HERO

CHAPTER-1
INTRODUCTION TO THE INDUSTRY
1.1 INDUSTRY PROFILE
A well developed transport network indicates a well developed economy. For rapid
developed a well developed and well kint transporatation system is essential. As
India`s transport network is developing at a fast space, Indian Automobile Industry is
growing too. Also, the Automobiles Industry has strong backward and forward
linkages and hence provides employment to a large section of the population. Thus
the role of Automobile Industry cannot be overlooked in Indian Economy. All kinds
of vehicles are produced by the Automobiles Industry.
The Automobiles Industry in India the tenth largest in the world with an annual
production of approximately 2 million units is expected to became one of the major
global automobiles in the coming years. A number of domestic companies produce
automobiles in India and growing presence of multinational investment, too. Has led
to an increase in overall growth. Following the economic reforms of 1991 the Indian
automobiles industry has demonstrated sustained growth as a result of increased
competitiveness and relaxed restrictions.
Indian Automobiles Industry includes the manufacture of trucks, buses, passengers

cars, defense vehicles, two wheeler, etc. The industry can be broadly divided into the
car manufacturing and heavy vehicle manufacturing units.
The major two wheeler manufactures are:
1. Hero Moto Crop

2. Yamaha Motors
3. Honda Motors
4. Suzuki Motors
5. TVS Motors
6. Mahindra and Mahindra
Dept. of MBA, B N M Institute of Technology 1 Page

7. Bajaj Auto
8. Royal Enfield
9. Piaggio and C.SpA
10. Kinetic Engineering Ltd`
The heavy like buses, trucks, defense vehicles, auto rickshaws, and other multi-utility
vehicles are manufactured by TATA-Telco, Ashok Leyland, Eicher Motors, Bajaj,
Mahindra and Mahindra, etc.
Following Indian`s growing openness the arrival of new and exiting models, easy
availability of finance at relatively low rate of interest and price discounts offered by
the dealers and manufactures all he stirred the demand for vehicles and a strong
growth of the Indian industry.

CHAPTER - 2
ORGANIZATION PROFILE
2.1 Industry Automobile
Hero MotoCorp Ltd., formally Hero Honda Motor Ltd is the world’s largest
manufacturer of two wheeler based in India. In 2001 the company achieved the
coveted position of being the largest two wheeler manufacturer in India and also the
worlds No.1 two wheeler company in terms of unit volume sales in a calendar year.
Company continues to lead the domestic motor cycle market with 54.6% share.
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 Hondas bike hero Honda splendor sells
more than one million units per year. On 1st june 2012, hero MotoCorp reported its
highest every monthly sales at 5,56,644 units in May, registered a growth of 11.28%.
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.[18] Hero Honda sells more two wheeler s than the second, third and fourth
placed two-wheeler companies put together.[11] Hero Honda's bike
Hero Honda Splendor sells more than one million units per year.[19]On 1st June
2012, Hero MotoCorp reported its highest ever monthly sales at 5,56,644 units in
May, registering a growth of 11.28%.[20]
Hero MotoCorp Limited
Type Public
Traded as BSE: 500182
NSE: HEROMOTOCO

BSE SENSEX Constituent
Industry Automotive
Founded 19 January 1984; 35 years ago
Founder Dr. Brijmohan Lall Munjal
Headquarters New Delhi, India
Key people Dr. Brij Mohan Lall
Munjal(Chairman Emeritus)
(Deceased)
Pawan Munjal (Chairman,
MD & CEO)[1]
Products Motorcycles, Scooters
Production 7,587,130 units (2018)
output
Revenue ₹31,480 crore(US$4.6 billion)
(2017)[2]
Operating ₹4,885 crore(US$710 million)
income (2017)[2]
Net income ₹3,546 crore(US$510 million)
(2017)[3]
Total assets ₹5,308 crore(US$770 million)
(2013)
Number of 5,842[3]
employees
Website Hero Motocorp
2.2
2:2.1 Vision
The story 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.
2:2.2 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.
2:2.3 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.
2:2.4 Manufacturing
Hero Honda bikes are manufactured across three globally bench marked
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 Uttarakhand.
2.25 Technology
In the 1980’s the Company pioneered the introduction of fuel-efficient, environment
friendly four-stroke motorcycles in the country. It became the first Company to
launch the Fuel Injection (FI) technology in Indian motorcycles, with the launch of
the Glamour FI in June 2006.
Its plants use world class equipment and processes and have become a benchmark in
leanness and productivity. Hero MotoCorp, in its endeavor to remain technology
pioneer, will continue to innovate and develop cutting edge products and processes.
2:2.6 Product Profile

