INDIVIDUAL REPORT ON

STRATEGIC PLANS OF HERO

MOTOCORP.



BY
Soumya Sundar Dash
M-13-28
1
st
Year DoMS, RGIPT

CONTENTS



1. INTRODUCTION.
2. VISION, MISSION & STRATEGY.
3. ANALYSIS OF BUSINESS ENVIRONMENT.
4. SWOT ANALYSIS.
5. FINANCIAL STATEMENTS.
6. SUGGESTED CHANGES IN STRATEGY.


7. CONCLUSION.
8. BIBILOGRAPHY.

INTRODUCTION


Hero MotoCorp Ltd., formerly Hero Honda, is an Indian motorcycle
and scooter manufacturer based in New Delhi, India. The company is
the largest two wheeler manufacturer in the world. Hero Honda
started in 1984 as a joint venture between Hero Cycles of India and
Honda of Japan.
Hero is the brand name used by the Munjal brothers for their
flagship company, Hero Cycles Ltd. A joint venture between the Hero
Group and Honda Motor Company was established in 1984 as the
Hero Honda Motors Limited at Dharuhera, India. Munjal family and
Honda group both owned 26% stake in the Company. During the
1980s, the company introduced motorcycles that were popular in
India for their fuel economy and low cost. A popular advertising
campaign based on the slogan 'Fill it Shut it Forget it' that
emphasized the motorcycle's fuel efficiency helped the company
grow at a double-digit pace since inception. In 2001, the company
became the largest two-wheeler manufacturing company in India and
globally. The technology in the bikes of Hero MotoCorp (earlier Hero
Honda) for almost 26 years (19842010) has come from the
Japanese counterpart Honda. Hero MotoCorp has three
manufacturing facilities based at Dharuhera and Gurgaon in Haryana
and at Haridwar in Uttarakhand. These plants together have a
production capacity of 6.9 million 2-wheelers per year. Hero
MotoCorp has a sales and service network with over 3,000
dealerships and service points across India. It has a customer loyalty
program since 2000, called the Hero Honda Passport Program. Hero
MotoCorp has five joint ventures or associate companies, Munjal
Showa, AG Industries, Sunbeam Auto, Rockman Industries and
Satyam Auto Components, that supply a majority of its components.


TIMELINE

1956: Formation of Hero Cycles in Ludhiana(majestic auto
limited)
1975: Hero Cycles becomes largest bicycle manufacturer in
India.
1983: Joint Collaboration Agreement with Honda Motor Co. Ltd.
Japan signed Shareholders Agreement signed
1984: Hero Honda Motors Ltd. Incorporated.
1985: First motorcycle "CD 100" rolled out
1987: 100,000th motorcycle produced
1989: New motorcycle model - "Sleek" introduced
1991: New motorcycle model - "CD 100 SS" introduced,
500,000th motorcycle produced
1991: Hero Honda motorcycle CD 100 SS launched.
1994: Hero Honda motorcycle Splendor launched, 1000000
th

motorcycle produced.
1997: Hero Honda motorcycle Street launched.
1999: Hero Honda motorcycle CBZ launched.
2001: Hero Honda motorcycle Passion and Hero Honda Joy
launched.
2002: Hero Honda motorcycle Dawn and Hero Honda
motorcycle Ambition launched. Splendor has emerged as the
World's largest selling model for the third calendar year in a row
(2000, 2001, 2002)
2003: Hero Honda motorcycle CD Dawn, Hero Honda
motorcycle Splendor plus, Hero Honda motorcycle Passion
Plus and Hero Honda motorcycle Karizma launched. Becomes
the first Indian Company to cross the cumulative 7 million sales
mark
2004: Hero Honda motorcycle Ambition 135 and Hero Honda
motorcycle CBZ launched. Hero Honda became the World No.
1 Company for the third consecutive year. Crossed sales of
over 2 million units in a single year, a global record. Splendor -
World's largest selling motorcycle crossed the 5 million mark. T
2005: Hero Honda is the World No. 1 for the 4th year in a row.
2006: Hero Honda is the World No. 1 for the 5th year in a row.
15 million production milestone achieved.
2007: Hero Honda is the World No. 1 for the 6th year in a row.
20 million production milestone achieved
2008: Hero Honda Haridwar Plant inauguration
2009: Hero Honda GoodLife Program launched
2011: New licensing arrangement signed between Hero and
Honda (Hero Honda is renamed as Hero). Launch of new
refreshed versions of Glamour, Glamour Fi, CBZ Xtreme,
Karizma & Crosses the landmark figure of 5 million cumulative
sales in a single year
2012: New Models of Hero MotoCorp Maestro the Masculine
scooter and Ignitor the young generation bike are launched.
2013: Hero MotoCorp unveiled line-up of 15 updated products
including Karizma R, ZMR, Xtreme, Pleasure, Splendor Pro,
Splendor iSmart, HF Deluxe ECO, Hero MotoCorp
SuperSplendor, Passion Pro and Xpro, Glamour and Glamour
FI etc. It also introduced three new technologies- Engine
Immobilizer in new Xtreme, Integrated Braking System (IBS) in
new Pleasure and i3S (Idle Stop and Start System) in new
Splendor iSmart


