hero honda master com

8/3/2019 Hero Honda MASTER com

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Chris DeMicco,Chris DeMicco, Laura Dunne, Dave Gelber, Sarah Haight, Sarah HunkinsLaura Dunne, Dave Gelber, Sarah Haight, Sarah Hunkins

December 2December 2ndnd, 2005, 2005

Driven By The TrustDriven By The TrustOf Our CustomersOf Our Customers



2

Problems & IssuesProblems & Issues

Joint Venture Problems Joint Venture Problems

Honda Motor Company Ltd. announced it was setting upHonda Motor Company Ltd. announced it was setting up

a subsidiary (HMSI)a subsidiary (HMSI)

The development of the CD The development of the CD--100 motorcycle was only 100 motorcycle was only

successful for a very short period of timesuccessful for a very short period of time

Honda held complete responsibility for the Research &Honda held complete responsibility for the Research &

Development department for Hero HondaDevelopment department for Hero Honda Honda negotiated new ventures and partnerships withHonda negotiated new ventures and partnerships with

other Indian manufacturers in the automobile and power other Indian manufacturers in the automobile and power

equipment industry, leaving Hero completely out equipment industry, leaving Hero completely out



3

Problems & IssuesProblems & Issues

Ex ternal ProblemsEx ternal Problems

The Indian government starting allowing foreign The Indian government starting allowing foreigncompanies to enter the Indian markets through joint companies to enter the Indian markets through joint

ventures ventures The Indian marketplace was gaining more entrants The Indian marketplace was gaining more entrants

causing rivalry in the industry to risecausing rivalry in the industry to rise

Competitors such as TVSCompetitors such as TVS--Suzuki, Yamaha from JapanSuzuki, Yamaha from Japan

and Bajaj Auto began to introduce newer product linesand Bajaj Auto began to introduce newer product lines



4

Implementing ChangesImplementing Changes

Management introduced new ideas coupled withManagement introduced new ideas coupled withimproved terms of agreement for their joint ventureimproved terms of agreement for their joint venture

Two primary goals in mind Two primary goals in mind

Continuing their successContinuing their success

Maintaining their e x isting market shareMaintaining their e x isting market share



5

New TacticsNew Tactics

Collaborating with Steyr Daimler PuchCollaborating with Steyr Daimler Puch

Supplying completely knockedSupplying completely knocked--down (CKD) kitsdown (CKD) kits

Establishing a more proactive marketing Establishing a more proactive marketing

department department

Ex panding the distribution network Ex panding the distribution network



6

RenegotiatingRenegotiating

Ex tending the joint venture agreement Ex tending the joint venture agreement

Bettering the terms in regards to royaltiesBettering the terms in regards to royalties

Requesting more timely cooperationRequesting more timely cooperation

Manufacturing the Street and Dream modelsManufacturing the Street and Dream models

Increasing the quantity of components andIncreasing the quantity of components andsubassemblies purchasedsubassemblies purchased



7

RecommendationsRecommendations

Use company philosophy as competitive advantageUse company philosophy as competitive advantage

Create a marketing campaign around the businessCreate a marketing campaign around the businessstrategy strategy

Building motorcycles for the common manBuilding motorcycles for the common man

Reasonably priced with above average fuel economy Reasonably priced with above average fuel economy

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



8


Utilize a related diversification strategy Utilize a related diversification strategy ²² enter theenter thescooter market scooter market

Use e x pertise of India·s terrain and people to captureUse e x pertise of India·s terrain and people to capture

the scooter market before new sister company Hondathe scooter market before new sister company HondaMotor Scooters India Ltd. enters the market Motor Scooters India Ltd. enters the market

Capitalize on positive and popular brand imageCapitalize on positive and popular brand image

Share similar resources for motorcycles and scootersShare similar resources for motorcycles and scooters



9


Ex pand to countries that heavily utilize twoEx pand to countries that heavily utilize two-- wheelers wheelers

Popular vacation spots in Central and South America asPopular vacation spots in Central and South America as

well as the Caribbean well as the Caribbean Tourists year Tourists year--round; may opt to rent motorcycles or scootersround; may opt to rent motorcycles or scooters

versus automobiles versus automobiles

Could be potential for high volume/fleet salesCould be potential for high volume/fleet sales

Ex amine warm tourist locations within the United StatesEx amine warm tourist locations within the United Statesincluding California and Florida for possible market including California and Florida for possible market entry entry



10

Case UpdateCase Update

Hero Honda Today Hero Honda Today

India and Hero HondaIndia and Hero Honda

Fuel Efficient Fuel Efficient

Pollution Control/Quality Pollution Control/Quality

Technology Technology

Customers, Dealers/VendorsCustomers, Dealers/Vendors

Fiscal Year 2003Fiscal Year 2003--20042004

Market ShareMarket Share

Distribution & Service Network Distribution & Service Network

Routes/Delivery Routes/Delivery ²² MapInfoMapInfo



11


Fiscal Year 2004Fiscal Year 2004--20052005

Earnings ResultsEarnings Results

Technological Support Technological Support

September 30th, 2004 Rs 1,943.60

September 30th, 2005 Rs 2,379.20



12


Current ModelsCurrent Models

100 cc plus segment 100 cc plus segment

Super Splendor & Glamour Super Splendor & Glamour

150 cc plus segment 150 cc plus segment Achiever Achiever

Scooter Segment Scooter Segment ²² wider customer base wider customer base

´Pleasureµ´Pleasureµ



13

SWOT AnalysisSWOT Analysis

StrengthsStrengths

Ability to understand customer·s needs and wants Ability to understand customer·s needs and wants

Recognized and established brand nameRecognized and established brand name

Effective advertising capability Effective advertising capability

WeaknessesWeaknesses

R&D is not close to the Hero manufacturing plant R&D is not close to the Hero manufacturing plant

Hero is vulnerable in the joint venture because HondaHero is vulnerable in the joint venture because HondaMotor Company has so much power Motor Company has so much power



14

SWOT AnalysisSWOT Analysis

OpportunitiesOpportunities

Global e x pansion into the Caribbean and CentralGlobal e x pansion into the Caribbean and Central America America

Ex pansion of target market (include women)Ex pansion of target market (include women)

Become India·s leader in the scooter market Become India·s leader in the scooter market

Threats Threats

Honda Motorcycles and Scooters India can take away Honda Motorcycles and Scooters India can take away

market share and cause joint venture to go sour market share and cause joint venture to go sour

Bajaj Motors is a strong competitor Bajaj Motors is a strong competitor



15

A Bright Future?A Bright Future?

Yes Yes!! Established name and dominant market positionEstablished name and dominant market position

Strong Marketing Department Strong Marketing Department

Local KnowledgeLocal Knowledge

Technological Advancements Technological Advancements

Introduction of scooter Introduction of scooter

Renewal of joint ventureRenewal of joint venture



Thank you!Thank you!Questions/comments?Questions/comments?

hero honda master com

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