Professional Documents
Culture Documents
Group 1
•
vOpportunities
• Global market
• Focus on women segment
• Bajaj Auto gradually pulling out of
scooter segment is opening a huge
market
• Introducing high CC bikes in Indian
market under the JV to tap the high
demand in that segment due to
increasing personal disposable
income
• Low rate of interest on loans will tend to
increase the demand
• Developing Gas-based technology
• Govt. proposal to reduce minimum age
v Threats
• Low recognition of ‘Hero’ brand after end of
JV with Honda Motorcycles and Scooters
India (HMSI)
• HMSI eating the present market of Hero
Honda after the JV is called off
• Govt. norms-FDI increased to 100% in
automobile sector
• High cash reserves of competitors-Bajaj
Auto is threatening considering the
financial advantage for Bajaj Auto if the
Hero Honda JV ends
• New entrants like M&M and likes of Harley
Davidson
• Many motorcycle giants entering Indian
market targeting the niche market with
PESTEL Analysis
Ø Political Factors
• 100% foreign equity investment without any minimum investment
criteria
• Assist development of vehicles propelled by alternate energy
source
• Formulation of auto fuel policy ensuring availability of appropriate
fuel to meet the emission norms
• Changing emission norms
• Laying emphasis on R&D in automobile industry
• Weighted tax deduction of up to 150% for in house research and
R&D activities
• Govt. impetus on improving connectivity and infrastructure of
roads
• Various Govt. policies aim to promote integrated, phased and self-
sustained growth Indian automotive industry
• Govt. encouraging establishment of international hub for
manufacturing small, affordable, passenger cars and a key
center for manufacturing tractors and two-wheelers in the
world
Ø Economic Factors
• Increasing employment opportunities
• Constant increase in per capita income and disposable
income
• Credit facility available at low rate of interest for
purchasing automobiles
• Government encourages joint ventures with global
players by means of weighted tax deduction and
other economical benefits
• Constant growth in GDP
• Low excise duties
• Regulated import duties
• Growth of manufacturing sector at 8.5% due to
various government schemes
• Govt. granting concession like reduced interest rates
for export financing
• Govt. ensures balanced transition to open trade at a
minimal risk to the Indian economy and industry
Ø Social Factors
• Increase in per capita income
• Increasing per capita disposable
income
• Upward migration of household
income levels
• Demography– High percentage of
youth
• Preference for fuel efficient vehicles
• Price sensitivity and value for money
• Influence of the west
• Increasing acceptance for innovation
and new technology
Ø Technology Factors
• Increasing importance laid on R&D
carried out by companies in India
• Government of India promoting
National Auto motive Testing and R&D
Infrastructure Project to support
growth of the auto industry in India
• Technological solutions help in
integrating the supply chain. Hence
reduce losses and increase
profitability
• Govt. policies steering India’s software
into automotive technology
• Govt. encourages modernization of
industry and facilitate indigenous
design, research and development
Ø Environment Factors
• Govt. putting emphasis on
international emission norms
• Due to entry of global companies in
Indian market, advanced
technology in product and
production process have developed
• Development of alternate fuel is
encouraged
• Physical infrastructure like roads and
bridges affect the use of
automobiles. Better the roads,
Ø Legal Factors
• Legal provision relating to
environmental pollution by
automobiles
• Legal provision relating to safety
measures
• Govt. ensures balanced transition to
open trade at minimum risk to Indian
economy and local industry
• Indian government policy aimed at
promoting an integrated, phased and
conducive growth of Indian
automobile industry
• Government intends to harmonize the
regulatory standards with the rest of
BCG Matrix
Question Mark Star
Glamour FI Karizma
H ig h
Joy Passion
Lo w Ambition
Lo w M a rke t sh a re H ig h
qCash Cows
- The 4 bikes mentioned have been
CD Deluxe
E xistin
CBZ N ew
pKarizma
ro d u ct
g
Passion etc.
Hero Honda CD DAWN Passenger car ( in talks for JV
m a rke t
Africa
Strategy maps
Strategy
• To constantly innovate, create value
and deliver new technology to the
customer at affordable prices to
lead the growth of 2 wheeler
market in India
• Customer perspective
üPrice is competitive for 125 CC
segment and probably charge
higher for emphasizing on product
differentiation
üAdd value to brand name
üValue for customer will increase ,
providing them with first of its kind
technology in India
• Internal perspective
üImproved processes to match the
equation of creating value and
delivering it successfully
üManage customers by meeting the
new demand and catering to
service
• Learning and Growth
üHave right talent pool and availability
of capital to improve technology
and safeguard it
• Financial perspective
üGive deeper penetration into the
market for 125 CC models, pump in
more revenue
üThis would lead to increase in market
share
üSales will increase and value of the
company will also increase for the
shareholders
• Thank you