumers Besides, Honda also produces products according to different market segments, always meeting all the needs of users The demand for using motorbikes of Vietnamese people still has a very high potential for development With the culture of using motorbikes, compared to other types of personal vehicles, motorbikes are always the first priority choice of Vietnamese users Sales thinking and customer care are still low, because too many distribution agents lead to inadequate control over how to take care of customers Environmental issues have always been of great concern to society, so Honda has produced environmentally friendly vehicles that limit emissions and save raw materials The quick grasp of market demand, helped Honda get a lot of attention With Honda's ongoing efforts in robotics research and development, the company is able to create new innovative products that can help improve the lives of people around the world Threats The business has been hacked on June 8, 2020, the company's system was hacked This brought the company's operations to a standstill The popularity of electric vehicle products has increased with low cost, saving money and protecting the environment Product competition in the market is strong with big reputable brands Therefore, consumers tend to compare products between brands in terms of price, quality, and service External environment analysis PESTEL Political Today, the problem of traffic congestion at rush hour is always a painful problem in society This problem is caused by many reasons, one of which is the excessive use of personal motorbikes and the low culture of motorbike riding The government aims at policies ranging from restricting to banning the use of motorbikes This policy has createdgreat difficulties for the motorcycle industry in general and Honda company in particular.The Government and ministries in the fight against the COVID-19 pandemic understand the difficulty of businesses in this situation Therefore, the government has issued timely support policies The issuance of Decree 41/2020 / ND-CP on the extension and postponement of tax payment, land rent, production and business support and disbursement of public investment capital In the coming time, the Government and ministries and branches will have similar and timely policies to be able to support businesses in difficult times (HondaVietNam, 2020) The timely support of the Government has helped Honda company somewhat reduce the burden when business is difficult during the Covid-19 Economic Vietnam's economy continues to face many challenges in the context of the unusual development of the Covid-19 epidemic Our country's economy is affected by many factors such as financial risks, the decline and shrinking of household and business income while increasing unemployment pressure, climate change, etc (Nguyen, 2021) Honda's Vietnam market capacity in 2020 will reach more than 3.2 million vehicles, down about 3.1% compared to the previous period In which, the company's sales reachednearly 2.6 million vehicles, up 0.5% compared to 2019 The market share reached 79.7% In 2021, due to the impact of Covid-19, people will lose their jobs, mainly spending on necessary products, so the motorcycle market's output will be affected quite a lot (HondaVietNam, 2020) The market demand for motorcycles has decreased This has a significant impact on the company's annual motorcycle consumption Social The vast majority of Vietnamese people, after a period of attachment to the use of motorbikes, form a motorcycle culture Nowadays, wherever they go near or far, they use motorbikes, not like to walk, not like to use alternative means Therefore, the demand for buying and using motorbikes in Vietnam still tends to continue to grow.Nowadays, Vietnamese consumers is to prioritize using genuine products with guaranteed quality, and not like using Chinese goods This is a favorable condition to eliminate Chinese Honda manufacturers from the country, and at the same time reduce competitors in this market.The increasing situation of air pollution has caused the management agencies to come up with many solutions to control emissions into the environment for both cars and motorbikes Therefore, more and more people are choosing electric cars to replace traditional Honda cars by modern technology and minimizing negative impacts on the environment (Autobikes, 2020) Traditional vehicles have higher operating costs than electric vehicles including fuel and repair costs The future trend of vehicle transformationcould create a new era for electric vehicles This will hinder the development of the domestic motorcycle industry However, long distance travel between the two places still requires the use of motorbikes, because electric vehicles need to be charged and cannot gofar Technological Today's technology is developing more and more advertising products, the function of the product must also change in a more technological way Honda Company has continuously launched models that apply modern technologies such as bluetooth connection with My Honda + application, new generation intelligent engine eSP +, torquecontrol system, the Honda SMART Key smart lock system has helped to perfect the products At the same time, satisfy the