Analysis of Dynamic Capabilities in Honda’s Aircraft Development and Launch of Aircraft Business

This study examines Honda’s aircraft development and entry into the aircraft business from the perspective of dynamic capability theory. The company initiated research on a small business jet in 1986 and subsequently introduced the HondaJet into the market in 2015. Despite the high development costs and significant barriers to entry that are characteristic of the aircraft industry, Honda has established a competitive advantage in this market through long-term technology accumulation and the development of organizational capabilities. Utilizing Teece’s framework of sensing, seizing, and transforming, this study explores how Honda acquired and built the capabilities essential for its aircraft business. The study will examine the process by which the technical knowledge accumulated from the early stages of R&D led to the adoption of the HondaJet’s distinctive on-wing engine arrangement (OTWEM-system) and composite airframe structure, and how the decision-making of the development team and routines in the organization were formed and transformed, leading to the strategy for commercialization. The study indicates that a confluence of technological innovation, organizational culture, and leadership influence converged to underlie Honda's success in the aircraft industry. This study provides theoretical and empirical implications for the development and commercialization of new businesses by firms in highly uncertain market environments.