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8esource 8ased SLraLegy ro[ecL

PL8C PCnuA MC1C8S L1u


SubmlLLed Lo rof Mano[ 1homas

Croup Members SaLadru 8agchl C08 088 SoumlLra uhall C08 090



ConLenLs
1 lnLroducLlon 11 Pero Ponda Croup Pero Ponda MoLors LLd 1 1wo Wheeler lndusLry ln lndla
13 SLraLeglc lnLenL of PPML (vlslon Mlsslon) 14 key MllesLones

age

3 4 10 11

8esource Analysls 1 llnanclal 8esources hyslcal 8esources 3 Puman 8esources 4
1echnologlcal 8esources 3 8epuLaLlon 6 Leadershlp 7 value Chaln Analysls 8 Slack 9 SLreLch
Leverage of Lhe 8esources 13 16 17 19 0 4 9 30

3 CorporaLe arenLlng CrlLlcal Success lacLors Pero Croup 4 CompeLlLlve AdvanLages of PPML 3
8eferences

34 33 37

3 1 lnLroducLlon

11 Pero Ponda Croup Pero Ponda MoLors LLd

Pero Lhe brand name symbollzlng Lhe sLeely amblLlon of Lhe Mun[al broLhers came lnLo belng ln Lhe
year 1936 lrom a modesL manufacLurer of blcycle componenLs ln Lhe early 1940s Lo Lhe worlds largesL
blcycle Lwowheeler manufacLurer Loday (Pero Ponda MoLors LLd was sLarLed ln Lhe year 1984 as a
!v beLween Pero Croup Ponda MoLors !apan) Lhe odyssey was fuelled by one vlslon Lo bulld long
lasLlng relaLlonshlps wlLh everyone lncludlng workers dealers and vendors 1hls phllosophy has pald
rlch dlvldends Lhrough Lhe years

Pero a name synonymous wlLh Lwowheelers ln lndla ls Loday a mulLlunlL mulLlproducL
geographlcally dlverslfled Croup of companles 1hrough fully lnLegraLed operaLlons group roll lLs own
sLeel make crlLlcal componenLs such as free wheels for Lhelr blcycles and have Lhe foreslghL Lo
slmulLaneously dlverslfy lnLo myrlad venLures llke producL deslgnlng l1 enabled servlces flnance and
lnsurance [usL Lo name a few

Llke every success sLory Peros saga conLalns an elemenL of splrlL and enLerprlse of achlevemenL
Lhrough grlL and deLermlnaLlon coupled wlLh vlslon and meLlculous plannlng 1hroughouL lLs success
Lrall Lhe Pero Croup and lLs members have dlsplayed unwaverlng passlon of seLLlng hlgher sLandards
for Lhemselves and dellverlng slmply Lhe besL Lo Lhelr cusLomers

Lnglneerlng SaLlsfacLlon ls Lhe prlme moLlve of Lhe Pero Croup and lL has become a way of llfe and a
parL of Lhe work culLure of Lhe Croup 1hls ls whaL drlves Lhe Croup Lo seek newer vlsLas adopL fasLer
Lechnology and creaLe quallLy drlven producLs Lo Lhe uLmosL saLlsfacLlon of cusLomers parLners dealers
and vendors

lrom now on we would mean Pero Ponda MoLors LLd whenever we sLaLe elLher Pero Ponda" or
PPML" and Lhe Pero Croup ln LoLallLy when we sLaLe slmply Pero"

4 1 1wo Wheeler lndusLry ln lndla

AuLomoLlve markeL ln lndla (007008) 1he auLomoLlve markeL of lndla ls domlnaLed by Lwo
wheelers whlch consLlLuLe abouL Lh of Lhe enLlre markeL

assenger vehlcle 1604 Com m erclal vehlcle 303 1hree w heeler 378

1w o w heeler 7313

1he manufacLurlng faclllLles for all Lhese auLomoLlve players are well spread across Lhe counLry wlLh
Lhe easL zone havlng Lhe leasL of parLlclpaLlon 1he followlng flgure shows Lhe spread 1he zones whlch
are clrcled show Lhe presence of Lhe Lwo wheeler manufacLurers

3

uelhlCurgaonnoldaChazlabad Ludhlana Parldwar

lLampu !amshedpu 8a[koLPalol kolkaLa

Mumbalunenaslk Aurangabad

Pyderaba

Chennal 8angalore Posur

1here are many facLors whlch affecL Lhe lndla auLomoLlve lndusLry as a whole whlch ls analyzed ln Lhe
followlng flgure 1hese facLors drlve Lhe lndusLry make lL compeLlLlve globally lndla ls slowly
becomlng Lhe manufacLurlng hub for Lhe auLomoLlve secLor

6

Cverall economlc growLh Lower duLles Laxes ollcy lmpacL on oll prlces

CovernmenL ollcles

CrowLh ln lncome levels Lasler flnanclng Lower lnLeresL loans lasL paced urbanlzaLlon
(840 by 00) Mlddle class expandlng by 3040 mn every year oor publlc LransporL sysLem

ConLemp orary producLs ShorLer llfe cycle

new roducL Launches

lndlan AuLomoLlve lndusLry

lncreaslng Consumer uemand

LxporL CompeLlLlveness 8educed cosL Lo consumer lndla emerglng as a manufacLurlng hub

CosL CompeLlLlveness

AfLer analyzlng Lhe drlvers leL's Lake a look aL Lhe pro[ecLed sales ln Lhe auLomoblle secLor

oLenLlal vehlcle sales ln lndla ln 013 16 (ln mn)

087 01316 78 064 63

0

3
Cars

10
Cvs

13
1wo wheelers

0

3

30

1hree Wheelers

7

key lnslghLs lnLo Lhe pro[ecLlons are - Sale of moLorcycles ln lndla ls llkely Lo Louch 10 mllllon mark by
010 as per lrosL and Sulllvan reporL - 1he slze of Lhe lndlan auLomoLlve lndusLry ls expecLed Lo grow aL
13 pa over Lhe nexL decade Lo reach around uS$ 10 139 bn by 016 - 1he LoLal lnvesLmenLs
requlred Lo supporL Lhe growLh ls esLlmaLed aL around uS$ 33 40 bn

now Lurnlng our focus lnLo Lhe Lwo wheeler lndusLry we flnd LhaL moLorcycles domlnaLe Lhe lndusLry

8 layers ln Lhe Lwo wheeler lndusLry ln lndla All Lhe manufacLurers ln Lhe auLomoblle lndusLry can be
broadly classlfled lnLo Lhe followlng caLegorles Ma[or players are Pero Ponda MoLors LLd 8a[a[
AuLo LLd 1vS MoLor Company Ponda MoLorcycle ScooLer lndla LLd Mlnor players are Suzukl
MoLorcycles lndla LLd ?amaha 8oyal Lnfleld (nlche SegmenL) new LnLranLs Mahlndra Mahlndra
(Acqulred klneLlc MoLor Co LLd ln 008) MahabharaL MoLors (Wlll sLarL produclng 1vS branded
wheelers ln Apr'09) CLher layers ManufacLurers of elecLrlc Lwo wheelers such as ?o 8lkes

9 8rlef ueLalls abouL Ma[or CompeLlLlon uomesLlc 1woWheeler MarkeL Share (006'07) 8A!A!
Second largesL Lwowheeler manufacLurer and Lhe largesL Lhreewheeler manufacLurer ln lndla new
producL launched (8a[a[ ulscover) ln 13cc caLegory ln !uly 08 lour new producL launches are proposed
ln Lhls year lLself 8a[a[ AuLo has seen AugusL sales decllne by 37 lLs sales growLh was vlrLually flaL
durlng Lhe AprllAugusL perlod

1vS 1vS ls Lhe Lhlrd largesL Lwowheeler manufacLurer ln lndla lL esLabllshed a manufacLurlng faclllLy ln
lndonesla as well 1vS enLered lnLo a !v ln !un 008 wlLh MahabharaL MoLors of kolkaLa Lo lncrease
presence ln easLern reglon 1vS launched Lhe lasL producL llame ln March 008 1vS MoLor has also
seen sales sLagnaLe wlLh a growLh of only 113 beLween Aprll and AugusL Ponda MoLor Pas recenLly
enLered Lhe lndlan markeL Lhrough lLs dlrecL subsldlary (ln addlLlon Lo lLs [olnL venLure Pero Ponda)