Hero Honda's product range includes variety of motorcycles that have set the industry
standards across all the market segments. The Company also started manufacturing
scooter in 2005. Hero Honda offers large no. of products
and caters to wide variety of requirements across all the segments.
Distribution The Company’s growth in the two wheeler market in India is the result of
an intrinsic ability to increase reach in new geographies and growth markets. Hero

MotoCorp’s extensive sales and service network now spans over to
5000 customer touch points. These comprise a mix of authorized dealerships,Service
& Spare Parts outlets, and dealer-appointed outlets across the country.
2:2.7 Brand
The new Hero is rising and is poised to shine on the global arena. Company’s new
identity “Hero MotoCorp Ltd.” is truly reflective of its vision to strengthen focus on
mobility and technology and creating global footprint. Building and promoting new
brand identity will be central to all its initiatives, utilizing every opportunity and
leveraging its strong presence across sports, entertainment and ground- level
activation.
Different bike models of Hero motors:
Splendor+
Xpulse 200

Duet:

Maestro edge:
Splendor i-smart 110cc:

Xtreme 150 S:
Hero XF3R 300cc: ( Up coming)

2:3.1 Motorcycle models:
 Streak
 Achiever
 Ambition 133, Ambition 135
 CBZ, CBZ Star, CBZ Extreme
 CD 100, CD 100 SS, CD Dawn, CD Deluxe, CD Deluxe (Self Start)
 Glamour, Glamour F.I
 Hunk
 Karissa, Karim 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.
2:4.1 Organization Pattern

Board Of Directors
Name Designation
Mr.Pawan Munjal Chairman & M.D & CEO
Mr.Vikram S Kasbekar Executive Director - Operations
Mr.M Damodaran Ind. Non-Executive Director
Ms.Shobana Kamineni Ind. Non-Executive Director
Mr.Paul Edgerley Ind. Non-Executive Director
Prof.Jagmohan Singh Raju Independent Director
Mr.Suman Kant Munjal Non Executive Director
Mr.Pradeep Dinodia Non Executive Director
Key Executives
Name Designation
Mr.Niranjan Gupta Chief Financial Officer
Mr.Vijay Sethi Chief Information Officer
Dr.Markus Braunsperger Chief Technology Officer

Ms.Neerja Sharma Co. Secretary & Chief Compl. Officer
Mr.Rajat Bhargava Head
Mr.Neeraj Mathur Head
Mr.Sanjay Bhan Head
Mr.Malo Le Masson Head
2:5.1 Milestones achieved by Hero Motocorp.
 1,00,000th motorcycle produced in 1987.

 New motorcycle model - 'CD 100 SS' introduced and 500,000th motorcycle in 1991
produced.
 New motorcycle model - 'Splendor' introduced and 1,000,000th motorcycle produced
in 1994.
 Hero Honda Splendor was declared the world's largest selling two-wheeler in 2000.
 Declared the largest manufacturer of two-wheeler s in the world in 2001.
 Became the first Indian company to have sold 70,00,000 units in 2003.
 Achieved the 15 million production mark in 2006.
 Crossed the 20 million production mark in 2007.
 Achieved the 25 million production milestone in 2008.
 Crossed the landmark figure of 5 million cumulative sales in a single year in 2011.
 Crossed the 50 million production milestone in 2013.
2:6.1 Major highlights :
 Counseled 9,330 girls in Punjab and Rajasthan under Edu Connect and
HamariPari programme to help them choose the right career path.
 Benefited 6,240 girls in Andhra Pradesh and Delhi through programme s related
to overall development, with focus on education, health and hygiene.
 Enrolled 8,222 children in schools across Andhra Pradesh, Bihar and Odisha.
 Benefited 2,707 girls through Hero ‘Mobile Science Lab' project.
 Supported 517 girls by distributing books at ShishuShikshaSadanBalika School,

Allahabad.

