Executive summary

Recently, motorcycles are the most popular means of transportation in Vietnam.

Currently, there are more than 21 million circulated motorbikes, counting for 4

Vietnamese persons per motorbike on average with some popular trade names such

as Honda, Yamaha, Sym, and Suzuki …, which meets about 90% traveling demand

of Vietnamese. The demand for motorbikes is more and more increasing with the

development of Vietnam economy. Seeing this, the competition among motorcycles

makers in Vietnam is more and more powerful. In order to attract customers as well

as to satisfy customers’ needs about product quality, reasonable price, fashion

styles… motorcycles makers have carried out a lot of marketing strategies because

marketing management has the task of attracting and building relationships with

customers by creating customer value and satisfaction so that organization can sell

its products as many as possible, more importantly, higher than its competitors.

However, it is not easy for any organization to set up a successful marketing plan

because the development of the marketing plan is influenced by the situation analysis

which provides a gather of relevant market information at both micro and macro

environment of an organization. Among motorcycles makers, Honda Vietnam makes

a huge effort to remain their brand name and ensure the quality of product with a

reasonable price. And it is said that Honda motorcycles always take up the leading

market shares in Vietnam making Honda to be the leading company in motorbike

industry. So, this report is aimed at providing situation analysis of Honda Vietnam

including company, environmental, competitor, customer, brand and SWOT

analysis.

1. Introduction

On the global market, when the competition in international economic integration

becomes more and more blazing hot, especially in the context of financial crisis and

economic downturn, enterprises need to create and maintain competitive advantage

which makes them outstanding compared with their competitors so that

organizations can be solidly based in both short- run and long-run and during their

lifetime. The success of organization is based on the effort of each individual in

organization, each business unit and the whole organization as well. There are many

different departments in an organization like marketing, research and development,

finance, accounting, purchasing and manufacturing etc… and each department

performs its own function. However, each department does not carry its task alone, it

co-operates with other departments within the organization so that it not only

accomplishes its objective but also contributes to achieve the objective of the whole

organization. Profit is a numerical data showing the success of the organization and

it is stated that the profit of the organization is the difference between sales revenue

and all incurred expenses. Thus, among these departments, marketing department

seems to be the most important one contributing to the success of the organization. In

this paper, a gathering of relevant market information that influence the development

of the marketing plan will be provided in the circumstances of Honda Vietnam

Company, particularly in the context of Honda Lead.

2. Company analysis

2.1. Company profile

Honda Vietnam Company which was established in March 1996 with charter capital

of 62,900,000 million US dollars is a joint-venture of Honda Motor Co., Ltd (Japan),

Asian Honda Motor Co., Ltd (Thailand) and Vietnam Engine & Agricultural

Machinery Corporation. At early days, the company specialized in manufacturing

and assembling motorcycles. By 2005, Honda Vietnam received the adjustment

investment license in which automobile assembling was added to its business, it also

provides warranty services, repairs motorcycle and automobile. Honda motorcycles

and automobiles always take up the leading market shares for the high-class

motorcycle range in Vietnam making Honda to be the leading company in motorbike

industry.

2.2 Mission statement

With the mission statement "to become a company that the society wants to exist",

Honda Vietnam's activities have been oriented toward the community since

establishment. HVN has strived for both the happiness and safety of the Vietnamese

people, as well as the development of the country. The company has always made

great efforts to apply modern and advanced equipment and technology in production,

to develop its domestic supplier network to increase the localization ratio, to transfer

technology, to research and develop new models, to recruit local employees, to train

and improve the skills of our labor force, and to actively contribute to the national

budget. Although Honda Vietnam has provided a variety of range of motorcycles

like SH 125cc, Air Blade F1, Lead, Click play, Click, Future NEO F1, Future NEO,

Wave 110RSX , Wave 110 RS, Wave 110S, Super Dream, Wave alpha, it was

unable to scale up production as its factory in Vinh Phuc was running at full

capacity. So, in order to meet the increasing demand, Honda Vietnam Company

formally held an Opening ceremony for its second motorcycle plant in Vinh Phuc

province in August 29, 2008 with the key features of "Environmental and human

friendliness" to fulfill the customers’ orders, especially for the Lead scooter. This is

the proof for Honda Vietnam's effort to satisfy more increasing and diversified

demand of Vietnamese customers.

