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Introduction

Strategic planning and management is the method to go for organizations to organize themselves to sustain and overcome competition in market places. Today, many leaders and managers do not have sufficient time to devote to developing, measuring, and executing business development strategies. As a result, the organizations may lose their long-term modest benefits and advantages while focusing only on urgent operational issues. Another usual issue is the lack of time, implements, tool, and resources to execute and update the strategies. In this research we goal to develop practical strategic thinking skills among the organization. Strategic thinking is the first step towards gaining improved positions on the market and accomplishing sustainable and workable business results (profit).

Honda Atlas Cars Pakistan Limited is additionally ventured between the Honda Motor Company Limited Japan, and so Atlas Group of Companies, Pakistan. The corporate was incorporated on November 1992 and venture agreement was signed on August 1993. The company is listed in the Karachi, Lahore and Islamabad the Stock Exchanges. On July 14, 1994, car bookings started at six dealerships in Karachi, Lahore, and Islamabad. Since therefore, the Dealerships Network has expanded and now company has sixteen 3S (Sales, Service and Spare Parts) and also the thirty 2S (Service and Spare Parts) Pit stops the network all told major cities of the Pakistan. The Corporate may be a subsidiary of the Honda Motor Company Limited, Japan. The reason we selected Honda motor company is, this company is worldwide know for its high sales rate and the methodological strategies.

Research objective

The purpose of this research is to discover the importance and the significance of Strategic. Business Management which refers to the ongoing planning, execution and the analysis of the actions that a business must perform in order to be able to achieve it’s objectives. Not only this but it is a process that initially starts with a firm’s own assessment of its resources after which it draws up a strategy according to it. These strategies determine whether or how successful a business would be in the long run. However it should also be noted that a good strategy is of no use unless it is successfully implemented. This means the successful execution of its plans by a company keeping in mind different factors of the dynamic business environment. Thus, it should be known that all of this is interconnected with each other. Through our research we will be able to discover how Atlas Honda invests time and money in Market research and as well as the training of it’s workers to improve it’s strategic planning and execution that leads to it having a very high rate of customer satisfaction.

Strategic Objectives of Honda

Customers are the explanation and source of business. It’s the joint Aim with the dealers to ensure that the customers to enjoy the Best level of the Satisfaction from use of the Honda Cars.

· Quality:

To ensure that products and services of HONDA COMPANY meet the set standards of

Excellence.

· Technology:

To develop, maintain distinct business advantages through the continual induction of the improved hard and soft technologies.

· Shareholders:

To ensure the health and the viability of business and safeguarding

Shareholders’ interest by maximizing profit, payment of regular satisfactory

By providing dividends and adding value to the shares

· Position:

“A dynamic growth is oriented company through the excellence in the quality and dedication to provide the greater fuel efficiency at the competitive prices, and the service ensuring attractive returns to the equity holders, rewarding associates according to their ability and the performance, fostering a network of engineers and the researchers ensuing unique contribution to the development of industry, customer safety, satisfaction and the protection of fulfilling its social responsibilities in all the respects. The high quality and the high standards, quality assurance activities are by the governed by a central body at the cross band level. Applying and reflecting design and development expertise to the preparation and the production stages, Company is able to deliver the enhanced quality through the creation of drawings designed to facilitate the manufacturing process, as well as to develop the manufacturing control techniques that have limit the process of variability. Post-sale, improvements are made to the product quality based on an analysis of the customer’s feedback. These improvements are basic reflected in our know-how for the next round of the design and development.

· Quality Cycle:

Quality Cycle has been created by the Honda Company to enhance the quality at every stage i.e. Design, Development, Production, Sales and After Sales Service. Expertise in the Design, and the Development and Production is applied to facilitate the manufacturing control techniques to avoid the process variations.

Problems faced during the execution of the (Honda Company) strategies

Problems Honda Company Can Face:

Recently the auto sector has faced plenty of problems since the PTI government took over. As we all know that the devaluation of our currency has resulted in expensive imported parts, which causes increase in prices of cars ultimately resulting in low sales, and resulted in huge losses. Another problem that occurred recently was the implementation of the FED by this govt. due to which the profits of the auto sector again declined and a significant share of the car’s amount went straight to the govt. Production of parts in Pakistan is not feasible thanks to high prices of electricity and absence of gas for the industries. The labor in Pakistan is not skilled and can’t compete with China or Japan’s labor when it comes to producing the auto parts and engines. These are just some of the major problems and many more problems are yet to be discussed.