increasing demand of customers to experience newproducts integrated with technology (HondaVietnam, 2020) Honda Company is one of the pioneer manufacturers in technological innovation, applying modern technologies to its products As social networking and e-commerce channels develop day by day, it is easier to advertise products to consumers via Facebook, Tiktok, Youtube, etc In November 2019 Honda officially kicked off the series of event "Ho Chi Minh City Balloon - Honda Always for You" in big cities such as Ho Chi Minh City, Can Tho, Da Nang and Hanoi With the participation of many famous singers, it has attracted a lot of young customers toparticipate and experience, both advertise products and gain trust from customers Young people are a big potential Honda customer Honda has adopted technology to bring its product information to customers in the fastest and most effective way Environmental During the time of social distancing to combat the COVID-19 pandemic, pollution indicators have dropped significantly This proves that car exhaust is a source of environmental pollution In the near future, the Department of Transport of Ho Chi Minh City will make a proposal to the City People's Committee on a roadmap to control motorcycle emissions in the near future (Dung, 2020) Understanding the problem, Hondahas integrated for its products technology to limit CO2 emissions, both saving raw materials and meeting the needs of environmental protection for customers Competition "Eco-driving with fuel economy" with the effect "How many kilometers can you go with liter of gasoline?" held in August 2020, the competition attracted 189 teams competing in the general circle The contest is a place for young people to think creatively, exchange and learn about techniques and technologies, and put ideas into practice (HondaVietnam, 2020) This helps the company to come up with ideas within thelimit of equipment equipment from motor vehicles, promoting the movement of energy saving and environmental protection Implement social activities that both contribute to environmental protection and promote the development of the brand name and enhance the company's reputation Legal Our country has joined the convention on intellectual property rights, but the accompanying legal system is still not effective and complete Therefore, stealing ideas and copying product designs in our country is still too common On the motorcycle market today, it is easy to see some cases of copying the product models of famous car manufacturers and selling them at a cheaper price than the real thing The lack of completeness in the laws related to intellectual property rights, causes great difficulties forcompanies producing mainstream products, leads to loss of product value and damages the company's reputation Consumption situation Customer market: Honda’s main goal is to provide high quality transportation for Vietnamese people with reasonable price Nowadays, motorcycle is considered as the most common means of transportation in Vietnam In average, there are 2-3 motorcycles in each house in Vietnam So, Vietnam has a large motorbike consumption Honda consumers in Vietnam include both female (35%) and male (65%) They divide customers into many different segmentation groups such as 18-24 years old (45%), 25-35 years old (38%), 35-44 years old (13%) and over 44 years old ( 4%) According to the World Bank, the level of income has gradually increased every year The GDP per capita in Vietnam reached $2052.3 in 2015 Besides, an average cost of a motorcycle selling in VN varies from $800-$900 Vietnamese people could buy a motorbike themselves without saving money from to years Honda customers have medium price sensitivity because Honda Company has dominated Vietnam market with 66% market share in 2015 Time of penetration of Honda to Vietnam Market Honda began its penetration into the Vietnamese market in 1994, when it signed a joint venture agreement with the Vietnam Engine and Agricultural Machinery Corporation (VEAM) This agreement led to the establishment of Honda Vietnam Co., Ltd (HVN) in 1996 The first plant in Vietnam was established in 1997 (B Thi, & X Thi 2009), and Honda started manufacturing at this time The joint venture focused on motorcycle manufacturing and distribution, with the first motorcycles being produced in December 1997 In the years that followed, Honda expanded its presence in Vietnam by introducing automobiles, power products, and establishing a dealer network throughout the country Business strategy of Honda Vietnam Vietnamese people are certainly familiar with Honda-branded motorbikes, every out of 10 vehicles carry this brand when on the road For this brand from the land of cherry blossoms – Honda is a motorbike company that understands the psychology of the countries they visit, especially in Vietnam, Honda has gained a huge market share Honda's products are famous for being durable and extremely good quality, hitting the hearts of Vietnamese people Some products can be mentioned such as: Wave, Future, Lead, AirBlade, etc., has gained a large number of users, loved and used by many people Honda's main marketing strategy is "Coverage to all generations" which has been implemented very well and very successfully