Hero Cycle Strategy


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Generic strategy and Grand strategy of Hero Cycles

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Hero Cycle Strategy

  2. 2. HISTORY • Hero group was established by the Munjal brothers • Founded in 1956 • Headquartered in Ludhiana • By 1975, Hero cycles became the largest bicycle manufacturer in India • In 1986 Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world.
  3. 3. • The company has three separate segments, namely Cycle and Cycle parts, C R Strips and Auto Components • The company is one of the largest exporters of bicycles and bicycle parts • They exports to 82 countries around the globe, which includes most of the European countries • 2012-Hero crossed the figure of 13 Cr Cycles • Market Share – 51% • Turnover – Rs. 2080cr (2012)
  4. 4. PRODUCTS • City Bikes • Kids Zone • Roadsters • Mountain Bikes • Girlz Zone • Hero Sprint • Octane • Urban Trail • Disney
  5. 5. THE VISION • "We, at the Hero Cycles 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”
  6. 6. THE MISSION • "Forge a unique and mutually beneficial relationship with all our stakeholders”
  7. 7. HERO GROUP OF COMPANIES • Hero cycles Ltd • Hero Motors Ltd • Hero Cold Rolling Division • Hero Exports • Majestic Auto Ltd • Rockman Cycle Industries • Highway Cycle Industries • Munjal Auto Industries Ltd
  8. 8. • Munjal Showa Ltd • Munjal Castings • Munjal Auto Components • Hero Global Design • Hero ITES • Hero Soft • Easy Bill Ltd • Munjal e-systems.
  9. 9. PEST ANALYSIS • POLITICAL FACTOR The bicycle manufacturing industry includes a political / legal aspect. From a global standpoint, there have been political disagreements and legislative measures regarding the monopoly of bicycle products and technologies. • ECONOMIC FACTOR On the microeconomic perspective, companies have utilized Information Technology to support the progress of their business.
  10. 10. • SOCIAL FACTOR Bicycles and its technologies are having an important role in social relationships. • TECHNOLOGICAL FACTOR High quality yet affordable bicycles and technologies are still Hero Bicycles’ largest profit generator, but due to the developments in the bicycle manufacturing industry, this is now developing. Bicycles are not about all basic traveling machines anymore but now more about being creative.
  11. 11. INDUSTRY STRUCTURE • India is the 2nd Largest Player, after China, India produces approximately 10% of the world annual bicycle production, which estimated at 125 million Units. • Competition – Oligopoly • The annual demand of bicycles in India approximately 10 million Units out of which around 2.5 million units is a government demand for various welfare schemes. • CAGR – 14% Per yr (2008-2012)
  12. 12. • The Indian bicycle market comprises of two segments: Standards – Rural Economy , Cheap, same models Specials – Fancy Segment, New generation Bicycles, Premium price • Major Players – Hero – TI (Tube Investment of India Ltd) – Atlas
  13. 13. SWOT ANALYSIS STRENGTH OPPORTUNITIES • Good Customer Base Right time for expanding existing • Strong Brand Image capacities. • Quality • Innovation WEAKNESS THREATS • Unable to fulfill demand of some Dumping of materials by China in regions. different parts of the world. More players entering into this segment.
  14. 14. CORE COMPETENCY • Speed in development of new product: Company can design a simple model in just 2-3 days; more complex model can be done in 10 days • Manufacturing Capability: Bicycle manufactured in 1956 is 639 and bicycle manufactured in 2002-03 is 6.1 million. Bicycle manufactured per day is 16000 approx. and market share of Hero Cycle in India is 50% plus. • Availability: Due to easy reach to vendors deliver of the products become easy, so products are easily available for there customers.
  15. 15. GRAND STRATEGY • In the year 2002, they made a tie up with National Bicycle Industries, a part of Matsushita Group, Japan, for manufacturing high end bicycles. • In September 2006, the company signed a technical collaboration-cum-joint marketing agreement with Ultra Motor for producing a new range of low-speed electric two-wheelers in India. • During the year 2008-09, the company launched 14 new models and new set of product for export market.
  16. 16. • Pantaloons Retail India Limited (PRIL) and Hero cycles have come together to promote the premium segment of Hero bicycles in India. PRIL’s “Planet Sports” will be the major promoter of Hero cycles. • The tie up has been done mainly for the high end bicycles which are being launched in India by Hero Cycles. These high end bicycles will be sold in Planet sports as well as other shop in shop format including Future groups Pantaloons, Brand Factory and Sports warehouses.
  17. 17. GENERIC STRATEGY • Cost Leadership - This strategy involves the firm winning market share by appealing to cost-conscious or price-sensitive customers. • Differentiation - Differentiate the products in some way in order to compete successfully • Focus - The company ideally focuses on a few Target Market (also called a segmentation strategy or niche strategy).
  18. 18. THANK YOU..