Besides, Honda Vietnam has been always taking part in social activities with the

wish of becoming a Company that the society wants to exist. The Company has paid

special attention to traffic propaganda & safety driving instructions, education

development support, culture, arts & charity… Especially, the campaign “I love

Vietnam” with the message: safety, environment and Social Activities prove Honda

Vietnam’s effort to contribute actively to the development of Vietnam.

2.3. Company objective

In accordance with the mission statement, company sets up its corporate objectives

guiding the present and future development of the company over the next 12 months

as follows:

Expansion of market share in existing and new markets;

Development of new product lines to satisfy different consumer preferences;

especially, providing high quality scooter like SH for high class in the society

Building closer relationship with young consumers in Vietnam based on appreciating

life styles and thinking of the young generation who always pursue the continuous

development for a better life and for the development of Vietnam.

Maintaining the best quality with a suitable price

Keeping up with modern technology and applying the latest technology in

manufacturing product

2.4 Overview about LEAD scooter

Currently, Honda Vietnam has twelve kinds of motorbikes which are being offered

in the market. SH 125cc is the newest one entering Vietnam market from the

beginning of November in 2009. Among various types of Honda Vietnam

motorcycles, we intended to choose Honda Lead to deeply analyze specific situation

because of some reasons. Firstly, Lead is similar in design to the Honda SCR scooter

that has been imported from China for sales on the local market over a year now .

Secondly, from the first day appearing in Vietnam market at the beginning of year

2009, the model of the vehicle 110 Lead Honda Vietnam has caused "shock" to all

customers due to the much higher price that it was listed. It is derived from the high

demand and scarcity supply for Honda Lead. Actually, when we searched

information about Honda, we saw a lot of negative and bad news about Lead as well

as Honda reputation. It is the reason why we want to concentrate more about this

scooter to understand thoroughly marketing strategy of Honda Lead.

Lead was firstly introduced to market on December 24, 2008 and sold on January 2,

2009 at all HEAD ( Honda Exclusive Authorized Dealers). Honda LEAD is the third

type of scooters manufactured by Honda Vietnam; the others are Air Blade and

Click scooters. Lead is high – class and luxury scooter for those who have high

living standard and modern lifestyle. The slogan for this scooter is “Lead to the next

stage”, which shows pioneer stuff of the users. Like other products of Honda, Lead is

also a saving energy and user – friendly scooter and it follows the long – term

objective of Honda toward Vietnam market that “Honda is always trying to bring

Vietnam customers more joy with high quality, safe products and reasonable price”

Honda LEAD is featured with a four-stroke, 108cc engine, built-in liquid cooled

radiator and computerized fuel injection system to be more fuel efficient and

environmental friendly meeting the Euro 3 emission standard. Additionally, many

safety features are installed into the LEAD, such as Combi Brake; and the bright

Halogen Light. Beside that LEAD is perfectly designed to deliver the most additional

valuable benefits to customers such as: The super large U-Box; Conveniently Fuel

Center Lid; comfortable seat; Tubeless tire. Also, customers have many choices

when coming to LEAD Honda Vietnam because of various colors of black, white,

red or silver.  Especially, the very first time appearance of 2 newly EZ Flip colors:

Gold and Pink that offers color transformation in changing brightness conditions is

expected to bring about a fresh and active style for riders. Furthermore, the suggested

retail price of the LEAD will be at VND 30,990,000 VND for standard colors and

31,490,000 VND for special colors (VAT included). 