· Problems In Decreasing Of Sale:

Auto sector within the Pakistan is hot waters yet the last no of the years however the fiscal year 2019-20 turned into the worse than expected. Sales of the locally assembled passenger cars witnessed 53% decline during the financial year 2019-20 was the more serious than excepted due to the slowdown in the economic activities, higher interest rates and the constantly rising car prices & towards the end, due to the coronavirus pandemic which virtually put car sales at a halt almost. However the automaker, which seems to have suffered the most in these times is Honda Atlas, the sales of the reduced by 63 percent during the last fiscal year. Honda sells three locally assembled products – the Civic, City and BR-V, cumulative sales of the which stood at 44,234 units within the FY2018-19, however in FY2019-20 the sales get down and reduced to 16,387 units rendering a deplorable 63% decline. Not that the sales got drastically reduced or taking place the corporate posted alarming PRs 511 million quarterly loss for the approaching period ending June 2020. Why Honda is feeling much of the heat as compared to the others ones, well there are multiple reasons behind the continued demise & we obviously aren’t visiting to blame the depreciating the currency or increase in duties as sole reason for which the automaker often blabber about the foundation cause are a few something very different which has accumulating for many years and has remained unattended by company.

· Constantly Increasing Prices:

As observed more than the 100 non production days during first 6 months of the fiscal year 2019-20 alone, Honda Atlas despite sluggish demand in market, kept substantially increasing prices to its products so to dampen declining profit margins. In addition to revisions due to added FED, prices of the Honda cars inflated from PRs 80,000 to up to the PRs 300,000 within the year, whereas during the last couple of years alone prices were revised by up to 52% pushing the cars out of the reach of many.

· Declining Quality Standards:

Honda once referred to as the most effective when it involves quality & fit n finishes of vehicles it's assembled within the Pakistan. However as time progressed, internal control has gone down the drain. Not only the quality has been declined, and the absence of the basics such as the trunk linings & bonnet insulations, nothing but the insatiable moves by company to the average costs.

· No Small Displacement Engine in the Lineup:

Not having small displacement in engine in its lineup has been coasted Honda Atlas are more than any other auto assembler in the Pakistan. In the early 2019, company also has encountered a sneaky situation in the following government’s decision to allow the non-filers to purchase vehicles up to 1300cc engine capacity. Honda Atlas only have the vehicles above 1300cc, it assembles 1,339cc and 1,497cc City variants, 1,498cc BR-V and 1,799cc Civic model cars. The company requested the government to allow All-filers to purchase the 1,350cc vehicles instead of 1,300cc in following Small budget. However couple of months later, the ban on the non-filers was lifted.

The other major reasons were higher car prices owing to the devaluation impact, the 10% FED imposition on 1,700cc and above cars (Civic) and imposition of the Advance Customs Duty (ACD) i.e. 5% on all imports.

Moreover, overall increase in the car financing costs due to the higher interest rates led to slowdown in the demand for company.

During the month, Honda is going to shut down its plant for 10 days as it inventories piled up to 2,000 units on plummeting car sales amid rising prices due to imposition of new, and higher taxes in budget and steep currency devaluation in the recent Months.

The some other income was going down by 61% to Rs.174 million with operating expenses are increasing 113.14% to PRs. 739 million as compared with PRs. 341 million.

