Hero Moto Corp Ltd. is an Indian motorcycle and scooter manufacturer formerly known as Hero Honda. In 2010, Honda decided to move out of the joint venture, leading Hero and Honda to see each other as competitors. This caused issues around brand identity, technology sharing, and royalty payments that Hero Moto Corp had to address. It responded with defensive marketing strategies and buying a stake in Honda. The document discusses Hero Moto Corp's market share and competitors, revenue growth, bargaining power with suppliers and customers, R&D investments, and political, technological, economic, and social factors influencing its business environment.

1. Hero Moto Corp Ltd. 1

2. Issue Cause Effect Theory Solution Competition
2010 Hero and Honda New brand Market Leader Hero Moto Corp Bajaj Auto,
Hero - Honda started seeing identity & logo- defensive should spend on Honda, TVS
decides to move each other as Hero Moto Corp strategies- R&D for Motors,
out of Joint competitors - Position innovation, Mahindra
Venture defence develop new Scooters, LML,
- Counter technology and Kinetic Motors,
offensive upgradation Suzuki, Royal
defence Enfield, Yamaha
- Contraction
defence
Honda didn't Hero group Hero Moto Corp
have intention might have to buys stake in
of sharing the pay higher Honda
upgraded royalties for the
technology upgraded
technology
Refusal to
merge the Spare
Parts business Hero Moto Corp Ltd. 2

3. Market Size
(Sales unit 2012)
15.4 Million (Approx.)
Motor cycles Scooters Moped
10 Million 2.7 Million 0.78 Million
Hero MotoCorp
6.23 Million
Motor cycles Scooters
58% market share 15.2% market share
5.79 Million 0.41 Million
Hero Moto Corp Ltd. 3
Source: http://www.heromotocorp.com/hero_admin/data_content/pdf/annual_report/Annual_Report_2011_12.pdf

4. Revenue Stream
Years 2007-08 2008-09 2009-10 2010-11 2011-12
Sales (units) 33,37,142 37,22,000 46,00,130 51,02,444 62,35,205
25% 24%
20%
17%
16%
15%
14%
15%
13% Sales growth (nos.) %
11%
12%
10% 10%
11% 10% OPM
10% NPM
5%
0%
2008-09 2009-10 2010-11 2011-12
Hero Moto Corp Ltd. 4

5. Threat of New Entrants
Low Bargaining High Bargaining
Power of Suppliers Power of customers
Suzuki Others
Yamaha 4% 3%
4%
Honda Hero
16% MotoCorp
40%
TVS
14%
Munjal Showa Bajaj
AG Industries 19%
Extensive competition
Satyam Auto components
Sunbeam Auto
2012 Domestic Sales – 15.4 Million
Rockman Industries
Threat of substitutes
Hero Moto Corp Ltd. 5

6. Rs. 79
76%
Rs. 45
Government Policies
High import duty on
motorbikes
105% R & D facilities in
U.S. Erik Buell
Racing
$ 20 Millions
Core Competency
Exports
0.17 Mn two-wheelers
Share Price
10 % since 2011 Tie-up with AVL for
1713-1905 engine development
Hero Moto Corp Ltd. 6

7. Political
• Land acquisition
• Imposition of taxes
Technological Economical
• Technical collaboration with • Changing lifestyles & high quality
PEST
Steyr Diamler Puch • Deluxe segment (category)
• Largest investment of over Rs. 2500 Cr. 100-125cc grew up by 15%
to build an integrated R&D centre in 125-250cc category grew at 9%
Rajasthan • 4% excise cut & 1% reduction in CST
• Technical & Financial collaboration with • Higher interest rate & fuel prices
Showa Corporation Japan
Social
- Green Technology
- Safe Manufacturing
- Rain Water Harvesting
- The Green Supply Chain
- Vocational Training Camp
- Safe Rider Program
Hero Moto Corp Ltd. 7

8. Hero Moto Corp Ltd. 8

9. Hero Moto Corp Ltd. 9