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) Page 2
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

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