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Strategic Hero Honda
- 1. BENAZIR BHUTTO SHAHEED UNIVERSITY Name Rehman khan Batch 1st Semester 2nd Program MBA Project of study Hero Honda Subject strategic management Instructor Mr khuram shakir
- 2. 0 10 20 30 40 50 (VISION) Competative mission Growth missionMarketing mission Customer service mission Products mission Technology mission Organization mission Team management mission Vision and mission statement & strategic planning Where we are stand or go ? What we do ? How we do ?
- 3. Successful hero Hondaindustry reason Geographically (Lower middle and middle class household ) Youth new generation Financial institute (credit household) Advertising promotion .(overall india) Punjab national bank(financing hero Honda 0n 11.5 % for 5 years) Bajaj capitation end (joint venture Kawasaki in Philippine) Entry allow to Indian market (1944 To 1980) Brij mohan lal 2002.3 18 million bike sale (due to consumer financing)
- 4. Boston consultant growthmatrix Star growth Question ? Cow cash Dog DELUX CD SS DAWN JOY GLAM0RER AMBITION Hunk CBZ PLEASURE SPLENDOR PASSION KARIZMA CBZ
- 5. Question Mark HeroHonda 0 0 0 0 0 0 0 0 0 investment market growth share Profits 80 80 10 5
- 6. Star of HeroHonda 0 10 20 30 40 50 60 70 80 investment market growth market share benefit 20.4 70 80 50
- 7. COW CASH HEROHONDA 0 10 20 30 40 50 Invetment Marke growth Market share Profits 10 10 50 40
- 8. Dog of HeroHonda 0 10 20 30 40 50 60 70 80 Investment Market growth Market share Profits 80 10 5 1
- 9. PRODUCTS LIFE CYCLEHERO HONDA Questio n Star Cow cash Dog introduction Growth Maturit y Decline
- 10. GRAND STRATEGY MATRIX RAPIDMARKET GROWTH STRONG COMPETITVE POSITION WEAK COMPETITVE POSITION SLOW MARKET
- 11. ANSOFF MATRIX OFHERO HONDA Market penetration Product development Market development Market diversification
- 12. Organic and inorganic 70% Growth 30% Inorganic organic 30 % 70 % Risky No loans Loans Kinetic Motor Co M&M joint venture
- 13. Mergers and Acquisitions BackwardIntegration Forward Integration Buy same other auto companies . Buy same trucks for supply chain To reducing competition. To Increase market share & growth.
- 14. Competitive profile matrix(CPM) KEYFACTOR HERO HONDA MOTOR BAJAJ AUTO MOTOR TVS MOTOR Weight Rating Score Rating Score Rating Score Price 0.15 3 0.45 3 0.45 2 0.3 Market share 0.05 2 0.1 4 0.2 2 0.1 Advertising 0.15 4 0.6 4 0.6 1 0.15 Export 0.15 3 0.45 3 0.45 1 0.15 Quality 0.05 2 0.1 2 0.1 2 0.1 Technology 0.05 1 0.05 2 0.1 1 0.05 Financial position 0.1 3 0.3 2 0.2 2 0.2 Customer loyalty 0.1 3 0.3 2 0.2 1 0.1 Product distribution 0.15 4 0.6 3 0.45 3 0.45 Customer service 0.05 3 0.15 3 0.15 2 0.1 TOTAL 1.00 3.1 2.9 1.7
- 15. Strength position andaction evaluation internal strategy position Competitive CA External strategy position Industry IS (-1 to -6) Industry (+1 to +6) AXIS X Product quality Market share. Brand and image Products life cycle -3 -5 -1 -2 Barrier to entry. Growth potential. Access to financing Consolidation +2 +5 +6 +2 Total axes x average ( 1) 2.75 3.75 2004/5 Financial FS environmental ES AXES Y ROA 23.85%/24.69% Liquidity Net profit Debt Equity Ration ROCE Earnings per share +5 +2 +4 +3 +5 +6 Inflation Technology Demand elasticity Taxation -2 -5 -1 -5 Total axes Y average (0.19) 4.16 3.25
- 16. SWOT ANALYSIS OFHERO HONDA Strength 1 Ability to understand customer’s needs and wants 2 recognized and established brand name. 3 effective advertising capability, 4 strong distribution network and service centers . Weakness 1 R&D is not close to the Hero manufacturing plant . 2 Hero is vulnerable in the joint venture because Honda motor company has so much power . 3 The technological changes in the bike sector occurred at a very rate 4 technology launch of the ambition, but it was not patented. Opportunity 1 Global expansion 2 target market (including women) 3 facilitate the selling of more bikes. Threat 1 Bajaj motors . 2 TVS Motors 3 Kinetic Motor Co M&M joint venture
- 17. For industry actiondecision Weakness opportunity(WO) Strength opportunity (SO) Improve the internal weakness by take advantage of opportunity . SO use firm internal strength to take advantage of external opportunity. Strength threat (ST) Weakness threat (WT) This strategy use for to reduce the external threat . This strategy use for defensive tactic aimed to reduce internal weakness and external threat .