 Benefited 125 girls through Step Up Samarth programmers in Dharuhera, Haryana.
 Helped 96 girls at MatraAnchal Girls Hostel, Haridwar, through building an additional

floor.
 Enrolled 30 women in Skill Development Centre for beautician and tailoring courses.
2:7.1 Work Flow Model
2:8.1 Awards won by Hero MotoCorp.

 Received the 1991 Harvard Business School Award for Corporate Performance by
Economic Times.
 Received the NSIC award- National Award for outstanding contribution to the
Development of Indian Small Scale Industry by the President of India in 1995.
 Received the 1999 National Productivity Award for the Best Productivity Award in
the category of Automobile & Tractor by the Vice President of India.
 Received the Most Respected Company Award in Automobile Sector by Business
World in 2003.
 Received the 2006 Top Indian Company in the Automobile - Two Wheeler sector by
American Express Corporate Awards.
CBZ Xtreme won the 'Bike of the Year' award at the NDTV Profit Car India & Bike
India Awards 2007.
 Received the Business Leadership Award by NDTV Profit in 2008.
 Hunk won Bike of the Year at the Top Gear Design Awards in 2008.
 Won Two-wheeler Manufacturer of the Year at the NDTV Profit Car & Bike Awards
2009.
 Won the Company of the Year award at the Economic Times Awards for Corporate
Excellence 2008-09 in 2010.
 Adjudged as the best brand in the Auto (Two-Wheeler's) category in the Brand Equity
"Most Trusted Brand" 2011 survey.
 Adjudged the Business Leader in Automobiles (two-wheeler s) at the NDTV Profit
Business Leadership Awards 2012.
 Received Business Leader of the Year Award by the President of India, Shri. Pranab
Mukherjee, at the AlMA Managing India Awards 2013.
 Best environmental friendly project.
 Best Initiative for Community Awareness.
 Best CIO - for most innovative way of working on CSR.
 Top 100 Most Impactful CSR Leaders in World.
2:9.1 Hero MotoCorp Future

Hero motorcycles are a household name in India and are famous worldwide. The

continuous manufacturing of quality products over the years helped Hero MotoCorp
achieve the status of being the largest manufacturer of two-wheeler s in the world, as being
the most sought-after brand is a per-requisite for being the biggest producer. A vision and a
strategy for the company to strive hard to keep moving towards perfection have been laid
down.
The company's vision document says, “The story of Hero Honda began with a simple
vision - the vision of a mobile and an empowered India, powered by its two wheeler s.
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. 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”.

Chapter - 3
Mckensy`S 7s framework and Porter’s Five Force Model with
special reference to Organization under study.
3.1 The base of the 7S Framework

In the 7S Framework the so-called hard and soft elements are incorporated, in which hard
elements aim at matters an organization can influence directly. The soft elements are
present in an organization in a more abstract way and can be found in the organizational
culture. The hard elements in the 7S Framework are Strategy, Structure and Systems; the
soft elements are Style, Shared Values, Skills and Staff.
7S Framework by Mckinsey - Hero

In order to understand the 7S Framework better a brief explanation is given below.
3.2 Objectives

 Improve the performance of a company.
 Examine the likely effects of future changes within a company.
 Determine how best to implement a proposed strategy.
3.3 Skill
The training provide by the company to employees is
 On - job training
 Off - job training
On job training
 30 days of induction is conducted to each and every employee of an organization.
 One year monitoring program by senior offers of the different department
 Three kinds of learning are thought to employees
 Individual learning
 Team learning
 Organizational learning
3.4 Staff
staffing is process human resource for the organization and assuring that they have the
potential contribution to the achievement of the organization goals. Hero company
generally prefers to have highly qualified and dedicated management professional in case
staffing at narasapura plant.
3.5 Strategy
Strategy refers to the determination of purpose and basic long ten objectives of an
enterprise and the adoption of course of an enterprise and the adoption of course and the
allocation of resources necessary to the aims.
 Acquire the huge public service.
 Service maximization as well as staff maximization
 Increase the turn to the next year
 Facing the cut thought the competition
 Adopt the sophisticated technology decreasing the cost and heavy work force

