A Report on Hero Motocorps Strategy

Analysis
INTRODUCTION
Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest
manufacturer of two - wheelers, based in India. It was started in 1984 by Brijmohan
Lall Munjal in Dharuhera. It has its presence in thirty nations across the globe.
The current Chairman, MD and CEO of the company is Pawan Munjal while Sunil
Munjal stepped down as the promoter of the company.
Hero MotoCorp Ltd announced its June quarter results which showed that net profit
rose to a record high of Rs883.10 crore, up 18.3% from the year-ago period. Twowheeler sales increased 6.7% year-on-year to 1.75 million units in the latest quarter
and net revenue rose by 7.7% to Rs8,010.66 crore from Rs7,435.47 crore.
Reportedly, an uptick in rural demand for two-wheelers helped the companys robust
growth.

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 MotoCorp's 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 MotoCorp's 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.

Operations
Hero has its operations in five units across the nation, namely

1.
2.
3.
4.
5.

Haridwar (2.8 Million units per annum)

Dharudera (2.1 Million units per annum)
Gurgaon (2.1 Million units per annum)
Neemrana (1.05 million units per annum)
Jaipur (Global Centre of Innovation and Technology)

Performance

Hero and Honda

In 1984, Hero MotoCorp and Honda came together as a joint venture to form Hero
Honda. This new venture marked the way for their success becoming the largest two
wheeler manufacturer in the world. But in 2010 the JV came to an end and wasnt
extended further. Since then both the players have a neck to neck competition to
gain the maximum share of the market. Hero with its name synonymous to
motorcycles leads in markets like Rajasthan, UP, Madhya Pradesh, West Bengal and
AP-Telangana while Honda has some edge in Karnataka, Maharashtra, Gujarat and
Kerala.

Current events
The biggest current happening within Hero was Sunil Munjal no longer being the
promoter by selling out his share to the family that he received after the death of
Brijmohan Lall Munjal.
Hero recently announced an investment of Rs 850 Crore in R&D in its Jaipur facility.
The management is aware that after losing the technology support of Honda, the
organisation needs to develop technology of their own to stay competitive and
remain as the leader.

Also, there was a change in the top level management as Rajiv Bhargava was
appointed as the Head of Strategy in November 2013 to give a new direction to the
company.
Hero is working aggressively on its global presence and the steps to improve it. It
recently formed a strategic partnership with Speedbrain GmbH, the German off-road
racing specialist to form HeroMotoSports team which made its debut in Morocco bike
rally and will be participating in other bike rallies across the globe leading up to the
Dakar rally 2017. The Hero MotoSports Team Rally will also assist in development
and testing of new Hero vehicles concepts, using the data collected from the races.
It also extended it sponsorship in the T20 Caribbean Premier League and will be
continued to call the 'Hero Caribbean Premier League' until the 2018 season.
Pawan Munjal, Chairman, Managing Director and CEO, Hero MotoCorp Ltd, said:
"The extension of our title sponsorship of the Hero CPL is also in keeping with the
increasing global presence of brand Hero, which is now present in 30 countries
across Asia, Africa and South and Central America. The Hero CPL is now set to
become one of the important events in Hero's annual global sporting calendar."
Hero to take on Honda in the scooter segment will be introducing a 125cc scooter as
a direct competition to Activa 125.

TIMELINE

GREENOVATION STRATEGY
During FY 2015-16, they participated in the 16th Auto Expo in New Delhi with the
theme Greenovation, reiterating their commitment to develop innovative
technologies for a sustainable future. The highlight of the Hero Greenovation pavilion
was a Green Wall consisting of over 8,000 live plants. It was a replica of the wall at
our Garden Factory (Manufacturing Plant) in Neemrana, Rajasthan, which generates
oxygen equivalent to the daily requirement of 3,700 people.
The pavilion displayed interesting thoughts and selfies of customers and fans, who
are the real Hero. Formed in the shape of a heart, multiple screens of the Digital
Heart were continuously refreshed to show the latest content throughout the day.
The pavilion also offered numerous engagement opportunities for visitors, making
the time spent at the Hero stall a memorable one.
Besides, there were stunt zones, wheelie machines, RFID integrations, Instagram
anti-gravity booth and 360-degree immersive video experiences at the stall. They
unveiled an exciting new range of products and concepts at the Auto Expo. They
also showcased two new products, new Splendor iSmart 110 and Xtreme 200 S as
well as two concept vehicles; XF3R and Duet E.

OTHER STRATEGIES AND INITIATIVES

Five-Year Warranty In Turkey
They became the first two-wheeler company in Turkey to offer a five-year warranty.
This warranty will be offered on five Hero products, namely Karizma R, Hunk, Thriller
Sports and the two newly-launched scooters Dash and Duet.