3. Environmental analysis

3.1 Natural

Environmental pollution is a serious problem in Vietnam nowadays. There are many

types of environmental pollution like water pollution, land pollution, noise

pollution…among them, air pollution is a hot issue for not only Vietnam but also

other countries all over the world because air environment has many changes

affecting badly to people and creature. Air pollution is caused by many factors such

as exploring and using natural resources: coal, oil..., emission from factory,

vehicles…it is said that air pollution, especially in big cities, is mainly caused by

vehicles. Environmental experts say that vehicles, especially motorcycles, cause 70

per cent of all air pollution. Therefore, producing friendly- environment motorcycles

is encouraged and is concerned a lot, especially; a standard on motorbike exhaust

fumes was set up in 2007. In the absence of a control standard for motorbike fumes,

the best solution at present is to find a way to minimize fumes from all engines to

save the environment. Seeing this, Honda Vietnam has tried to apply new technology

in producing motorcycles which is friendly to environment. With all features above,

Honda Lead saves energy and environmental friendly meeting the Euro 3 emission

standard.

3.2 Social/ cultural

When traffic jams situation happens more and more frequently, in addition to

government legislation requires every one on motorcycles to wear helmet, scooters

become favorite means of transportation nowadays because scooters express some

advantages compared to motorbikes as follows: Firstly, scooter is more convenient

for driving in small roads or rush hours, traffic jams than motorbikes because scooter

does not need much adjustment for gear as motorbike. Secondly, scooter has a large

box for bags and helmets. Most of all, the line Scooter is currently circulating in the

market are designed relatively consistent with the appearance of Vietnamese people

as relatively low saddle. Moreover, many people perceived that scooter will take

more petrol than motorbike, so average income class will have tendency to buy

motorbike but now, which is improved so much. In addition, with the development

of economy, people have higher income; they have more demand for scooter which

is better fit with modern life style and fashion. In short, scooter is more and more

popular with Vietnamese consumers, so Honda decided to launch Honda Lead

scooter to satisfy customers’ demand.

4. Competitor analysis

Currently, motorbike market is quite attractive. There are a large number of the

companies focusing on this field. So, since Honda launched LEAD into the market, it

has met both internal competitors like Air-Blade, Click… and many external direct

opponents such as Smash, Mio classical, Nouvo, Suzuki amity 125, Attila Victoria,

Honda SCR China, ….Besides, a lot of the companies producing cars: Toyota, Ford,

Huyndai, BMW…are considered as indirect competitors of Lead. Among direct

competitors above, Attila Victoria and Honda SCR imported from China will be

selected to assess their strengths and weaknesses relative to Honda Lead.

As we can see that SYM is the first adversary which competes with Honda. SYM is

associated with reliability and genuineness. SYM, with line of diverse motorbike

products such as Attila, VS Exel, Magio 110 RS, Bonus 110…created a new wave on

the Vietnam market and has competed strongly with Honda. Specially, SYM introduced

original Attila to the Vietnam market in 1998, Attila Victoria, a new version to the

market in August 2008 before introduction of Honda Lead at the end of 2008, which

made Attila Victoria coming to customers earlier. It has not only new shape but also

cheaper price than Lead (28 million VND- Attila Victoria, and 31 million VND –

Honda Lead). In addition, SYM has provided services more attractively for users as

they buy this product than Honda. For example, guarantee period of Attila Victoria is 2

-year warranty like Lead and one more option is 30000km comparing with 20000km of

Honda. In general, Attila is one of the competitive and powerful motors which Honda

needs pay attention to make Lead more perfect.

Secondly, SCR which has been produced by Honda China is also a strong competitor of

Lead. In general, Lead and SCR are nearly similar about the shape, engine, but the price

of Lead (31000000 VND) is cheaper than SCR (33000000 VND) and the color of Lead

is younger and more various. SCR has only two colors for customers to choose: yellow

and pink but there are four colors for Lead. When Honda launched Lead to the market,

SCR is very popular to users and receives much more attention from customers because

of good features such as big box, fuel injection engine PGM-FI…. These features are

also included in Lead. The difference between them is that Lead is equipped without the

sub-foot drum motor, which creates difficulty for users especially female. At this point,

SCR can be evaluated more highly than lead. However, the operation of Lead is quite

humid and smooth, which makes customers more comfortable and the guarantee period

of Lead is longer than SCR (six months to one year). To sum up, with appearance of

Lead in 2008, it attracted more attention of many people and has reduced a large

number of SCR bought.

