Hero MotoCorp

The Company Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of two - wheelers, based in India. In 2001, the company achieved the coveted position of being the largest two-wheeler manufacturing company in India and also, the 'World No.1' two-wheeler company in terms of unit volume sales in a calendar year. Hero MotoCorp Ltd. continues to maintain this position till date.

Vision

The story of Hero Honda began with a simple vision - the vision of a mobile and an empowered India, powered by its bikes. Hero MotoCorp Ltd., company's new identity, reflects its commitment towards providing world class mobility solutions with renewed focus on expanding company's footprint in the global arena.

Mission

Hero MotoCorp's 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.

Hero MotoCorp Ltd

Type Public company

Traded asBSE: 500182NSE: HEROMOTOCOBSE SENSEX Constituent

Industry AutomotiveFounded 19 January 1984 (Gurgaon)Founder(s) Brijmohan Lall MunjalHeadquarters New Delhi, India

Key peopleBrijmohan Lall Munjal (Chairman)Pawan Munjal (MD & CEO)

ProductsMotorcycles, scooters, three-wheeler vehicles and spare parts

Revenue19,669.290 crore (US$3.92

billion)Operating income

2,597.07 crore (US$518.12 million) (FY 2010-2011)

Net income1,927.90 crore (US$384.62

million) (FY 2010-2011)Parent Hero GroupWebsite www.heromotocorp.com

Chairman's Profile

Mr. Brijmohan Lall Munjal

  "Don't dream if you can't fulfill your dreams'' Brijmohan Lall Munjal is often fond of saying. The founder and patriarch of the $3.2 billion Hero Group is your classic first generation entrepreneur. He is a man who started small, dreamt big and used a combination of grit and perseverance to create one of the country's largest corporate groups and the World's No.1 Two Wheeler Company. 

Instinctive from a young age, Brijmohan Lall made a rather unusual start in life. Around the time when the freedom movement in India was taking shape in the late 1920s, he walked into a newly opened Gurukul (Indian heritage school) near his home in Kamalia (now in Pakistan). He was only six years old then.

Thus began an extraordinary tale of courage and perseverance. Brijmohan began his business story after partition in 1947, when he and his brothers relocated to Ludhiana. The family set up a company that provided poor people with basic transport (cycles). Three decades later, as India evolved, he added a second crucial chapter - which visualized affordable and technologically superior transport to millions of middle class Indians. The rest is history. 

Building Relationships When Brijmohan and his brothers started out, there was no concept of organized dealer networks. Companies just produced, and most dealers functioned like traders. Brijmohan changed the rules of the business by trusting his gut instincts; introducing business norms that were ahead of their time, and by investing in strategic relationships. Brijmohan built a series of bonds and networks with hundreds of family members, vendors, dealers and employees. Much like the Japanese keiretsu system, these networks are now the glue that holds the Hero Group together.

"Thanks to the relationships that we have nurtured so passionately in the Hero Family, the younger generations of some of our bicycle dealers have become dealers of Hero MotoCorp. These relationships have survived through generations - through bad times and good times'' the patriarch now reminiscences.

Besides bonding with his vendors and dealers, Brijmohan has been personally responsible for kindling a spirit of entrepreneurship amongst his employees, and today, 40 of his former employees are successful entrepreneurs.

Staying AheadThough not technically qualified in the conventional sense, few of his contemporaries have understood the dynamics of technology better than Brijmohan Lall has. He could always visualize the applicability of technology before others could. For example, in the 1980s, when all two-wheeler companies in India opted for two-stroke engine technology, Brijmohan preferred a four-stroke engine - a technology that dramatically increased fuel efficiency and reduced maintenance costs. This technology was one of the biggest reasons for Hero MotoCorp's stupendous success.

A Corporate Citizen A frugal upbringing and a value system modeled on the famous Gurukul system - which stresses the sanctity of the teacher-pupil relationship - imbibed in Brijmohan a strong sense of social commitment and responsibility.