 Maintaining the good organizational ethics and culture
 Serving the customers as well as retaining the customers
3..6 Structure
The structure typically hierarchical arrangement of lines of authority. Communication,

rights and duties of an organization. Organizational structure determines how the roles,
power and responsibilities are assigned, controlled and coordinated and how information
flows between the different levels of management.
A structure depends on the organization objectives and strategy. In a centralized structure,

the top layer of managements most of the decisions making power and has tight control
over departments and divisions may have different degrees of independence. A company
such as proctor and gamble that sells multiple may organize their structure so that groups
are divided according to each and depending on geographical area as well.
3.7 System
The organization is described as a system used for transforming input into output. At the
centre of this transformation process is the technical core, which is the heart of the
organizations production of its product or service. In an automobiles company the
technical core includes the plants that manufactures automobiles. In a university, the
technical core include the academic activities of teaching and research. Inputs into the
technical core includes human resources, land, equipnment, buildings and technology.
Outputs from the technical core include the goods and services that are provided for
customers and clients. Operations strategy and control feedback shape the quality of
outputs and the efficiency of operations within the technical core.
3.8 Shared values
Shared value of the organization can be characterized as the whole of the norms, views and
culture by the people working in the organization. The values are the things that you would
save even if they were demonstrably not profitable.
The values are:

1. Customer satisfaction is of cordial value to hero motocorp.
2. High concern for quality, safety and work environment.
3. Self service subsidized canteen, common for all
4. To sustain an organization of able and committed employees and opportunities for

growth and development.
3.9 Style
Style refers to the employee shared and common way of thinking and behaviour. The
management sets the objectives to the line and functional specialists and provides clear
procedure and rules for decision making.
Management is the central power sources that make the decision under the guidelines
issued by the head office.
Head of each divisions constitute the management committee headed by the director. The
committee formulates strategic plans and policies to take the business forward and reviews
implementation of the company annual plans.
3:3.1 Hero MotoCorp Porter Five Forces Analysis
Porter Five (5) Forces Model

Porter Five (5) Forces Model was proposed by Michael E. Porter in 1979. The purpose was
to assess and evaluate the competitive positioning and strengths of business organisations.
The model has three horizontal competitive forces (Threat of Substitute Products or
services, the threat of new entrants and rivalry among existing firms) and two vertical
forces (Bargaining power of buyers and bargaining power of suppliers).
These forces shape the competition within any industry. The overall industry
competitiveness declines when these forces reduce profitability. Porter found SWOT
analysis lacking in rigour. Many new companies use the Porter Five (5) Forces Model to
decide whether it is profitable to enter in a particular industry.
Here is the pictorial presentation of the Porter Five (5) Forces Model:

Hero MotoCorp Porter Five (5) Forces Analysis
Application of this model can help Hero MotoCorp to determine the industry attractiveness
and understand its competitive positioning in the market. The analysis can also be used to
make some strategically wise decisions that could improve the performance of Hero
MotoCorp and ensure long-term survival.
3:3.2 Threats of new entrants
Threat of new entrants reflects how new market players impose threats to the existing
market players. If the industry will be profitable and barriers to enter the industry will be
low, it will attract more players and hence, the threat of new entrants. will be high.
Here are some factors that reduce the threat of new entrants for Hero MotoCorp:
 Entry in the industry requires substantial capital and resource investment. This
force also loses the strength if product differentiation is high and customers place
high importance to the unique experience.
 Hero MotoCorp will face the low threat of new entrants if existing regulatory
framework imposes certain challenges to the new firms interested to enter in the
market. In this case, new players will be required to fulfil strict, time consuming

regulatory requirements, which may discourage some players from entering the
market.
 The threat will be low if psychological switching cost for consumers is high and
existing brands have established a loyal customer base.
 New entrants will be discouraged if access to the distribution channels is restricted.
Hero MotoCorp will be facing high new entrants threat if
 Existing regulations support the entry of new players.