in Vietnam  Hitting the customer’s psychology Honda's current marketing strategy is very successful and more successful than competitors Honda comes from a country that is said to be "Meticulous to every detail", so as soon as it entered the Vietnamese market, Honda immediately won the hearts of customers Honda is very smart when understanding the psychology "Comfort is better than pride" of Vietnamese customers, so it hit that mentality That also shows Honda has researched very carefully before entering in this market Honda always tries its best to bring the highest quality products as well as longevity.Besides, there is a huge demand for motorbikes in Vietnam Just like natural needs such asfood, clothing and shelter, means of transport are also indispensable for Vietnamese people in today's life Nowadays, motorbikes in Vietnam are a popular means of transport and also the main means of transportation of the people A family has - motorbikes in the house In addition, for the average income of Vietnamese people today, motorbike is the most suitable choice – it has a relatively affordable price in line with the average salary of Vietnamese people In recent years, the motorcycle market has become more andmore diverse in terms of models, the demand for changing has also increased significantly, but people still want reasonable prices and durability Honda recognizes these trends and has also upgraded as well as producing new models  Product variety As everyone knows, each Honda’s motorbike has different characteristics to suit all customer requirements A typical example is the Wave motorbike – a long-term motorbikein Vietnam For customers who prefer simple, unfussy designs, they choose Wave Alpha In contrast, Wave S has a more powerful design and fuel-efficient, etc Therefore, creatingfor users to have many choices in the same product line In addition, Honda's product lines are also aimed at people with an average income, completely suitable for every Vietnamese people Honda has motorcycles with an average price from - 20 million VND, targeting low-income people who need a means of transportation or for a living (Wave, Future, etc.) The next segment is people with stable and fairly high incomes, or young people looking for their own style and showing personality This segment includes both manual transmission and auto transmission motorcycle with prices ranging from 20 -50 million VND (AirBlade, Lead, etc.) Besides, Honda also targets the high-end segment with luxurious, classy cars that also partly show their social status These cars often cost over 50 million VND, for example: SH, Vario, PCX, etc  Massive communication and promotions It is undeniable that Honda is a motorcycle brand that is very invested in advertising from television advertising to outside advertising It is not difficult to come across advertisements for Honda's new models on the road, or simply propaganda about traffic safety Moreover, Honda's strength is advertising on television with images taken care of by Honda, hitting the psychology of young Vietnamese people In addition to aggressive advertising, promotions are also Honda's strong point This is also Honda's most successful promotional campaign Honda always offers preferential prices when buying a car such as a free helmet, support for registration fees, and periodic maintenance at Hondacenters without paying This strategy is very satisfied with customers and it generates positive feedback from the public  “I love Vietnam” and sympathy from customers “I love Vietnam” is the slogan of Honda Vietnam Honda's motorbikes have been with Vietnamese people from the 70s to today's modern models Not stopping there, Honda cooperated with a Vietnamese television station to launch a series of programs "I love Vietnam" with the aim of increasing traffic safety awareness in Vietnam This program is widely spread on television and also on the Internet with great coverage nationwide Honda wishes to be able to create sympathy with customers, increase reliability and "pin" in the subconscious about a clean brand, increasing the level of brand recognition Honda’s strategy to enter Vietnam Market  Low-cost strategy Honda's goal is to gain a competitive advantage by developing products at the lowest possible cost As a result of using a multinational strategy for the motorcycle product Honda has focused on developing its manufacturing plant in Vietnam in order to capitalize on Vietnam's location economies Furthermore, Honda focuses on the strategy of developing a variety of product lines aimed at various target customers, ranging from low-priced cars to high-end segment cars Honda offers Wave Alpha motorcycles startingat 13,000,000 VND, with a durable quality and a compact design that is suitable for the needs of rural consumers with low income This low-cost competitive strategy has enabled Honda to capture the rural market, which accounts for 70% of Vietnam's population Honda Vietnam has had success with low-cost but high-quality vehicles suchas the Wave Consumers have expressed a high level of satisfaction with these vehicles Honda faced stiff competition from low-cost Chinese motorcycles in the early stages of itsbusiness in Vietnam, but through a low-cost strategy, Honda