strategic management by hero motocop

KOUSALI INSTITUTE OF MANAGEMENT STUDIES,

DHARWAD

Karnatak University, Dharwad

SUBJECT: STRATEGIC MANAGEMENT

GROUP NO 4

TO: PUSHPA HONGAL

Assistant professor KIMS KUD

By: RAKESH: 15MBA039

SOMANNA: 15MBA044

MALIK K: 15MBA026

YUVRAJAKUMAR.S: 15MBA054

STRATEGIC MANAGEMENT-HERO MOTOCORP

KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD)

INDEX

Sl no CONTENTS Pg no

1 INDUSTRY OVERVIEW: About Automobile Sector

Top Players

Economic Contribution

Recent data

3-7

2 COMPANY OVERVIEW:

History of Hero Motocorp

Mission, Vision and Objectives of Hero Motocorp

Milestones of Hero Motocorp

Organizational Structure of Hero Motocorp

Product line of Hero Motocorp

Major competitors of Hero Motocorp

8-13

3 Corporate governance at hero motocorp 14

4 Social responsibility at hero 15-18

5 Ethical practices at hero 18-21

6 Environmental analysis 22-25

7 Strategy formulation 26-28

8 Corporate strategies 29

9

Important strategic move of hero motocorp 30

10 Competitor analysis 31

11 Finding, suggestion and conclusion 32-33



1. INDUSTRY OVERVIEW:

About Automobile Sector:

In 1897, the first car ran on an Indian road. Through the 1930s, cars were

imports only, and in small numbers. An embryonic automotive industry emerged

in India in the 1940s. Hindustan Motors was launched in 1942, long-time

competitor Premier in 1944, building Chrysler, Dodge, and Fiat products

respectively.

Mahindra & Mahindra was established by two brothers in 1945, and began

assembly of Jeep CJ-3A utility vehicles. Following independence in 1947, the

Government of India and the private sector launched efforts to create an

automotive-component manufacturing industry to supply to the automobile

industry. In 1953, an import substitution programs was launched, and the import

of fully built-up cars began to be restricted. The automobile industry is a

business of producing and selling self-powered vehicles, including passenger

cars, trucks, farm equipment and other commercial vehicles. The auto industry

has become one of the largest purchasers of many key industrial products such as

steel.

The automotive industry in India is one of the largest in the world with an annual

production of 23.37 million vehicles in FY 2014-15, following a growth of 8.68

per cent over the last year. The automobile industry accounts for 7.1 per cent of

the country's gross domestic product (GDP). The Two Wheelers segment, with

81 per cent market share, is the leader of the Indian Automobile market, owing

to a growing middle class and a young population. Moreover, the growing

interest of companies in exploring the rural markets further aided the growth of

the sector. The overall Passenger Vehicle (PV) segment has 13 per cent market

share.



Top players:

Hero Motocorp

Bajaj Auto

TVS

Honda

Mahindra

KTM

Piaggio

Economic Contribution:

India is also a prominent auto exporter and has strong export growth

expectations for the near future. In FY 2014-15, automobile exports grew by 15

per cent over the last year. In addition, several initiatives by the Government of

India and the major automobile players in the Indian market are expected to

make India a leader in the Two Wheeler and Four Wheeler market in the world

by 2020. The sales of PVs grew by 8.51 per cent in April–October 2015 over the

same period in the previous year. The overall CVs segment registered a growth

of 8.02 per cent in April–October 2015 as compared to same period last year.

Medium & Heavy Commercial Vehicles (M&HCVs) registered very strong

growth of 32.3 per cent while sales of Light Commercial Vehicles (LCVs)

declined by 5.24 per cent during April–October 2015, year-to-year.

Some of the major initiatives taken by the Government of India are:

The Government of India aims to make automobile manufacturing the main

driver of "Make in India" initiative, as it expects the passenger vehicles market

to triple to 9.4 million units by 2026, as highlighted in the Auto Mission Plan

(AMP) 2016-26.

In the Union budget of 2015-16, the Government has announced plans to provide

credit of Rs 850,000 cr (US$127.5 billion) to farmers, which is expected to boost

sales in the tractors segment.

