Hero Moto Corp Ltd.   1
Issue          Cause            Effect             Theory      Solution      Competition     2010      Hero and Honda    N...
Market Size                                            (Sales unit 2012)                                          15.4 Mil...
Revenue Stream      Years               2007-08             2008-09         2009-10          2010-11      2011-12  Sales (...
Threat of New Entrants   Low Bargaining                                                                 High Bargaining  P...
Rs. 79                                      76%                      Rs. 45Government PoliciesHigh import duty on    motor...
Political                                         • Land acquisition                                         • Imposition ...
Hero Moto Corp Ltd.   8
Hero Moto Corp Ltd.   9
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Strategic Management hero motocorp

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Strategic Management hero motocorp

  1. 1. Hero Moto Corp Ltd. 1
  2. 2. Issue Cause Effect Theory Solution Competition 2010 Hero and Honda New brand Market Leader Hero Moto Corp Bajaj Auto, Hero - Honda started seeing identity & logo- defensive should spend on Honda, TVSdecides to move each other as Hero Moto Corp strategies- R&D for Motors, out of Joint competitors - Position innovation, Mahindra Venture defence develop new Scooters, LML, - Counter technology and Kinetic Motors, offensive upgradation Suzuki, Royal defence Enfield, Yamaha - Contraction defence Honda didnt Hero group Hero Moto Corp have intention might have to buys stake in of sharing the pay higher Honda upgraded royalties for the technology upgraded technology Refusal to merge the Spare Parts business Hero Moto Corp Ltd. 2
  3. 3. Market Size (Sales unit 2012) 15.4 Million (Approx.) Motor cycles Scooters Moped 10 Million 2.7 Million 0.78 Million Hero MotoCorp 6.23 Million Motor cycles Scooters 58% market share 15.2% market share 5.79 Million 0.41 Million Hero Moto Corp Ltd. 3Source: http://www.heromotocorp.com/hero_admin/data_content/pdf/annual_report/Annual_Report_2011_12.pdf
  4. 4. Revenue Stream Years 2007-08 2008-09 2009-10 2010-11 2011-12 Sales (units) 33,37,142 37,22,000 46,00,130 51,02,444 62,35,20525% 24%20% 17% 16% 15% 14%15% 13% Sales growth (nos.) % 11% 12% 10% 10% 11% 10% OPM10% NPM5%0% 2008-09 2009-10 2010-11 2011-12 Hero Moto Corp Ltd. 4
  5. 5. Threat of New Entrants Low Bargaining High Bargaining Power of Suppliers Power of customers Suzuki Others Yamaha 4% 3% 4% Honda Hero 16% MotoCorp 40% TVS 14% Munjal Showa Bajaj AG Industries 19% Extensive competitionSatyam Auto components Sunbeam Auto 2012 Domestic Sales – 15.4 Million Rockman Industries Threat of substitutes Hero Moto Corp Ltd. 5
  6. 6. Rs. 79 76% Rs. 45Government PoliciesHigh import duty on motorbikes 105% R & D facilities in U.S. Erik Buell Racing $ 20 Millions Core Competency Exports 0.17 Mn two-wheelers Share Price 10 % since 2011 Tie-up with AVL for 1713-1905 engine development Hero Moto Corp Ltd. 6
  7. 7. Political • Land acquisition • Imposition of taxes Technological Economical• Technical collaboration with • Changing lifestyles & high quality PEST Steyr Diamler Puch • Deluxe segment (category)• Largest investment of over Rs. 2500 Cr. 100-125cc grew up by 15% to build an integrated R&D centre in 125-250cc category grew at 9% Rajasthan • 4% excise cut & 1% reduction in CST• Technical & Financial collaboration with • Higher interest rate & fuel prices Showa Corporation Japan Social - Green Technology - Safe Manufacturing - Rain Water Harvesting - The Green Supply Chain - Vocational Training Camp - Safe Rider Program Hero Moto Corp Ltd. 7
  8. 8. Hero Moto Corp Ltd. 8
  9. 9. Hero Moto Corp Ltd. 9
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