By :By :08EM-001 Aakash08EM-001 Aakash08EM-011 Ankur08EM-011 Ankur08EM-021 Manish08EM-021 Manish08EM-059 Sanjeev08EM-059 Sanjeev

Driven By The Trust Of Our CustomersDriven By The Trust Of Our Customers

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Hero Group Initiated by the Munjal brothers in 1956 with the flagship company Hero

Cycles.

• Hero Cycles manufactured Over 16000 Bicycles a day.

• They Sold about 86 million bicycles in aggregate as of 2002.

• They had nurtured an excellent network of dealers to serve India’s expansive markets.

• Over the years Hero Group had entered multiple business areas.

Collaboration in 1984 to form Hero Honda.

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Milestones

 

1956 Hero Cycles Limited is established

1971 Highway Cycles was set up to meet the demands of Hero Cycles. It is today the largest manufacturer of single speed and multi-speed freewheels.

1975 1975Hero Cycles Limited became the largest manufacturer of bicycles in India.

1978 Majestic Auto Limited was formed and the Hero Majestic Moped was introduced

1984 Hero Honda Motors Limited established in joint venture with Honda Motors of Japan, to manufacture motorcycles.

1985 1985Munjal Showa Limited established to manufacture shock absorbers and struts and is today among the top two shock absorber manufacturing companies in India.

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Milestones

 

1993 Hero Motors becomes Indias largest exporter of two wheelers

1995 Hero Corporate Services Limited as the service segment for the Hero Group Companies, ancillaries, suppliers, dealers and other associates.

1998 Hero Briggs and Stratton Auto Private Limited was set up to produce 4-stroke two-wheeler engines in various cubic capacities.

2000 Hero Group diversifies into IT and IT enabled services through its service segment - Hero Corporate Services Limited.

2000-2001 Hero Honda emerges as the market leader in motorcycles with sales of over a million motorcycles and a strong market share of 47%.

2006 Hero Honda enters the scooter segment, launches 100cc "Pleasure“

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Milestones

• Today, Hero Group comprises of 20 companies, 300 ancillary suppliers, deep market penetration with over 5,000 outlets, 23,000 + employee and has a turnover of US$ 3.20 billion (FY 2006).

Mr. Satyanand Munjal, Mr. Brijmohan Lall Munjal and Mr. O. P. Munjal continue to carry the torch.

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Hero Honda Group

Founded : January 19, 1984 . HQ :Delhi, India

Key people : Brijmohan Lal Munjal & Pawan Munjal

Industry :Automobile Products :Motorcycles, Scooters

Revenue :U$ 2.8 billion

The JV between India's Hero Group and Honda Motor Company of Japan Introduced new generation motorcycles

'Fill it - Shut it - Forget it'

• Hero Honda Sales and service network now spans over 3000 customer touch points Its unique CRM initiative - Hero Honda Passport Program

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Two Wheeler Market

Present Estimated Size - 5.4 mn units per year

CAGR ( Last 5 years ) - 10 %

• Average Two Wheelers per 1000 persons

India - 27

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Status Today

• HERO HONDA RETAINS WORLD NO.1 TWO-WHEELER MANUFACTURER POSITION FOR THE 9TH CONSECUTIVE YEAR

• REPORTS THIRD CONSECUTIVE QUARTER WITH  MORE THAN A MILLION UNITS IN SALES

• TURNOVER (NET SALES & OTHER OPERATING INCOME), AT RS. 3827 CRORE; GROWS BY 32.82%, EBIDTA AT 17.27%

• OVER 59% SHARE IN DOMESTIC MOTORCYCLE INDUSTRY

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Brand Promotion Once a Hero always a Hero……………… Promote a product that would be relevant to the Indian middle class and the

sheer size of the target audience would mean that even a small percentage of market share would equal a large market.

Focusing on personal transportation was also a smart move Hero started first on bicycles and then moved into motorcycles. Both

choices were targeted at India’s burgeoning middle class, which was tired of the insufficient public transport system and in search of economical and reliable personal transport.

Create a motorcycle that required little maintenance and had enormous fuel efficiency

The brand’s simple ad campaign “Fill it, shut it, forget it” struck a chord with its audience who were very conscious of the need for fuel efficiency.

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SWOT AnalysisSWOT Analysis Strengths

Ability to understand customer’s needs and wants Recognized and established brand name Effective advertising capability

Weaknesses R&D is not close to the Hero manufacturing plant Hero is vulnerable in the joint venture because Honda Motor

Company has so much power.`

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SWOT AnalysisSWOT Analysis Opportunities

Expansion of target market (include women) Become India’s leader in the scooter market

Threats Global expansion into the Caribbean and Central America Honda Motorcycles and Scooters India can take away market

share and cause joint venture to go sour Competitors such as TVS-Suzuki, Yamaha from Japan and

Bajaj Auto began to introduce newer product lines

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Key PointsKey Points Used company philosophy as competitive advantage. Created a

marketing campaign around the business strategy.

Building motorcycles for the common man.

Reasonably priced with above average fuel economy

Emphasize this could increase the likeliness of the bikes as being a substitute for the auto market, especially when gas prices are so high

Utilized a related diversification strategy – entered the scooter market

Capitalized on positive and popular brand image.

Shared similar resources for motorcycles and scooters

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Success storySuccess story• HHML had grown consistently, earning the title of the world’s

largest motorcycle manufacturer after having churned out 1.3 million vehicles in 2001.

• World’s largest two-wheeler manufacturer with annual sales volume of over 2 million motorcycles.

• Owns world’s biggest selling motorcycle brand – Hero Honda Splendor.

• Over 9 million motorcycles on Indian roads.

• Deep market penetration with 5000 outlets..

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RecommendationsRecommendations Expand to countries that heavily utilize two-wheelers

Popular vacation spots in Central and South America as well as the Caribbean

Tourists year-round; may opt to rent motorcycles or scooters versus automobiles

Could be potential for high volume/fleet sales

Examine warm tourist locations within the United States including California and Florida for possible market entry

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A Bright Future?A Bright Future? Yes!

Established name and dominant market position Strong Marketing Acumen Local Knowledge Technological Advancements Introduction of scooter Renewal of joint venture

Thank you!Thank you!