How Strategy-Making Shapes Honda’s Future in Emerging Markets?

In the 1990s, emerging markets experienced significant growth, driven by trade liberalization and globalization. Previous studies on emerging market strategies have primarily focused on innovations originating in these markets and their generation mechanisms, assuming heterogeneity between developed and emerging markets. However, these studies have several limitations: (1) they approached developed and emerging markets based on the dualistic perspective of heterogeneity and homogeneity; (2) they overlooked the diversity of demand within emerging markets; (3) they inadequately examined the dynamic nature of firm behavior in specific contexts. Therefore, this study aimed to explore the heterogeneity and homogeneity of emerging markets, demand characteristics, and the dynamic strategies and actions employed in these markets. Using an inductive research approach, this study examined the Honda motorcycle business in emerging markets from the perspective of strategy formation theory. This study's findings indicated that Honda demonstrated flexibility by focusing on the heterogeneity and homogeneity of emerging and developed markets to guide its strategic actions. Honda strategically allocated its technology and management resources to address the diversity in emerging markets. Consequently, Honda’s global concentration and localization strategies became complementary, and markets and strategic actions co-evolved over time. The theoretical contributions of this study were as follows. It demonstrated that developed and emerging markets possess both familiar and distinct aspects. Further, it unveiled inherent diversity in emerging markets, presented a dynamic perspective on the strategic behavior of MNCs in emerging markets, and highlighted their evolutionary processes. Additionally, the study expanded the theory of strategy formation processes into international management.