Waseem Sayegh

There is a famous English idiom that goes “Hindsight 20/20″. Urbandictionary.com explains this idiom by saying: “an individual has a realization about the event that should have been obvious all along, yet they didn’t catch on because they were acting in the heat of the moment.” The Honda A and B cases were written in hindsight of Honda Motors’ success in the United States. The Honda A case describes that success by citing a report written by the Boston Consulting Group (BCG). On the other hand, Honda B case describes the same success from interviews conducted by Dr. Richard T. Pascale with the founders of Honda Motors. In other words the Honda A case is from a consultant’s perspective and Honda B case is “straight from the horse’s mouth”.
One would think that BCG and Pascal would underline the same success factors. Though, it turns out BCG and Pascal did not agree on the success factors. Instead, they were too far apart. After reading the cases one can only conclude that Hindsight is not always 20/20, especially in the Honda A case. This paper will compare and contrast BCG’s perspective and Pascale’s perspective as to why Honda succeeded in the USA.
BCG’s case was written a thousand feet away from the action. The case was written as though Honda had a grand plan all along and that it was immaculately executing it. BCG supports its theory by providing numbers and diagram. They go into details about the Japanese selling and distribution systems and cost and price performance. Finally BCG concludes with “competitive strategy implications” as if to suggest that they have revealed a guaranteed recipe for success.
Pascal on the other hand details the story behind the story. Yes, Honda had great selling and distribution systems and cost and price performance. Though we need to stress that Honda did not start off with this or that. Instead, Honda started off with a failure, and a tweak to correct that failure. The tweak was followed by another failure, that failure was followed by a tweak, and so on and so forth. Each time Honda failed it grew stronger as it learned from its mistakes thus strengthening its knowledge as an organization. Honda also took advantage of external happenstances as though it had a “just in time” strategy.
We learn from Pascal’s case that Honda’s strategy in the United States was simply a goal. The goal was aiming for a “10% share of the US imports”. Its founders were so committed to their strategy that they were on the ground reacting to every road block that might hinder achieving that goal. We also learn from Pascal’s case that Honda’s selling and distribution systems were a result of Honda’s bad experience with its first exclusive distributor back in 1949. As for its obsession with market share, we can infer that it was the result of its 1940’s exclusive dealer limiting its sales to 80 units per month. Furthermore its cost and price performance was a result of knowing the business since a “50cc engine is 50% cheaper to make than a 100cc engine.”
To sum it up, from the first case we learn that consultants looked at the motorcycle industry’s raw data and saw certain patterns. Without a core understanding of the motorcycle industry the consultants falsely concluded that these patterns where the reason behind the success of Honda in the United States. From the second case we learn that these patterns were the result of Honda’s success in the United States and not the reason behind Honda’s success. We also learn that the real reasons behind Honda’s success were: First, Honda’s founders got their hands dirty by being there in the middle of the action reacting to changes in the environment and tweaking their strategy. Second, Honda knew the business inside out: from knowing how to build a motor to knowing the reseller that delivered the motorcycle to their customer. Third, as a learning organization Honda fed its failure back into its organization to help it with its future decision making.