HONDA VERSUS PIAGGIO (1946 to 2000s) -THE USA BATTLE

OBJECTIVES:
To understand the strategies used by Honda and Piaggio, in their pursuit for global leadership
To discuss and analyse the reasons behind the results of Honda and Piaggio. Did Piaggio and
Honda create a point of uniqueness? Discuss.
To debate why good companies go bad
To understand and discuss the need and importance of strategy formulation
ASSIGNMENT QUESTIONS:
I. Discuss and compare the performance of Piaggio and Honda since inception, in its pursuit of
global leadership.
II. Discuss the reasons that led to Piaggios and Hondas business results. Also analyse why
good companies go bad.
III. Compare the strategy formation of Honda and Piaggio in a competitive global market.
INFORMATION ABOUT PIAGGIO AND HONDA
Piaggio was founded in Genoa, Italy in 1884, before the two world wars. It started out with
luxury ship-fittings. World War I brought a new diversification that distinguished Piaggios
activities for many decades it started producing aeroplanes and seaplanes. World War II
caused Italy, one of the three Axis powers, to become a strategic target of numerous air raids
of the allied powers. Many factories manufacturing war machines were completely destroyed,
leaving Piaggio close to ruin. After which Piaggio rebuilt its plants. Based on economic
assessments and sociological considerations, Piaggio decided to address the mobility needs of
the Italians. Consequently, in 1946, Piaggio launched the 2-stroke Vespa 98cc Much like what
happened to Italy, post-World War II left Japan with the industries and transportation
networks severely damaged. Japans economic collapse, along with scarcity of fuel,
discouraged its citizens from buying automobiles. Bicycles became the mainstay of Japanese
transportation. Soichiro Honda (Soichiro), a mechanic fascinated by motors, purchased twostroke engines and mounted them on bicycle frames. And the Honda Motorcycle Company
(Honda) was born in 1948. Soichiro continued to experiment with new designs that eventually
led him to produce a lightweight, easy-to-use motorcycle. In 1949, Soichiro produced his DType motorcycle the Dream the first motorcycle using all-Honda parts. While Honda was
formed to serve the basic transportation needs, Piaggio was already in business trying to
create a low-cost effective transportation. Piaggios US market entry was in striking contrast to
Hondas. While Honda went on its own selling through its own subsidiary), Piaggio entered US
in 1951 through collaboration with Sears-Roebuck. The strategists goal is to to create new
space that is uniquely suited to the companys own strengths space that is off the map.
Note: this case is prepared to support the ISEP-IPP MEM course, Business Management
curricular unit. The case is inspired in 308-052-8 IBS CSC case study. Vs1.2015.10.19
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ANEX: TABLE HIGHLIGHTING THE VARIOUS EVENTS DURING 1946, 1950S, 1960S, 1970S,
1980S, 1990S AND 2000S