10 13 SLraLeglc lnLenL of PPML (vlslon Mlsslon)

vlslon/Mlsslon

Mlsslon Pero Ponda's mlsslon ls Lo sLrlve for synergy beLween Lechnology sysLems and human
resources Lo produce producLs and servlces LhaL meeL Lhe quallLy performance and prlce asplraLlons of
lLs cusLomers AL Lhe same Llme malnLaln Lhe hlghesL sLandards of eLhlcs and soclal responslblllLles

1hls mlsslon ls whaL drlves Pero Ponda Lo new helghLs ln excellence and helps Lhe organlzaLlon forge a
unlque and muLually beneflclal relaLlonshlp wlLh all lLs sLake holders"

MandaLe Pero Ponda ls a world leader because of lLs excellenL manpower proven managemenL
exLenslve dealer neLwork efflclenL supply chaln and worldclass producLs wlLh cuLLlng edge Lechnology
from Ponda MoLor Company !apan 1he Leamwork and commlLmenL are manlfesLed ln Lhe hlghesL level
of cusLomer saLlsfacLlon and Lhls goes a long way Lowards relnforclng lLs leadershlp sLaLus"

Cb[ecLlve values 1he Pero Croup phllosophy ls 1o provlde excellenL LransporLaLlon Lo Lhe common
man aL easlly affordable prlces and Lo provlde LoLal saLlsfacLlon ln all lLs spheres of acLlvlLy

1he group phllosophy clearly sLaLes whaL Lhe group ob[ecLlves are and sLresses Lhe focus on
cusLomers provldlng rellable and affordable moblllLy for Lhe masses and oLher sLakeholders llke
employees suppllers dlsLrlbuLors socleLy and envlronmenL aL large

AparL from belng cusLomercenLrlc Lhe Pero Croup provldes lLs employees wlLh a flne quallLy of llfe and
lLs buslness assoclaLes (suppllers dlsLrlbuLors) wlLh a LoLal sense of belonglng Lhus sLrengLhenlng Lhe
bond LhaL ls already deeprooLed

11 14 key MllesLones

?LA8 1983 1984 1983 1987 1989 1991

MllesLones !olnL CollaboraLlon AgreemenL wlLh Ponda MoLor Co LLd !apan slgned Shareholders
AgreemenL slgned Pero Ponda MoLors LLd lncorporaLed llrsL moLorcycle Cu 100 rolled ouL 100000Lh
moLorcycle produced new moLorcycle model Sleek lnLroduced new moLorcycle model Cu 100 SS
lnLroduced 300000Lh moLorcycle produced 8aman Mun[al vldya Mandlr lnauguraLed A School ln Lhe
memory of founder Managlng ulrecLor Mr 8aman kanL Mun[al new moLorcycle model Splendor
lnLroduced 1000000Lh moLorcycle produced new moLorcycle model SLreeL lnLroduced Pero
Pondas nd manufacLurlng planL aL Curgaon lnauguraLed 000000Lh moLorcycle produced new
moLorcycle model C8Z lnLroduced LnvlronmenL ManagemenL SysLem of uharuhera lanL cerLlfled
wlLh lSC

199

1994

1997 1998

1999

14001 by unv Polland 8aman Mun[al Memorlal PosplLal lnauguraLed A PosplLal ln Lhe memory of
founder Managlng ulrecLor Mr 8aman kanL Mun[al 4000000Lh moLorcycle produced LnvlronmenL
ManagemenL SysLem of Curgaon lanL cerLlfled lSC14001

000

by unv Polland Splendor declared World no 1 largesL selllng slngle Lwowheeler model Pero Ponda
assporL rogramme C8M rogramme launched new moLorcycle model asslon lnLroduced

001

Cne mllllon producLlon ln one slngle year new moLorcycle model !oy lnLroduced 3000000Lh
moLorcycle produced

1 new moLorcycle model uawn lnLroduced 00 new moLorcycle model AmblLlon lnLroduced
AppolnLed vlrender Sehwag Mohammad kalf ?uvra[ Slngh Parbha[an Slngh and Zaheer khan as 8rand
Ambassadors 8ecomes Lhe flrsL lndlan Company Lo cross Lhe cumulaLlve 7 mllllon sales mark Splendor
has emerged as Lhe Worlds largesL selllng model for Lhe Lhlrd calendar year ln a row (000 001 00)
003 new moLorcycle model Cu uawn lnLroduced new moLorcycle model Splendor + lnLroduced
new moLorcycle model asslon lus lnLroduced new moLorcycle model karlzma lnLroduced new
moLorcycle model AmblLlon 133 lnLroduced Pero Ponda became Lhe World no 1 Company for Lhe
Lhlrd consecuLlve year 004 Crossed sales of over mllllon unlLs ln a slngle year a global record
Splendor Worlds largesL selllng moLorcycle crossed Lhe 3 mllllon mark new moLorcycle model C8Z*
lnLroduced !olnL 1echnlcal AgreemenL wlLh Ponda renewed 1oLal sales crossed a record of 10 mllllon
moLorcycles Pero Ponda ls Lhe World no 1 for Lhe 4Lh year ln a row new moLorcycle model Super
Splendor lnLroduced 003 new moLorcycle model Cu ueluxe lnLroduced new moLorcycle model
Clamour lnLroduced new moLorcycle model Achlever lnLroduced llrsL ScooLer model from Pero
Ponda leasure lnLroduced 006 008 Pero Ponda ls Lhe World no 1 Lwowheeler co for Lhe 3Lh
year ln a row Pero Ponda ls Lhe World no 1 Lwowheeler co for Lhe 8Lh year ln a row

13 8esource Analysls 1he resources LhaL PPML has are analyzed from varlous vlewpolnLs so as Lo
ascerLaln wheLher lL has acLually achleved compeLlLlve advanLage by noL only uLlllzlng buL also
sLreLchlng leveraglng lLs resources AddlLlonally we Lrled Lo exLrlcaLe Lhe lnLerllnkages beLween Lhe
value chaln and Lhe resources of PPML lurLher we Lrled Lo esLabllsh whaL slack" PPML has ln Lhe
resource pool Lo Lackle adverse slLuaLlons 1 llnanclal 8esources We begln Lhe resource analysls of
Pero Ponda MoLors LLd wlLh Lhe break up of Lhe caplLal sLrucLure of Lhe flrm Lhe flnanclal comparlson
of dlfferenL players ln Lhe Lwo wheeler segmenL 1he company ls 100 debL free wlLh Lhe break up of
Lhe caplLal sLrucLure as follows

LCul1? SPA8LPCLuL8S
(48) (6)

(6)

6 of Lhe shares are each owned by Pero Croup Ponda MoLors !apan whlle Lhe resL ls owned by
equlLy shareholders AparL from Lhls Ponda MoLors !apan geLs a royalLy fee of 3 of Lhe conLrlbuLlon
margln because of Lhe Lechnlcal know how provlded Lo Pero Ponda needless Lo say Lhls has been one
of Lhe mosL successful overseas [olnL venLures by Ponda MoLors !apan 1here are no such schemes llke
LSC's ln place Powever employees are free Lo Lake Lhe company's shares aL Lhelr own dlscreLlon lL ls
lnLeresLlng Lo noLe LhaL ln splLe of Lhe global melLdown Pero Ponda's neL proflL has lncreased by 47 as
ln Lhe flrsL Lhree quarLer as compared Lo lasL flnanclal year

14 now leL us Lake a look aL Lhe proflL loss accounL balance sheeL of Pero Ponda MoLors LLd
compare Lhose wlLh LhaL of lLs maln compeLlLors le 1vS MoLors 8a[a[ AuLo 1he analysls ls done for
flnanclal year 007 08 PMSl ls noL lncluded as lL ls noL llsLed 8Cll1 LCSS ACCCun1 PPML ACL
8A!A! 007 ACL 1vS 00700607 ACL CPAnCL

00708 00607

CPAnCL 08

00607

CPAnCL 08

Cross Sales 103833 113404 430 Less exclse duLy neL Sales CLher lncome 1oLal 8evenue LxpendlLure
+ lnLeresL + 910694 884371 uepreclaLlon 81 A1 14108 1461 96788 83789 1318 18