 Consumers can easily switch the brands due to weak/no brand loyalty.
 Initial capital investment is high.
 Building a distribution network is easy for new players.
 Retaliation from the existing market players is not a discouraging factor.
How Hero MotoCorp can tackle the Threat of New Entrants?
 Hero MotoCorp can develop brand loyalty by working on customer relationship

management. It will raise psychological switching costs.
 It can develop long-term contractual relationships with distributors to widen access
to the target market.
 Hero MotoCorp can also an investment in research and development activities, get
valuable customer data and introduce innovative products/services to set strong
differentiation basis.
Threat of Substitute Products or services
The availability of substitute products or services makes the competitive environment

challenging for Hero MotoCorp and other existing players. High substitute threat shows
that customers can use alternative products/services from other industries to meet their
needs. Various factors determine the intensity of this threat for Hero MotoCorp
The Threat of Substitute Products or services increases when;
 A cheaper substitute product/service is available from another industry

 The psychological switching costs of moving from industry to substitute products
are low.

 Substitute product offers the same or even superior quality and performance as
offered by Hero MotoCorp’s product.
However, this threat is substantially low for Hero MotoCorp when;
 The switching cost of using the substitute product is high (due to high
psychological costs or higher economic costs)
 Customers cannot derive the same utility (in terms of quality and performance)
from substitute product as they derive from the Hero MotoCorp’s product.
How Hero MotoCorp can tackle the Threat of Substitute Products or services?
 Hero MotoCorp can reduce the Threat of Substitute Products or services by clearly
emphasising how its offered product/service is better than the available substitutes.
 It should provide convincing reasons to the customers by offering a better
experience and high value for money.
 It can raise switching costs by working on loyalty.
3:3.3 Rivalry among existing firms
The Rivalry among existing firms shows the number of competitors that give tough
competition to the Hero MotoCorp High rivalry shows Hero MotoCorp can face strong
pressure from the rival firms, which can limit each other’s growth potential. Profitability in
such industries is low as firms adopt aggressive targeting and pricing strategies against
each other.
The Rivalry among existing firms will be low for Hero MotoCorp if;
 There are only a limited number of players in the market

 The industry is growing at a fast rate
 There is a clear market leader
 The products are highly differentiated, and each market player targets different sub-
segments
 The economic/psychological switching costs for consumers are high.
 The exit barriers are low, which means firms can easily leave the industry without
incurring huge losses.

Similarly, there are some factors that increase the Rivalry among existing firms for Hero
MotoCorp For example, the company will face intense Rivalry among existing firms if
market players are strategically diverse and target the same market. The rivalry will also be
intense if customers are not loyal with existing brands and it is easier to attract others’
customers due to low switching costs. Competitors with equal size and offering
undifferentiated products with slow industry growth tend to adopt aggressive strategies
against each other. These all factors make the Rivalry among existing firms a major
strategic concern for Hero MotoCorp
How Hero MotoCorp can tackle the Rivalry among existing firms?
Hero MotoCorp should focus on the implicit needs and expectations of its customers to
strengthen the differentiation basis. It should raise switching costs by developing long-term
customer relationships. The organisation should also invest in research and development
activities to identify new customer segments. In some cases, collaborating with
competitors can be mutually beneficial. The organisation can look for this option as well.
3:3.4 Bargaining Power of Suppliers :
Bargaining power of suppliers in the Porter 5 force model reflects the pressure exerted by
suppliers on business organisations by adopting different tactics like reducing the product
availability, reducing the quality or increasing the prices. When suppliers have strong
bargaining power, it costs the buyers- (business organization). Moreover, high supplier
bargaining power can increase the competition in the industry and lower the profit and
growth potential for Hero MotoCorp Similarly, weak supplier power can make the industry
more attractive due to high profitability and growth potential.
Bargaining power of suppliers will be high for Hero MotoCorp if:
 Suppliers have concentrated into a specific region, and their concentration is higher
than their buyers.
 This force is particularly strong when the cost to switch from one supplier to other
is high for buyers (for example, due to contractual relationships).
 When suppliers are few and demand for their offered product is high, it strengthens
the suppliers’ position against Hero MotoCorp