There is a special place in his heart for Ludhiana, the city where he took roots. Today, Ludhiana is a modern, bustling city, but Brijmohan has played no mean role in its evolution. Several schools and educational institutions in Ludhiana owe their existence to the Munjal family.

The Ludhiana Stock Exchange owes its existence to Brijmohan's vision as does the Ludhiana Flying Club. He's also set up the not-for-profit Dayanand Medical College and Hospital-an institute now rated as one of the best medical colleges in India, in terms of infrastructure, quality of staff and alumni profile.

In and around Dharuhera, near the first Hero MotoCorp plant, Brijmohan and his family have left their stamp of philanthropy. The Raman Kant Munjal Foundation - which Brijmohan set up in memory of his eldest son, today runs a higher secondary school and a very modern and well-equipped 100-bed hospital at Dharuhera. The group has also adopted numerous villages and provides education, vocational training, drinking water, roads, streetlights and sewerage.

Hero Motocorp Ltd. (BSE: 500182, NSE: HEROMOTOCO) formerly Hero Honda is an Indian motorcycle and scooter manufacturer based in New Delhi, India. Hero Honda started in 1984 as a joint venture between Hero Cycles of India and Honda of Japan. The company is the largest two wheeler manufacturer in India. The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at 108.

In 2010, When Honda decided to move out of the joint venture, Hero Group bought the shares held by Honda. Subsequently, in August 2011 the company was renamed Hero MotoCorp with a new corporate identity.

Company profile

“Hero” is the brand name used by the Munjal brothers for their flagship company Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor Company was established in 1984 as the Hero Honda Motors Limited at Dharuhera India. Munjal family and Honda group both own 26% stake in the Company. In 2010, it was reported that Honda planned to sell its stake in the venture to the Munjal family.

During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it -

Shut it - Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a double-digit pace since inception. The technology in the bikes of Hero Honda for almost 26 years (1984–2010) has come from the Japanese counterpart Honda.

Hero MotoCorp has three manufacturing facilities based at Dharuhera, Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants together are capable of churning out 3 million bikes per year. Hero MotoCorp has a large sales and service network with over 3,000 dealerships and service points across India. Hero Honda has a customer loyalty program since 2000, called the Hero Honda Passport Program.

The company has a stated aim of achieving revenues of $10 billion and volumes of 10 million two-wheelers by 2016-17. This in conjunction with new countries where they can now market their two-wheelers following the disengagement from Honda, Hero MotoCorp hopes to achieve 10 per cent of their revenues from international markets, and they expected to launch sales in Nigeria by end-2011 or early-2012. In addition, to cope with the new demand over the coming half decade, the company was going to build their fourth factory in South India and their fifth factory in Western India. There is no confirmation where the factories would be built.

History

Hero MotoCorp was started in 1984 as Hero Honda Motors Ltd.

1956 -- Formation of Hero Cycles in Ludhiana(majestic auto limited) 1975 -- Hero Cycles becomes largest bicycle manufacturer in India. 1983 -- Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed

Shareholders Agreement signed 1984 -- Hero Honda Motors Ltd. incorporated 1985 -- Hero Honda motorcycle CD 100 launched. 1989 -- Hero Honda motorcycle Sleek launched. 1991 -- Hero Honda motorcycle CD 100 SS launched. 1994 -- Hero Honda motorcycle Splendor launched. 1997 -- Hero Honda motorcycle Street launched. 1999 -- Hero Honda motorcycle CBZ launched. 2001 -- Hero Honda motorcycle Passion and Hero Honda Joy launched. 2002 -- Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition launched. 2003 -- Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor, Hero

Honda motorcycle Passion Plus and Hero Honda motorcycle Karizma launched. 2004 -- Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ*

launched. 2005 -- Hero Honda motorcycle Super Splendor, Hero Honda motorcycle CD Deluxe,

Hero Honda motorcycle Glamour, Hero Honda motorcycle Achiever and Hero Honda Scooter Pleasure.