968993 1060609 864

368333 447344 1766

170673 16408

10666 131386

46403 61848

103318 989996 436

86639 993 677

3193 383496 1648

1834

18983

30333 7838

9083

6393

10317 1008981 44

916884 1007603 900

331033 39089 1337

803411 8348

37498 383004

113473 17803 3433 73393 13796 3894

3337 3177

9083 666

6107 330

13 8alance SheeL 008 8A!A! Change 00708 from 00607 Share CaplLal 8eserves surplus Loans
(Secured unsecured) llxed AsseLs CurrenL asseLs CurrenL LlablllLles 14468 14491 4 73 373
79783 1vS Change 00708 from 007 0 18 3994 9463 00708 PPML

Change from 007

0 13

133434

66634

13

198 164971 18779

0

104303 77479 36677

4

13487 93678 18474

14

1he neL sales for Pero Ponda has lncreased by 436 whlle LhaL of lLs compeLlLors 8a[a[ AuLo 1vS
MoLors has decreased by 677 1648 respecLlvely uurlng Lhls Llme Pero Ponda has been able Lo
regaln lLs markeL share from a low of 44 Lo currenL levels of 36 1he LoLal revenue for Pero Ponda
has lncreased by 44 whlle LhaL of lLs compeLlLors 8a[a[ AuLo 1vS MoLors has decreased by 9
1337 respecLlvely A1 for Pero Ponda has lncreased by 18 whlle LhaL of lLs compeLlLors 8a[a[
AuLo 1vS MoLors has decreased by 39 3 respecLlvely 1he reason for Lhls success of Pero Ponda
has been due Lo Lhe adopLlon of a Lwo pronged sLraLegy llrsL lL lnLroduced producLs ln Lhe 130 cc
segmenL along wlLh varlanLs of lLs exlsLlng producL porLfollo Also lL underLook a program called Lhe
8ural verLlcal" ln whlch lL focused lLself ln lmprovlng Lhe dlsLrlbuLlon neLwork ln Lhe rural areas so as Lo
access Lhe unLapped markeL Looklng aL Lhe balance sheeL we flnd LhaL Lhe reserves surplus for Pero
Ponda has lncreased by 13 whlle LhaL of lLs compeLlLors 8a[a[ AuLo has decreased by 73 for 1vS
MoLors has lncreased by a meager 18 1he lncrease ln flxed asseLs for Pero Ponda

16 has been due Lo Lhe masslve lnvesLmenL ln green fleld pro[ecL a sLaLe of Lhe arL manufacLurlng
faclllLy called Lhe 1he Shrlne of 1echnology" aL Parldwar Comparlng Lhe operaLlng raLlos we flnd LhaL
PPML has been performlng beLLer Lhan lLs nearesL compeLlLors lC8 llnAnClAL ?8 00708 PPML neL
roflL Margln (ln ) A1 / SALLS 804 8A!A! 78 1vS 086

AsseLs 1urnover 8aLlo

SALLS / 1A

484

39

03

hyslcal 8esources Pero Ponda has goL Lhree manufacLurlng faclllLles aL uharuhera Curgaon ln
Paryana Parldwar ln uLLarakhand 1he producLlon capaclLy of Lhe flrsL Lwo planLs ls 6300 vehlcles per
day whlle for Lhe Lhlrd planL ls 3300 vehlcles per day 1he cycle Llme for vehlcle producLlon ls malnLalned
aL 18 secs lLs dlsLrlbuLlon neLwork ls conLrolled by reglonal offlces area offlces lncludes abouL 3000
dealers sLocklsLs SS's (Servlce Spare parLs) across Lhe lengLh breadLh of lndla 1he concepLs of
Lean ManufacLurlng are applled ln all Lhe planLs Lo lmprove performance drlve down cosL

3 Puman 8esources 1he followlng model has been developed by Callup Lo undersLand Lhe lmporLance
of a flL beLween a person Lhe organlzaLlon he ls worklng Lo Lhe performance of Lhe organlzaLlon

17

A CCCu 8uSlnLSS SLnSL
1o rellably lnfluence Lhese
8LAL 8Cll1 lnC8LASL S1CCk lnC8LASL

SuS1AlnA8LL C8CW1P

Lhese musL be managed
Ln1L8 PL8L

LnCACLu CuS1CML8S

LnCACLu LMLC?LLS

C8LA1 MAnACL8S luLn1ll? S18LnC1PS

1PL 8lCP1 ll1

S Curve for Success
Accordlng Lo Lhls model sLock prlce of a company depends upon lLs susLalnable growLh whlch ln Lurn
depends upon engaged cusLomers engaged employees how Lhey are managed So lL becomes
lmperaLlve Lo flnd Lhe rlghL flL beLween Lhe would be employee Lo Lhe organlzaLlon

1he followlng are Lhe sallenL feaLures of Pero Ponda managlng of human resource

8ecrulLmenL - - CrlenLaLlon - SLarL wlLh Mu speclflc Lo Lhe requlremenL and undersLandlng Lhe
producLs uevelopmenL Learnlng - luncLlonal 8ehavloral lnpuL ln slngle program Lhrough consulLanL
neLworklng use of l as one of Lhe Lool 8lghL llLmenL boLh culLurally and !ob based

18 Managlng erformance - Plgh performers laLeral movemenL speclal asslgnmenL developmenLal
program Coachlng Counsellng - Low performer uevelopmenL coachlng counsellng

Lmployee CommunlcaLlon - SLandup meeLlngs - - Cpen Pouse MonLhly CommunlcaLlon MeeLlngs

Lmployee lnvolvemenL - - - - - varlous compeLlLlons llke debaLe speech poem posLer qulz slogan
CrossfuncLlonal Leams SuggesLlon scheme CuallLy clrcles ldea camps

Lven l1 servlces are exLenslvely used Lo supporL employee welfare 1hls lncludes lnLraneL - - - - -
Lmployee ollcles Leave AppllcaLlon SysLem 8esource 8eservaLlon SysLem 8ulleLln 8oard LSS - - - Salary
Loan sLaLus ALLendance

19 SCML Cl 1PL unlCuL 8AC1lCLS A1 PL8C PCnuA MC1C8S L1u !olnL prayers exerclses 1he
employees sLarL Lhelr shlfL by saylng [olnL common prayers followed by physlcal exerclses and dlscusslon
on a Lheme for LhaL day As parL of Lhls Lhe employees geL LogeLher aL Lhe aLrlum Cne of Lhem acLs as a
leader of Lhe gaLherlng All of Lhem reclLe a prayer whereln Lhey pray for Lhe well belng of Lhe world
and freedom from paln fear mlsery 1hey pray for Lhe success of Lhelr work 1hls helps Lhem ln
afflrmaLlon Lowards achlevemenL of Lhe company's LargeLs AnoLher leader leads Lhe gaLherlng for
underLaklng physlcal exerclses whlch propel Lhem Loward beLLer physlcal menLal efforLs ln achlevlng
Lhe company's LargeLs

Self managed Leam members 1he operaLor on Lhe assembly llne also underLakes quallLy checks and
malnLenance acLlvlLles aparL from operaLlon relaLed acLlvlLles As a parL of Lhls Lhe operaLor ldenLlfles
uslng prescrlbed sysLems Lhe quallLy check polnLs malnLenance check polnLs 1hese check polnLs help
hlm ln lmprovlng quallLy and reduclng break downs 1hls resulLs ln havlng posL producLlon quallLy
checks and scheduled overhauls whlch conslderably resulLs ln savlng Llme maLerlal manpower

CuallLy Clrcles Cross funcLlonal Leams work LogeLher Lo solve facLory relaLed problems uslng quallLy
conLrol Lechnlques As a parL of Lhls Lhe employees volunLarlly form Lhelr Leams afLer Lralned by Lhe
quallfled Lralners ln applylng Lhe above 1he Leam ldenLlfles and selecLs problems 1he soluLlons are
presenLed Lo Lhe senlor managemenL for approval

4 1echnologlcal 8esources

1he company belleves ln Lhe concepL called World Class ManufacLurlng lLs ma[or lngredlenLs are shown
ln Lhe flgure below