 Suppliers’ forward integration weakens the Hero MotoCorp’s position as they also
become the competitors in that area.
 If Hero MotoCorp is not well educated, does not have adequate market knowledge
and lacks the price sensitivity, it automatically strengthens the suppliers' position
against the organisation.
 Other factors that increase the suppliers’ bargaining power include-high product
differentiation offered by suppliers, Hero MotoCorp making only a small
proportion of suppliers’ overall sales and unavailability of the substitute products.
Contrarily, the bargaining power of suppliers will be low for Hero MotoCorp if:
 Suppliers are not concentrated

 Switching costs are low
 Product lacks differentiation
 Substitute products are available
 Hero MotoCorp is highly price sensitive and has adequate market knowledge
 There is no threat of forward integration by suppliers.
How Hero MotoCorp can tackle the Bargaining Power of Suppliers?
Hero MotoCorp can strengthen its position against suppliers by decreasing the dependency
on one or a few suppliers. It will increase its price sensitivity. Developing the long-term
contractual relationships with suppliers from different regions not only lowers their
bargaining power but also allows Hero MotoCorp to improve its supply chain efficiency.
Finally, Hero MotoCorp can find the alternate ways of producing the product if product
demand is high enough and the firm has required competencies and expertise. However, it
requires detailed cost-benefit analysis to determine its feasibility. Product redesign and
diversification of the product lines can also help the organisation reduce the suppliers’
power in the market.
3:3.5 Bargaining Power of Buyers
Bargaining power of buyers indicates the pressure that customers exert on the business
organisations to get high quality products at affordable prices with excellent customer
service. This force directly influences the Hero MotoCorp’s ability to accomplish the

business objectives. Strong bargaining power lowers profitability and makes the industry
more competitive. Whereas, when buyer power is weak, it makes the industry less
competitive and increase the profitability and growth opportunities for Hero MotoCorp
There are some factors that increase the bargaining power of buyers:
 A more concentrated customer base increases their bargaining power against Hero
MotoCorp
 Buyer power will also be high if there are few in number whereas a number of
sellers (business organisations) are too many.
 Low switching costs (economic and psychological) also increase the buyers’
bargaining power.
 In case of corporate customers, their ability to do backward integration strengthen
their position in the market. Backward integration shows the buyers' ability to
produce the products themselves instead of purchasing them from Hero MotoCorp.
 Consumers’ price sensitivity, high market knowledge and purchasing standardized
products in large volumes also increase the buyers' bargaining power.
Some factors that decrease the bargaining power of buyers include lower customer
concentration (means the customer base is geographically dispersed), customers’ inability
to integrate backwards, low price sensitivity, lower market knowledge, high switching
costs and purchasing customized products in small volumes.
How Hero MotoCorp can tackle the Bargaining Power of Buyers?
Hero MotoCorp can manage the bargaining power of buyers by increasing and diversifying
their customer base. It can be done by introducing new products, targeting new market
segments and adopting the product diversification strategies. Marketing and promotional
strategies can also be helpful in this regard. Building loyalty by embedding innovation and
offering excellent customer experience can raise the switching costs, which will ultimately
reduce their bargaining power. Hero MotoCorp can adopt these strategies to strengthen its
competitive positioning in the market.

