strategic management ppt - final.pptx

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Submitted By: Dayanidhi kar-358 Kumar Anand-376 Manish Ranjan Singh-383 Mitesh Lalwani-384 Navya Lavanya Ekkirala-392 SFAS of Indian Two-Wheeler Industry Hero MotoCorp

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Page 1: Strategic Management PPT - Final.pptx

Submitted By:Dayanidhi kar-358

Kumar Anand-376 Manish Ranjan Singh-383 Mitesh Lalwani-384 Navya Lavanya Ekkirala-392

SFAS of Indian Two-Wheeler Industry Hero MotoCorp

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• India is the largest two-wheeler market in the world.

• Domestic market expected to grow at a CAGR of 9-10 per cent till FY17.

• Rural Market is expected to be a major driver for the demand of Two-Wheeler Industry.

• Investments of around Rs 3,500-4,000 Crores are expected in next 2 years.

• Preferred Export destinations are Africa and Asian countries**.

• Sales growth has been at 2.9% in 2012-13 over previous year as against 13.9% growth over the past 5 years.

Facts and Figures on the Indian Two-Wheeler Market

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• Past 3 years (2010-2013) has seen a consumption squeeze in the two-wheeler market.

• Exports have seen a downward trend of -0.7% when compared to CAGR increase of 27% for the past 5 years.

• The direct correlation between infrastructure development, incomes , consumer durables’ ownership and two-wheeler penetration levels suggests that two-wheeler penetration levels will improve sharply in some of the lower-penetration states.

• The right regional mix of distribution network will hold the key to the future growth of the Indian two-wheeler Industry.

India as a market place for two-wheeler Industry

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Road development, Spending patterns highly linked to two-wheeler sales

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Infra-structure development versus two wheeler ownership • Evidence of infrastructure development driving

ownership of durables in less-penetrated states is also already visible.

• Better road connectivity in several states (measured by growth in length of roads under the Pradhan Mantri Gram Sadak Yojana – PMGSY) has sharply driven up two-wheeler ownership during 2004-05 to 2009-10.

• In Rajasthan, Bihar, Orissa and Uttar Pradesh, although overall ownership of two-wheelers remains low as compared to more developed states, ownership has more than doubled.

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YoY Growth(%)

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Cost Analysis• Softening in raw material prices provided a respite to the

manufacturers in FY13 .The major raw materials worth to be mentioned under this discussion are Steel and Rubber.

• Selling and distribution witness a substantial rise in FY13

• Efficiency measures have led industry to control its employee cost during past 2-3 years

• Power, transportation cost increased.

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Regulations in Industry• Change in technology for meeting various emission

norms

• Custom duty trend for two wheelers and key raw materials

• Excise duty trend for two wheelers and key raw materials

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Threats to 2W Industry• Good Public transport

• Poor Finance

• Unfavorable regulations

• Infrastructure projects pending

• Unfavorable RBI measures to tame inflation.

• Labor strike

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Facts and Figures-Hero Motorcorp•  Hero Honda sells more two wheelers than the second, third and

fourth placed two-wheeler companies put together.

•  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.

• Offers one of the widest range of two-wheelers with over 19 different products across the 100cc, 125cc, 150cc, 225cc and scooter categories.

• Hero Warranty : India’s 1st company to offer a 5-year warranty on all two-wheelers. This warranty has earned immense trust and respect for the brand among Hero’s clients and customers.

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Hero Moto Corp Standing

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Preparation for sustainabilityNewer Technology:• Investing 2-3 per cent of its annual revenue on R&D.• Using TQHRM : to attain brilliance in their work by improving

and empowering employees.• Coming with engine stop-start system a technology called as

micro hybrid in top-end cars and SUVs.• electronic immobiliser , is a security device that prevents the

engine from running without the correct key.• also coming up with scooters equipped with integrated braking

system (IBS), • applied for a patent for its i3S technology -- ideal stop-start

system -- which will debut on its flagship model Splendor as the 'iSplendor.‘

• firm's 150-cc bike 'Extreme' will be equipped with the electronic immobiliser, while its scooter model 'Pleasure' will be armed with the IBS.