The government plans to promote eco-friendly cars in the country. I.e. CNG-

based vehicles, hybrid vehicles, and electric vehicles—and also to make

mandatory 5 per cent ethanol blending in petrol.



The government has formulated a Scheme for Faster Adoption and

Manufacturing of Electric and Hybrid Vehicles in India, under the National

Electric Mobility Mission 2020, to encourage the progressive introduction of

reliable, affordable, and efficient electric and hybrid vehicles into the country.

The Automobile Mission Plan (AMP) for the period 2006–2016, designed by the

government is aimed at accelerating and sustaining growth in this sector. Also,

the well-established Regulatory Framework under the Ministry of Shipping,

Road Transport and Highways, plays a part in providing a boost to this sector.



Recent data:

Production:

The industry produced a total 23,960,940 vehicles including passenger vehicles,

commercial vehicles, three wheelers, two wheelers and quadricycle in April-

March 2016 as against 23,358,047 in April-March 2015, registering a marginal

growth of 2.58 percent over the same period last year.



Domestic Sales:

The sales of Passenger Vehicles grew by 7.24 percent in April-March 2016 over

the same period last year. Within the Passenger Vehicles, Passenger Cars, Utility

Vehicles and Vans grew by 7.87 percent, 6.25 percent and 3.58 percent

respectively during April-March 2016 over the same period last year.

The overall Commercial Vehicles segment registered a growth of 11.51 percent

in April-March 2016 as compared to the same period last year. Medium &

Heavy Commercial Vehicles (M&HCVs) registered a growth at 29.91 percent

and Light Commercial Vehicles grew marginally by 0.30 percent during April-

March 2016 over the same period last year.

Three Wheelers sales grew by 1.03 percent in April-March 2016 over the same

period last year. Passenger Carrier sales grew by 2.11 per cent & Goods Carrier

sales declined by (-) 3.62 percent respectively in April-March 2016 over April-

March 2015.

Two Wheelers sales registered a growth at 3.01 percent during April-March

2016 over April-March 2015. Within the Two Wheelers segment, Scooters grew

by 11.79 percent while Motorcycles and Mopeds dropped by (-) 0.24 percent and

(-) 3.32 percent respectively in April-March 2016 over April-March 2015.

Exports:

In April-March 2016, overall automobile exports grew by 1.91 percent.

Passenger Vehicles, Commercial Vehicles, Three Wheelers and Two Wheelers

registered a growth of 5.24 percent, 16.97 percent (-) 0.78 percent and 0.97

percent respectively in April-March 2016 over April-March 2015.



1. COMPANY OVERVIEW:

History of Hero Motocorp:

"Hum Mein Hai Hero"

Type: Public company

Traded as: BSE: 500182NSE: HEROMOTOCORP BSE SENSEX Constituent

Industry: Automotive

Founded: January 19, 1984

Founder: Dr. Brijmohan Lall Munjal

Headquarters: Gurgaon, India

Key people: Dr. Brijmohan Lall Munjal (Chairman Emeritus) (Died2015)

Pawan Munjal (Chairman, MD & CEO)

Products: Motorcycles, Scooters

Number of employees: 5,842

Parent Company: Hero Cycles

Website: www.heromotocorp.com



Hero Motocorp Ltd., formerly Hero Honda, is an Indian motor cycle and

scooter manufacturer based in New Delhi, India. The company is the largest two

wheeler manufacturer in India. In India, it has a market share of about 46% share

in 2-wheeler category. The 2006 Forbes 200 Most Respected companies list has

Hero Honda Motors ranked at #108.On 31 March 2013, the market capitalization

of the company was 308 billion (US$4.6 billion).

Hero started its operations in 1984 as a joint venture between Hero Cycles

(sometimes called Hero Group, not to be confused with the Hero Group food

company of Switzerland) of India and Honda of Japan.In 2010, when Honda

decided to move out of the joint venture, Hero Group bought the shares held by

Honda. Subsequently, in August 2011 the company was renamed Hero Motocorp

with a new corporate identity.

