Here Moto corp

1. HERO
MOTOCORP
Group no:4
RAKESH
YUVRAJ
SOMANNA
MALIK K

2. INDUSTRY OVERVIEW:
 About Automobile Sector:
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.

3.  Top players:
 Ashok Leyland
 Hero Motocorp
 Bajaj Auto
 Force Motors
 TVS
 Honda
 Eicher
 Tata Motors
 Mahindra
 Maruti

4.  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

5.  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.

6. COMPANY OVERVIEW:
History of Hero Motocorp:
Type Public company
Traded as BSE: 500182NSE:HEROMOTOCO
BSE SENSEX Constituent
Industry Automotive
Founded January 19, 1984
Founder Dr. Brijmohan Lall Munjal
Headquarters Gurgaon, India
Key people Dr. Brijmohan Lall Munjal
Pawan Munjal (Chairman, MD & CEO)
Products Motorcycles, Scooters
Number of employees 5,842
Parent Company Hero Cycles
Website www.heromotocorp.com

7. Hero Moto Corp (Hero Honda)
Parent Company Hero Group
Category Motorcycles, Scooters
Sector Two-Wheelers
Tagline/ Slogan Hum meihai Hero; DeshkiDhadkan(Hero Honda)
USP
Wide product variety, excellent brand equity & high
customer loyalty

8. Mission, Vision and Objectives of Hero Motocorp:
The Mission:
"Its 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."

9.  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 product 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.

10.  Organizational Structure of Hero Motocorp:

11.  Product line of Hero Motocorp:
• Pleasure
• Maestro
• Maestro Edge
• Duet
• HF Dawn
• HF Deluxe
• HF Deluxe Eco
• Splendor+
• Splendor Pro
• Splendor Pro Classic
• Splendor iSmart ETC

12.  Major competitors of Hero Motocorp:
1. Yamaha
2. Bajaj Auto Limited
3.TVS
4.Suzuki
5. Harley Davidson
6. Royal Enfield
7. Ducati Superbike

13. 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.

14. 4. SOCIAL RESPONSIBILITY AT
HERO MOTOCORP:
 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.
 Hamari Pari:
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.


15.  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.
 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.

16. Corporate Social Responsibilty Awards:
• Best Initiative for Community Awareness with it's Social Media
Campaign 'Hamari Pari'
• 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

17. 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
 Green Roof:
 Energy Conservation:
 Oil Conservation
 Waste Food Recycling
 Water Conservation:
 Paint Conservation

18. 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

19. 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.

20. 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.

21. 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.

22. 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.

23. 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.

24. 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.

25. 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.

26. 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.

27. • External factor analysis matrix (EFAS
matrix):
S.No EFAS WAIGHTAGE RATING TOTAL 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

28. • 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
mentainance 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

29. 7. STRATEGY FORMULATION:
 SFAS Matrix:
S.No SFAS WAIGHT
AGE
RATI
NG
TOTA
L
DURATION COMMENTS
Sh
ort
interme
diate
Lon
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

30.  Porters generic strategies:
Strategies Cost Leadership Differentiation
Focused
Splendor focused on economic
class people in terms of mileage
The 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

31. 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.

32. 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
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.

33.  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.

34. 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.

35. 10. COMPETITORS ANALYSIS:
 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.

36. 11.FINDINGS, SUGGESTION
AND CONCLUSION
 Findings:
 Good in formulation of strategies
 High efficiency in distribution
 Lack of in-house spare production
 Lack of innovation in terms of design
 Narrow concentration on demographic segments

37. Suggestions:
 Should focus on untapped international markets
 Concentrate on trends of youths
 Technological up gradation as the same technology is
unavailable as of they had in Honda in Joint venture.
 As the bargaining power of suppliers is low they have wide
choice of suppliers to reduce cost

38. 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.