The Strength And Weakness

Following are Honda Atlas important (SWOT) Strengths, Weaknesses, Opportunities and Threats:

Strengths:

1. Brand image

2. Strong R&D

3. Timely new models

4. Advance technology/equipment

5. Customer loyalty

6. Smoother drive as compare to its competitors

7. Safety

8. Environment Friendly Cars

Weaknesses:

1. Dealership Network

2. Costly Spare Parts

3. Limited Product Line

4. Shortage of Trained Technicians

5. High Cost of Production

Opportunities:

1. People’s awareness about Global Warming

2. Customers desire is for the hybrid and fuel-efficient vehicles

3. Increase in the technology in the automobiles forces customers to return to the

Dealer for service

4. Budget friendly & economy cars

5. Automobiles increasing

Threats:

1. WTO (World trade Order) opening the local markets for the global

Competition

2. Political instability

3. Energy crises

4. Depreciation of rupee against dollar

5. Increase in Petroleum and steel prices

6. Inflation

7. Declining quality of infrastructure in the country.

QUESTIONNAIRE/SURVEY:

(For this research paper we conducted a survey)

A survey is a list of questions is ready namely open ended and closed ended questions and that they are distributed to public to fill them. On the idea of answer of individual’s conclusion are drawn from them.

Research methodology

This questionnaire/survey for this research was scattered across the WhatsApp and Facebook groups’ members of this research project. The goal was to gather responses of 30-40 managers/employees. Our data was collected using an online survey, which was designed on Google forms and consisted of 9 questions relating to our research. It took around 5 days to collect the responses from the participants.

Our questionnaire:

-Forming strategy is really important to achieve the company's goals.

· Yes, forming strategy is really important.

· No, we can achieve our goals without strategy too

· Maybe.

-How important do you consider long-term objectives to be?

· Very important

· Important

· Unimportant

· Not important at all

-Availability of proper strategy formulation and execution leads to higher value.

· Highly agree

· Agree

· Disagree

· Highly disagree

-Strategy formulation is the more difficult than implementation them.

· Highly agree

· Agree

· Disagree

· Highly disagree

-In your opinion, which is the premier factor for strategic execution?

· Organizational structure

· Leadership and communication

· Operational planning

· Resource allocation

· Others:

-Problem a company face while strategy implementation

· Poor goal setting

· Lack of alignment

· Inability of track progress

· No measurements or leading indicators

· Others:

-Problems Pakistan companies are facing to form and execute the strategies.

· Week strategy

· Ineffective training

· Lack of resources

· Lack of follow through

· Linking budget to strategy

· Lack of Instituting Mechanisms for continuous improvement

· Others:

-How often a company should change it strategies

· Regularly

· After every few years

· Strategies should always remain the same

-Would you develop a strategy for your firm?

· Yes

· No

· Maybe

SURVEY OUTCOMES:

7

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Research Analysis

65% of the managers believe that companies that lack in strategy formulation and execution usually fail to meet their goals. They all believe that forming strategy is very important for them to the company goals. 90% managers believe that long term planning plays an important role in the success of company. They believe that proper planning also increases the value of the company. Strategy formulation is a very complex task and around 50% people think that formulating strategy is even harder than implementing it. Leadership is the premier factor for executing the strategy because without a skillful and visionary leadership the implementation won’t be easy. Poor goal setting is one of the main problems that a company faces while implementing the strategy so the goal setting needs to be done very professionally. In Pakistan majority of the companies lack resources and they face difficulty in adopting a new strategy. Strategies implemented should be changed according to the situation and there is nothing wrong in implementing a new strategy if the situation has changed and the old strategy isn’t working properly.

RESOURCES/TECHIQUES REQUIRED TO EXECUTE THE STRATEGY:

· Manpower : Manpower may also be called as human resources. An organization of constituent is the most important one for the human. Human resources could be a terminology used for description for those that people who form the component of a corporation. It can be also applied to human economics. For example a small organization or whole country. Human resources namely a functional component in a company whose main task is about implementing management strategies and also to assign task is to individuals. Human Resources can also settle strategies and devising system, standards, policies and processes. It will help in implementing strategies in whole organization.

· Raw material: Raw material is something that is naturally picked and some labor and action is provided on it to transform it into final product. Some raw materials used that are used for manufacturing of cars are: aluminum and steel for building body parts, titanium is employed for building some exhaust systems and platinum can be turn to utilized to build the internal part of catalytic converters. Though the major part of developing automobile is virgin steel, petroleum-based products like vinyl’s and plastics also contribute to making large percentage of automotive components. From petroleum some lightweight materials can be extracted to develop lightweight cars, this can considerably reduce the percentage. As the price of diesel and petrol preserver increasing it’s pretty much important to style the engine, which can help in saving fuel and increasing the life of vehicle.