VISION, MISSION & STRATEGY

VISION
The story of Hero Honda began with a simple vision - the vision of a mobile
and an empowered India, powered by its two wheelers. Hero MotoCorp
Ltd., company's new identity, reflects its commitment towards providing
world class mobility solutions with renewed focus on expanding company's
footprint in the global arena.

MISSION
Hero MotoCorps mission is to become a global enterprise fulfilling its
customers' needs and aspirations for mobility, setting benchmarks in
technology, styling and quality so that it converts its customers into its
brand advocates.
The company will provide an engaging environment for its people to
perform to their true potential. It will continue its focus on value creation
and enduring relationships with its partners.

STRATEGY
Hero MotoCorps mission is to become a global enterprise fulfilling its
customers' needs and aspirations for mobility, setting benchmarks in
technology, styling and quality so that it converts its customers into its
brand advocates.
The company will provide an engaging environment for its people to
perform to their true potential. It will continue its focus on value creation
and enduring relationships with its partners.
BUSINESS ENVIRONMENT

POLITICAL ENVIRONMENT
The political environment consists of various lands acquisition by the
company and payment of subsequent taxes to the government. Hero
MotoCorp can now export to Latin America, Africa and West Asia. Hero is
free to use any vendor for its components instead of just Honda-approved
vendors. Hero MotoCorp hopes to achieve 10 per cent of their revenues
from international markets, and they expected to launch sales in Nigeria.
the company is coming up with their fourth factory in Neemrana in
Rajasthan while their fifth factory is planned to be set up at Halol in Gujarat.
ECONOMICAL ENVIRONMENT
Hero MotoCorps sales in 100-125cc segment grew up by 15% and in 125-
150 cc it grew up by 9%. 4 % excise cut & 1% reduction in CST has also
impacted the sales .At the same time higher interest rate & fuel prices have
also impacted the sales .With increase in fuel prices people are opting for
performance bikes rather than going for premium bikes .
TECHNOLOGICAL ENVIRONMENT
Hero MotoCorp has entered into Technical collaboration with Steyr Diamler
Puch. They have also made a large investment of over Rs 2500 crores to
build an integrated R&D center in Rajasthan. They have also entered into
technical & financial collaboration with Showa Corporation Japan. In July
2013, HMC acquired 49.2% shareholding in Erik Buell Racing, a
motorcycle sport company which produces street and racing motorcycles
based in East Troy, Wisconsin, USA. It paid approx. USD 25 million for this
stake.


SOCIAL ENVIRONMENT
Hero MotoCorp have been committed to demonstrate excellence in our
environmental performance on a continuous basis, as an intrinsic element
of their corporate philosophy. Hero aims at introducing Green initiatives in
all aspects of the company whether it is Production Development,
Manufacturing, and Supply Chain (backward and forward) or even in the
operations within the company. The company carries out production and
manufacturing through Green Infrastructure which has been especially
developed to reduce harmful impact on the environment such as green
roof, sewage treatment plant, effluent treatment plant, waste food recycling,
paint conservation etc. To complete the process of sustainable
development, Hero MotoCorp has also included the companys supply
chain in its green processes. It has put together a Green Dealer
Development Program at the front end and a Green Vendor Development
Program for the backend of the supply chain. Hero MotoCorp have also
started GoodLife program and passport programme as a part of its CSR
activities.They are also sponsoring various sport personalities and are
major sponsor of Indian Hockey Team.





