QUESTION 2

Honda Motor Company, Ltd. is a Japanese public multinational conglomerate manufacturer of automobiles, motorcycles, and power equipment, headquartered in Minato, Tokyo, Japan. Honda has been the world's largest motorcycle manufacturer since 1959, reaching a production of 400 million by the end of 2019, as well as the world's largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year. Honda became the second-largest Japanese automobile manufacturer in 2001. In 2015, Honda was the eighth largest automobile manufacturer in the world.

Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura, in 1986. Aside from their core automobile and motorcycle businesses, Honda also manufactures garden equipment, marine engines, personal watercraft, power generators, and other products. Since 1986, Honda has been involved with artificial intelligence/robotics research and released their ASIMO robot in 2000. They have also ventured into aerospace with the establishment of GE Honda Aero Engines in 2004 and the Honda HA-420 HondaJet, which began production in 2012. Honda has two joint-ventures in China: Dongfeng Honda and Guangqi Honda.

In 2013, Honda invested about 5.7% (US$6.8 billion) of its revenues into research and development. Also in 2013, Honda became the first Japanese automaker to be a net exporter from the United States, exporting 108,705 Honda and Acura models, while importing only 88,357.Honda is headquartered in Minato, Tokyo, Japan. Their shares trade on the Tokyo Stock Exchange and the New York Stock Exchange, as well as exchanges in Osaka, Nagoya, Sapporo, Kyoto, Fukuoka, London, Paris, and Switzerland.

The company has assembly plants around the globe. These plants are located in China, the United States, Pakistan, Canada, England, Japan, Belgium, Brazil, Mxico, New Zealand, Malaysia, Indonesia, India, Philippines, Thailand, Vietnam, Turkey, Taiwan, Per and Argentina. As of July 2010, 89% of Honda and Acura vehicles sold in the United States were built in North American plants, up from 82.2% a year earlier. This shields profits from the yen's advance to a 15-year high against the dollar. American Honda Motor Company is based in Torrance, California. Honda Racing Corporation (HRC) is Honda's motorcycle racing division. Honda Canada Inc. is headquartered in Markham, Ontario, it was originally planned to be located in Richmond Hill, Ontario, but delays led them to look elsewhere. Their manufacturing division, Honda of Canada Manufacturing, is based in Alliston, Ontario. Honda has also created joint ventures around the world, such as Honda Siel Cars and Hero Honda Motorcycles in India, Guangzhou Honda and Dongfeng Honda in China, Boon Siew Honda in Malaysia and Honda Atlas in Pakistan. The company also runs a business innovation initiative called Honda Xcelerator, in order to build relationships with innovators, partner with Silicon Valley startups and entrepreneurs, and help other companies work on prototypes. Xcelerator had worked with reportedly 40 companies as of January 2019. Xcelerator and a developer studio are part of the Honda Innovations group, formed in Spring 2017 and based in Mountain View, California.

Following the Japanese earthquake and tsunami in March 2011, Honda announced plans to halve production at its UK plants. The decision was made to put staff at the Swindon plant on a 2-day week until the end of May as the manufacturer struggled to source supplies from Japan. It's thought around 22,500 cars were produced during this period. For the fiscal year 2018, Honda reported earnings of US$9.534 billion, with an annual revenue of US$138.250 billion, an increase of 6.2% over the previous fiscal cycle. Honda's shares traded at over $32 per share, and its market capitalization was valued at US$50.4 billion in October 2018

Required:

a.Demonstrate with examples the type of growth (horizontal, vertical, organic, diversified or merger and acquisition) that Honda has gone through from 1959.

b. Solve out of the four market structure perfect competition, monopolistic competition, oligopoly and monopoly which market structure does Honda belong to.

c. Show Honda's geographic spread around the world and determine why it is important to have good international trade among countries.