With evaluation above, it is clear that Lead stands the second position comparing with

Attila Victoria and SCR. Up till now, with the reasonable price Lead is a good choice

for those having average or high income. The positioning of Lead and its two direct

competitors can be defined at the following map:

Quality

Lead

Attila

SCR

Low price

A positioning map

5. Customer analysis

In the Vietnam motorcycles market, there are four customer segments divided for

those who use Honda Lead.

Customer

segments

Characteristics

Geographical Currently, Honda has about 400 retail stores in all the

country. Like other kind of motorcycles, Honda Lead

has been distributed to HEAD (Honda Exclusive

Authorized Dealers) from the North to the South,

however it has still been consumed mostly in big

cities in which have dense populations and high

living standards such as Hanoi, HoChiMinh city, Hai

Phong, Da Nang, Hue, Can Tho, etc.

Because Lead is a high – class and luxurious scooter

product, it is not much sold in rural areas.

Demographic With opulent and superior design as well as various

colors, Lead can be used by both male and female

Its price is acceptable for workers who have at least

above the average income as well as students having

good economic ability.

It is also suitable for the whole families with parents

and children who are students needing motorbike to

go to school.

It is also always available for everyone with needs in

any occupation

Psychographic Actually, Honda Vietnam designed Lead for specific

socioeconomic classes in term of economic ability. It

focuses on those who have high living standards, in

other words, who can afford for this luxurious

product.

Lead is a preferable motorcycle to those who are keen

on scooter because of its style which makes drivers

feel proud of them as well as brings luxury and

modernity to its owner.

Behavioral Lead is firstly launched in Vietnam market at the

beginning of year 2009. It is a time near Tet holiday,

therefore consumers want to have a new motorbike at

this time in order to make ready for Tet. This leads to

the increase demand for this scooter.

Nowadays, a motorbike is not simple as a means of

transportation. It also shows the socioeconomic status

of its owner, so consumers want to choose motorbike

which represents their high rank because of its luxury.

Consumers also choose Lead because of its

advantages compared with the other scooters such as:

saving energy; light, simple and user – friendly

design; advanced, powerful and mild engine; cheap

stated price and brand familiarity.

Honda Vietnam is the leading company in motorbike

industry, therefore the products of Honda like Lead is

often the priority choice come to the customers’

mind.

The buyers using Lead – a product of Honda are

somewhat loyal. They are loyal to the motorbikes

manufactured by Honda Vietnam. They believed that

Honda will create value and satisfaction for them.

Most customers in big cities and urban areas are

aware of the Lead brand because of its repetitive

advertisings on television as well as monumental

show for the first appearance of this scooter.

However, many potential users in the rural areas are

unaware or not informed about this kind of

motorcycle because Honda has not focused on this

market segment.

Decision type for the Honda Lead

Actually, scooter like Honda Lead is still an expensive and infrequently purchased

product for Vietnam customers; therefore before making decision to buy a new one,

they highly involved in a purchase by searching a lot of necessary information about

its price, quality and characteristics. Moreover, there are significant differences

among brands such as Honda, Yamaha, Suzuki and SYM as well as other

motorcycles products coming from China. For example, Honda products are saving –

energy and user – friendly, while Yamaha products normally look so sporty and

powerful. It is the reason why consumers always compare among brands to choose

the best one. These features show us that it is complex buying behavior.

6. Brand analysis

6.1 Product life circle (PLC) stage

Up to now, Honda Lead has been appearing in Vietnam market for about one year.

Like other new products, it also progresses through a range of stages from

introduction to growth, maturity, and decline. This sequence is known as the product

life cycle and is associated with changes in the marketing situation, thus impacting

the marketing strategy and the marketing mix. As can be seen from “price storm” of

Honda Lead, this product came over the introduction stage and begins with the

growth rate showed through the high demand and quick sale. However, it can be

predicted that it may enter the maturity stage and whether it can back into the growth

stage or not depends on the way the company changes one of the marketing mix of

the product - price. In this report, we will focus on the introduction and growth stage

as well as maturity stage.

