KADI SARVA VISHWA VIDHYALAYA

S K PATEL INSTITUTE OF MANAGEMENT AND

COMPUTER STUDIES(MBA)

PRESENTATION ON HERO MOTO CORP.

GROUP MEMBERS ROLL NONANDANI DARSHITA 64NASIT KINJAL 65NAYAK MILAN 67PATEL NIRAV 81VYAS ANKITA 119

INTRODUCTION OF HERO MOTO CORP.

Hero Motocorp Ltd. formerly Hero Honda, is an Indian motorcycle manufacturer based in New Delhi.

Hero Honda started in 1984 as a joint venture between Hero cycle of India and Honda of japan. The company is the largest two wheeler manufacturer in India.

In 2010-11 both companies are separated and Hero become HERO MOTOCORP LTD.

INTRODUCTION OF HERO MOTO CORP. cntdThe new brand identity and logo of Hero Motocorp were developed by the British firm Wolff olins.

VISION & MISSION OF THE COMPANY

VISSION:company's new identity, reflects itscommitment towards providing worldclass mobility solutions with renewedfocus on expanding company's footprintin the global arena.

Vision & Mission Continue….MISSION:Hero Motocorp 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.

ORGANIZATIONAL STRUCTURE

DR.Brijmohan lall Munjal- Chairman.Mr. Pawan Munjal- MD & CEOMr. Sunilkant Munjal- Joint MDMr. Pradip Dindodiya- Non executive & independent directorV.P. Malik- Non executive & independent directorMr. Sumankant Munjal- Non executive & independent directorMr. Paul Edgerley- Non executiveDr. Anand Burman- Non executive & independent directorM. Damodaran- Non executive & independent directorDr. Pritam Singh- Non executive & independent directorMr. Ravi Nath- Non executive & independent director

MILSTONES ACHIEVED BY HERO MOTO CORP.

2011- New Licensing agreement sign between Hero andHonda and Hero Honda renamed as Hero Motocorp.

2011- Launch new version of Glamour, CBZ xtreme and Karizma.

2012- Migration of all the product to brand Hero.2012- Strategic partnership with Erik Buell

Racing(EBR) of USA2012- Bike of the Year Award 2012 2012- Business Standard Motoring Awards, 20122013- Neemrana Plant Foundation Stone laid2013- 50 Million cumulative 2 wheelers production.

Major Players and Competitor

PRINCIPLE OF ECONOMICSHero Motocorp faces short run trade offs:

Hero invests Rs 450 crore in new R&D centreHero will invest Rs 450 crore for setting up its fourth R&D facility in the country on the outskirts of Jaipur in Rajasthan which would be operational by 2015.

In place of R&D here motor crop also can invest in production, or advertisement.

PRINCIPLES OF ECONOMICS

PEOPLE RESPONDS TO INCENTIVES:

The concept of introducing CELL START BIKES which Lead to increase in the demand for Hero bikes.

Most of the people like this type of bikes and they respond positively to the incentive provide by Hero Motocorp.

People response to incentives

Hero is the India’s first company to offer a 5-year warranty on all two-wheelers. This initiative has resulted in strong customer commitment and trust, which will further strengthen our market position.

5 years or 70,000 km on motorcycles, whichever is earlier; 5 years or 50,000 km onscooters, whichever is earlier

PRINCIPLES OF ECONOMICS

THE COST OF SOMETHING WHAT YOU GIVE UP TO GET IT

To purchase any product one have to pay for that product in marketing language we called it as PRICE. To enjoy the drive of Hero’s product one have to pay for it.

This concept is not applicable to customer only it also apply to Hero also. To purchase raw material to make the product the have to pay for raw material.

PRINCIPLES OF ECONOMICSGOVERNMENT CAN SOMETIMES IMPROVE THE MARKET CONDITION:Before 2011 there was a joint venture of Hero and Honda. They were partners since so many years and they penetrate the India’s two wheelers automobiles sector.Government gave green flag to the both the company to do business in India so that market condition will become fruitful.

PRINCIPLES OF ECONOMICS

Free Bike Service concept:

Service Schedule: ACHIEVER

Type of Free Service 1st 2nd 3rd 4th 5th 6th

Validity in Kms from the date of purchase

500-750

3000-3500

6000-6500

9000-9500

12000-12500

15000-15500

Validity in Days from the date of previous service

60 100 100 100 100 100

Paid ServiceEach Paid Service needs to be availed after every 3000 kms or 90 days from the previous service, whichever is earlier.

PRINCIPLES OF ECONOMICSTRADE CAN MAKE EVERYONE BETTEROFF:Hero Motocorp commences exports to Latin America, AfricaNEW DELHI: In a bid to achieve its stated objective of exporting a million unit over the next five years, World's largest two wheeler maker, Hero MotoCorp commenced its export operations to Africa, Latin and Central America.

PAWAN MUNJAL(CEO) said: Our first consignments of two-wheelers have already been shipped Peru in Latin America, Guatemala and central America.We shall also be dispatching the first lot of our two-wheelers to Kenya too later this month.