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Preparation for sustainability…contdGlobal tie ups:• Hero MotorCorp picked up a 49.2 per cent stake in US-based

Erik Buell Racing for USD 25 million in July, 2013 after entering into a technology sourcing pact last year.

• Entered into an alliance with Austria-based engine developer AVL to enhance capability in various segments

• Associated with the AMA Pro Road Racing superbike series, North America's premier motorcycle road-racing championship, with two racing teams called Team Hero and AMSOIL Hero EBR.

• Diluting its commitment to cricket, Hero MotoCorp are engaged in promoting several sports, including cricket, golf, hockey and soccer and super bike racings globally.

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Media

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A Mission to maintain High Ecological Standards• Introducing Green initiatives in Production Development, Manufacturing,

Supply Chain (backward and forward) or even in the operations within the company

• To ensure a low carbon footprint, Hero has, in the last few years, proactively eliminated harmful substances like Asbestos, Hexavalent Chromium, Phenolic Substances

• Gurgaon plant has been judged the “Best Maintained Garden” for the year 2013

• In January 2011, Hero initiated the Heat Recovery from Incineration project which has helped to save 1258 tons of Co2 emissions and 16, 22, 400 units per annum.

• In October 2011, Hero introduced its Solar Power Project – 100 KW which has helped to save 1, 56, 000 units per annum, 121 tons of Co2 emissions and 37.96 tons on furnace oil.Done through the solar energy that is captured by the photovoltaic cells during the day.

• initiated oil conservation through the installation of Chip Wringer which is capable of recovering neat cutting oil from chips that are generated from m/c operation. This has led to oil recovery of about 56 liters/ day per plant.

• Effectively involved with Water Management, Rain Water Harvesting and ETP Recycling Plant.

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Low cost material & R&D Outlook• PLM (Product Life Cycle Management) is already in place and is being

used extensively. • The TDM (Test Data Management) and Schedule Manager projects went

live during the year.• R&D's focus will rest on four key planks: on refurnishing existing

platforms, on developing products with alternate fuel options, on compliance with stringent safety and environment norms and finally, on achieving cost competitiveness through VA/VE and innovative cost reduction ideas.

• world-class Technology & Integrated R&D Centreat Kukas, Jaipur will have innovation labs for component design, engine and vehicle testing, latest software being used for collaborative design and vehicle simulation.

Different positioning strategy• "Just 4 her"  like exclusive stores for women• ambitious plan to enter 30 countries, The Company has incorporated an

off-shore investment subsidiary in the Netherlands•  expedite its global expansion plans, which includes overseas

investments and merger and acquisition opportunities.• gearing with The Hero MotoCorp GoodLife Program (Customer

Relationship Program).

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SFAS Matrix• The SFAS (Strategic Factors Analysis Summary) Matrix

summarizes an organization’s strategic factors by combining the highest weighted external and internal factors from the EFAS & IFAS Tables respectively.

• The SFAS Matrix requires the strategic decision maker to condense these strengths, weaknesses, opportunities, and threats into fewer than ten strategic factors. This is done by reviewing and revising the weight given each factor.

• The revised weights reflect the priority of each factor as a determinant of the company’s future success.

• SFAS ,EFAS and IFAS for HERO MOTOCORP :

Microsoft Office Excel 2007 Workbook

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TOWS Matrix• The TOWS Matrix is a relatively simple tool for generating strategic

options.

•  By using it, organizations can look intelligently at how you can best take advantage of the opportunities open to them.

• At the same time that you minimize the impact of weaknesses and protect yourself against threats.

• At a practical level, the only difference between TOWS and SWOT is that TOWS emphasizes on the external environment whereas SWOT emphasizes the internal environment.

• TOWS for HERO MOTOCORP : Microsoft Office

Excel 2007 Workbook

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Expansion plans are backed by their strong long-term goals• Hero MotoCorp plans to establish 20 manufacturing and

assembly facilities to expand its presence across 50 countries by 2020

• Setting up a fourth plant at Neemrana in Rajasthan with an annual installed capacity of 750,000 units .

• Setting up a fifth plant at Halol in Gujarat, with an annual installed capacity of 1.2 Million.

• Setting up a Global Parts Centre (GPC) at Neemrana, Rajasthan.

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Thank You