6.1.1 Introduction and growth stage:

Actually, Honda Lead has very quick introduction stage, so it moves to the growth

stage immediately. Firstly, as the product is introduced into the market, the demand

for it was so high that sale goes up rapidly instead of slow sales growth as predicted

for this stage. Moreover, according to Mr Shinichi Shimada, Senior Manager of

Customer Service Department, Honda Vietnam affirmed that this company is

suffering loss of prestige when Head himself push price up and benefit from the

difference between the listed and selling price, meanwhile the company do not

benefit from the price increase.

6.1.2 Maturity stages

Currently, the “price storm” of Honda Lead has not been solved appropriately by

Honda Vietnam Company and it’s HEAD. Consumers have been disagreeing with

what Honda managers explained for their irresponsible action in term of controlling

price. In addition, they no longer believe Honda reputation and they may boycott

Honda products including Lead. In recent time, the sales of Honda Lead slow down,

which make profits drop. This report forecasts that Honda Lead may have chance to

return the growth stage if the company changes the marketing strategy in term of

price to make customer trust the company reputation again. In contrast, if Honda

Company do not act correspondently with the customers’ opinion, they are likely to

loose the motorcycles market to other competitors.

6.2. Current marketing strategy using 4Ps framework

It is very important to the Honda Company to determine 4Ps which stand for

Product, Place, Promotion and Price with the purpose of changing customers’

negative mind about Honda Lead.

Product

Honda Company is trying to increase Lead output to meet the customers’ demand

and avoid the increase price due to the scarcity of this scooter. Moreover, the

company also improves the product quality to make customers feel satisfaction

Place

Honda Lead

Honda Lead has been distributed through HEAD in all the country. HonDa Company

has still used HEAD as their main channel of product distribution.

Promotion

Honda continues their promotion campaigns through two main communication

elements namely advertising and public relation. Because of the large market share

of motorcycles lines, Honda is utilizing both PUSH and PULL strategies. In term of

public relations, Honda is always trying to build good relationships with the

Vietnamese customers by involving in the community as well as investing in social

portfolio with the purpose of proving their efforts toward Vietnam society.

Price

Recently, Honda often makes customers dissatisfied with the pricing decision

because of the much higher difference between the listed and selling price. Honda

Company clearly knows about this issue from the “price storm” of Lead and Air

Blade, but they have not solved this affair appropriately yet. This brings HEAD

chance to push price up whatever they like to make profits.

7. SWOT ANALYSIS 

7.1. Strengths

Honda has been a well-known brand in the world before entering to Vietnam in

1996. People know about Honda Japan, Honda Thailand and now Honda Vietnam.

Over 10 years of long existence and development, Honda Vietnam now becomes a

part in the Vietnamese people’s life. Moreover, taking part into social activities,

especially makes Honda become the friendly motor brand with people. Thus, Honda

Vietnam is one of the most prioritized brands for choosing motorcycles of domestic

customers. LEAD, firstly launched in Vietnam market on 24 December 2008, is one

product of Honda Vietnam after 12 years since company’s establishment, so it will

also have full fame and take advantages of its brand. It makes one of the strongest

points of this scooter.

Another strength of LEAD Honda which plays a part in the firm’s way to become

popular is the excellent characteristics of products- a scooter designed with concept

of “Premium and Modern” and takes in the international trend of big scooters. LEAD

is the perfect match with modern and premium lifestyle and is the “new standard

scooter” to the people living in the cities. Beside the features of a modern scooter’s

engine, such as, 4 stroke, 108cc radiator built-in liquid cooled engine, LEAD is also

computerized Honda PGM-FI( electronic fuel injection ) system that providing

LEAD as the best fuel efficiency in its class and offers environmental friendliness

meeting the strictly Euro 3 emission standard. This advanced point is not applied for

lots of scooters in Vietnam, for example, Click Play (Honda), Nouvo( Yamaha)…

Additionally, many safety features are installed into the LEAD, such as Combi

Brake. Beside that LEAD is perfectly designed to deliver the most additional

valuable benefits to customers ,namely, LEAD has a super larger U-Box than other

scooters’, for instance, Nouvo or Air Blade… so it is very convenient for driver to

