Reviving the Power Products Business

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The ME engine series, G150



<< 1. Reviving the Power Products Business
<< 2. Listening to the Users, and Incorporating Their Ideas
<< 3. An Engine to Beat the Industry's Goliath
<< 4. Identifying Problems Using Key Criteria
<< 5. Defining Toughness and Durability
<< 6. The Challenge: Cutting the Cost in Half
<< 7. The ME Engine: Combining Honda's Expertise
 


Honda began manufacturing power products in 1952, just four years after the company was founded. Naturally, motorcycles created a technological base for those power products. For example, the company's first general-purpose engine, the Type H, was a modified version of the Type F engine used in the Cub. Therefore, in a way the company's new business in power products was propelled by technology acquired through the manufacture of motorcycles.

The road to success in power products would not be easy, though. While Honda was already enjoying a reputation as a premier maker of motorcycles, it had no experience with power products. Moreover, the value the customers looked for in power products varied according to their particular applications. Added to that was the fact that many more types of power products had to be manufactured in order to satisfy market expectations. These elements combined to create a far more complex business than the one involving motorcycles. A key aspect of the business is that power products are generally divided into two categories: engines and complete machines. Accordingly, how a company might operate can vary depending on the category. Engines are supplied mainly to OEM companies as single units, while complete machines include a range of end-user products such as tillers.

Motorcycles and cars are like complete machines. Ever since the 1959 introduction of its F150 tiller, Honda had focused on complete machines. There was a strong conviction that the significance of being in that business was the ability to build and sell complete machines. With complete machines, Honda could satisfy its customers directly. However, along with that came various points of feedback from Honda customers. Listening to that feedback would lead to new products and technologies.

General-purpose engines, on the other hand, are supplied to OEM companies, so it is difficult to relate those products to their end users. The staff involved in the development of Honda power products had a definite sense of passion for their work.

They would not be satisfied with just making general-purpose engines. Therefore, it was natural for the company to focus on complete machines.

Another challenge inherent in power products is that the manufacturer must offer a range of models for each product in order to meet different needs. If it fails to do so, the manufacturer cannot meet customer expectations or sustain its retail operations. This applies to all work machines, including agricultural equipment, power generators and outboard marine engines, necessitating the small-volume production of multiple varieties. For these reasons Honda required a certain amount of time to build sufficient strength in the areas of development, cost competitiveness and marketing, in order to compete in the marketplace.

Honda's struggle to develop and market complete machines continued for two straight decades. However, as long as it remained in business the company would not be satisfied with less than absolute performance. As the 1970s began, there was a thirst throughout the organization; a hunger for the vision and direction that would revive the flagging power products business.
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