launched Wave, a product assembled in Vietnam With the same price as Chinese motorcycles but higher quality, Honda was able to reclaim market share and grow stronger in Vietnam ("Chiến Lược Kinh Doanh Của Công Ty Honda Việt Nam", 2019)  Differentiation strategy Honda products are well-known for their dependability, beauty, powerful engines, and fuel efficiency Honda always innovates designs and techniques to suit consumers with any product line In addition, Honda introduced a high-quality product line into the Vietnamese market, including SH motorcycles and, most recently, CPX This is a highend product line with many unique and outstanding features aimed at high-income customers, young people who prefer trendy and classy items Honda provides a compelling differentiation criterion for customers to purchase products that is "fuel economy." With the introduction of FI technology and electronic fuel injection, Honda Vietnam has captured the attention of customers at a time when gasoline prices are steadily rising, contributing to a rapid increase in market share Furthermore, the company provides a strategy aimed at young people, who account for a large proportion of the total population Honda uses the very youthful slogan "Be U with Honda" in conjunction witha loud advertising strategy popular in the press, resulting in a new youthful image for Honda, which was previously thought to be a product for the previous generation Honda products are constantly improving in terms of eye-catching designs and colors in order to keep up with the dynamism of young people ("Chiến Lược Sản Phẩm Của Công Ty Honda Việt Nam", 2021) Marketing strategy standardization) concepts (Adaptation / Standardization, Adapted A thorough marketing strategy covers "the four Ps" of marketing: product, price, place, and promotion  The Product: Standardization Brand: Standardization Quality: Standardization Product design: Standardization  The Price: Adaptation  The Place: Adapted standardization  The Promotion: Adaptation => Honda's marketing strategy is adaptation Benefits obtained and Orientation Honda Vietnam's strategy to enter the Vietnamese market through a joint venture allowed the company to gain several benefits and achieve significant success Some of the benefits obtained and the orientation of Honda Vietnam after entering the market include: Local expertise: By partnering with VEAM, a local Vietnamese company, Honda gained access to valuable local knowledge, expertise, and resources This collaboration helped Honda navigate the regulatory environment, establish a supply chain, and understand local consumer preferences and market trends Market share: Honda quickly became the leading motorcycle manufacturer in Vietnam The company's high-quality products, strong brand reputation, and wide distribution network allowed it to capture a significant share of the growing motorcycle market This success later paved the way for Honda to introduce automobiles and power products in the country Localization: Honda Vietnam focused on localizing production and sourcing components from local suppliers, which helped the company reduce costs, improve supply chain efficiency, and contribute to the development of the local automotive industry Employment generation: By establishing manufacturing facilities in Vietnam, Honda created thousands of jobs, contributing to the country's economic growth and development Community involvement: Honda Vietnam has been actively involved in various corporate social responsibility (CSR) initiatives, focusing on areas such as education, traffic safety, and environmental protection These initiatives have helped the company build goodwill and strengthen its relationship with the local community Expansion opportunities: Honda Vietnam's success in the motorcycle market enabled the company to expand its product portfolio and introduce automobiles and power products In 2019, Honda Vietnam launched its first automobile manufacturing plant, further strengthening its presence in the country Moving forward, Honda Vietnam's orientation may include: Continuing to expand its product portfolio to cater to the evolving needs of the Vietnamese market Strengthening its dealer network and enhancing customer service to maintain its competitive edge Focusing on the development and introduction of environmentally-friendly vehicles, such as electric and hybrid models, in line with global trends and local government initiatives Enhancing local research and development capabilities to better understand and address the needs of the Vietnamese market Maintaining its commitment to CSR initiatives and working towards sustainable growth in Vietnam Conclusion Evaluation of two strategíes: Low-cost strategy and Differentiation strategy  Low-cost strategy: Advantages: - Cost leadership: By offering products at the lowest possible cost, Honda can achieve cost leadership in the market and attract price-sensitive customers - Market share: A low-cost strategy allows Honda to capture a larger market share, especially in rural areas where customers have limited budgets - Competitive edge: By providing high-quality products at lower prices, Honda can effectively compete with rivals, such as low-cost Chinese motorcycles - Economies of