store a lot of things. Also, customers have many choices when coming to LEAD

Honda Vietnam because of various colors of black, white, red, silver, gold and pink

that offers color transformation in changing brightness conditions is expected to

bring about a fresh and active style for riders. While Air Blade has black, white, red;

or Nouvo has more dark blue. Furthermore, the suggested retail price of the LEAD

will be at VND 30,990,000 VND for standard colors and 31,490,000 VND for

special colors (VAT included). It is the suitable price for a modern and high graded

scooter. .  

 7.2. Weaknesses

Everything has two faces: strengths and weaknesses; and LEAD Honda Vietnam is

not an exception. Besides its strengths, LEAD has a number of weak points.

First of all, that is the weakness concerning with HEAD management. During the last

period of the economic recession, Honda Vietnam has offered customers many

promotion programs such as gift vouchers, discount prices in order to stimulate the

motor demand. However, HEAD does not inform customers about those prices. In

addition, HEAD pushes the prices up because of the escalation in scooter demand

due to higher average income of consumers. This brings HEAD lots of money from

the discount prices and from the difference between the original prices and the

increasing prices. The motor prices at HEAD are obviously higher than those at

others small motor shops. Partly, the listed retail price of the LEAD is at 30,990,000

VND for standard colors and 31,490,000 VND for special colors (VAT included),

but in fact that the customers must buy LEAD higher three- four millions and even

when its price goes up 39,000,000 VND. But Honda Vietnam did not have any effort

to solve this problem. They just told via the media that HEAD could sell motors at

any price that they wanted. This means Honda Vietnam denies being responsible for

this affair. Another result from the “prices storm” is that the motor prices being

pushed up would let consumers down. On the Internet, there are some forums calling

the consumers to boycott LEAD Honda Vietnam. Moreover, the “prices storm”

helped HEAD to be tax dodgers because they sell motor to the customers at high

prices but pay tax at listed prices, meaning the low prices. Therefore, they can have

more money from the difference between the two prices.

The last weakness is about Honda Vietnam services such as sales service,

maintenance service. At HEAD, when customers complain about the highly

increasing prices of Lead, no one gives them suitable explanation or intends to

convince them to buy. Generally, attitude of sales persons are not helpful and that

makes a lot of buyers dissatisfied. Another example is concerned with the

guarantee’s maintenance of Lead. When the customers go to HEAD to have

warranty, they often wait for long time or receive unfriendliness of staff. 

7.3. Opportunities

It cannot be denied that some factors and forces of the external environment bring

the Honda Lead great opportunities.

The first important one is from Vietnamese customers. Organization exists to meet

the needs of customers. If it creates great customer values and satisfaction, it is

successful. As stated in the website www.state.gov, Vietnamese per capita income

(2008) is 1,024 dollar per year. That level of income explains why customers in

Vietnam prefer a motor with a reasonable price. However, nowadays, a lot of people

have higher average income, so they want their vehicles not only to travel but also to

represent for their socioeconomic status. Thus, the tendency to buy scooter instead of

motorbike gradually increases. LEAD helps its customers have both requirements in

a scooter- convenience and style. In addition, there is a significant rise in the

customers’ demand for motors, especially motorcycles (scooters and motorbikes) at

90% in big cities ( www.honda.com.vn ). These characteristics of Vietnamese customer

market give products of Honda Vietnam Company, including LEAD, a chance to

enhance the performance remarkably. In reality, being aware of this opportunity, the

company has expanded the scale of production of LEAD to satisfy customers’

needs. 

The second opportunity which the external environment offers is socio - cultural

conditions. It is evident that air pollution is one of the country’s most alarming issues

caused mainly by motor vehicles as Vietnam expects to have 31 million motorbikes

and 3 million cars by 2015 ( http://english.thesaigontimes.vn ). This problem causes serious

harm to people and nature. Therefore, the whole society becomes more aware of the

importance of protecting the environment. They intend to use emission-limiting and

fuel-saving vehicles. Taking advantage of this opportunity, the Honda Vietnam

Company has issued a mass of hi-tech and eco-friendly products, accompanied by

environmental protection activities. Honda Vietnam has obtained many advanced

achievements in the motor industry and LEAD is one of the best ones.