In June 2012, Hero Motocorp approved a proposal to merge the investment arm

of its parent Hero Investment Pvt. Ltd. with the automaker. The decision comes

18 months after its split from Hero Honda.

"Hero" is the brand name used by the Munjal brothers for their flagship

company, Hero Cycles Ltd. A joint venture between the Hero Group and Honda

Motor Company was established in 1984 as the Hero Honda Motors Limited at

Dharuhera, India. Munjal family and Honda group both owned 26% stake in the

Company.

During the 1980s, the company introduced motorcycles that were popular in

India for their fuel economy and low cost. A popular advertising campaign based

on the slogan 'Fill it – Shut it – Forget it' that emphasized the motorcycle's fuel

efficiency helped the company grow at a double-digit pace since inception. In

2001, the company became the largest two-wheeler manufacturing company in

India and globally. It maintains global industry leadership to date. The

technology in the bikes of Hero Motocorp (earlier Hero Honda) for almost 26

years (1984–2010) has come from the Japanese counterpart Honda.



Mission, Vision and Objectives of Hero Motocorp:

The Mission:

"It’s our mission to strive for synergy between technology, systems and human

resources, to produce products and services that meet the quality, performance

and price aspirations of our customers. While doing so, we maintain the highest

standards of ethics and societal responsibilities. "

The Vision:

"We, at the Hero Group are continuously striving for synergy between

technology, systems and human resources to provide products and services that

meet the quality, performance, and price aspirations of the customers. While

doing so, we maintain the highest standards of ethics and societal

responsibilities, constantly innovate products and processes, and develop teams

that keep the momentum going to take the group to excellence in everything we

do."



Milestones of Hero Motocorp:

Hero MotoCorp, the renowned two-wheeler manufacturing company from India

becomes the first company in the country by producing 50 million units. Hero

announced that they have reached the milestone by producing 50 million units

the 50 millionth products was the Xtreme, which is one of the motorcycles

among the motorcycle line up by Hero. Hero MotoCorp after reaching this goal

has already set the next target of reaching the 100 million production mark by

2020. Considering its success in the Indian market segment, Hero has planned to

expand its business across 50 countries in the world which includes countries

such as Brazil, Nigeria, Argentina and Philippines.

Mr. Pawan Munjal who is the Managing Director and CEO of Hero MotoCorp

India, while commenting on this achievement has said that Hero is indeed the

first two-wheeler company in India that produced 50 Million units till date. The

renovated and refurbished Hero is going to function at an enhanced scale. He

concluded by listing the further goals of the company which are to be

accomplished by the year 2020. Currently, Hero enjoys its presence in 10

countries across the world, while in the year 2011 it was only present in 4

countries. By these informations it is clear that it is only the beginning for Hero

MotoCorp and gradually the company shall not only achieve its targets but shall

also satisfy their customers by producing vehicles that are high on reliability,

quality and performance.



Organizational Structure of Hero Motocorp:



Product line of Hero Motocorp:

Pleasure

Maestro

Maestro Edge

Duet

HF Dawn

HF Deluxe

HF Deluxe Eco

Splendor+

Splendor Pro

Splendor Pro Classic

Splendor i-Smart

Splendor i-smart 110cc

Passion Pro

Passion Pro TR

Passion XPro

Super Splendor

Glamour

Glamour FI

Ignitor

Achiever

Impulse

Hunk

Xtreme (Thriller in LATAM)

Xtreme Sports (Thriller Sports in LATAM)

Karizma R

Karizma ZMR



Major competitors of Hero Motocorp:

1. Yamaha

2. Bajaj Auto Limited

3. TVS

4. Suzuki

5. Harley Davidson

6. Royal Enfield

7. Ducati Superbike

3. CORPORATE GOVERNANCE AT HERO

MOTOCORP:

Every year, the CSR Committee will place for the Board’s approval, a CSR

Plan delineating the CSR Programmes to be carried out during the financial

year and the specified budgets thereof. The Board will consider and approve

the CSR Plan with any modification that may be deemed necessary.

The CSR Committee will assign the task of implementation of the CSR Plan

within specified budgets and timeframes to such persons or bodies as it may

deem fit.