0
CuALl1?

ZL8C lnvLn1C8? CCnCL1 luLL? ln1LC8A1Lu vALuL CPAln

3 S S?S1LM

WCM

1M ul8LC1 CnLlnL S?S1LMS

LLAn lLLxl8LL MAnulAC1u8lnC

1he ulrecL Cnllne SysLem (uCL) ls slmllar Lo !l1 Pere Lhe vendors are selecLed for uCL caLegory based
on a varleLy of parameLers such raLe of parLs belng defecLlve replaced ln warranLy ln order Lo remove
boLLlenecks lmprove quallLy of work fully lnLegraLed roboLlc llnes are used such as ln Alumlnlum phase
(for manufacLurlng cyllnder heads crankcase eLc) and ln weld palnL shops

llexlble manufacLurlng sysLem ls followed where ln any producL assembled ln any assembly llne

3 8epuLaLlon

Pero Ponda has Lolled hard for Lhe brand lmage lL now has 1hls has been achleved noL only by Lhe
conLlnued excellence of lLs producLs servlces buL also due Lo Lhe several of Lhe followlng soclal
envlronmenLal lnlLlaLlves LhaL lL has under Laken

SafeLy PealLh LnvlronmenL ollcy LxLenslve use of lnclneraLors effluenL LreaLmenL planLs sold
wasLe dlsposable sysLems lL has also been awarded lSC 9001 lSC 14001 CPSAS 18001 cerLlflcaLlons

8alnwaLer harvesLlng sysLem lL has an exLenslve sysLem of raln waLer harvesLlng as ls shown ln Lhe
followlng flgure

1

CS8 lnlLlaLlves AnoLher name for Lhe uelhl !alpur Plghway ls Lhe klller hlghway" 1hls ls because Lhls
hlghway ls noLorlous for accldenLs ln order Lo Lake care of such casualLles Pero Ponda has opened 1he
8aman Mun[al Memorlal PosplLal" 1he hosplLal also caLers Lo Lhe needs of Lhe people of Lhe rural areas
of Paryana Lhrough moblle dlspensarles eLc 1he 8aman Mun[al vldya Mandlr" was opened Lo provlde
quallLy educaLlon Lo Lhe poor needy

Pero Ponda 1rafflc ark 8lde Safe rogram 1hls was lnlLlaLed Lo Leach people Lrafflc rules rldlng
Lhelr vehlcles ln Lhe mosL approprlaLe manner Lo avold accldenLs

romoLlonal AcLlvlLles 1lme and agaln Pero Ponda has been assoclaLed wlLh Lhe ma[or sporLlng evenLs
ln Lhe counLry llke golf crlckeL lL has sponsored reallLy shows llke M1v 8oadles Sa 8e Ca Ma a

6 Leadershlp

ur 8rl[mohan Lall Mun[al Chalrman Pero Ponda Croup ls one of Lhe besL known flrsLgeneraLlon
enLrepreneurs ln lndla ur Mun[al sLarLed Pero group rlghL from Lhe scraLch along wlLh Lhree of hls
broLhers afLer shlfLlng base Lo Ludhlana lndla from aklsLan afLer 1947 and bullL a buslness emplre of
uS$ 3 bllllon ln a span of nearly slx decades comprlslng of 0 companles ln dlverse flelds lncludlng auLo
parLs blcycles moLorcycles educaLlon 8C l1 sofLware eLc

lrom a modesL beglnnlng as blcycle componenL manufacLurer ln Lhe early '30s Lo world's largesL blcycle
maker ln 1986 Llll daLe Lo world's largesL Lwowheeler maker ln 001 and conLlnulng Pero Croup has
achleved much wlLhln Lhls llmlLed perlod of Llme Lhanks Lo Lhe guldlng vlslon and prlnclples of lLs
foundlng faLher ur 8rl[mohan Lall Mun[al 1he core values LhaL he lnculcaLed from Lhe beglnnlng of hls
academlc llfe as he aLLended Lhe Curukul sysLem of educaLlon gulded hlm Lhrough Lhlck Lhln 1he
value seL whlch forms Lhe lnLrlnslc core of hls buslness phllosophy ls based on slmpllclLy honesLy
hlghesL lnLegrlLy sense of falrness

ur Mun[al Lraversed Lhe road Lo success wlLh Lhe Pero group followlng Lhese prlnclples - - - - 1rusL
Lhe lnsLlncLs" ueal wlLh people wlLh compasslon" 1hlnk ahead of Llme" Show oLhers Lhe way
Lhrough hlghesL form of corporaLe clLlzenshlp"

1he examples for all of Lhe prlnclples [usL menLloned are easy Lo flnd ouL ur Mun[al never saLlsfled
belng only a blcycle componenL manufacLurer moved up Lhe value chaln by becomlng a compleLe
blcycle manufacLurer ln 1936 1hrough conLlnuous growLh and esLabllshlng a naLlonwlde supply
dlsLrlbuLlon neLwork whlch was based on muLual LrusL and relaLlonshlp wlLhln 30 years of sLarLlng Pero
Croup became Lhe largesL blcycle manufacLurer ln Lhe world and lL conLlnues Lo be so Llll daLe Pero
Croup under Lhe able leadershlp of ur Mun[al ploneered blcycle exporLlng from lndla as early as ln
1963 1hough exporLs were lnlLlally llmlLed Lo Afrlca Mlddle LasL now Pero Croup caLers Lo Lhe uS

3 Luropean markeLs as well AdopLlon of key new Lechnologles and provldlng besLlnclass value
performance are Lhe hall marks of Pero Cycles

AL a Llme when Lhe lndlan Lwowheeler lndusLry was known by Lhe rusLy 8a[a[ CheLak and oLher Lwo
sLroke englne vehlcles ur Mun[al revoluLlonlzed Lhe lndusLry by brlnglng Lhe flrsL foursLroke
moLorblkes Lo Lhe Lable lL was a brllllanL sLraLeglc move Slnce Lhese Lechnologles were noL lndlgenously
avallable he collaboraLed wlLh Lhe Ponda MoLor Company of !apan and Pero Ponda MoLors LLd was
formed ln 1984 as a !v beLween Ponda Lhe Pero Croup lL's one of Lhe besL success sLorles ln lndla as
a collaboraLlve efforL beLween Lwo dlfferenL culLures and enLlLles 1he !v Lhrlved because Lhe roles of
Lhe parLners were clearly demarcaLed by Lhe leadershlp Ponda Lo provlde Lhe Lechnologlcal lnpuLs and
overall guldance Pero Croup Lo provlde Lhe manufacLurlng resources and fooL Lhe dlsLrlbuLlon efforLs

WlLh Lhls ur Mun[al ensured cheaper affordable moblllLy Lo Lhe mllllons of lndlans noL only Lhe four
sLroke englnes gave beLLer mlleage buL Lhese are rellable less polluLlng machlnes whlch lmmedlaLely
became Lhe darllng of Lhe masses and for CovL regulaLors as well Pe was aL Lhe forefronL of Lhe
campalgn by Pero Ponda MoLors LLd llll lL ShuL lL lorgeL lL whlch broughL forLh Lhe valueofmoney
aspecL of Lhese blkes and endeared Lhe masses 1he LesLlmony Lo all Lhese efforLs came ln 001 when
Pero Ponda MoLors LLd became Lhe largesL Lwowheeler maker ln Lhe world wlLh a cusLomer base of
over 0 mllllon 1hough wlLhouL Leamwork commlLmenL all Lhese achlevemenLs would noL have been
posslble lL was Lhe vlslon and zeal of Lhe founder whlch pushed Pero Croup Lo rlse hlgher and hlgher
and Louch Lhe horlzons

ur Mun[al ls noL known only by hls buslness acumen buL by hls phllanLhroplc acLlvlLles as well Pe
spearheads CorporaLe ClLlzenshlp CS8 acLlvlLles of Lhe Pero Croup ln hls personal capaclLy he ls an
acLlve 8oLarlan and he coordlnaLes varlous soclal lnlLlaLlves ln Lhe capaclLy of 8oLary ulsLrlcL Covernor

ln recognlLlon of hls conLrlbuLlon Lo lndlan lndusLrles and socleLy aL large he was conferred numerous
awards and recognlzed Lhe lmporLanL among Lhese are
-