2007 -- New Models of Hero Honda motorcycle Splendor NXG, New Models of Hero Honda motorcycle CD Deluxe, New Models of Hero Honda motorcycle Passion Plus and Hero Honda motorcycle Hunk launched.

2008 -- New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour, Glamour Fi and Hero Honda motorcycle Passion Pro launched.

2009 -- New Models of Hero Honda motorcycle Karizma:Karizma - ZMR and limited edition of Hero Honda motorcycle Hunk launched

2010 -- New Models of Hero Honda motorcycle Splendor Pro and New Hero Honda motorcycle Hunk and New Hero Honda Motorcycle Super Splendor launched.

2011 -- New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ Xtreme, Karizma launched.New licensing arrangement signed between Hero and Honda.

August-- Hero and Honda part company, thus forming Hero MotoCorp and Honda moving out of the Hero Honda joint venture. November-- Hero launched its first ever Off Road Bike Named Hero "Impulse".

Termination of Honda joint venture

In December 2010, the Board of Directors of the Hero Honda Group have decided to terminate the joint venture between Hero Group of India and Honda of Japan in a phased manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero Honda. Under the joint venture Hero Group could not export to international markets (except Sri Lanka) and the termination would mean that Hero Group can now export. Since the beginning, the Hero Group relied on their Japanese partner Honda for the technology in their bikes. So there are concerns that the Hero Group might not be able to sustain the performance of the Joint Venture alone.

Hero MotoCorp

The new brand identity and logo, Hero MotoCorp, was developed by the London firm Wolff Olins. The logo was revealed on 9 August 2011 in London, the day before the third test match between England and India.

Hero MotoCorp can now export to Latin America, Africa and West Asia. Hero is free to use any vendors for its components instead of just Honda-approved vendors.

Company performance

During 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 a market share of 57% in the Indian market. Hero Honda sells more two wheelers than the second, third and fourth placed two-wheeler companies put together. Hero Honda's bike Hero Honda Splendor sells more than one million units per year.

Recognition

Logo of Hero Honda, as the company was known till Aug. 2011

        The Brand Trust Report published by Trust Research Advisory has ranked Hero Honda in the 13th position among the brands in India.

Motorcycle models

Sleek Street Achiever Ambition 133, Ambition 135 CBZ, CBZ Star, CBZ Xtreme CD 100, CD 100 SS, Hero Honda Joy, CD Dawn, CD Deluxe, CD Deluxe (Self Start) Glamour, Glamour F.I Hunk Karizma, Karizma R, Karizma ZMR FI Passion, Passion Plus, Passion Pro Pleasure Splendor, Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor

NXG,Splendor PRO Hero Impulse launched in 2011 after the separation of hero and Honda. Its India's first

off-road and on road Bike.

Suppliers

It is reported Hero Honda has five joint ventures or associate companies, Munjal Showa, AG Industries, Sunbeam Auto, Rockman Industries and Satyam Auto Components, that supply a majority of its components.

Organization structure:

Organizational Design and Organizational Structure

Organizational Design Management decisions and actions that result in a specific organization structure.

Four Design Decisions

1. Division of Labor:– Process of dividing work into relatively specialized jobs to achieve advantages of specialization.

Division of labor in organization can occur in three different ways:

a. Work can be divided into different personal specialties.b. Work can be divided into different activities necessitated by the natural sequence.c. Work can be divided along the vertical plane of an organization.

2. Departmentalization:– Process in which organization is structurally divided by combining jobs in departments according to some shared characteristics or basis.

Some of the more widely used departmentalization bases are the following:

a. Functional departmentalization

b. Territorial departmentalization

c. Product departmentalization

d. Customer departmentalization  3. Span of Control:– Number of individual who report to a specific manager.

