SEMINAR PRESENTATION ON BUSINESS POLICY

Presented by:-

AWANISH KUMAR SINGH

P.G.D.M. 4TH SEM.

ROLL NO. 2008101018

Two wheeler industry

TABLE OF CONTENTIntroduction History of two wheeler industry Advantage Company profileMajor Players (Competitor )Market ShareS.W.O.T. AnalysisStrategiesRecommendation Conclusion

IntroductionIndia, is the second largest producer of two-

wheelers in the world.

The Indian two wheeler market has a size of over Rs100,000 million.

The segment can be broadly categorized into scooters, motorcycles and mopeds.

The motorcycle market share is about 81.5% of the total two wheeler market in India.

History of Two-wheeler Industry• The Automobile Products of India (API)

started manufacturing scooters in the country.

• Until the mid 80’s, there were only three major motorcycle manufacturers in India namely Rajdoot, Escorts, and Enfield.

CNTD…• 1950-58 API and Enfield.

• 1960-79 LML Vespa, Bajaj, Enfield bullet, Jawa and Rajdoot.

• 1980-89 Hero Honda, TVS Suzuki and Kinetic Honda

Advantage

Sales of motor cycles in India is likely to touch the 10 million mark by 2010 !

Registered two-wheelers still growing. Growth in exports and domestic sales are 24.34%

and 11.92% respectively. Middle class expanding by 30 - 40 million every yearGrowing working population and Increased access

to credit.

Company profile1)The Company was Incorporated on 19th January,1984 at

New Delhi as a joint venture.

2)Today Hero Honda is the largest two-wheeler manufacturer in the world producing more than 3 million units of two-wheeler per year.

3) The company's most popular model is the Hero Honda Splendor, which is the world's largest-selling motorcycle.

ACHIVER

PASSION

HUNKKARIZMA

CBZ

GLAMOUR

PRODUCT OF HERO HONDA

DAWN

SUPER SPLENDOR

CD DELUX

SPLENDOR NXG

Key Players in Indian Market

Other PlayersKanda motorsMahindra two wheelersLMLSuzuki

Market Share

Bajaj Auto, 24.4%

TVS Motors, 17.7%

Yamaha, 3.8%

Others, 5.8%

Honda Motors, 8.5%

Hero Honda, 39.8%

Motorcycle 44% 36% 13

% 4% 1% 2% <1% - <1

%

- 15% 28% - 2% 46

% 9% <1% -

- - 82% - - - 8% 10

% -

India is now the second largest two-wheeler market in the world

Figures denote Mkt Share (Apr-Oct 08)

Indian two wheeler market – Competitive Scenario

STRATEGIES (A) BUSINESS STRATEGY

The company has formed its business units based on the following

parameters:

1.) Common manufacturing processes: - This is the most important parameter

used by Hero Honda to create its SBUs as this depends on the engineering and

assembly processes.

2.) Common raw materials requirements: Products that are similar in their

design catering to similar segments share the raw materials and hence need to

be clubbed in the same SBU while those with different requirements need a

different strategy. 

1 -Competitive Strategy 2 -Co-operative Strategy

(B) CORPORATE STRATEGY 1-growth

(Hero honda adopt Growth Strategy) -Conglomorate - Concentric

2 -Stability 3 -Retrenchment (C) FUNCTIONAL STRATEGY 1-R & D 2- Human research strategy 3-Marketing Strategy

Product Portfolio of Hero Honda  

Hero Honda has an extremely versatile product portfolio catering to the various segments of the two-wheeler industry.

It has the CD Dawn and the CD 100 positioned for the entry-level bike segment primarily aimed at the rural market.

The CD Deluxe, Splendor and the Passion models are aimed at the first time users of the urban segment.

The Passion Plus, Splendor Plus, Splendor NXG and Glamour are aimed at the executive or deluxe segment who want a sporty bike yet an affordable one. The premium motorbike segment is catered to by the stylish products of Hero Honda Hunk, Karizma, CBZ Extreme and Achiever. Finally, the scooter segment is represented by the Hero Honda Pleasure.

“ Hero Honda has a strong product portfolio.”  

STARS are units with a high market share in a fast-growing industry.

QUESTION MARK -These units typically "break even", generating barely enough cash to maintain the business's market share. Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units

CASH COW are units with high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business.

DOGS, or more charitably called pets, are units with low market share in a mature, slow-growing industry.

BCG matrix for Hero Honda Motor Limited

Sl No. SBU Market share of Hero Honda (SBU)

Market share of largest competitor

Relative market share

Market growth rate

Quadrant in which the SBU lies

1 Motorcycles 53.8% 27.5%( Bajaj )

1.95 19.89 % STAR

2 Scooters 12.8 % 55 % (Honda)

0.23 12.36 % Question Mark

Market share of two wheeler automobile sector

35.60% 27.50%

16%

7%4%9.50%

Hero Honda

Bajaj Motors

TVS Motors

YamahaMotorsHonda Motors

Others

Porters five force model for Hero Honda:-

Threat of new entrants Mahindra & Mahindra (M&M), India’s largest tractor and utility vehicle maker is buying the business assets of loss-making scooter maker Kinetic Motor Company for Rs 110 crore to gain an entry into the two-wheeler market.

Bargaining Power of Buyer:   Buyers in automobile market have more choice

to choose from and the increasing competition is driving the bargaining power of customers uphill. With more models to choose from in almost all categories, the market forces have empowered the buyers to a large extent.

Threat of substitute Products:  There is no perfect substitute to this industry.

Also, if there is any substitute to a two-wheeler, Bajaj has presence in it. Cars, which again are a mode of transport.

Bargaining Power of suppliers: Suppliers of auto components are fragmented and

are extremely critical for this industry since most of the component work is outsourced. Proper supply chain management is a costly yet critical need.

 

Competitive rivalry:

The industry rivalry is extremely high with any product being matched in a few months by competitor.

 

SWOT ANALYSIS

STRENGTHS

Hero Honda introduced First stroke bike in the Indian market.

Hero Honda gives 80 Km/Liter Avg.Huge sale network (3500 Dealers).Better sale service.It has the highest share in automobile sector.

STRENGTHS:

WEAKNESS:

They have big gap between cubic capacities of its products.

Its market share is reducing from last few years.

Spare parts are too costly.

OPPOURTUNITIES:

Hero Hondas the first manufacture to launch eco friendly bikes with 4-stroke engines. They have attained a stronger good will and popularity in the industry and the consumers.

They should go in new segments of bikes.

There is large no. of young consumers in the market. Company has to focus on them.

They have big opportunities in heavy bike segments.

THREATS:

Main threats to Hero Honda are their competitors like:-

Bajaj Auto Ltd.

TVS motors Ltd.

Yamaha Motors India.

Honda motorcycle and scooter India.

Suggestions

Encourage exports.Provide various two-wheeler financing

schemes among manufacturers. Open R&D centers.Pressurize government to reduce taxes and

duties.Collaborate with global players.

CONCLUSIONS

The feeling of freedom and being one with the Nature comes only from riding a two wheeler. Indians prefer the two wheelers because of their small manageable size, low maintenance, pricing and easy loan repayments. Indian streets are full of people of all age groups riding a two wheeler. Motorized two wheelers are seen as a symbol of status by the populace. Thus, in India, we would see swanky four wheels jostling with our ever reliable and sturdy steed: the two wheeler.

Thank YouAny Questions

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