The persons/bodies to which the implementation is assigned will carry out

such CSR Programmes as determined by the CSR Committee within the

specified budgets and timeframes and report back to the CSR Committee on

the progress thereon at such frequency as the CSR Committee may direct.

The CSR Committee shall review the implementation of the CSR Programmes

periodically and issue necessary directions from time to time to ensure orderly

and efficient execution of the CSR Programmes in accordance with this

Policy.

The CSR Committee will review periodically and keep the Board apprised of

the status of the progress of implementation of the approved CSR

Programmes.



Finally at the end of every financial year, the CSR Committee will submit its

report to the Board.

4. SOCIAL RESPONSIBILITY AT HERO

MOTOCORP:

a. Ride Safe India

A 360 degree initiative on making Indian Roads safer to drastically

reduce fatalities. We are setting up Road Safety Riding schools across

India and plan to do campaigns on ground, on air, on social media,

and in schools to educate the masses & empower them to make a

tangible difference. This initiative is supported by the Ministry of

Road Transport & Highways, Government of India.



b. HamariPari:

An effort to specifically empower the women of tomorrow – a

concentrated initiative targeted towards the girl child aged 6+ from

the underprivileged sections of the society to help and support them

in their holistic development.

c. Happy Earth:

Aims at bringing change in our environment for, literally, making our

world a happy place to live in. We initiated 120,000 tree plantations

in and around New Delhi; building over 50 toilets in various schools

and the future possibilities are endless.



d. Educate to Empower:

Education is the basis of empowerment – not only for the individual

but the society & economy at large. Our pledge for E2 is to support

education, knowledge sharing & skills development at all levels.

CSR events:

a. Cancer Awareness Camp

b. Traffic Training Park Inauguration

c. Inauguration of Mobile Science Lab

d. Inauguration of Mobile Medical Van

e. Launch of Hero & Railway Safety Program

f. Traffic Training Park at Hyderabad

g. Road Safety - Time for Action – DIAL

h. Road Safety Activity

i. National Road Safety Week



Corporate Social Responsibilty Awards:

Best Initiative for Community Awareness with it's Social Media

Campaign 'HamariPari'

Best use of CSR Practices in Automobile Sector

Best Environment Friendly Project for the Green Drive in Delhi where 1.2

lakh trees were planted

Top 100 Most Impactful CSR Leaders in World because of the on ground

impact the CSR initiatives

Golden Globe Tigers Award - Best Corporate Social Responsibility

Practices

Golden Globe Tigers Award - Best Environment Friendly Project

Golden Globe Tigers Award - Best Green Organization of the Year

5. ETHICAL PRACTICES AT HERO

MOTOCORP:

Hero believe in giving back to the environment just as much as they take from

it. And that is why Hero has initiated various ―green‖ steps, making it one of the

most environmental friendly companies in the country. Hero MotoCorp’s vision

lies in sustainable development which can only be created with a balance

between nature, business and mankind.

Hero care for the environment

Hero MotoCorp has already invested in various Cleaner Processes to ensure

minimum impact on the environment. Some of these processes include

thoroughly evaluating chemicals and raw materials for their green quotient

before introducing them in the production process. To ensure a low carbon

footprint, Hero has, in the last few years, proactively eliminated harmful

substances like

Asbestos

Hexavalent Chromium

Phenolic Substances.



In addition to this, the company also carries out production and manufacturing

through Green Infrastructure which has been especially developed to reduce

harmful impact on the environment.

Green Roof:

Covering about 45000 sq meters, Hero's green roof helps to conserve energy by

moderating the temperature on the roof and within surrounding areas. It also

helps to reduce the storm water runoff volume and peak flow rate dramatically.

The green roof can restore aesthetic and ecological value of open urban spaces.

It addition to this, it protects conventional roofing systems by doubling the

service life of the underlying waterproof membrane.

Sewage Treatment Plant:

Hero ensures that sewage is biologically treated to attain efficacy. This

treatment plant is designed to accommodate up to 6 hours of holding and

ensuring effluent is 100% treated and recycled into soft water that is used in

cooling towers.

