By : 08EM-001 Aakash 08EM-011 Ankur 08EM-021 Manish 08EM-059 Sanjeev Driven By The Trust Of Our Customers

2 Hero Group  Initiated by the Munjal brothers in 1956 with the flagship company Hero Cycles. Hero Cycles manufactured Over Bicycles a day. They Sold about 86 million bicycles in aggregate as of They had nurtured an excellent network of dealers to serve India’s expansive markets. Over the years Hero Group had entered multiple business areas.  Collaboration in 1984 to form Hero Honda.

3 Milestones 1956Hero Cycles Limited is established 1971Highway Cycles was set up to meet the demands of Hero Cycles. It is today the largest manufacturer of single speed and multi-speed freewheels Hero Cycles Limited became the largest manufacturer of bicycles in India. 1978Majestic Auto Limited was formed and the Hero Majestic Moped was introduced 1984Hero Honda Motors Limited established in joint venture with Honda Motors of Japan, to manufacture motorcycles Munjal Showa Limited established to manufacture shock absorbers and struts and is today among the top two shock absorber manufacturing companies in India.

4 Milestones 1993Hero Motors becomes Indias largest exporter of two wheelers 1995Hero Corporate Services Limited as the service segment for the Hero Group Companies, ancillaries, suppliers, dealers and other associates. 1998Hero Briggs and Stratton Auto Private Limited was set up to produce 4-stroke two-wheeler engines in various cubic capacities. 2000Hero Group diversifies into IT and IT enabled services through its service segment - Hero Corporate Services Limited Hero Honda emerges as the market leader in motorcycles with sales of over a million motorcycles and a strong market share of 47%. 2006Hero Honda enters the scooter segment, launches 100cc "Pleasure“

5 Milestones Today, Hero Group comprises of 20 companies, 300 ancillary suppliers, deep market penetration with over 5,000 outlets, 23,000 + employee and has a turnover of US$ 3.20 billion (FY 2006).  Mr. Satyanand Munjal, Mr. Brijmohan Lall Munjal and Mr. O. P. Munjal continue to carry the torch.

6 Hero Honda Group  Founded : January 19, HQ :Delhi, India  Key people : Brijmohan Lal Munjal & Pawan Munjal  Industry :Automobile Products :Motorcycles, Scooters  Revenue :U$ 2.8 billion  The JV between India's Hero Group and Honda Motor Company of Japan Introduced new generation motorcycles 'Fill it - Shut it - Forget it' Hero Honda Sales and service network now spans over 3000 customer touch points Its unique CRM initiative - Hero Honda Passport Program

7 Two Wheeler Market  Present Estimated Size mn units per year CAGR ( Last 5 years ) - 10 % Average Two Wheelers per 1000 persons India - 27

8 Status Today HERO HONDA RETAINS WORLD NO.1 TWO-WHEELER MANUFACTURER POSITION FOR THE 9TH CONSECUTIVE YEAR REPORTS THIRD CONSECUTIVE QUARTER WITH MORE THAN A MILLION UNITS IN SALES TURNOVER (NET SALES & OTHER OPERATING INCOME), AT RS CRORE; GROWS BY 32.82%, EBIDTA AT 17.27% OVER 59% SHARE IN DOMESTIC MOTORCYCLE INDUSTRY

9 Brand Promotion  Once a Hero always a Hero………………  Promote a product that would be relevant to the Indian middle class and the sheer size of the target audience would mean that even a small percentage of market share would equal a large market.  Focusing on personal transportation was also a smart move  Hero started first on bicycles and then moved into motorcycles. Both choices were targeted at India’s burgeoning middle class, which was tired of the insufficient public transport system and in search of economical and reliable personal transport.  Create a motorcycle that required little maintenance and had enormous fuel efficiency  The brand’s simple ad campaign “Fill it, shut it, forget it” struck a chord with its audience who were very conscious of the need for fuel efficiency.

10 SWOT Analysis   Strengths   Ability to understand customer’s 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.`

11 SWOT Analysis   Opportunities   Expansion of target market (include women)   Become India’s leader in the scooter market   Threats   Global expansion into the Caribbean and Central America   Honda Motorcycles and Scooters India can take away market share and cause joint venture to go sour   Competitors such as TVS-Suzuki, Yamaha from Japan and Bajaj Auto began to introduce newer product lines

12 Key Points   Used company philosophy as competitive advantage. Created 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   Utilized a related diversification strategy – entered the scooter market   Capitalized on positive and popular brand image.   Shared similar resources for motorcycles and scooters

13 Success story HHML had grown consistently, earning the title of the world’s largest motorcycle manufacturer after having churned out 1.3 million vehicles in World’s largest two-wheeler manufacturer with annual sales volume of over 2 million motorcycles. Owns world’s biggest selling motorcycle brand – Hero Honda Splendor. Over 9 million motorcycles on Indian roads.. Deep market penetration with 5000 outlets.

14 Recommendations   Expand to countries that heavily utilize two-wheelers   Popular vacation spots in Central and South America as well as the Caribbean   Tourists year-round; may opt to rent motorcycles or scooters versus 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

15 A Bright Future?   Yes!   Established name and dominant market position   Strong Marketing Acumen   Local Knowledge   Technological Advancements   Introduction of scooter   Renewal of joint venture

Thank you!