· Technology: Technology refers to the use of the new idea to the implement for some new theory with the help of the various tools and the techniques. For instance the Multi Point Fuel Injection (MPFI) is a technology that is used for the some kind of the efficiency. This advantage of this technology is that superior fuel combustion helps in saving engine, better fuel management it helps in saving fuel, engine performance helps in increasing the average of the engine and reduced the pollution.

· Expertise: For developing the work one needs to select the people who are expertise in the particular domain. All these factors that are needed to developed. It will help in the developing the product for South Asian market, as they demand. This help in building automobile that is perfect.

LITERATURE REVIEW

· Growth Rate of HONDA COMPANY:

Honda Atlas Cars’ profit nosedived 82% to Rs681.8 million for the year ended March 31, 2020 thanks to a fall in sales volume while finance cost remained sharply higher. Earnings per share of the company fell to Rs4.77 in Apr-Mar FY20 as hostile Rs26.97 within the previous year. Income of the company were recorded at Rs55 billion, down 42% compared to Rs95.1 billion within the previous year. Honda Atlas within the year under review was mainly thanks to the declining sales volume as volumetric sales dropped 54% on a year-on-year basis. He added that a substantial increase in finance cost was also witnessed during the year cost of the company registered. Distribution cost of the corporate registered a decrease of 28% from Rs931.8 million within the previous year to Rs668 million within the amount under review. In recent years, regulatory policies for existing car assemblers have tightened to produce benefits to consumers that are exploited by unreasonable price hikes and lack of technological advancements in car models. Despite having just 10-15% non-filer customers, HCAR may be visiting touch increase its sales numbers within the near term amid rapid currency depreciation that occurred during 2018 and therefore the imminent economic slowdown anticipated over 2019. Over the following three years, new car models by new entrants like Volkswagen, Renault and Hyundai will give tough competition to HCAR, as they’ll be availing the lowered tariff benefits offered through Automotive Development Policy (ADP), 2016. Despite growth of the twenty-two industries, the size during MY18-25F, we expected HCAR to lose market share by 3% within the increasingly competitive environment.

Decreases of Sales during Pandemic:

The car sector are remained under the shadow of the Covid-19 because the Honda Atlas Cars (HCAR) reported a loss of Rs511 million within the quarter ended June 30, 2020 against the profit of Rs241.7 million within the corresponding period of previous year.

Loss per share (LPS) of the company came in at Rs3.58 within the April-June 2020 quarter compared to earnings per share (EPS) of Rs1.69 within the corresponding period of last year. “On a quarter-on-quarter basis, the company’s losses accentuated from Rs0.20 per share within the previous quarter,” “The result’s below market expectations primarily due to higher-than-expected contraction in gross margins. Income dipped 63.6% to Rs6.5 billion within the April-June 2020 quarter. The company had recorded sales of Rs17.9 billion within the same quarter last year.

According to the analyst, the drastic decline in earnings came on the rear of a 72% down in unit sales during the period under review against the identical period of previous year. “Covid-19-related lockdowns and restrictions reduced unit sales of the corporate leading to a decline in revenues of 64% year-on-year and 58% quarter-on-quarter,” he said.

Arif Habib Limited analyst Arsalan Hanif elaborated that in during the April-June quarter, the corporate sold 2,102 units of Civic and City and 227 units of BR-V model.

Gross profit margin of the carmaker fell significantly from Rs1.4 billion during the April-June within the quarter of previous year to Rs54.2 million in the quarter under review, a decrease of 96%.

“Gross profit margins fell to 0.83% within the April-June 2020 quarter as critical 11.99% within the same period of previous year,” said Hanif. “The decline in margins came on the rare of rupee depreciation to not mention high per-unit fixed costs because the closure of plants due to lockdown resulted in lower production.”

No. Of Cars Sale:

Comparison of number of vehicle sale in 2020 and 2019

Ratio:

APPROPRIATE STATISTICAL/ DATA ANALYSIS APPLIED

Increasing the Sale of Honda Company Shown In Graph:-

Honda Atlas Cars recorded highest increase in the sales volume on year-on-year basis with 72% rise to the 2,258 units. The company has managed to sell 1,314 units in same month of the last year. Indus Motor happy on a 52% growth as sales rise from 2,173 units in the August last year to the 3,307 units in the August 2020.