Effluent Treatment Plant:

To prevent water pollution, Hero has also invested in an Effluent Treatment

Plant which is capable of treating waste water that contains degreasing

chemicals, acidic/ alkaline nature, plating waste, heavy metals and waste oil that

is generated out of processes. The output parameter is maintained strictly with

norms to ensure that 100% treated water is recycled back into the process while

the sludge is safely disposed off to a secured landfill.

Waste Food Recycling:

Hero ensures hygienic disposal of municipal waste through its organic waste

converter, which in turn generates manure. This waste goes through 15 minutes

of treatment and is then homogenized and odor free. It is turned into compost in

the next two weeks and finally is available for landscaping and greening

applications.

Paint Conservation:

Along with preventing water pollution, Hero MotoCorp does its very best to

prevent releasing pollutants in the air as well. On an annual average, the

company recycles about 120 tons of paint sludge and additives and turns it into

paint primer. It also has a Solvent Recovery Machine that helps to prevent 59 Kl



of volatile organic compounds from getting released into the air on a yearly

basis, thus ensuring cleaner air.

Energy Conservation:

In January 2011, Hero initiated the Heat Recovery from Incineration project

which has helped to save 1258 tons of Co2 emissions and 16, 22, 400 units per

annum. This process includes the recovery of waste heat from the incinerator

through heat recovery coil. The waste heat is used for heating process water in

engine component washing.

In October 2011, Hero introduced its Solar Power Project – 100 KW which has

helped to save 1, 56, 000 units per annum, 121 tons of Co2 emissions and 37.96

tons on furnace oil. This is done through the solar energy that is captured by the

photovoltaic cells during the day. This electrical energy is then connected to the

main grid, to ensure optimum energy conservation.

In June 2012, Hero replaced its 400 ton air conditioner with a VAM chiller to

reduce Co2 production and energy consumption. This machine produces chilled

water by using heat from power generator sets or through heat sources such as

oil, gas, hot water and steam.

Oil Conservation:

Hero MotoCorp has also initiated oil conservation through the installation of

Chip Wringer which is capable of recovering neat cutting oil from chips that are

generated from m/c operation. This has led to oil recovery of about 56 liters/

day per plant.

The company also uses on line hydraulic oil filtration system on presses which

has helped in saving 1200 liters/ year.

Water Conservation:

Perhaps one of the biggest initiatives taken, Hero has worked consistently hard

in conserving water through Water Management, Rain Water Harvesting and

ETP Recycling Plant.

WaterManagement- Training and Awareness is created through this process on

how to develop water balance. It also includes reducing water consumption at



the source and recycling it back to process applications and other beneficial

applications like cooling towers and irrigation after treatment. Water

management also entails recharging rain water and regular monitoring to sustain

savings.

Rain Water Harvesting- Hero has also introduced a rain water harvesting

scheme that includes the collection and de-silting of rain water. The company

has a catchment area in plants that measures about 2, 60, 000 square meters and

has a potential recharge of about 1, 32, 600 cubic meters of rain water annually.

ETP Recycling Plant- This plant introduced by Hero has a capacity of recycling

approximately 1400 Kld of treated effluent daily. It uses the modern technology

of reverse osmosis and ultra filtration for purifying water. The recycled water is

then supplied to the paint shop with desired parameters or used as Soft water/

DM as required.

Green Supply Chain:

To complete the process of sustainable development, Hero MotoCorp has also

included the company's supply chain in its green processes. It has put together a

―Green Dealer Development Program‖ at the front end and a "Green Vendor

Development Program" for the backend of the supply chain. Through these

programs Hero makes it partners aware of the importance of caring for the

environment. Dealers and vendors are also encouraged to manage their material

resources, energy resources, industrial wastes, pollution and other effluents on

the basis of a number of pre-determined parameters.



6. ENVIRONMENTAL ANALYSIS:

PEST Analysis:

Political factors

Political factors indicate to what extent the Government influences in the

economy. These factors are of crucial importance for strategic management.