scale: By focusing on local manufacturing and sourcing, Honda can benefit from economies of scale, reducing production costs and further lowering product prices Disadvantages: - Lower profit margins: A low-cost strategy may result in lower profit margins, as the company needs to keep prices low to remain competitive - Quality perception: Offering low-cost products may create a perception of lower quality among customers, potentially affecting the brand image - Limited differentiation: Competing on price alone can make it difficult to differentiate from other competitors in the market, especially those also employing a low-cost strategy  Differentiation strategy: Advantages: - Brand image: A differentiation strategy allows Honda to create a strong brand image, as customers associate the brand with innovation, dependability, and fuel efficiency - Customer loyalty: By offering unique and outstanding features, Honda can attract high-income customers and create customer loyalty - Market segmentation: Focusing on different target customers, such as young people, allows Honda to cater to specific market segments and capitalize on their preferences - Higher profit margins: By offering differentiated products with unique features, Honda can charge premium prices, resulting in higher profit margins Disadvantages: - Increased costs: A differentiation strategy often involves increased costs, such as research and development, advertising, and manufacturing Imitation: Unique features and innovations may be copied by competitors, reducing Honda's competitive advantage over time Narrower market focus: Focusing on differentiated products may limit Honda's reach in some market segments, such as those seeking the most affordable options Recommending international marketing strategy solution Product purchasing decisions in Honda's international market are complicated dueto varying needs and environments Therefore, there must be marketing strategies adaptedto specific countries The first step is to develop international advertising strategies,identify and select the best media to deliver the message, and select or operate anadvertising agency capable of ensuring Responsible for international advertising Thesecond is the most effective method of reaching out to the target customer groups, whichincludes direct marketing Direct marketing is a versatile, targeted, and highly effectivemethod of promoting foreign customers This method of marketing is aimed at a specificmarket, and the advertising budget is allocated to that market Third, internationalpromotion is a type of sales promotion that, when used correctly, can be a very effectivetool for international marketing They can be used to encourage purchases, rewardcustomer loyalty, moderate seasonal demand, increase repurchase frequency, and draw attention to a customer's business in general Challanges a The challenge firstly caused by the company’s competitors Currently on Vietnam's motorcycle market, there are suppliers such as Honda Vietnam, Yamaha Vietnam, Suzuki, SYM In particular, Honda Vietnam accounted for about 64% market share, Yamaha accounts for about 25%, the remaining approximately 11% market share belongs to the other distributors In spite of far less market share, Yamaha motorcycles are the market challenges Honda Vietnam is outstanding with reliable Yamaha Vietnam winning the youth admiration The competition is really high Besides these two direct competitors Yamaha and Honda, this segment also has the participation of the ventures as Suzuki, SYM, the domestic unit and a new factor - the Piaggio Despite the modest investment of $ 15 million into the factory with an area of ha, Piaggio is still a formidable opponent With main products - Vespa, Piaggio was the first assembly of high-end scooter in Vietnam, creating advantages in price and warranty system before the import models of Honda and Yamaha It can not be a balanced competitor of the two joint ventures; however, the Piaggio is in plans to increase global production It is possible in the future, the plant in Vietnam is a transit point to other countries and then, Piaggio will become a significant force  Direct Competitors Automakers: YAMAHA, SYM YAMAHA which is Honda's most powerful opponent in every segment that is geared toward companies If Honda is a new model immediately YAMAHA will also launch soon a strategic vehicle to not lose market share Particularly SYM are competitors on the manufacturing sector Scooter with cars Atila outstanding Product: - Quality - Designs Price Distribution Channel Promotion - Promotion HONDA YAMAHA SYM Durability, Fuel economizing Simple and sporty style Average From 14 to 30 million HEAD Authorized dealers nationwide Average High Aporty Small Average From 16 to 30 million The Yamaha dealers nationwide High From 16 to 40 million The SYM dealers nationwide Offering when free oil Offering buying when free oil Offering buying when free oil buying motorcycles motorcycles motorcycles Financing the program “daystar rendezvous” Holding the contest “safty driving” Staff drive to the Event “10 years of main road in the big SYM” city when launching a new product - Advertising  Potential competitors: Manufacturers from China, Europe and domestic assemblers b