8uslnessman of Lhe ?ear ln 1994 by buslness magazlne 8uslness lndla

4
-

naLlonal Award for ouLsLandlng conLrlbuLlon Lo Lhe uevelopmenL of lndlan Small Scale lndusLry ln 1993

- -

ln 1999 leaLured ln MosL Admlred CLC LlsL of Lhe magazlne 8uslness 8arons 1he ulsLlngulshed
LnLrepreneurshlp Award from 1he Pu Chamber of Commerce and lndusLry ln 1997

- - -

Slr !ehanglr Chandy Medal for lndusLrlal eace ln 000 by xL8l !amshedpur leaLured as LrnsL and
?oung LnLrepreneur of Lhe year ln 001 1he LlfeLlme AchlevemenL award for ManagemenL from All
lndla ManagemenL AssoclaLlon ln 003

-

8anaras Plndu unlverslLy varanasl conferred hlm wlLh a uocLoraLe degree of uocLors of leLLers
Ponorls Causa ln CcLober 004

-

Awarded adma 8hushan ln March 003 for hls conLrlbuLlon Lo 1rade and lndusLry ln 003

7 value Chaln Analysls

lL ls qulLe obvlous LhaL Pero Ponda possesses some compeLlLlve advanLages over compeLlLlon enabllng
Lhem Lo be Lhe largesL Lwowheeler maker ln Lhe world for Lhe 7Lh year ln a row and commandlng a
hefLy markeL share of 3 of lndlan Lwowheeler markeL (8ef Annual 8eporL '07'08 PPML) and
conLlnulng Lo grow aL a healLhy raLe of 13 (A1) amld worsenlng flnanclal crlsls and deepenlng of
recesslonary lnfluences We aLLempL Lo ascerLaln Lhe compeLlLlve advanLages LhaL PPML has by
analyzlng lLs value chaln rlmary AcLlvlLles lnbound LoglsLlcs lrom early days PPML Lrled Lo have close
lnLegraLlon wlLh suppllers as vendor managemenL ls crlLlcal for lLs operaLlon for Lhe slmple facL LhaL
73 of producLlon cosL ls due Lo maLerlal componenLs 1hus lL ls essenLlal for PPML Lo ensure LlghL
conLrol reducLlon of loglsLlcal cosL and/or LransacLlon cosL when procurlng componenLs AddlLlonally
reducLlon of lnvenLory wlll be an added boon so LhaL worklng caplLal requlremenL wlll be less

WlLh Lhese alms PPML adopLed !usL ln 1lme" (!l1) manufacLurlng phllosophy whlch demanded close
coordlnaLlon beLween lLs manufacLurlng faclllLles and Lhe vendors and

3 anclllary unlLs lor example 100 anclllarles are seLLlng manufacLurlng bases ln Parldwar near Lhe
newly sLarLed PPML planL Lo ensure lnLegraLed supply chaln All Lhese vendors wlll be connecLed Lo Lhe
maln planL by conveyors Lo prevenL chances of Llme maLerlal loss due Lo mulLlple handllng LfforLs are
afooL Lo exLend Lhe !l1 beyond shop floor ln Lhe operaLlonal sLraLeglc declslons of Lhe vendors as well
llke producLlon plannlng capaclLy expanslon eLc ln Lhls respecL PPML has succeeded ln esLabllshlng
onllne realLlme connecLlvlLy beLween lLs operaLlon and LhaL of 7 of lLs 300 plussLrong vendor base
(ln 007'08) All Lhese lnlLlaLlves have helped Lo reduce LransacLlonal loglsLlcal cosLs and save 8s 343
per vehlcle ln 007'08 uurlng 00809 PPML plans Lo work wlLh vendors Lo develop new vendor
producLlon faclllLles 3rd arLy LoglsLlcs (3L) servlce provlders have also been ldenLlfled for Lhe
Parldwar planL lf 3L ls sLarLed Lhls wlll be a flrsL for any Lwowheeler company ln lndla

CperaLlons As was belng descrlbed above PPML ls probably Lhe only lndlan company Lo have Lruly
masLered Lhe arL of !l1 manufacLurlng PPML also follows Lean ManufacLurlng uses hlgh degree of
auLomaLlon levels (full auLomaLlc roboLlc operaLlon ln weldlng and some oLher speclflc areas) Lo ensure
hlgh efflclency low lnvenLory producLlon wlLh usual beneflLs llke lncreased cash flow reduced cash
operaLlng cycles and Lhus lmproved worklng caplLal condlLlons 1hese fully equlpped planLs where Lhese
manufacLurlng concepLs have been applled durlng planL layouL deslgn commlsslonlng phases are Lhe
unlque Langlble asseLs LhaL PPML has

PPML has Lhree manufacLurlng faclllLles aL uharuhera Curgaon and Parldwar (newesL) wlLh annual
producLlon capaclLy of 43 mllllon unlLs WlLh employee sLrengLh belng ln Lhe range of 430 Lhe
producLlvlLy per employee ls very hlgh lurLher Lhe concepLs of Lean ManufacLurlng !l1 lnLegraLed
Supply Chaln have been applled from Lhe sLarL ln Parldwar planL maklng lL hlghly efflclenL

1echnologlcal knowhows deslgn lmprovemenLs eLc for Lwowheelers are provlded by Ponda afLer Lhe
lnlLlal deslgn requlremenLs as espoused by cusLomers and markeL Lrends puL ln a sLrucLured form by
Pero Ponda 8u Leam ln lndla

CuLbound LoglsLlcs

6 PPML feeds Lhe demand ln lndla exporLs 93000 blkes Lhrough lLs well esLabllshed dellvery
channels from Lhe 3 planLs 1he efforL ls Lo provlde for mlnlmum walLlng perlod or raLher fllllng Lhe
reglons as per Lhe demand forecasLs and markeL Lrends

MarkeLlng Sales MarkeLlng arm of PPML sLarLed Lhe hugely successful llll lL ShuL lL lorgeL lL"
campalgn years ago Lo plLch for lLs beLLer fuel efflclency and Lhus lower ownlng cosL lL has been a
consLanL sLrlve for PPML's markeLlng efforLs (ln adverLlsemenLs ln promos) Lo focus Lhe value for
money and rellablllLy of lLs producLs and Lhus aLLracLlng new cusLomers and reLalnlng cusLomers as well
1o ensure cusLomer loyalLy PPML has come up wlLh Pero Ponda assporL rogram whlch glves speclal
prlvlleges Lo lLs cusLomers PPML does noL lndulge ln prlce wars ln an efforL Lo malnLaln Lhe percepLlon
of endurlng quallLy among presenL poLenLlal cusLomers Cf laLe Lhere were complalnLs from
cusLomers LhaL PPML ls noL dynamlc enough Lo presenL newer flashler more powerful blke models ln
Lhe premlum segmenL LhaL compeLlLors llke recharged 8a[a[ ls offerlng AnoLher complalnL was LhaL
many of Lhe varlanLs offered by PPML have llLLle or lnslgnlflcanL producL dlfferenLlaLlon whlch can
[usLlfy Lhe prlce dlfference PPML has pald heed Lo Lhese sLaLed unsLaLed needs of lLs cusLomers and
lmproved Lhe 4's (roducL rlce lace romoLlon) lLs offerlngs now are well accepLed ln Lhe
markeL

PPML has roped ln popular hearLLhrob PrlLhlk 8oshan as lLs brand ambassador Lo glve lmpeLus Lo lLs
markeLlng efforLs lL has been a consLanL endeavor of PPML Lo caLer Lo boLh urban and rural markeLs
wlLh slmllar zesL wlLh adverLlslng campalgns and promoLlonal evenLs clearly focuslng on Lhe Lwo
markeLs Par Caon Par Angaan" ls Lhe recenL rural connecL lnlLlaLlve Lo cover 3360 vlllages wlLh a
populaLlon of 3000 or more by 300 speclally Lralned rural sales execuLlves

PPML has a consclous sLraLegy of peneLraLlng new markeLs and unrepresenLed LerrlLorles Lhrough lLs
dlsLrlbuLlon neLwork whlch ls made up of dealers auLhorlzed represenLaLlves sLocklsLs and SSs ln
March 001 Lhe company had 86 such cusLomers polnLs ln lndla 8y March 008 Lhls number wenL up
Lo over 3300 Cn an all lndla basls 30 dealers 130 SSs 67 dealers and 43 clLy work agenLs were
added wlLhln Lhls perlod

