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Date Submitted: 11/07/2015 01:20 AM
THE HONDA-YAMAHA WAR
THE HONDA-YAMAHA WAR started in 1981 when Yamaha announced the opening
of a new motorcycle factory. That factory made Yamaha the world’s largest motorcycle
manufacturer, a prestigious position previously held by Honda. Honda had been
concentrating on its automobile business, but now, faced with Yamaha’s challenge to its
motorcycle business, it counterattacked.
In the war that followed, Honda provided customers with increasingly higher levels of its
manufacturing outputs. It raised the levels of its market qualifying outputs, cost and
delivery, by cutting prices and flooding distribution channels. It raised the levels of its
order winning outputs, innovativeness and performance, by introducing new products and
raising the technological sophistication of current products. At the start of the war, Honda
and Yamaha each had 60 models of motorcycles. Over the next 18 months, Honda
introduced or replaced 113 models, while Yamaha could manage only 37 changes. Honda
also introduced four-valve engines, composite materials, direct drive, and other features.
Since Yamaha could not provide these manufacturing outputs at the new market
qualifying levels, let alone at order winning levels, demand for Yamaha products
disappeared. At one point, Yamaha had more than 12 months of inventory in its dealer
showrooms.
Finally, Yamaha surrendered. In a public statement, Yamaha’s president announced, “We
want to end the Honda Yamaha war. It is our fault. Of course, there will be competition
in the future, but it will be based on a mutual recognition of our competitive positions.”
Analysis
Honda raised the level of its market qualifying outputs, cost and delivery, and its order
winning outputs, performance and innovativeness, so much that it almost forced its
competitor, Yamaha, out of the industry.
Honda’s production systems were more suitable for providing the order winning outputs
than Yamaha’s. Honda used operator-paced line flow and JIT...