Consumers tend to choose more and more products The company gained market share partly by reputation, many consumers buy products just because Honda's long-standing reputation These consumer trends are not sustainable because customers’ tastes change over time and are affected by many factors c International economic integration International economic integration brings Honda Vietnam the hidden opportunities and challenges Market opening welcomes foreign investment But Vietnamese enterprises are at risk of strong competition by foreign products China's motorcycles are rushing into Vietnam with very cheap price with emphasis on low-income customers - large proportion of the population 10 million can buy nearly three Chinese motorcycles To regain, Honda Vietnam immediately launched the Wave α for just over 10 million This price is suitable with Vietnamese people because it deserves by quality of product Experience learned and learning for Vietnam businesses when entering the international market Experiences learned from Honda Vietnam's success can provide valuable insights for both businesses and the state/government when entering the international market:  For Businesses: Localization: Vietnam businesses should consider adapting their products, services, and strategies to the specific needs and preferences of the target international market Honda Vietnam's success in localizing its production and sourcing components from local suppliers is a testament to the importance of understanding and catering to local demands Partnerships and Joint Ventures: Collaborating with local partners can help businesses gain valuable insights, expertise, and resources in the target market Honda Vietnam's joint venture with VEAM allowed it to navigate the regulatory environment and establish a strong presence in the country Diversification: Offering a wide range of products catering to various market segments can help businesses capture a larger share of the international market Honda Vietnam's strategy of offering low-cost and high-end products ensured they reached customers with different preferences and budgets Focus on Quality and Innovation: Maintaining high quality and constantly innovating is essential to stay competitive in the international market Honda Vietnam's focus on dependability, fuel efficiency, and innovative designs helped them differentiate themselves from competitors Market Research: Conducting thorough market research can help businesses identify opportunities, trends, and potential challenges in the international market Understanding the local market and consumer preferences can help businesses tailor their strategies accordingly Corporate Social Responsibility (CSR): Engaging in CSR initiatives can help build goodwill and strengthen relationships with the local community Honda Vietnam's commitment to education, traffic safety, and environmental protection has contributed to its positive brand image in the country  For the State and Government: Support and Incentives: The government can provide financial and regulatory incentives to encourage domestic businesses to enter international markets Tax breaks, low-interest loans, and export promotion programs can help businesses overcome initial barriers and risks associated with international expansion Infrastructure Development: Investing in infrastructure, such as transportation networks, communication systems, and industrial zones, can create a conducive environment for businesses to succeed internationally Trade Agreements: The state and government should focus on negotiating favorable trade agreements and establishing strategic partnerships with other countries These agreements can help businesses access new markets, reduce trade barriers, and attract foreign investment Education and Training: Investing in education and training programs can help develop a skilled workforce that can effectively compete in the international market This includes promoting technical and vocational education, as well as supporting research and development activities Regulatory Environment: Streamlining regulations and providing a transparent, predictable, and business-friendly environment can encourage domestic businesses to enter the international market The government should also focus on protecting intellectual property rights to foster innovation and competitiveness By learning from Honda Vietnam's experiences, both businesses and the state/government can develop strategies and policies that support and promote the successful international expansion of Vietnamese businesses REFERENCES https://www.studocu.com/vn/document/truong-dai-hoc-ngoai-ngu-tin-hoc-thanh-phoho-chi-minh/marketing/establishing-an-international-marketing-plan-forhonda/17823970 https://global.honda/about/philosophy.html?from=navi_drawer https://123docz.net/document/5164781-phan-tich-swot-va-yeu-to-san-pham-cua-congty-honda-viet-nam-trong-linh-vuc-xe-may-e.htm https://www.studocu.com/vn/document/dai-hoc-kinh-te-quoc-dan/kinh-doanh-thuongmai/bai-tieu-luan-hoach-dinh-chien-luoc-phat-trien-cong-ty-honda-viet-nam1008017/23128986 https://www.honda.com.vn/gioi-thieu/tam-nhin https://tapchicongthuong.vn/bai-viet/cong-ty-honda-viet-nam-thuc-hien-triet-ly-kinhdoanh-ba-niem-vui-42453.htm