Project report

On
Hero MotoCorp





By
Kshitij Sinha, SMBA 13028
Sanchit Singhal, SMBA 13048
Tejasvi Mohan, SMBA 13064
Huber Genin, TRF14FM003
1. Interpret the pattern of actions taken by company in last 10 years.

2. Use Figure (as given in slide#23 of 'introduction to strategy') to classify these actions.
Actions to upgrade, build or acquire competitively important resources and capabilities via
strategic alliances and collaborative partnerships
The Company has tied up with AVL, Austria, a global leader in engine design and development,
to develop different categories of engines and US motor biking firm, EBR. To make their bikes
more fuel efficient and enter the super biking segment they have tied up with Magneti Marelli
SpA, Italy.They tied up with Engines engineering for technical knowhow in terms of designing
of future products.
Actions and approaches used in managing R&D and production.
They have taken rapid strides to create a technology platform and an R&D ecosystem. Necessary
blueprint has been finalized to bring into reality one of the India's largest Auto Industry
Technology & Integrated R&D Centre near Jaipur. They have made their production system
much more efficient in their Haridwar plant as compared to their original Gurgaon plants.
Actions to gain sales and market share with lower prices based on lower costs.
Hero MotoCorp is taking a big leap forward by introducing many industry first technologies in
its bikes. Three such technologies were highlighted by the company at its recent conference. One
is the idle Stop Start System (i3S) aka engine stop-start system.
Actions to enter new product or geographic markets.
HMC setup its first wholly-owned overseas plant in Colombia with plans been finalized to setup
plants in Argentina and Brazil. The company is also setting up assembly plants in Bangladesh,
Tanzania, Uganda and Kenya, though these factories will be operated jointly with local partners.
Actions to gain sales and market share via more performance features, more appealing
design, better quality or customer service, wider product selection, or other such actions.
HMC launched the first sports bike in India The Hero Honda Karizma


HMC introduced the first rimless and hydrogen fuel cell powered bike The Hero iON


HMC launched the first dirt bike in India The Hero Impulse

HMC is launching the first hybrid scooty in India next year The Hero Leap


3. How has company's international strategy evolved from over time?
In December 2010, the board of directors of the Hero Honda Group had decided to
terminate the joint venture between Hero Group of India and Honda of Japan in a phased
manner. Under the joint venture Hero Group could not export to international markets
(except Sri Lanka and Nepal) and the termination would mean that Hero Group can now
export. Since the beginning, the Hero Group relied on their Japanese partner Honda for
the technology in their bikes.
Till the break-up in 2011, Hero could not set up its own R&D or enter certain export
markets under a binding agreement. This has given the competition a lead both TVS
and Bajaj since the 1980s have steadily been expanding R&D capabilities.
Hero MotoCorp separated from Honda Motor Co in 2011 and has augmented its global
presence, selling products across 18 countries, including Peru, Guatemala, Turkey and
Egypt.
Hero MotoCorp Ltd, Indias largest two-wheeler maker, is looking to start selling bikes
in the US next year, hoping to create a niche market for its products.
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. $25 million for this stake.
Hero MotoCorp Ltd is also in talks with Fiat groups auto parts company Magneti Marelli
SpA for a system that can make its motorbikes and scooters more fuel efficient. They
have also formed a partnership with Austrian engine developer AVL List GmbH and
Italys Engines Engineering Srl.
HMC recently announced its manufacturing presence in South America with its first
wholly-owned overseas plant in Colombia with a $70-million investment. Now it is also
finalizing plans to set up a bike plant in Argentina, the second-largest market in the
region after Brazil. This plant will start by mid-2015, with an initial capacity of 78,000
units, scalable to 1.5 lakh units over 3-4 years.
Hero is also planning a third plant in the region in Brazil currently. The company is also
setting up assembly plants in Bangladesh, Tanzania, Uganda and Kenya, though these
factories will be operated jointly with local partners.

4. Has company changed its vision or direction during last 10 years?
The Hero Honda story began with a simple vision the vision of a mobile and an empowered
India, powered by Hero Honda.


Mission 2004
Hero Hondas mission is to strive for synergy between technology, system and human resources,
to produce products and services that meet the quality, performance and price aspirations of its
customers. At the same time maintain the highest standards of ethics and social responsibilities
Mission 2013
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.
Strategy 2013
Hero MotoCorps key strategies are to build a robust product portfolio across categories, explore
growth opportunities globally, continuously improve its operational efficiency, aggressively
expand its reach to customers, continue to invest in brand building activities and ensure customer
and shareholder delight.
By 2020, the Indian two wheeler giant is planning to surpass 100 million units in cumulative
production and achieve a turnover of INR 60,000 crores. The company is planning to reach there
by expanding its presence to more than 50 countries with manufacturing units in 20 of them.

5. Identify the drivers from the external environment that might have triggered any
changes in the strategy.
OPPORTUNITIES
Until 2011, company was a part of Honda Motorcycle and Scooter and as per the contract
between them was bound to stay in the Indian-Subcontinent or in the countries where Honda
was not present. Hero wanted to explore growth opportunities globally and decided go
autonomous.
Necessary blueprint has been finalized to bring into reality one of the India's largest Auto
Industry Technology & Integrated R&D Centre near Jaipur.
The company has set up its first assembly unit in Africa in Nairobi (Kenya) where it has also
launched its first modified product-the HF Dawn. The other two African countries where it
has launched operations include Burkina Faso and Ivory Coast. In Kenya, it has partnered
with Sameer Group to sell its two-wheelers.
The company is looking at expanding operations and setting up a full-fledged manufacturing
unit in Colombia next year. The market size in Colombia is significant and the manufacturing
unit there would help the company rapidly expand its business. Industry sources indicate
600,000 two-wheelers are sold in Colombia annually.
The Company has tied up with AVL, Austria, a global leader in engine design and
development, to develop different categories of engines and US motor biking firm, EBR.
To make their bikes more fuel efficient and enter the super biking segment they have tied up
with Magneti Marelli SpA, Italy.
Hero MotoCorp tied up with Engines engineering for technical knowhow in terms of
designing of future products.
THREATS
Bajaj Auto found popularity in low end and premium offerings in Indian and potential
international marketing leading Hero Honda to become Hero MotoCorp.
Honda will become a serious threat due to its strong technical presence throughout the world.
China is clearing its way to the WTO and with its record of fast growth; it has emerged as a
new economic leader in the subcontinent. At the same time, India has engaged its energies to
cope up with the pace of globalization on one hand and ensuing economic slowdown on the
other.
Since, Brazil is using Ethanol blended petrol; it has become a serious issue for Hero to
develop a compatible engine to enter this biggest market in South America.