SWOT ANALYSIS
STRENGTHS:
1. Ability to understand the customer mentality and requirements.
2. Well recognized and established brand name.
3. Strong network of distributors, dealers and service station.
4. Wide range of products, hence covering the entire customer base.
WEAKNESSES:
1. Post-split from Honda group, it has to venture into its own R & D
department.
2. It has to reinvent and innovate its technology to maintain the market
share.
3. It has to again make its presence as a brand among the masses as
people still refer to it as Hero Honda.
OPPORTUNITIES:
1. Global expansion into other continents.
2. Expansion into target markets.
3. Attempt to become market leader in scooter market.
4. Capitalizing on its distribution channel to regain its market share by
large volume selling.
THREATS:
1. Many competitors in Indian Market like TVS, Bajaj, and Mahindra.
2. Post-split, Honda is also giving tough competition.
3. More companies are trying to enter into Indian market in the premium
segment.
4. Need to change the mindset of people who think it as producer of
motorbikes for daily commuting to also producer of premium bikes like
karizma.

FINANCIAL ANALYSIS



Paid up Capital (in Rs.): 39.94 crores
Total Turnover (in Rs): 24,166.49 crores
Total Profit after Taxes (in Rs): 2,118.16 crores
Total Spending on Corporate Social Responsibility (CSR) as
percentage of Profit after Tax (PAT) (%): Our total spending on CSR
is Rs. 13,960,887 which is 0.06% of our PAT.
These are data of 2012 as mentioned in the Annual report on the
companys website.


This chart gives the analysis of share price of hero MotoCorp for past five
years. The share price has been fluctuating between Rs. 900 and Rs.
2200. It can be seen that even during recession hero MotoCorp s share
price was consistent .The share price had gone down when the joint
venture between Hero and Honda Group was closed.








CASH FLOW STATEMENT OF HERO
MOTOCORP
Cash Flow
---------------
---- in Rs.
Cr. -----------
--------
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Net Profit
Before
Tax
2529.2 2864.71 2404.76 2831.73 1781.46
Net Cash
From
Operating
Activities
1890.43 2359.78 2288.11 2686.64 1359.03
Net Cash
(used
in)/from
Investing
Activities
Net Cash
(used
in)/from
Financing
Activities
-1056.27 -2458.16 -989.18 -2109.31 -499.93
Net
(decrease
)/increase
In Cash
and Cash
Equivalent
s
101.22 -5.59 -23.38 49.7 -2.09
Opening
Cash &
Cash
Equivalent
s
33.73 39.32 62.61 13.45 15.19
Closing
Cash &
Cash
Equivalent
s
134.95 33.73 39.23 63.15 13.1
-732.94 92.79 -1322.31 -527.63 -861.19


SUGGESTED CHANGES IN STRATEGY

Hero MotoCorp should go for competitive pricing and target to
improve on its sales in other continents so that it can establish it as a
global brand.
It should go for aggressive advertisement as most people still
consider it as Hero Honda. It can hire global superstars for its
advertising.
It should do more research and development work to develop more
fuel efficient bikes in this era of high fuel prices.
It should move out of the old management system of Hero Honda to
create its unique identity.
From companys perspective it should look for reducing the employee
turnover and it should try to capture the highly efficient manpower to
improve its market share.
It should go for more products in upper segment where other
competitors have multiple models.
It should do extensive research and development to bring a revolution
in technology used in the motorbikes which it did earlier when it was
with Honda.
It should target the scooter segment where it has least number of
products.
CONCLUSION

As studied , Hero MotoCorp has a long way to go in the motorcycles and
scooter segment in the global market. They can leverage upon their
previous association with Honda group to improve their brand presence .
They have set out on a long journey , but they didnt begun well . Now they
are on the right path , going along by merging with foreign companies for
research and development activities. They have started working on a global
mindset by venturing into new markets such as Latin America , Nigeria.
It has started bringing out premium products at low price as was seen in
the latest auto expo 2014.
The conclusion is that they started poorly after split but they didnt took
much time to bring their brand among the consumers as well as
competitors .

BIBILOGRAPHY

www.moneycontrol.com
www.wikipedia.org
www.heromotocorp.com
www.economictimes.com