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KOUSALI INSTITUTE OF MANAGEMENT STUDIES,
DHARWAD
Karnatak University, Dharwad
SUBJECT: STRATEGIC MANAGEMENT
GROUP NO 4
TO:...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 2
INDEX
Sl no CONTENTS Pg no
1 INDUS...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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1. INDUSTRY OVERVIEW:
 About Auto...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 4
 Top players:
 Hero Motocorp
 B...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 5
The government has formulated a Sc...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 6
 Recent data:
Production:
The ind...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 7
Domestic Sales:
The sales of Passe...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 8
1.COMPANY OVERVIEW:
 History of H...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 9
Hero Motocorp Ltd., formerly Hero ...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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 Mission, Vision and Objectives ...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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 Milestones of Hero Motocorp:
He...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 12
 Organizational Structure of Her...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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 Product line of Hero Motocorp:
...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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 Major competitors of Hero Motoc...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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Finally at the end of every finan...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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b. HamariPari:
An effort to speci...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 17
d. Educate to Empower:
Education ...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 18
Corporate Social Responsibilty Aw...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 19
In addition to this, the company ...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 20
of volatile organic compounds fro...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 21
the source and recycling it back ...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 22
6. ENVIRONMENTAL ANALYSIS:
 PEST...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 23
affect the costs and the quality ...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 24
 External factor analysis matrix...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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 Internal factor analysis matrix...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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7. STRATEGY FORMULATION:
 SFASMa...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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 SWOT analysis:
STRENGTH
 Huge ...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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 Porters generic strategies:
Str...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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Growth Strategy
Corporate strateg...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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9. Important strategic move of HE...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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Hero MotoCorp: The company has re...
STRATEGIC MANAGEMENT-HERO MOTOCORP
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11. FINDINGS, SUGGESTIONS AND
CON...
STRATEGIC MANAGEMENT-HERO MOTOCORP
KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 33
Conclusion:
Hero Motocorp is one ...
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Strategic management by Hero motocop

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This project is about the various strategies that are used by the Hero motocorp and the various aspects of the company. the contents in the project are.
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
Corporate governance at hero motocorp
Social responsibility at hero
Ethical practices at hero
Environmental analysis
Strategy formulation
Corporate strategies
Important strategic move of hero motocorp
Competitor analysis

Published in: Leadership & Management
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Strategic management by Hero motocop

  1. 1. 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
  2. 2. 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
  3. 3. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 3 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.
  4. 4. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 4  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.
  5. 5. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 5 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.
  6. 6. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 6  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.
  7. 7. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 7 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.
  8. 8. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 8 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
  9. 9. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 9 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.
  10. 10. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 10  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."
  11. 11. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 11  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.
  12. 12. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 12  Organizational Structure of Hero Motocorp:
  13. 13. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 13  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
  14. 14. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 14  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.
  15. 15. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 15 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.
  16. 16. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 16 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.
  17. 17. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 17 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
  18. 18. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 18 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.
  19. 19. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 19 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
  20. 20. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 20 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
  21. 21. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 21 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.
  22. 22. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 22 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
  23. 23. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 23 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.
  24. 24. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 24  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
  25. 25. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 25  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.
  26. 26. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 26 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
  27. 27. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 27  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.
  28. 28. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 28  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:
  29. 29. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 29 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.
  30. 30. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 30 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
  31. 31. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 31 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.
  32. 32. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 32 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.
  33. 33. STRATEGIC MANAGEMENT-HERO MOTOCORP KOUSALI INSTITUTE OF MANAGEMENT STUDIES (KUD) Page 33 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.

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