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
BSE: 500182
Traded as NSE: HEROMOTOCO
BSE SENSEX Constituent
Industry Automotive
Founded 19 January 1984 (Gurgaon)
Founder(s) Brijmohan Lall Munjal
Headquarters New Delhi, India
Brijmohan Lall Munjal (Chairman)
Key people
Pawan Munjal (MD & CEO)
Motorcycles, scooters, three-
Products
wheeler vehicles and spare parts
19,669.290 crore (US$3.92
Revenue
billion)
Operating 2,597.07 crore (US$518.12
income million) (FY 2010-2011)
1,927.90 crore (US$384.62
Net income
million) (FY 2010-2011)
Parent Hero Group
Website 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 Ahead
Though 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