Political factors include areas such as fiscal policy, labor law, environmental

law, trade restrictions, rates and political stability. Political factors may also

include goods and services the Government wants to provide or does not want

to provide or be provided (for instance subsidies). The Government also has

great influence on the healthcare, education and infrastructure of a country or

nation.

Economic factors

Economic factors include growth, interest rates and the inflation rate of an

economy. These factors have a major impact on how businesses operate and

make decisions. For example, interest rates may influence an enterprise’s cost of

capital and therefore they may influence to what extent a company grows and

expands. Exchange rates may affect the costs of export goods and the supply

and prices of imported goods.

Social factors

Social factors are, among other things, cultural aspects and include health

consciousness, population growth, age structure, careers and an emphasis on

safety. These social factors influence the demand for the products and services

of an organization and how this organization responds to this demand. An

ageing population, for example, may imply a smaller and less flexible staff

resulting in higher labor costs. Based on social factors, organizations may

change their management strategies to adapt to these developments for example

by recruiting older staff on account of a shortage of knowledge workers.

Technological factors

Technological factors include ecological and environmental aspects as well as

aspects of research and development (R&D) and automation. Technological

factors influence entry barriers, minimum efficient production levels and

insourcing and outsourcing considerations. In addition, technological factors



affect the costs and the quality of products and services and often lead to

innovation.

Industry analysis:

Porters five force model:

1) Competitive Rivalry (High)

TVS, Mahindra, Honda.

Demand is high.

Growing population.

2) Threats on new entry (High)

Make in India.

FDI(100%)-impacting.

3)Substitute products (Moderate)

Availability of public transport.

Taxi, private players(OLA,)

4)Bargaining power of supplier (Low)

Depends on our number of suppliers.

Hero mainly takes from ―china‖(lights) & Germany(engine parts).

Lacks of parts required; hence in market lots people are waiting to

supply.

5)Bargaining power of customer (Moderate)

Low switching cost. Alternative /substitutes are available.

Competitors (TVS, Honda, and Bajaj) but same price range.



External factor analysis matrix (EFAS matrix):

S.

No

EFAS WAIGHTA

GE

RATI

NG

TOT

AL

COMMENTS

Opportunities

O1 Growth 0.2 5 1 Brand loyal

O2 Exports 0.05 3 0.15

O3 Affordable 0.3 4 1.2 Target economic class

Threats

T1 Competition 0.2 5 1

T2 government Policies 0.15 4 0.45 Frequent Change in

Government policies

T3 Public Transport'

effect

0.1 3 0.3

T4 Inability to pass row

material cost

.

0.2

4 0.8 increase in cost of

required resources

1 4.9

INTERPRETATION:

1. Hero motocorp is growing is a leading automobile industry in

India which is growing at a rate 10 % p.a.

2. Hero Motocorp should focus on untapped international markets

3. Hero motocorps vehicles are affordable as they target the

economic class people.

4. Strong competition from Bajaj, TVS and Honda.

5. Government polices effects the sale of vehicles i.e. fuel prices



Internal factor analysis matrix(IFAS Matrix):

S.No IFAS WAIGHTAGE RATING TOTAL COMMENTS

Strengths

S1 Huge brand Equity

0.15 5 0.75 Easy recognition of

Brand

S2 Research and

Development

0.05 3 0.15 Excellent hen comes

to mileage and

performance

S3 Distribution 0.1 4 0.4 Dealership, Stock

maintaining Strong

MIS.

S4 Advertising and

rebranding

0.15 5 0.75 Innovation and

dynamic and survival

Weakness

W1 Premium bike 0.25 5 1.25 Existing Competitors

playing vital role

W2 High imports 0.15 4 0.6 China(lights) and

Germany(engine)

W3 Same design\ similar

features

0.05 3 0.15 Lack in

Customization.

W4 Broken venture with

Honda

0.1 5 0.5 Technological effect

and Quality

improvement.

1 4.55

INTERPRETATION:

1. Hero Motocorp has huge brand equity which helps to recognize

easily.

2. Hero Motocorp have excellent distribution network i.e. over 3000

services centers and dealers.

3. Hero motocorp have good advertising which helps company to

easily rebrand from Hero Honda to Hero Motocorp.