Porter 5 force model implications
The application of Porter five (5) forces model in real-world context allows organisations
to .make wise strategic decisions. Impact and importance of each of the five forces is
context dependent. By using Five Force analysis, Hero MotoCorp can determine the
industry attractiveness, make effective entry/exit decisions and assess the influence of
these forces on their own business and competitors. Moreover, the dynamic analysis of this
model can reveal important information.
For example, Hero MotoCorp can combine the Porter 5 force model with PESTEL
framework to determine the industry’s potential future attractiveness. In some cases,
companies do not have the required information to analyse five forces. In such a scenario,
the analysis can be conducted with the help of assumptions. Mostly, consultants consider
this model as a starting point, and other frameworks (like PESTEL and Value Chain) are
used in conjunction for a better understanding of the external environment
CHAPTERP-4

SWOT ANALYSIS
4.1Strengths
Hero MotoCorp enjoy various competitive advantages and strengths that has contributed to
its success and immense growth for more than 3 decades.
 Brand Recognition - Brand and brand trust plays a huge part when purchase decisions
are made by consumers. Hero MotoCorp is a strong brand which is synonymous with
reliability and fuel efficient two wheeler s. According to The Brand Trust Report
published by Trust Research Advisory, the conglomerate surged 223 places to rank 33
as one of India's most trusted brands in 2018. It was ranked 6 in the automobile
category, the highest of any Indian two wheeler manufacturer in the shortlist.
 Extensive Domestic Network - Hero MotoCorp has over 6,500 dealerships and
service points across India. The large number of service points has allowed it to roll
out its Express Service scheme, where it strives to service a customer's vehicle within
60 minutes.
 Strong Global Presence - Ever since the termination of the joint venture between
Hero Group of India and Honda of Japan, Hero MotoCorp began to establish its global
footprint. As of late 2018, its two wheeler,s are being sold in over 37 countries and has
8 manufacturing plants in 3 countries.

 Large Product Portfolio - Not only does Hero MotoCorp provide a large variety
of two wheeler,s, it is moving rapidly alongside current market trends as well. In late
2016, it made its first venture into the electric vehicle market by investing in a
Bangalore-based tech manufacturer, Another Energy. It has a rich and diversified
portfolio targeting different segments. For example, the XPulse series is catered
towards the international consumer and the Xtreme series is targeted at the growing
premium motorcycle segment.
4.2 Weaknesses
Despite its strong domestic presence and large market, Hero MotoCorp still have some
weaknesses that can threaten its growth and future.
 Poor Gender Diversification - As of late 2018, Hero MotoCorp had only 256 female
employees out of 8266, Although the figure has tripled from a mere 1% in 2014, much
more still can be done to address the gender inequality and diversification.
 Global Exports - Despite having a gargantuan market share domestically, Hero
MotoCorp is still largely focused on India. In 2017, only 12% of the units sold by all
two wheeler manufacturers in India contributed to exports. This is greatly eclipsed by
China, which had exported more than 46% of units sold, more than 4 times the
amount. As more competitors are looking to jump on the two wheeler market in India,
it would be unwise for the company to solely focus on its home ground.
 Declining Service Quality - In a study conducted by the International Journal of
Innovative Research in Science, Engineering and Technology in 2015, the overall
service quality for Hero MotoCorp fell below expectations of end consumers.
According to the study based using SERVQUAL model of service quality, Bajaj Auto,
one of its closest competitors, was deemed to have better overall service and appeal.
4.3 Opportunities
 Joint Ventures and Acquisitions- Despite the terminated joint venture with Honda
Japan, it is crucial to note that for many years, technology in its two wheeler,s came
from Honda. By acquiring start-ups or going into joint ventures will allow the
conglomerate to obtain more valuable technology and tap into other market segments.
A good example is its 49.2% stake buyout of Erik Buell Racing, which allows Hero
MotoCorp to synergize motor technologies and extend sales into the North American
market.