- 18. Macro and microenvironment
- 19. Market size &Growth rate of two wheeler (Q1) 42 16 37 74 21 5 0 10 20 30 40 50 60 70 80 1994 to 1998 years 2004/5 years scooter motercycle moped
- 20. Q 1 whatare industry dominate economic future 1 Market Size & Growth Rate. 2 Surplus/shortage 3 Number of Rivals 4 Entry/exit barriers 5 The Scope of Competitive Rivalry . 6 Surplus/shortage 7 Backward/Forward Integration. 8 Industry profitability 9 Space of Technology change. 10 Economic of scales 11 Rapidly product innovation.
- 21. Q2 WHAT ISCOMPETITIVE LIKE& HOW ARE STRONG ARE THE COMPETITIVE FORCES) Porter's 5 Forces Model People . Organizational Culture & Structure Products & Intellectual Property Capital & Natural Resources Technology
- 22. Porter's 5 ForcesModel of the Lucky cement(Q2)
- 23. Threat to entry(Q2) BAJAJ & Kawasaki(joint venture TVS MOTOR COMPANY LTD (TVS) YAMAHA MOTOR PVT. LTD HONDA MOTORS PVT LTD Kinetic Motor Co M&M joint venture
- 24. SUBSTITUTES GOODS (Q2) Priceband . RS 60000 RS 108000 Buyers willingness of the customers to go forward try the new product in the market kohat cement Kinetic Motor Co M&M joint venture BAJAJ & Kawasaki(joint venture
- 25. COMPETITIVE RIVALRY HEROHONDA (Q2) • Number and Diversity of Competitor , • Price Competition. . • Product Quality . • Exit Barriers HHML YAMAHA KINET&MM HMSI REL 550 MAJESTIC TVS BAJAJ
- 26. BARGAINING POWER OFBUYERS HERO HONDA (Q2) • Switching Costs . • Number of customers/ Volume of sales. • Brand Image’ • Price competitive 8% 12% 28% 28% 60% Price competative Swiching cost Numbers of customer /sale Brand image Growth
- 27. BARGAINING POWER OFSUPPLIERS OF HERO HONDA(Q2) 70 40 50 20 40 35 30 20 30 70 45 15 70 30 55 18 0 10 20 30 40 50 60 70 80 INDIA NEPAL SERI LANKA BANGLA DISH No and size of suppliers strong position of sellars swich cost profit Strong is the position of sellers Few potential suppliers Switching costs. Differentiation of your product? Profit high .
- 28. Q3 FACTORS DRIVINGINDUSTRY CHANGE Industry Emerging internet/ application Product innovation Change growth rate Increase globalization Change in cost &efficiency Technology change/ manufacturi ng Entry or exit of major firm Influence and government Poliy Changes Differentiated products
- 29. Q4 Assessing theMarket Positions of Rivals 6 6 5.5 5.5 5.6 5.6 5.6 5.5 5 5 4 4 4 4 4 4 8 6 7 7 5 5 7 7 2 4 3 3 5 5 3 3 6 2 2 2 2 2 2 2 0 1 2 3 4 5 6 7 8 9 HHML BAJAJ KINET &MM TVS YAMAHA HMSI MAJESTIC REL quality local national podect line integration Price /Quality range(high, medium, low) Geographic coverage(local, regional, national) Degree of vertical integration(none, partial, full) Product line breath(wide, narrow
- 30. High Low Strategy group Mapping(Q4) Fewmodel model variety many models Medium HERO HONDA Bajaj Auto TVS Motor Yamaha Motors (Majestic Auto Royal Enfield HMSI MM Kinetic Motor
- 31. Q5 What Strategicmoves are Rivals likely to make next Competitive intelligence about rivals’ Strategies, their latest actions and announcements, Their resources strengths and weaknesses, the efforts being made to improve Their situation Managers who fail to study competitors closely risk being overtaken by rivals’ fresh strategic moves.
- 32. 6 Q =Key Success Factors 1. Technology-related. 2. Manufacturing related 3. Distribution related. 4. Marketing related; 5. Skills and capability related , 6. Finance capital related.
- 33. 7 Q =Does the outlook for the industry offer the company a good opportunity to earn attractive profits Industry market size and growth rate potential . Competitive condition conductive rising industry profitability . Competitive force become strongly or weak . Potential for entry /exit of major firms. Degree of the risk uncertainly in industry future . Competitive analysis (sweeping industry )
- 34.