Why Hero Honda Breakup

1. International Business’s Hero MotoCorp
Group no. 5
Abhishek Thakur (2)
Anamika Anand (85)
Meenakshi Joshi(31)
Avin Kumawat(10)
Monika Rathee(113)
Kajal Goyal (136)
Ravi Ranjan(49)
Shraddha Kasar(62)

2. Background of Hero Honda
• 1956 - Formation of Hero Cycles in Ludhiana by Munjal Brothers
• 1983 - Joint Collaboration Agreement with Honda Motor Co. Ltd.
Japan signed. Shareholders Agreement signed
• 1984 - Hero Honda Motors Ltd. Incorporated
• 2001 - The company became the largest two-wheeler manufacturing
company in India and globally
• 2010 - The board of directors of the Hero Honda Group had decided
to terminate the joint venture between Hero Group of India

3. Success of Hero Honda’s Joint Venture
• Development
i. Technology
ii. Market
• Flexibility

4. Reason Behind Split of Hero Honda
• Issue of export
• Board of representations
• Investment in R&D
• Direct Competitors

6. Poter’s Diamond Model for Indian two
wheeler Industry
Demand Condition
• Market Size
• Market Growth Rate
• Market Awareness
• Market Saturation
Factor Condition
• Skilled Labour
• Specialist Knowledge
• Capital
• Infrastructures
Related and
Supporting Industries
• Cost Effective
• Create Barrier to entry
• Exports

7. Firm Strategy,
Structure & Rivalry
• Competition Leads to
Innovation
• Strategy depends on
Social, Political & Legal
factor of a country
Government
• Act as a Catalyst &
Challenger
• Industry Regulation
and Policies
Chance
• Random event
• Natural Disaster

8. Porter Five Model in 2 Wheeler Industry
Threat of new entrants
• Entry Barriers are high
• Huge Investment
• Setting up Sale and Service centre
• Well stabilised player are already
exiting
• Industry is Consolidated
Threat of Substitute
• Face Direct competition
• Substitute product (Bus, Auto,
Car other public Transport)
• Relatively quality of substitute
is higher
Rivalry among
competitors
• Price, Quality, Product
• Attracting Customer (discount,
availability of loan, low rate of
interest, free service)
• Each Company adopt different
kind of marketing skills.

9. Bargaining Power of
Supplier
• Bargaining power of supplier are
low.
• Some component supplier have
some bargaining ( Steel,
Batteries, Tyres).
• The automobile supply business
is quite fragmented.
Bargaining Power of
Buyer
• Bargaining power of buyer are
High.
• There are 5 and 6 Brand
available in market.
• Nowadays people go to unique
brands because of good service
they provide after purchase.

10. International Strategy for Hero MotoCorp
• Regional Manufacturing Strategy
• Partnership with local distributor in various foreign market(Kenya,
Uganda, Tanzania).
• To diversify market presence going for JV(Bangladesh, Colombia).
• Product Globalization

11. Growth of Hero moto corp.
against Honda
•Own Technology
•Scooter Segment
•Electrification in Automobile Sector