Decreasing the Sale of Honda Company Shown In Graph:-

This was of course due, in large part, due to COVID-19 outbreak, all the showrooms and manufacturing plants also shutdown in April of 2020,during which , no car was sold or produced by any company

Discussion

The main risk to the outlook is that the threat of a second wave or a protracted pandemic especially during the upcoming within the winter season. A return to more stringent containment measures could derail economic recovery. Moreover, the country is at brink of the stagflation with the rising inflation amidst modest and growth. This instance needs development of time-sensitive plans to seem at the demand-supply scenario and devise an honest mechanism. On the external front, this account deficit is anticipated to remain within 2% of GDP. A gradual revival of exports and upward trend in remittances on account of steps taken by the SBP will support external account. This, together with the expected private and the official flows, should still keep the Pakistan’s external position stable in the FY21. Once the economic activity normalizes and effects of the pandemic subside, the country is projected to experience a broad-based recovery, which could provide stimulus to the two-wheeler segment similarly. Atlas Honda is successfully navigating through the uncertain times with target safety and well being of everyone while ensuring business continuity. The company is well poised and has demonstrated its ability to avail and execute emerging opportunities and methods, respectively, with an aim to remain building future business proposition and increasing stakeholders’ value. During this regard, principles of the Atlas Way will continue providing a solid premise to the company. It is clear that it's appropriate and feasible for Honda firm to follow the merchandise diversification strategy. During this context, the company will should put new production plants so on supply new cars. This could include the arrangement of heavy budget and extensive marketing of the new products. Since the monetary policies of the country are tight at now, the company should arrange the capital in sort of equity by floating the shares within the market or stay awake for the interest rates to drop because the economic and inflationary situation of the country stables.

Results

Atlas Honda Limited know revealed their financial results for this year ended March 31, 2020, as per which, their online profits amounted to PRs. 3.07 billion (EPS: 24.81), nearly 4 percent under the figures reported within the last year. The company announced final cash dividend for the year at PRs. 8.5 per share, i.e. 85%. This might be additionally to the interim dividend already paid at PRs. 6.5 per share i.e. 65%. According to financial reports released on Monday, the topline of income of company grew by the merely 3 percent, where as the price of the sales surged by and around 4 percent. This resulted during a extremely 6.7 percent decline in gross profits. While the foremost expense heads of the company, i.e. Sales and Marketing and the Administrative depicted insignificant changes over year, the non-core income are showed an increase 25 percent while non-core expenses fell to 16 percent. The company received an enormous blow within the variability of a 119 percent increase in finance costs, as results of an increase in borrowings. The levy expense, however, fell by 5.2 percent, providing the some cushion to the financial wellbeing of the company.

CONCLUSION:

Conclusion of the report

Strategic management includes the detailing and execution of the significant objectives and activities taken by an organization top managers for proprietors, in view of thought of assets and an evaluation the interior and outside conditions in which the association operates. Strategic management gives by and large course to a venture and includes determining the organization's targets, creating approaches and plans to accomplish those destinations, and afterward-allocating resources and implement the plans. Academics and practicing managers have built up various models and systems to assist in strategic decision-making in the context of complex environments and competitive dynamics

Honda is generally promoted by observers and varied literatures in strategic management Its procedures have generally been utilized either appropriately or wrongly to back up various reasonable divisions, with contracting positions i.e. learning v. analytical planning, core capabilities v competencies etc. The vast majority of these presumptions, and confirmations have nonetheless, demonstrated mistaken inferable from exact mix-ups that outcome into the over accentuation of the organizations qualities, while its errors go to a great extent unnoticed. Further, methodologies and clarifications are communicated in type of reductionist; single-sided speculations that to a great extent neglect to depict the real essential direction of Honda.

Honda’s ability to meet high targets and post tremendous growth rates is largely due to its tendency to set stretched targets, which brings into direct competition with the biggest players in the automotive industry. In order to compete, it uses its resource base to compete by either providing niche products or undercutting competitors on basis of cost advantages, attained through scale economies.

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