The last but not least is the opportunity due to globalization. Like many other

companies, in Vietnam in Post-WTO time, LEAD has great opportunities from this

important event. When our economy integrates completely to the world market, the

company is in front of the chance to have much wider customer market without any

trade barriers. Also, it can adopt modern technology, foreign investment and

effective management methods more easily.

7.4. Threats 

Beside opportunities, LEAD Honda Vietnam faces some threats as follows:

Firstly, threat is set up by the bargaining power of customers. It is the fact that the

more the society has developed the more trends towards modernization and

diversification has been popular. It makes the number of industries appeared,

including motorcycles industry. Among Vietnamese scooters market, there are lots

of different brands with various and innovative products such as Mio, Nouvo

(YAMAHA), Zip, LX, Fly 125 (PIAGGIO), Attila, Joyride (SYM), Bella, and Amity

(SUZUKI) … Therefore, the customers have more choice to select the best one that

suits with their preferences. To meet the demand of customers, LEAD Honda

Vietnam continues to make sustained efforts to improve their product in terms of

price, style and function as well as services day by day. They are trying their best to

launch scooter that fits well with Vietnamese people’s needs and at the same time

reduce negative effects on environment.

Secondly, the bargaining power of suppliers is mentioned. It is clear that Honda has

established a close relationship with its suppliers mainly in Japan. They are trying to

persuade their suppliers to reduce the price of some components. Because of the

limitation of domestic market in manufacturing car’s component, Honda has to

import the component from foreign country like Japan, China and assemble in

Vietnam. Those causes manufacturing Lead depend on foreign suppliers in terms of

price and quantity.

Next, threat is caused by new entrant. Since Viet Nam is a member of WTO,

Vietnamese customers have more choices to own suitable scooter. There are more

famous foreign brand names than ever before in domestic market such as Piaggio,

CPI … with good quality and appealing appearance. They attract a large amount of

customers especially ones who have high income and desire to show off their status.

Additionally, Vietnam permit motorcycles importing business not only new but also

old ones with efficient quality standard and expiry date rules. Moreover, according to

Mr Do Huu Hao, vice prime minister of Ministry of Industry, the import tax of motor

is reduced considerably in the next 3 years at the rate of at least 15 % in comparison

with the current price. Thus, Honda now is in the edge of losing market share in

Vietnamese market.

Finally, it comes from rivalries. Yamaha, Suzuki, two strong competitors of Honda

Vietnam, now keep innovating their products, including scooters, and having long-

term goal to become the leading producers. Evidently, Yamaha has scooters, such as,

Mio, Exciter, Nouvo with various prices from 20,000,000 to 32,700,000 VND; while

Suzuki also has Suzuki Hayate with lower price, good quality, fashion. In addition,

Lead now has to struggle against the scooters flood from China which cheap price is

a competitive advantage of these products to compete with Lead.

From SWOT analysis, some suggestions are mentioned to help Lead scooter

continue to be the best option for Vietnamese customers.

Strengths Possible actions

Long term brand

Technology

Continue developing marketing strategies, such

as promotion programs, doing charity … to raise

the company’s image and brand name of LEAD

in the market

Update advanced and modern machinery

technology all over the world

Weakness

Control selling price

Sale and maintenance

service

Control to stabilize price, avoid big difference

between listed and selling prices

Manage, train and motivate ( reward or

punish)staffs

Be able to use mobile repairing service

Opportunities

Vietnamese customers

Socio- cultural conditions

Do research about demand of domestics and

international customers and society to innovate

Globalization LEAD and expand market for this scooter

Threats

Bargaining power of

customers

Bargaining power of

suppliers

New entrant

Rivalries

Innovate continuously product with high quality

and suitable price for customers

Look for domestic suppliers to make lower price

and assemble actively