FACTORS AFFECTING COMPANY’S PRODUCT

Rate of Inflation (7% in October 2013) Competitor’s pricing strategy Competitor’s marketing strategy Government policy Technological changes Price of complementary goods

Newly Launched products marketThe major contributor of total sales is Hero MotoCorp which accounts for around 40% market share as always. New launches from Hero MotoCorp like Passion X Pro, Ignitor are doing well as per company reports. The company is increasing scooter manufacturing capacity to 60,000 units per month from the current 54,000 units, thanks to its latest scooter Maestro. Overall Hero MotoCorp sold 5,04,271 units in February and total 10,59,068 units in the first two months of this year.Read more at

SALES TURNOVER

We can see that their sales turnover was continuously increasing till 2012, they were earning profit but in 2013 there sales turnover is decrease

YEAR SALES TURNOVER(IN CR)2009 13,553.232010 16,856.432011 20,787.272012 25,252.982013 23,768.11

MARKET SHARE 45% market share in the domestic two-

wheeler market. 56% market share in the domestic

motorcycle market Team Hero. Hero Good life is the industry’s largest

customer relationship management program, with 10 million members.

SUBSTITUTE WITHIN THE COMPANY

Hero Moto Corp AchieverPrice Range:  59,425 to 59,425

Hero Moto Corp GlamourPrice Range:  54,025 to 56,025

Hero Moto Corp HunkPrice Range:  67,725 to 70,725

SUBSTITUTE WITHIN THE COMPANY(CNT..)

Hero Moto Corp ImpulsePrice Range:  70,500 to 70,500

Hero Moto Corp Passion ProPrice Range: 45,350 to 51,500

Hero Moto Corp PleasurePrice Range: 44,100 to 44,100

SUBSTITUTE AMONG COMPETITOR

Bajaj Pulsar PricePrice Range :   60,539 to

68,697 Bajaj Discover PricePrice Range :   49,000 to 57,073

Honda Aviator PricePrice Range :   48,621 to 53,939

ELASTICITY OF DEMANDAs we know that inflation rate is continuously increasing in the world. In October 2013 the inflation rate in India is 7% which is very higher compare to previous years.Because of the inflation rate there is a increase in the price of the material that are required to make hero bikes and scooters. Raw material become costlier and price of the bike is also increased. Increase in the price lead to decrease in the demand for the hero bikes.

Market share of Hero Splendor is decreasing and it reach to 35% of the total market share which was 42% earlier.

ELASTICITY OF DEMAND(cont..)There is a drastic fluctuation in the sales of the splendor bikes. So that we can call that elasticity of splendor bike is greater than 1.Ep>1 Diagram:

performanceDuring the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12% over last year. in the same year, the company had market share of 57% in the Indian market.

Hero Honda's bikes hero Honda splendor sale more than one million units per year.

The company sold record 61,17,599 units of two wheelers in the period of January-December 2011,a growth of19.2% over the calendar year of 2010 when it had sold 51,34,549 two wheelers.

SALES OF HERO BIKES

SALES TURNOVER AND TOTAL EXPENCE

CSR ACTIVITY OF HERORAMAN MUNJAL VIDHYA MANDIR: Senior secondary school 1200 students, 61 teachers Big play ground Computer center Library facilities Ultra modern laboratory

CSR ACTIVITY OF HERO

PROVIDING CYCLE TO PHYSICALLY CHALLANED PEOPLE:

Hero ensure that every person is taken care of. To identify this vision, Hero supports physically challenged individuals through diverse initiatives and encourages them at every step of life.

KEY FINANCIAL RATIOSParticular 201103 201003 200903 200803 200703Liquidity Ratios          Debt/Equity Ratio 0.24 0.02 0.03 0.05 0.08Current Ratio 0.40 0.57 0.50 0.56 0.57Turnover Ratios          Inventory Turnover Ratio

42.99 43.97 42.06 40.62 45.97

Fixed Assets Turnover Ratio

4.99 6.37 6.08 6.44 7.05

Debtors Turnover Ratio

172.92 129.92 60.54 38.06 46.74

Interest Coverage Ratios

153.20 1349.44 705.13 706.14 774.98

Profitability Ratios

         

Operating Profit Margin

13.66 18.03 14.51 13.06 12.02

PAT/Total Income 9.12 13.02 9.26 7.90 7.30NPM (Net Profit Margin)

9.33 13.30 9.46 8.04 7.43

Return on Capital Employed

60.68 76.48 50.99 49.09 51.66

Return on Networth

60.05 61.43 37.77 35.48 38.30

OLIGOPOLY MARKETAs we earlier show that there are not many firms in the two wheeler automobiles sector.We can call Hero Motocorp as oligopoly market.

BIBLIOGRAPHYhttp://www.heromotocorp.com/en-in/about-us/about-us.htmlhttp://www.heromotocorp.com/en-in/rider-zone/bike-services-and-maintenance-schedule.html http://www.motorbeam.com/sales-figures/february-2013-bike-sales-figures-analysis/#FqEk2dKbSa62FqxQ.99http://money.sulekha.com/hero-honda-motors_key-financial-ratios