7 1he dlsLrlbuLlon neLwork of PPML ls boLh wlde deep rooLed lL ls based on boLh muLual LrusL
relaLlonshlp beLween PPML lLs dlsLrlbuLors and PPML's phllosophy of ensurlng lLs parLners Lo grow
wlLh lLs own growLh 1rusL loyalLy of dlsLrlbuLlon neLwork ls very lmporLanL ln malnLalnlng Lhe
leadershlp poslLlon ln Lhls hlghly compeLlLlve lndusLry ln facL PPML's sLrengLh ln Supply Chaln
dlsLrlbuLlon neLwork ls one of Lhe unlque lnLanglble resources LhaL lL has superlor brand lmage
rellablllLy percepLlon of lLs brand ls Lhe ouLcome of Lhese lnLanglble Langlble key asseLs

Servlce PPML has consLlLuLed one Lhe besL afLersales servlce neLwork ln Lhe lndusLry AparL from
lmprovlng Lhe quallLy of servlce and easy avallablllLy of spare parLs PPML has also focused on
cleanllness and oLher aesLheLlcs of Lhe servlce sLaLlons and added amenlLles such as alrcondlLloned
walLlng area lnLerneL browslng and coffee shops eLc Lo enhance Lhe lnhouse experlence of Lhe
consumers aL Lhose cusLomer LouchpolnLs"

1o ensure LhaL mllllons of cusLomers ln Lhe rural areas are noL lefL walLlng for adequaLe servlce as lL ls
lmposslble for PPML Lo lnLroduce servlce sLaLlons aL every nook corner of Lhe counLry moblle servlce
sLaLlons are regularly arranged wlLh prlor lnLlmaLlon Lo publlc abouL Lhe rouLe LhaL Lhe moblle workshop
would Lake when passlng Lhrough LhaL reglon so LhaL consumers can come and geL Lhelr Lwowheelers
servlced All Lhese acLlvlLles are almed Lo lncrease Lhe cusLomer loyalLy and Lhus reLalnlng cusLomers

1he value acLlvlLles done by PPML ln lLs value chaln (boLh prlmary supporL acLlvlLles) are glven ln llg
lA1 1he unlque value acLlvlLles of PPML LhaL ls aL Lhe hearL of lLs compeLlLlve advanLages are shown ln
llg lA

vlrLual value Chaln All Lhe acLlvlLles LhaL PPML ls dolng ln lLs hyslcal value Chaln (vC) are belng
augmenLed mulLlfold by lLs efforLs ln esLabllshlng and lmprovlng Lhe vlrLual value Chaln (vvC Lhe flow
of lnformaLlon across lLs value acLlvlLles) lor example PPML has lmplemenLed SA L8 package for all
necessary modules llke producLlon maLerlals flnance markeLlng asseLs quallLy sales and dlsLrlbuLlon
so LhaL only slngle verslon of rlghL lnformaLlon ls avallable wlLh everybody aL any Llme lL reduced
dupllcaLlon of efforLs across many funcLlonal areas

8

Su C 81 AC 1l vl 1l LS

lnfrasLrucLure

AdmlnlsLraLlve legal and accounLlng Lasks managed sysLemwlde
uevelop new vlrLual Leams unlon relaLlons oversee workers lnvesL ln new SLreamllne
Lurnaround Llme eng deslgns wlLh suppllers Lo blke models new facLorles shlp parLs L ll
SLreamllne Source parLs orderlng and componenLs documenLaLlon parLner wlLh sysLems
key suppllers AdopL fasLer means Lo order and recelve componenLs lnbound LoglsLlcs Make and
assemble componenLs lnLo auLos CperaLlons Cversee suppller managemenL personnel Cversee
personnel lnvolved ln dlsLrlbuLlon Cversee markeLlng personnel Cversee servlce personnel

Puman 8esource ManagemenL 1echnology uevelopmenL

SLreamllne Work wlLh shlpplng Llme dealers Lo webbased lmprove selllng lnvenLory Lracklng
producL mlx 8uy medla urchase Llme work capaclLy on rallroads/Lrucks wlLh adverLlsers
Shlp Lo dealers uslng rallroads/ Lrucks dellver CuLbound LoglsLlcs

lmprove servlce Lurn around Llme wlLh spl 1ools Lackles Source spare parLs Lools parLner wlLh
key suppllers

rocuremenL

8lMA8? AC1lvl1lLS

AfLer sales AdverLlse promoLe producL servlce Spare Lo publlc work parLs avallabllLy wlLh
dealershlps MarkeLlng / Sales Servlce

llg lA1 Pero Ponda's 8uslness SysLem (value AcLlvlLles Mapped ln Lhe value Chaln)

lurLher PPML has been able Lo connecL realLlme wlLh 7 of lLs vendors 1hls ensures seamless flow
of lnformaLlon abouL Lhe producLs componenLs beLween lLself and lLs collaboraLors beyond Lhe physlcal
boundarles maklng Lhe whole process much more lnLegraLed robusL as lf Lhe same sysLem ls belng
used across locaLlon planLs lrrespecLlve of Lhe ownershlp SlgnlflcanL reducLlon of LransacLlon cosLs
can be achleved ln Lhls manner 1hese aspecLs are essenLlal facLors of lLs successes ln applylng Lhe !l1
manufacLurlng phllosophy uealer ManagemenL SysLem C8M are oLher examples of vvC for PPML 8y
managlng vC vvC LogeLher ln concerL PPML ls able Lo explolL lLs value chaln much more effecLlvely

9

Su C 81 AC 1l vl 1l LS

lnfrasLrucLure



AdmlnlsLraLlve legal and accounLlng Lasks managed sysLemwlde



Puman 8esource ManagemenL 1echnology uevelopmenL

no formal labour unlon employee loyalLy

no formal no formal labour no formal labour no formal labour labour unlon unlon employee
unlon employee unlon employee employee loyalLy loyalLy loyalLy loyalLy SLreamllne uealer mgL Lo
shlpplng Llme lmprove selllng lnvenLory Lracklng producL mlx SA L8 SA L8 lmprove servlce
Lurn around Llme wlLh spl 1ools Lackles Source spare parLs Lools parLner wlLh key suppllers
AfLer sales servlce (largesL neLwork) Spare parLs avallabllLy Servlce

Cnllne realLlme new deslgn Lech from connecLlvlLy Ponda new wlLh vendors facLorles
SLreamllne orderlng documenLaLlon sysLem SA L8 Source parLs componenLs parLner wlLh
key suppllers

rocuremenL

8lMA8? AC1lvl1lLS

8uy medla urchase Llme work capaclLy on rallroads/Lrucks wlLh adverLlsers Campalgns
AdopL fasLer !l1 Lean Mfg Shlp Lo dealers uhak uhak Co" means Lo order 1CM (lnlLlaLlng) uslng
C8M PP recelve World class mfg rallroads/ componenLs !l1 AuLomaLlon Lrucks dellver
assporL lnbound LoglsLlcs CperaLlons CuLbound LoglsLlcs MarkeLlng / Sales

llg lA Pero Ponda's CompeLlLlve AdvanLages Lhrough value AcLlvlLles vlrLual value Chaln (8ef
LxplolLlng Lhe vlrLual value Chaln ! l 8ayporL ! ! Svlokla)

8 Slack

Slack" ls deflned as LhaL cushlon of facLual or poLenLlal resources whlch allow an organlzaLlon Lo adapL
successfully Lo lnLernal pressures for ad[usLmenL or Lo exLernal pressures for change ln pollcy as well as
Lo lnlLlaLe changes ln sLraLegy wlLh respecL Lo Lhe exLernal envlronmenL

Among oLher lndlcaLors of slack based sLraLegles one ls Lhe lncrease ln worklng caplLal as a percenLage
of sales lor Pero Ponda peak selllng perlod ls SepL Lo nov ln Lhe year whereas Lhe lean perlod ls !un
Lo Aug uurlng Lhe peak seasons lL sells around 03 mllllon Lwowheelers ln a monLh whlch ls around 01
mllllon more Lhan lL can produce ln a monLh wlLh all

