Project on Hero Moto Corp
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1Hero Moto Corp Ltd.IssueCauseEffectTheorySolutionCompetition2010Hero - Honda decides to move out of Joint VentureHero and Honda started seeing each other as competitorsNew brand identity & logo- Hero Moto CorpMarket Leader defensive strategies- Position defence Counter offensive defence- Contraction defence
Hero Moto Corp should spend on R&D for innovation, develop new technology and upgradationBajaj Auto, Honda, TVS Motors, Mahindra Scooters, LML, Kinetic Motors, Suzuki, Royal Enfield, YamahaHonda didn't have intention of sharing the upgraded technologyHero group might have to pay higher royalties for the upgraded technologyHero Moto Corp buys stake in HondaRefusal to merge the Spare Parts business2Hero Moto Corp Ltd.Market Size (Sales unit 2012)15.4 Million (Approx.)Motor cycles10 MillionScooters2.7 MillionSource: http://www.heromotocorp.com/hero_admin/data_content/pdf/annual_report/Annual_Report_2011_12.pdf
Hero MotoCorp6.23 MillionScooters15.2% market share0.41 Million
Moped0.78 MillionMotor cycles58% market share5.79 Million
3Hero Moto Corp Ltd.Revenue StreamYears2007-082008-092009-102010-112011-12Sales (units)33,37,14237,22,00046,00,13051,02,44462,35,2054Hero Moto Corp Ltd.
Low Bargaining Power of Suppliers
Extensive competitionHigh Bargaining Power of customers
Threat of substitutesThreat of New Entrants
Munjal ShowaAG IndustriesSatyam Auto componentsSunbeam AutoRockman Industries2012 Domestic Sales 15.4 Million5Hero Moto Corp Ltd.
Government PoliciesHigh import duty on motorbikes 105%R & D facilities in U.S. Erik Buell Racing$ 20 MillionsShare Price10 % since 20111713-1905
Core CompetencyExports 0.17 Mn two-wheelers
Tie-up with AVL for engine developmentRs. 45Rs. 79
6Hero Moto Corp Ltd.
PoliticalEconomicalSocialTechnological- Green Technology- Safe Manufacturing- Rain Water Harvesting The Green Supply Chain Vocational Training Camp- Safe Rider Program Technical collaboration with Steyr Diamler Puch Largest investment of over Rs. 2500 Cr. to build an integrated R&D centre in Rajasthan Technical & Financial collaboration with Showa Corporation Japan Land acquisition Imposition of taxes
Changing lifestyles & high quality Deluxe segment (category) 100-125cc grew up by 15% 125-250cc category grew at 9% 4% excise cut & 1% reduction in CST Higher interest rate & fuel pricesPEST7Hero Moto Corp Ltd.Create HMC Experience
HMC Sports BikeHMC Roadies
HMC MerchandiseHMC Racing Events
8Hero Moto Corp Ltd.Thank You9Hero Moto Corp Ltd.