Three important factors in determining the managers span of control:

a. Required contact

b. Degree of specialization

c. Ability to communicate

4. Delegation of Authority – Process of distributing authority downward in an organization

Department details:

There are three departments in the hero show room:

1. Sales department        2. Service department (work shop) 3. Spare parts department.

Functions of departments:

Sales department functions:

The main function of a sales department is attracted and retains customers. Many moving parts are tied to this but the number one objective is to attract and retain customers. That said, sales activities need to been co-ordinated i.e., to meet the customer demand with appropriate supply.

The next is to increase the sales volume considering a particular period of time. Then to find appropriate persons/ agencies to carry out the sales activities. To help marketing department in meeting the sales volume fore casted by then. To give motivation by appropriate means to the sales persons and to give appropriate training to them in carrying out the sales activities successfully..

Sales department process:

Sales ↓ Sales manager ↓ Asst. sales manager ↓ Rural sales manager ↓ Sr.sales manager ↓ Jr.sales manager ↓ Asst.sales manager

Roles and responsibilities of departmental heads:

Role of A Works Manager:

The role of a works manager is similar to that of a hard ware engineer.

He is completely responsible for the floor operations.

The prime responsibilities are listed below:

Ensure all equipments in the workshop are maintained and used properly.

Ensure motorcycles are serviced as per recommended systems and procedures.

Responsible for attending to customer complaints immediately.

Workshop profitability.

Motivate the technicians and develop team spirit Identify best technicians and suggest for rewards.

Timely dispatch of warranty materials, free service claims etc.

Role of a manger customer care:

To plan workflow process in the workshop to ensure smooth operation.

To hold regular meetings with the technicians/supervisors to monitor the workshop performance.

Responsible for ARDS –regular visits-suggestions for improvement-monitor.

Role of a supervisor:

A supervisor plays an important role in workshop operation and is a key link between front office and workshop.

Since the supervisor constantly interacts with the customer, he is the face of the delarship…/company.

The supervisor should have clear customer, good manners and communication skills.

The prime responsibilities are listed below:

Receive customers, listen to them and record the complaints in a language understandable to the technicians. Fill all the relevant information in the job.

Checking all motor cycles for service/water wash quality.

Filling future job advise after interacting with the concerned technician.

To update the front office on ready vehicle status.

Help the customer in setting the bills.

To ensure updating of history cards.

Observations:

They are giving warranty to different vehicles in to different years.

They are also providing free services.

Production process:

Hero MotoCorp believes that to create a sustainable enterprise, it is critical to strike the right balance between business, mankind and nature.

Cleaner process ↓ Green supply chain ↓ Scarce resources ↓ Green awards and certifications ↓ We care for environment

Product line:

Cd-dawn Cd deluxe Pleasure Splendor+ Splendor NXG Passion PRO Super splendor

Glamour Splendor pro Achiever CBZ xtreme Hunk Karizma Karizma ZMR

The new vehicles in hero are:Maestro

Impulse

Marketing strategy:

Hero MotoCorp's key strategies are to build a robust product portfolio across categories, explore growth opportunities globally, continuously improve its operational efficiency, aggressively expand its reach to customers, continue to invest in brand building activities and ensure customer and shareholder delight. Hero MotoCorp two wheelers are manufactured across three globally benchmarked manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are located in the state of Haryana in northern India. The third and the latest manufacturing plant is based at Haridwar, in the hill state of Uttrakhand.

Market segmentation:

Nothing is permanent but ‘change’ and it has to change. Share of Hero Moto Corp has being declining since September 2011 constantly. Possible reasons for the same can be one or all of them. Yamaha launched three bikes in premium segment with SZ-S, SZ-R and FZ-S. Yamaha with their smart pricing strategy, radical looks /styling and youth appeal are slowly and steadily eating up market share in premium segment.

Honda also launched new version of Unicorn named Unicorn Dazzler which is packed with new looks targeting youth of the nation.

HMCL took a brave move and removed ‘kick starter’ from Hunk and CBZ-Xtreme. This has resulted into shift of customers into bikes which are of same price range and with kick start.

Customer feed back:

Post service

Relationship with customers

Occasional invitations sending to customers

Good life card @ 5% discount