30 3 planLs runnlng ln Lhelr full capaclLy Larller when Parldwar planL was noL commlssloned Lhe
supplydemand mlsmaLch was even more acuLe ln order Lo smooLhen Lhls flucLuaLlon ln demand and
also Lo ensure LhaL Lhls cycllcallLy doesn'L lmpacL Lhe operaLlons of Lhe planLs PPML has a sLraLegy ln
place whlch can be summarlzed as LhaL PPML conLlnues Lo operaLe Lhe planLs durlng lean seasons aL
hlgh capaclLy Lo bulld up a reasonable lnvenLory 1hls lnvenLory lncreases lLs worklng caplLal
conslderably ln LhaL perlod and acLs as a buffer when demand surges

9 SLreLch Leverage of Lhe 8esources

When Pero Ponda enLered Lhe Lwowheeler markeL ln '80s lL was shaped very much by Lhe regulaLory
bureaucraLlc forces and has been domlnaLed by sLroke scooLers blkes manufacLured by 8a[a[ AuLo
and some oLher companles 1he 4sLroke Lechnology Laken up by Pero Ponda was looked aL wlLh
skepLlclsm even Lhough lL promlsed hlgher powerLowelghL raLlo hlgher efflclency (and Lhus beLLer
mlleage) and less polluLlon 8uL Pero Ponda asplred Lo be Lhe largesL player ln Lhe lndusLry Lhe gap
beLween Lhe asplraLlon reallLy belng huge

1he promoLers of Lhe !v boLh Pero Croup Ponda of !apan had a loL of falLh confldence on Lhe
evenLual success of Lhls sLraLeglc alllance even Lhough lL faced a loL of challenges llke a vlolenL sLrlke
whlch affecLed lLs producLlon faclllLles ln 1987 Lven Splendor when lL was launched lnlLlally had many
Lechnlcal problems 8uL lL sLreLched leveraged lLs resources Lhe suppller dlsLrlbuLlon neLwork
(lnlLlally based on Lhe rellable loyal dlsLrlbuLlon channel of Pero Cycles whlch ls a group resource) and
Lechnologlcal superlorlLy of Ponda englnes deslgn Lo brldge Lhe gap beLween lLs asplraLlon levels
currenL reallLy and evenLually succeedlng becomlng Lhe largesL player ln Lhe lndusLry

1he Pero Croup as a whole has flrm bellefs ln lLs capablllLy of successfully borrowlng exLracLlng
knowledge from numerous Lechnlcal/sLraLeglc alllances !vs LhaL lL has formed over Lhe years as means
of resource accumulaLlon ln lLs pursulL of leveraglng resources AparL from Lhe mosL celebraLed !v wlLh
Ponda lL has esLabllshed such alllances wlLh numerous oLher companles As an underlylng Lheme ln all
Lhese acLlvlLles we can see a general Lrend emerglng (l) verLlcal lnLegraLlon Lhls ls common for mosL
relaLed dlverslflcaLlons (ll) ulverslflcaLlon lmporLance ls glven here for rlsk mlLlgaLlon

31 opporLunlLy grabblng by movlng ln unrelaLed buL hlgh growLh areas ln Lhe nexL few paragraphs
some of Lhese are dlscussed

(A) 1echnology 8elaLed arLnershlps/ Alllances and !olnL venLures
-

Pero enLered a [olnL venLure for Lechnlcal and flnanclal parLlclpaLlon wlLh one of Lhe worlds largesL
auLomoLlve makers Ponda MoLor Company LlmlLed of !apan ln 1984 for Lhe manufacLure of 100cc
moLorcycles ln lndla

-

Peros quesL for a lowbudgeL fuelefflclenL and envlronmenLfrlendly Lwowheeler led Pero MoLors Lo
enLer lnLo a 1echnlcal CollaboraLlon wlLh SLeyr ualmler uch of AusLrla ln 1987 for Lhe manufacLure of
Lhe 63cc orschedeslgn mlnlmoLorcycles

-

Mun[al Showa LlmlLed was formed ln 1echnlcal and llnanclal CollaboraLlon wlLh Showa CorporaLlon
!apan Lo deslgn develop and manufacLure of fronL forks shock absorbers sLruLs and gas sLruLs

-

Sunbeam AuLo LlmlLed has seLup a sLaLe of Lhe arL plsLon manufacLurlng faclllLy ln Lechnlcal
collaboraLlon wlLh M/S Ponda loundry Company LlmlLed of !apan Lhe

3 ploneers ln Lhe world for manufacLurlng hlghsLrengLh llghLwelghL plsLons used ln llghL powerful
fuelefflclenL englnes
-

Mun[al AuLo lndusLrles LlmlLed has a [olnL venLure wlLh Lhe SLaLeowned Cu[araL lndusLrlal lnvesLmenL
CorporaLlon Lo caLer Lo Lhe needs of Lhe overseas markeL

-

Pero Cycles C8 ulvlslon was seL up ln consulLaLlon wlLh MLCCn Aslas largesL englneerlng consulLanLs
and ln 1echnlcal CollaboraLlon wlLh Wean unlLed uSA

-

Pero Cycles Cold 8olllng ulvlslon has also enLered lnLo a Lechnlcal collaboraLlon wlLh kawasakl SLeel
CorporaLlon !apan for Lhe lmprovemenL of producLlon yleld ellmlnaLlon of defecLs reducLlon of
cusLomer reLurns and enhancemenL of malnLenance operaLlons agalnsL cerLaln predeLermlned LargeLs

(8) l1/l1LS 8elaLed Alllances Mun[aleSysLems Lhe LnLerprlseorlenLed and SofLware SoluLlons dlvlslon
of Pero CorporaLe Servlce LlmlLed ls a mlcrosofL gold cerLlfled parLner lL ls lSC 9001000 cerLlfled and
ls Loday a dedlcaLed and Lhe mosL preferred soluLlon cenLer for mlcrosofL buslness soluLlon

navlslon ln Lhe manufacLurlng secLor lL has Lo lLs credlL many sucessfully compleLed pro[ecLs ln varlous
lndusLrles llke auLomoblles swlLchgears pharmaceuLlcals Lradlng lndusrlal goods manufacLure
educaLlon servlces l1 enabled servlces eLc Pero Mlndmlne Lhe Lechnology based learnlng soluLlons
provlder and Lralnlng dlvlslon of Pero CorporaLe Servlce LlmlLed ls one of Lhe largesL and premler
Lralnlng powerhouses ln Lhe counLry focussed on bulldlng 8C/CusLomer Servlce rofesslonals ln Lhe
secLor of Alrllnes AuLomoLlve 8C lMCC l1 and harma lL has alllance wlLh Lwo companles ln order
Lo faclllLaLe Lhe successful Lralnlng of sLudenLs and professlonals ln globally undersLood 8uslness Lngllsh
-

uynLd CorporaLlon whlch provldes quallLy courseware by comblnlng proven classroom Leachlng skllls
wlLh Lhe besL of mulLlmedla Lechnlques

Perol1LS Lhe 8C and ConLacL CenLre soluLlons provlder of Pero ManagemenL Servlce LlmlLed has a
sLraLeglc alllance wlLh ACS lncorporaLed uSA a leadlng 8C and l1 servlces company WlLh revenues of
uS$ 433 bllllon ACS ls a lorLune 300 company wlLh

33 more Lhan 30000 people ln nealry 100 locaLlons around Lhe world WlLh Lhls alllance Perol1LS can
provlde onshore and nearshore soluLlons ln Lhe cusLomer acqulslLlon and cusLomer lnLeracLlon segmenL
of Lhe 8C lndusLry Perol1LS and ACS offer a compleLe range of servlces Lo cllenLs from Lhelr onshore
nearshore and offshore cenLers across Lhe unlLed SLaLes Canada ArgenLlna and lndla ACS lnc alms aL
lncreaslng cllenLs prosperlLy Lhrough CusLomer Care SoluLlons LhaL exceed lndusLry norms ln Servlce
and value (C) roducL Lnglneerlng 8elaLed Alllances
-

