Driven By The Trust Of Our Customers

Chris DeMicco, Laura Dunne, Dave Gelber, Sarah Haight, Sarah Hunkins December 2nd, 2005

Problems & Issues

 Joint Venture Problems
 Honda Motor Company Ltd. announced it was setting up a subsidiary (HMSI)  The development of the CD-100 motorcycle was only CDsuccessful for a very short period of time  Honda held complete responsibility for the Research & Development department for Hero Honda  Honda negotiated new ventures and partnerships with other Indian manufacturers in the automobile and power equipment industry, leaving Hero completely out
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Problems & Issues

 External Problems
 The Indian government starting allowing foreign companies to enter the Indian markets through joint ventures  The Indian marketplace was gaining more entrants causing rivalry in the industry to rise  Competitors such as TVS-Suzuki, Yamaha from Japan TVSand Bajaj Auto began to introduce newer product lines

Implementing Changes
 Management introduced new ideas coupled with improved terms of agreement for their joint venture  Two primary goals in mind
 Continuing their success  Maintaining their existing market share

New Tactics
 Collaborating with Steyr Daimler Puch  Supplying completely knocked-down (CKD) kits knocked Establishing a more proactive marketing department  Expanding the distribution network

Renegotiating
     Extending the joint venture agreement Bettering the terms in regards to royalties Requesting more timely cooperation Manufacturing the Street and Dream models Increasing the quantity of components and subassemblies purchased

Recommendations
 Use company philosophy as competitive advantage
 Create 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

Recommendations
 Utilize a related diversification strategy enter the scooter market
 Use expertise of Indias terrain and people to capture the scooter market before new sister company Honda Motor Scooters India Ltd. enters the market  Capitalize on positive and popular brand image  Share similar resources for motorcycles and scooters

Recommendations
 Expand to countries that heavily utilize twotwowheelers
 Popular vacation spots in Central and South America as well as the Caribbean
 Tourists year-round; may opt to rent motorcycles or scooters yearversus 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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Case Update
 Hero Honda Today
 India and Hero Honda
 Fuel Efficient  Pollution Control/Quality

 Technology
 Customers, Dealers/Vendors

 Fiscal Year 2003-2004 2003 Market Share  Distribution & Service Network  Routes/Delivery MapInfo
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Case Update
 Fiscal Year 2004-2005 2004 Earnings Results
 Technological Support September 30th, 2004 September 30th, 2005 Rs 1,943.60 Rs 2,379.20

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Case Update
 Current Models
 100 cc plus segment
 Super Splendor & Glamour

 150 cc plus segment

 Achiever

 Scooter Segment wider customer base

 Pleasure

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SWOT Analysis
 Strengths
 Ability to understand customers 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 Analysis
 Opportunities
 Global expansion into the Caribbean and Central America  Expansion of target market (include women)  Become Indias leader in the scooter market

 Threats
 Honda Motorcycles and Scooters India can take away market share and cause joint venture to go sour  Bajaj Motors is a strong competitor
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A Bright Future?

 Yes! Yes!
 Established name and dominant market position
 Strong Marketing Department

   

Local Knowledge Technological Advancements Introduction of scooter Renewal of joint venture

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Thank you!
Questions/comments?