Strategic Management hero motocorp

Hero Moto Corp Ltd. 1


Issue Cause Effect Theory Solution Competition

2010Hero - Honda

decides to move out of Joint

Venture

Hero and Honda started seeing each other as competitors

New brand identity & logo- Hero Moto Corp

Market Leader defensive strategies-- Position defence- Counter

offensive defence

- Contraction defence

Hero Moto Corp should spend on

R&D for innovation,

develop new technology and

upgradation

Bajaj Auto, Honda, TVS

Motors, Mahindra

Scooters, LML, Kinetic Motors,

Suzuki, Royal Enfield, Yamaha

Honda didn't have intention of sharing the

upgraded technology

Hero group might have to

pay higher royalties for the

upgraded technology

Hero Moto Corp buys stake in

Honda

Refusal to merge the Spare

Parts business


Market Size (Sales unit 2012)

15.4 Million (Approx.)

Motor cycles10 Million

Scooters2.7 Million

Source: http://www.heromotocorp.com/hero_admin/data_content/pdf/annual_report/Annual_Report_2011_12.pdf

Hero MotoCorp6.23 Million

Scooters15.2% market share

0.41 Million

Moped0.78 Million

Motor cycles58% market share

5.79 Million


Revenue Stream

2008-09 2009-10 2010-11 2011-120%

5%

10%

15%

20%

25%

12%

24%

17%

15%

13%

16%

11%11%10%

14%

10% 10%

Sales growth (nos.) %OPMNPM

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


Hero MotoCorp40%

Bajaj19%

TVS14%

Honda16%

Yamaha4%

Suzuki4%

Others3%

Low Bargaining Power of Suppliers

Extensive competition

High Bargaining Power of customers

Threat of substitutes

Threat of New Entrants

Munjal ShowaAG Industries

Satyam Auto componentsSunbeam Auto

Rockman Industries 2012 Domestic Sales – 15.4 Million


76%

Government PoliciesHigh import duty on

motorbikes 105% R & D facilities in

U.S. Erik Buell Racing

$ 20 Millions

Share Price10 % since 2011

1713-1905

Core CompetencyExports

0.17 Mn two-wheelers

Tie-up with AVL for engine development

Rs. 45

Rs. 79


Political

Economical

Social

Technological

- 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 prices

PEST


Create HMC

Experience

HMC Sports Bike

HMC Roadies

HMC Merchandise

HMC Racing Events


Thank You

Strategic Management hero motocorp

Automotive

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