Motor Shows
NADA Motor Show: Held in Kathmandu, the motor show saw a footfall of 50,000+
people spanning over five days, which had participation from major two-wheeler and
four-wheeler automobile companies. Colombo Motor show: The event saw a
footfall of over 40,000+ people. The key models such as Dash scooter, received
excellent feedback and Xtreme Sports stunt show was a showstopper at the event.
Istanbul Motor show: Five new models, Dash, Duet, Xtreme Sports, Hunk and
Karizma R, were showcased to the public in the motor show. The show witnessed a
footfall of over 120,000 people.

Innovative Measures

Moreover, they continuously keep evolving innovative ways to strengthen customer

engagement, educate them about new launches, address their concern and
stimulate conversations about the brand.
They believe customers are their true brand advocates.
They would continue to widen the customer touch points across the rural and urban
landscapes so that the brand and value proposition remain as relevant to first time
buyers as also to long time loyalist.

SWOT Analysis of Hero Moto Corp with USP, Competition, STP (Segmentation,
Targeting, Positioning)
Hero Moto Corp (Hero Honda)
Parent Company

Hero Group

Category

Motorcycles, Scooters

Sector

Two-Wheelers

Tagline/ Slogan

Hum mei hai Hero; Desh ki Dhadkan (HeroHonda)

USP

Wide product variety, excellent brand equity & high customer

loyalty
STP

Segment

Young boys looking for fast sporty bikes for Indian roads

Target Group

Young boys in the age 18-30 middle class

Positioning

Every person has a hero and a winner within ones self

Product Portfolio

Brands

1. CBZ

2. Karizma

3. Passion

4. Pleasure

5. Splendor

6. Impulse

SWOT Analysis

Strengths

1. Huge brand equity and one of the biggest players in the two
wheelers Indian market
2. Excellent R&D, and wide variety of products in every
segment.
3. Excellent distribution, over 3000 dealerships and service
centers
4. Good advertising and excellent rebranding from Hero
Honda to Hero Moto Corp

Weaknesses

1. Absence in the premium bike segment

2.High imports for its spare parts i.e. over 30% imports
3. Most of the products have similar features and low on
design and innovation

Opportunities

1.Two-wheeler segment is one of the most growing industries

2.Export of bikes is limited i.e. untapped international markets

Threats

1. Strong competition from Indian as well as international

brands
2. Dependence on government policies and rising fuel prices
3. Better public transport will affect two-wheeler sales
Competition
1. Yamaha
2. Bajaj Auto Limited
3.TVS
4.Suzuki
5. Harley Davidson
6.Royal Enfield

Competitors

7. Ducati Superbike

BCG Matrix

SPLENDER
SERIES;
PASSION
SERIES;
KARIZMA
PLEASURE

HUNK;
PLEASURE

CD DELUXE;
CD 100SS:
CD DAWN

ACHIEVER;
GLAMOUR

PEST ANALYSIS
P O LIT IC A L
Land
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T E C H N O LO G I
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S O C IA L

E C O N O M IC A L

G re e n
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References
http://www.heromotocorp.com/en-in/about-us.php
http://www.business-standard.com/article/companies/pawan-munjal-reappointedhero-motocorp-cmd-ceo-116080900506_1.html
http://www.hindustantimes.com/business/how-hero-taught-itself-to-stay-high-withouthonda/story-UFURzk5XFAj0qTorQz2EPP.html
http://www.livemint.com/Companies/cxCECC6CWlAGNBOaxJJY4L/Sunil-Munjalceases-to-be-promoter-of-Hero-MotoCorp.html
http://www.heromotocorp.com/en-in/investors/annual-reports-archives.html
http://www.telegraphindia.com/1160818/jsp/business/story_102994.jsp#.V8J7rph96h
d
http://www.livemint.com/Sundayapp/I52zvm28fnfHM3kJyRYwRK/Bad-loan-woesHero-on-a-roll-and-Michael-Phelpss-gold-rush.html
http://timesofindia.indiatimes.com/business/india-business/Strategy-war-escalatesbetween-Hero-Honda/articleshow/45636300.cms
http://www.thehansindia.com/posts/index/Auto-/2016-07-20/Hero-Announces-NewStrategy-To-Counter-Honda/243419
http://www.thehindubusinessline.com/companies/hero-motocorp-names-rajatbhargava-as-head-of-strategy/article5325734.ece
http://forbesindia.com/article/special/hero-motocorp-opens-rs850-crore-rdcentre/42635/1
http://www.newkerala.com/news/2016/fullnews-62961.html
http://economictimes.indiatimes.com/news/sports/hero-motocorp-extends-titlesponsorship-of-caribbean-premier-league-until-2018/articleshow/52522639.cms