7. STRATEGY FORMULATION:

SFASMatrix:

Sl.No SFAS WAIG

HTAG

E

RA

TIN

G

TOT

AL

DURATION COMMENTS

S

h

o

rt

inter

media

te

L

on

g

S1 High brand

equity

0.1 5 0.5 x x Easy recognition of Brand

S2 Advertisement

and Rebranding

0.15 5 0.75 x Innovation and dynamic

and survival

W1 Premium bikes 0.1 5 0.5 x x Existing Competitors

playing vital role

W2 Broken venture

with honda

0.15 5 0.75 x Quality weakening and

technology aspects

O1 Growth 0.1 5 0.5 x Brand loyal

O2 Affordable 0.1 4 0.4 x x Target economic class

T1 government

Policies

0.15 4 0.6 x Frequent Change in

Government policies

T2 Inability to pass

raw material

cost

0.15 5 0.75 x Increase in cost of

required resources

1 4.75



SWOT analysis:

STRENGTH

Huge brand equity and one of the biggest players in the two wheelers

Indian market

Excellent R & D and wide variety of products in every segment.

Excellent distribution over 3000 dealerships and service centers.

Good advertising and excellent rebranding from hero Honda to hero

motocorp.

WEAKNESS

Absence in the premium bike segment.

High imports for its spare parts i.e. over 30% imports.

Most of the products have similar features and low on design and

innovation

Hero uses Honda’s technology.

OPPORTUNITIES

Two wheeler segments is one of the most growing industries.

Export of bike is limited i.e. untapped international markets.

Affordable products with reasonable price.

THREATS

Strong competition from Indian as well as international brands.

Dependence on government policies and rising fuel price.

Better public transport will affect two wheeler sales.

Bajaj motor is a strong competitor.



Porters generic strategies:

Strategies Cost Leadership Differentiation

Focused

Splendor focused on

economic class people in

terms of mileageThe company

follows cost leadership in

many of its variants.

Standard engine in the range of 100 to 125cc

and cheaper assembly spares and more focused

on gear rather than non-gear.USP of wide

product Varity, excellent brand equity and high

customer loyalty

TOWS MATRIX:

TOWS Analysis Opportunities Threats

Growth.

Export

Affordable

Strong competition.

Dependence on

government

policies

Public transport

will affect.

Inability to pass

Raw material cost

Strength SO ST

Huge brand equity

Excellent R & D

Excellent distribution

Good advertising and

excellent rebranding

Growth can happen as the

brand equity is high.

Even R & D can lead in

making the affordability of

goods to different classes

With same high brand

equity and good R & D the

Product can be attracted to

foreign market.

Advertising and excellent

branding can help in

growth and cover the Niche

market.

Increase in R &D

can result into

reduction in

competition.

Advertising and

rebranding can also

reduce competition.

R & D can help

meet the cost of

raw material cost

passing.

Weakness WO WT

Premium bike segment.

High imports

Similar features and

design.

Broken venture with

Honda.

Growth can be blocked

because of lack of premium

bikes.

High imports shall restrict

the affordability.

Broken venture can block

the quality export.

Similar features

and design can be

advantage for

competitors.

Honda’s venture

breaking can be

advantage to

competitors.

8. CORPORATE STRATEGIES:



Growth Strategy

Corporate strategy is primarily about the choice of direction for a firm as a

whole and the management of its business or product portfolio

Concentrated strategy

If a company’s current product lines have real growth potential, concentration

of resources on those product lines makes sense as a strategy for growth. The

two basic concentration strategies are vertical growth and horizontal growth.

Vertical and Horizontal Strategy

Vertical growth can be achieved by taking over a function previously provided

by a supplier or by a distributor. The company, in effect, grows by making its

own supplies and/or by distributing its own products.

Here in corporate strategy the Hero Motocorp looks for the vertical growth

where in it has increased its distribution and has 3000+ distributors and

servicing centers which shows that the company focuses on the vertical growth

and this might have benefitted the company in terms of guaranteeing the

quality.

