The paper discusses Stokes Honda, a dealer of motorcycles. The paper gives a SWOT analysis of Stokes Honda. Additionally, it offers pricing positioning as well as distribution strategy of Stokes Honda. The SWOT analysis discusses the weak areas as well as highlights the strong aspects of the firm.
Strengths
The strengths of Stokes Honda are many. For example, the company handles a diversified product portfolio. Stokes Honda sells motorcycles and its parts. This makes the firm stable to technology disruptions as well as market cycles. Besides, Stokes Honda invests heavily in research and development. Such research enables the firm to attain competitive advantage via many technologies, for instance, novel welding technologies, energy efficient engines, as well as improved painting. The company also enjoys a strong brand image. Stokes Honda enjoys the reputation for selling quality engines.
Weaknesses
One of the weaknesses for Stokes Honda is product recalls. In some instances, the company recalls some of the motorcycles sold to fix faulty parts as well as manufacturing flaws. Such recalls damage Stokes Honda's reputation as well as future sales. Another weakness is weak positioning within emerging markets. The company holds a weak position within emerging automotive market.
Opportunities
An opportunity for Stokes Honda is a positive perspective for international motorcycle industry or sector. The motorcycle sector advanced by approximately 4.2 percent between 2011 and 2012 (Sonobe & Otsuka, 2014). The growth of motorcycle sector is anticipated to continue growing by 6 percent in 2016 (Sonobe & Otsuka, 2014). The increasing demand for parts, as well as motorcycles, is a significant opportunity for Stokes Honda to expand market share or grow sales. The company also has an opportunity to grow via acquisitions. Stokes Honda can significantly gain from acquisitions or partnerships of lesser competitors. This can help in adding novel brands to Stokes Honda’s product portfolio, attain higher economies of scale, as well as gain from synergies of different companies (Hill & Jones, 2010).
Threats
Stiff competition is a threat Stokes Honda faces. Novel small entrants disrupt or interfere with the market by introducing alternative products or motorcycles. Established firms are restructuring to be efficient. For that reason, Stokes Honda faces stiff competition from small as well as established players. Another threat is the increasing prices of raw materials. The prices of metals are increasing, which increases the production costs or expenses for motorcycles.
Pricing Positioning
Any company in the current’s competitive business environment needs an appropriate price as well as best positioning for success. Stokes Honda, for that reason, uses demand-based pricing to survive in the market. Stokes Honda focuses on the characteristics as well as the behavior of customers. Besides, the firm concentrates on characteristics or quality of its products. Demand-based pricing concentrates on the demand's levels for products and not for the labour or prices of the materials. Stokes Honda determines the level of products sold at various prices. By using demand schedules, the company determines levels of production as well as sales that are most profitable. The prices of motorcycles are figured out by taking into consideration the price estimates at various sales levels as well as anticipated incomes from volumes of sales linked to projected prices.
Another pricing method used is competition-dependent pricing. By using this strategy, Stokes Honda puts its pricing on par or uniform with prices of competitors, although not for all products. To match, Stokes Honda set a rate, which is comparable to that of competitors and others higher. Such a strategy allows Stokes Honda stay competitive for many customers, but does not reduce the competition. The strategy starts by establishing or identifying its current competitors. Stokes Honda then evaluates its product. Stokes Honda sets its costs lower, higher, or equal to prices of competitors dependent on merits as well as demerits of the firm’s product or anticipated response and reaction by competitors to set prices.
Positioning Strategy
Stokes Honda uses celebrity endorsement. The company runs a commercial ad with David Rudisha, 800 meters world star. The feature of products from Stokes Honda can be linked to David and his fast movement. The motorcycles from Stokes Honda have speed, fast, as well as innovative to survive all types of roads.
Distribution Strategy
Stokes Honda dealers sell their products through various distribution networks or channels. The products of the firm are sold to customers mainly through independent retail dealers or agents throughout the globe. The independent agents or dealers selling the products of Stokes Honda receive payments through different payment methods, for example, instalment payments, bank loans, financing through credit firms, as well as cash.
In conclusion, Stokes Honda must focus on its strengths as well as opportunities to survive in the current competitive business environment. The pricing strategies must always adjust to shifts in the market for Stokes Honda to remain competitive. The distribution strategy should always deliver products in the shortest time possible to avoid any inconvenience to customers. An efficient distribution channel helps in ensuring the loyalty of customers as well as helps in attracting new customers.
References
Hill, C. W. L., & Jones, G. R. (2010). Strategic management theory: An integrated approach. Boston, MA: Houghton Mifflin.
Sonobe, T., & Otsuka, K. (2014). Cluster-based industrial development: KAIZEN Management for MSE growth in developing countries. Basingstoke, Hampshire: Palgrave Macmillan.
