Super Starter/Super Smart-Variants of existing bicycles to penetrate the marketALLEGRO-fitness market existing new product
Marketing Strategy of Hero cycles
BICYCLE INDUSTRY• Market-Consolidated(Hero Cycles-40%, TI-22%, Avon-17% & Atlas-10%)• Competition-Oligopoly• Market structure-2nd Leader in world, India producesapproximately 10% of the world annual bicycleproduction, which is estimated at 125 Million units.• The annual domestic demand of bicycles in India isapproximately 10 million units out of which around 2.5million units is a government demand for the variouswelfare schemes.
HERO CYCLES• Hero group was established by the four Munjalbrothers ,Established a business of bicycle spare partsin the year 1944 in Amritsar• In 1956 in started a bicycle unit called Hero Cycles• By 1975, Hero cycles became the largest bicyclemanufacturer in India• In 1984, Hero group joined Honda Motors of Japan tocreate Hero Honda Motors Limited which soonbecame one of the market leader in motor-cycle salesin India• With a turnover of Rs. 1450 crore
INTERNAL ENVIRONMENT• Employs 4800 workers, produces 18,500 bicycles/day at its3 state of the art plants, 3000 dealers connect it to its finalcustomer.• Present in 56 countries including US, UK, germany spain & inEuropien continent.• A striking feature within the Hero Group is that there is noorganised labour union and family members of employeesfind ready employment within Hero. The philosophy withregard to labour management is "Hero is growing, growwith Hero.“• Best Exporter (the company has won the Engineering ExportPromotion Council Best Exporter Award continuously for thelast 28 years.)• Range-Gents, ladies, kids and high end to Road bikes,Mountain bikes, Tourers, Hybrids, BMX
SUSTAINABLE COMPETITIVEADVANTAGE• Valuable-The Hero Brand connect• Costly to Imitate- Ancillaries owned by Herogroup are also World Leaders(eg. Rockman,Highway)• Rare- 1 cycle per 5.6 sec (Volume ofproduction)• Unsubstitutable-?
INTEGRATIONHERO CYCLES(1956)ROCKMAN CYCLE INDUSTRIES LTD.(1961) Bicycle chains & hubsHIGHWAY CYCLES LTD.(1971) FreewheelsJV WITH HONDA(1984)MAJESTIC AUTO LTD.(1978) STEYR DAIMLERPUCH,AUSTRIA(1987)CollaborationHERO EXPORTS(1993) Export state ofthe art bicyclesNATIONAL BICYCLEINDUSTRIES,JAPAN(2002)High End bicycles
ANSOFF MATRIXALLEGRO-FitnesscycleSUPER STARTERSUPER SMARTRETAILINSURANCEHERO GLOBALDESIGNEXCLUSIVE OUTLETS FORPREMIUM CYCLES IN US& UK
Diversification• Related Diversification• Hero Global Design(2001)• Hero cycles-national bicycles which manufactures High EndBicycles(National bicycle is part of Matsushita grp.)• Unrelated Diversification• Easy Bills(2002)• Retail Insurance Buisness(2004)
MERGER & ACQUISITION• Hero Eco, the newly formed umbrella entitycomprising of Hero Electric, Hero Exports, HeroCycles, Mediva, Winn and Hero Ecotech hasacquired UK based Ultra Motors aiming tostrengthen its presence globally in the electricvehicle segment.• Hero Groups Partnership with ShowaManufacturing Corporation, Japan is over 18years old.• Hero Group’s partnership with the recentlyseparated Honda Motors was 25 years old.