Joint venture

Forming a joint venture between a foreign corporation and a domestic company

is the most popular strategy used to enter a new country. In this integration the

company was in long term contracts with Honda wherein they had agreed upon

the various types of services and facilitation of goods for the specific period,

and now the things have changed and the Hero Honda after breaking up of

contract became Hero Motocorp.



9. Important strategic move of HERO

Motocorp:

Diversification strategy:

Concentric strategy:

Ather Energy, the Bangalore-based smart electric

two-wheeler start-up, has announced that India’s

largest two-wheeler manufacturer Hero MotoCorp

is taking a 26-30% stake in the company.

For Hero MotoCorp, buying into Ather Energy is a strategic decision.

Commenting on taking a stake in Ather Energy, PawanMunjal,

chairman, MD and CEO of Hero MotoCorp, said: ―Adoption of

environment-friendly fuel is a priority for Hero, as is propagating

sustainable manufacturing through green facilities. One of our strategic

priorities, therefore, is to engage with the external ecosystem, including

start-ups in adjacent areas. Hero MotoCorp intends to enhance its

participation in the electric vehicle space by pursuing its internal EV

program in addition to partnering with Ather.

10. COMPETITORS ANALYSIS:

Market share and business

Performance During the year (2010-11) the Company notched 17.44%

growth in sales, with volumes of 54, 02,444 units compared to 46, 00,130

units in 2009-10. In value terms total sales (net of excise duty) increased

by 22.13% to Rs. 19,245.03 crores in 2010-11 from Rs.15, 758.18 crores

in 2009-10. The Company continued to lead the domestic motor cycle

market with 54.6% market share; others (Bajaj, Yamaha, TVS, Honda

etc) are holding the rest of the market of 56.4%). Hero MotoCorp 54.60%

Others 56.40% Market



Hero MotoCorp: The company has reported sales of 30, 73,852 units for

the period of April to September 2011 up by 21.98% compared to

25,19,973 units during the same 8period last year.

Bajaj Auto: The company has sold 19, 90,408 units of two wheeler

during April to September 2011 period up by 16.27% compared to 17,

11,863 units sold during the same period last year. Combined sales of

brand Discover has crossed 5 million marks which is remarkable for

Bajaj Auto.

TVS Motors: The company has sold 11, 17,253 units during April 2011

to September2011 period up by 15.06% compared to 9, 71,039 units in

the same period last year.

HMSI: (Honda Motors & Scooter India ltd) The company has sold 9,

22,979 units during the April 2011 to September 2011 period up by

13.21% compared to 8, 15,310 units sold in the same period last year.

Yamaha India: During April to September 2011 the company sold 2,

31,032 units up by34.10% compared to 1, 72,289 units sold in the same

period last year.

Suzuki Motorcycle: During the April 2011 to September 2011 the

company sold 1,68,037 units up by 39.12% compared to 1,20,710 units in

the same period last year.

Mahindra Two Wheelers: During the April to September 2011 period

the company reported sales of 74,254 units up by 4.83% compared to

sales of 70,836 units in the same month last year. So after changing the

name from hero Honda to hero MotoCorp ltd nothing has been changed

in their market performance, so still they are the market leader.



11. FINDINGS, SUGGESTIONS AND

CONCLUSION:

Findings:

1. Good in formulation of strategies

2. High efficiency in distribution

3. Lack of in-house spare production

4. Lack of innovation in terms of design

5. Narrow concentration on demographic

segments

Suggestions:

1. Should focus on untapped international markets

2. Concentrate on trends of youths

3. Technological up gradation as the same technology

is unavailable as of now they had in Honda in Joint

venture.

4. As the bargaining power of suppliers is low they

have wide choice of suppliers to reduce cost.



Conclusion:

Hero Motocorp is one of the leading automobile company in

India it provides low cost vehicles and they targeted middle

class families. Hero motocorp advertise in a manner to attract

the population with emotional and cultural attachments like

Chalta rahe tera mera melon ka yaarana

Hero salute for real Hero (army person)

Hero come home safe

Hum me hai Hero (social concern)

Hero motocorp has wide distribution network over 3000

dealerships.

strategic management by hero motocop

Leadership & Management