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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 Piaggio’s and Honda’s 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 Piaggio’s

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. Japan’s 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 two-

stroke 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 D-

Type 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. Piaggio’s US market entry was in striking contrast to

Honda’s. While Honda went on its own selling through its own subsidiary), Piaggio entered US

in 1951 through collaboration with Sears-Roebuck. The strategist’s goal is to to create new

space that is uniquely suited to the company’s 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