Pero Clobal ueslgn ls Lhe largesL CerLlfled Lnglneerlng rovlder (CL) of 1C from lndla Pero Clobal
ueslgns alllance wlLh 1C enables Lhe developmenL of ellLe corps of englneerlng professlonals an
opporLunlLy Lo work dlrecLly wlLh 1C and lLs cusLomers and Lo galn experLlse as a ro/LnClnLL8 LxperL
LhroughouL 1Cs Worldwlde CusLomer 8ase lL also enables Pero Clobal ueslgn Lo provlde hlgh quallLy
Legacy uaLa Converslon Servlces

-

Pero Clobal ueslgn ls Lhe excluslve represenLaLlve of orsche ueslgn CesmbP (sLudlo) ln lndla

-

Pero Clobal ueslgn has a buslness agreemenL wlLh 1argeL ueslgn a leadlng lndusLrlal and auLomoblle
deslgn company ln Cermany

PorlzonLal / verLlcal lnLegraLlon Cver Lhe years Lhe Pero group has dlverslfled lnLo dlfferenL buslnesses
ln whlch a paLLern of verLlcal lnLegraLlon can be observed A conslderable level of verLlcal lnLegraLlon ln
lLs manufacLurlng acLlvlLles has been ample ln Lhe Croups growLh and led Lo Lhe esLabllshmenL of Lhe
Pero Cycles Cold 8olllng ulvlslon Mun[al and Sunbeam CasLlngs Mun[al AuLo ComponenLs and Mun[al
Showa LlmlLed amongsL oLher componenLmanufacLurlng unlLs 1he lnLegraLlon of Lhe auLomoLlve
buslness of Lhe group sLarLed wlLh Lhe seLLlng up of Ma[esLlc AuLo LlmlLed where Lhe flrsL lndlgenously
deslgned moped Pero Ma[esLlc wenL lnLo commerclal producLlon ln 1978 1hen came Pero MoLors
whlch lnLroduced Pero uch ln collaboraLlon wlLh global Lechnology leader SLeyr ualmler uch of
AusLrla Pero Ponda MoLors was esLabllshed ln 1984 Lo manufacLure 100 cc moLorcycles

34 3 CorporaLe arenLlng CrlLlcal Success lacLors Pero Croup We have already sLaLed LhaL many of
Lhe group Lechnlcal/sLraLeglc alllances and !vs are almed aL lncreaslng Lhe verLlcal lnLegraLlon of Lhe
buslnesses lrom Lhe corporaLe parenLlng concepLs also Lhese lnlLlaLlves are falllng mosLly ln Lhe
PearLland zone (shown below) le Lhese relaLed dlverslflcaLlons are helped by accumulaLed
compeLencles of Lhe group as well as complemenLlng Lhe core buslness as well 1he followlng arenLlng
llL MaLrlx shows how ma[or Pero group companles are placed

1he unrelaLed dlverslflcaLlons lnLo l1/l1LS arena should fall ln Lhe 8allasL zone 8uL none of Lhe buslness
venLures are elLher ln Allen 1errlLory or ln value 1rap caLegory

33 1he followlng Lable shows CrlLlcal Success lacLors as we found ouL for Lhe Pero Croup for lLs
dlverslflcaLlons ln varlous buslnesses CrlLlcal Success lacLor PealLhcare LqulpmenLs 8lcycle arLs
AuLomoLlve arLs

MoLorcycle

8lcycle

Mopeds

MarkeLlng Consumer Awareness CperaLlonal Lfflclency 1echnology Supply Chaln CosL nl CosL of
Cwnershlp

?es ?es

?es ?es ?es ?es ?es ?es

?es

?es ?es

?es

?es ?es

?es ?es

?es ?es ?es ?es ?es

?es

?es

4 Core CompeLency CompeLlLlve AdvanLages

Core CompeLency of ManagemenL 1hrusL on CuallLy Pero Ponda does noL sell Lhe cheapesL blkes ln
Lhe lndlan markeL lnsLead Lhe company's producLs command a premlum as Lhe consumers belleve LhaL
LhaL Lhey offer beLLer value for Lhelr hardearned money 1hls has been posslble by Lhe managemenLs
relenLless LhrusL on quallLy ln a counLry where focus on quallLy ls percelved Lo be less lmporLanL Lhan
achlevlng cosL leadershlp and volume sales Lhe company has been exemplary ln lLs efforLs Lowards
malnLalnlng Lhe hlghesL quallLy sLandards 1he focus on quallLy ls clearly vlslble from Lhe varlous pollcles
of Lhe managemenL such as llnklng a ma[or componenL of Lhe worker's wages wlLh facLors such as
quallLy and producLlvlLy

8uL lL has Lo be kepL ln mlnd LhaL Pero Ponda has achleved and conLlnue Lo achleve and provlde lLs
cusLomers producL and servlces of such hlgh quallLy aL comparable or aL lower cosL

36 Lhan lLs compeLlLors by vlrLue of lLs dlllgenL followlng of Lean ManufacLurlng oLher World Class
ManufacLurlng concepLs locus on ConLlnual lmprovemenL 1he managemenL has been successful ln
leveraglng Ponda's vasL producL and Lechnology range and Lhe producL offerlngs of Lhe company are a
reflecLlon of Lhe ablllLy of Lhe managemenL Lo explolL Lhe compeLencles of lLs !v parLner Lo Lhe fullesL
lor example Lhe company was Lhe flrsL Lo lnLroduce fuel ln[ecLlon for Lwo wheelers ln lndla

8ulldlng Long 1erm 8elaLlonshlps wlLh Channel arLners 8elng aL Lhe helm of Lhe lndlan Lwo wheeler
lndusLry and susLalnlng Lhe pole poslLlon calls for an efflclenL supply chaln 1he managemenL has been
able Lo llve up Lo Lhls challenge Lhrough lLs ablllLy Lo bulld long Lerm relaLlonshlp wlLh over a large no of
dealers suppllers oLher channel parLners 1he focus has been Lo creaLe a susLalnable buslness model
LhaL leads Lo a wlnwln proposlLlon for all Lhe members of Lhe value chaln 1he Mun[als have gone much
beyond Lhe convenLlonal deflnlLlon of anclllarlsaLlon maklng lL a polnL Lo exLend Lechnlcal and
managerlal supporL Lo Lhese anclllarles 1hese anclllary unlLs are manned by frlends relaLlves ex
employees or close assoclaLes of Lhe Mun[al famlly slnce Lhe Croup paLrlarch Mr 8rl[mohan Lall
never wanLed Lo march alone

uomaln knowledge 1he managemenL posses lndepLh knowledge of Lhe lndlan markeL 1he
comblnaLlon of Lhls knowledge and Lhe suppller neLwork along wlLh Ponda's experLlse over 4sLroke
Lechnology has greaLly conLrlbuLed Lo Lhe success of Lhe !olnL venLure 1hls also helps Lhe company Lo
Lhlnk ahead of lLs compeLlLors and come up wlLh producLs for saLlsfylng Lhe ever changlng consumer
needs

Clobal Cearlng Managlng Alllances Cver Lhe years Pero Croup has sLrengLhened lLs [olnL venLures
forged proflLable relaLlonshlps wlLh lLs parLners and allled lLself wlLh some of Lhe besL players ln Lhe
markeL 1echnology asslmllaLlon Lhrough wlde sourclng has been and wlll conLlnue Lo be an lnLegral parL
of Lhe progresslon of Lhe Pero Croup

ln a nuL shell Lhe ma[or reasons behlnd Pero Ponda's success are - vlslonary Leadershlp

37 - - - - 1echnlcal SuperlorlLy Superlor CusLomer locus ManufacLurlng Lxcellence MarkeLlng Sales
CapablllLy

1he followlng dlagram summarlzes Lhe compeLlLlve advanLages Pero Ponda en[oys Lhus

vlslonary Leadershlp

1echnlcal SuperlorlLy

ManufacLurlng Lxcellence MarkeLlng Sales CapablllLy

8rand lmage

3 8eferences l LxplolLlng Lhe vlrLual value Chaln by ! l 8ayporL ! ! Svlokla ll SLraLegy as SLreLch
Leverage by Cary Pamel C k rahlad lll wwwherohondacom lv wwwherogroupcom v
wwwbuslnessweekcom vl wwwlndlaLodaycom

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