The current business environment is very competitive, ever changing and demanding. As a result business organizations have deployed highly qualified and experienced management team to ensure their companies survive in the market competition. A good management team mainly focuses on management of resources, time and scope at the same time. The automobile sector is one of the most competitive sectors in the business world. There are many established business companies that compete in the automobile sector. Honda Motors (HMC) and General Motors (GM) are among the successful business companies in the automobile sector.
In the recent years, the performance of Honda Motors (HMC) has been impressive as the profit margin of this company has increased dramatically. On the other hand, the performance of General Motors (GM) has been less impressive as compared to that of Honda Motors (HMC). On the fourth fiscal quarter of 2011, Honda Motors (HMC) consolidated a net income of $536 billion while on 2010 it was $450 billion. In 2011 the net income of General Motors (GM) was $919 billion while in 2010 it was $910 billion. The above data indicate the performance of Honda Motors (HMC) is improving at a fast rate.
The operating revenue and net sales of Honda Motors (HMC) in 2011 added up to $26, 616 million. At the same time the operating revenue and net sales of General Motors (GM) added up to $1594million. By comparing the expenses incurred for production purposes, there is clear evidence that Honda Motors (HMC) used little resources as compared to General Motors (GM). Therefore, the main reason why Honda Motors (HMC) incurs a bigger profit margin as compared to Honda Motors (HMC) is as a result of good management and implementation of effective and productive policies (Vlasic 2009).
GM Ratios & Returns
Price-to-sales
Return on Equity
Operating Margin
Profit Margin
4.00%
GM Financials
Honda Motors (HMC) Yen (millions)
Financial Highlights
Year ended
Mar. 31, 2010
audited
Net sales and other operating revenue
Operating income
Income before income taxes and equity in
income of affiliates
Net income attributable to Honda Motor Co. Ltd
Profit Margin
26%
Honda Motor Co., Ltd
The presence of a qualified and experience management team is what has propelled Honda Motors (HMC) towards financial prosperity. Excellent financial management is imperative for any business organization. Managers at Honda Motors (HMC) have formulated good business ideas such as profit distribution which require them to direct more money to the most productive departments. This policy has increased the productive of this company which in return results to an increase in the profit margin of the company.
The impressive performance Honda Motors (HMC) in the market competition has also played an integral role in attracting investors. As a result the rate of investment at Honda Motors (HMC) is much higher as compared to the investment rate of General Motors (GM). The other concept that has driven Honda Motors (HMC) to success is good decision-making and time management by the management (Kleiman 2010).
Honda Motors (HMC) is dominant in the automobile market competition due to the presence of experienced personnel who have enabled the company to attain financial strength. This has made the Honda Motors (HMC) difficult to compete with. As a result other automobile companies such as General Motors (GM) have been forced to lag behind in terms of automobile production in recent years. Therefore, top quality project management is the best inventiveness that can establish a company in the business market.
References
Honda Motor Co., Ltd, (April 28, 2011), reports consolidated financial results for the fiscal fourth quarter and the fiscal year ended march 31, 2011
Vlasic, Bill (July 10, 2009). G.M. Vow to Slim Includes Top Ranks. The New York Times, Retrieved September 9, 2012
Kleiman, Lawrence S. ((2010), Management and Executive Development, Reference for Business: Encyclopedia of Business: n. pg. Web. 25 Mar 2011