 Electric Two Wheeler,s - The electric bike and scooter market is booming
globally and it would be an opportunity for Hero MotoCorp to leverage on. The e-bike
market is expected to reach about 24.3 billion U.S. dollars by 2025. According to
Prescient and Strategic Intelligence, the electric scooter and motorcycles market in
India alone will surge past $617.7 million by 2025.
4.4 Threats
 Strong Competition - Hero MotoCorp faces strong competition domestically despite

its strong foothold in India. The two wheeler market in India is very competitive and is
dominated by three other major players, TVS Motors, Honda, and Bajaj Auto.
In 2012, Honda launched made-in-China two wheeler s which are priced lower than
equivalent cost-efficient models. Honda has been expanding aggressively since the joint
venture was terminated in 2010. It began enticing Hero dealers to join the Honda network
under its subsidiarity in India, Honda Motorcycles and Scooters India Pvt. Ltd (HSMI).
Similarly, TVS Motors has collaborated with BMW to establish its presence in the
premium motorcycle market in direct competition with Hero's Xtreme series. Competition
will continue to remain strong as India is an extremely large market to delve into.
 Public Transport Infrastructure - The government of India is striving to improve on

its public transport infrastructure. Projects such as the National Highways
Development Project (NHDP) under the ambitious Bharatmala Pariyojana will add on
more than 80,000 km of highways in India. In early 2019, India's Union Minister Nitin
Gadkari announced that India's public transport will be based on the London model
with an MoU with Transport for London (TFL) being signed in the previous year.
Government initiatives will definitely reduce the demand for automobiles if public
transport becomes more reliable.
CHAPTER-5
Analysis of the financial statement
Ratios
1)Current Ratios = Current Assets

Current Liabilities
Table 5.2.1 showing Current Ratio

Particulars 2019 2018 2017
A}Current Assets 6512.14 4240.67 3943.77
B}Current Liabilities 4784.07 4969.92 4582.97
Current ratio (Times) Total 1.36 0.85 0.86
Analysis : Current ratio in the year 2017 was 0.86 times and in the year 2018 it decreased
1.36 times but in the year 2019 it increased 1.36. The low current ratio represents that the
liquidity position of the firm is not good and the firm shall not be able to pay its current
liabilities in time. The high ratio represents that the firm is liquid and is able to meet its
current obligations.
Chart 5.2.1 Showing Current Ratio

2 3 4 5 6 7
1.6
1.36
1.4
1.2
1
1 0.85 0.86
0.8
0.6
0.4
0.2
0
2019 2018 2017
Current Ratio Total
Interpretation : Current ratio in the year 2017 was 0.86 times and in the year 2018 it
decreased 1.36 times but in the year 2019 it increased 1.36. The low current ratio
represents that the liquidity position of the firm is not good and the firm shall not be able to
pay its current liabilities in time. The high ratio represents that the firm is liquid and is able
to meet its current obligations.
2) Quick Ratio
Quick Ratio = Current Assets - Inventories - Prepaid expenses
Current Liabilities
Table 5.2.2 Showing Quick Ratio

Quick A 5439.77 3147.07 3287.46
Quick B 4784.07 4969.92 4582.97
Quick Ratio (times) 1.14 0.63 0.72
Analysis : Quick ratio in the year 2019 was 1.14, 2018 was 0.63 and in 2017 it was 0.72.
Higher the quick ratio better the liquidity position. In the year 2017 and 2018 the quick
ratio is less than 1 that indicates company is relying highly on the inventory or other asset
to pay their short term liabilities.
Chart 5.2 .2Showing Quick Ratio
Quick
2 2
Ratio
3 3 4 4
1.14
1 1
0.72
0.63
2017 2018 2019
Interpretation : Quick ratio in the year 2019 was 1.14, 2018 was 0.63 and in 2017 it was
0.72. Higher the quick ratio better the liquidity position. In the year 2017 and 2018 the
quick ratio is less than 1 that indicates company is relying highly on the inventory or other
asset to pay their short term liabilities
3) Earnings per share ( EPS)
EPS = Net profit before tax, interest and preference dividend

Number of equity shares
Table 5.2.3 Showing Earning per share

Net profit and 3384.87 3697.36 3377.12
preference dividend
No. Of equity shares 1997.27 197.11 1996.97
(Lakh s)
EPS 169.47 185.14 169.11
Analysis : EPS is useful to determine the net market price of equity shares. It also shows
the business ability to pay the dividend to its investors. EPS was 169.11 in the year 2017,
then there was a increase in EPS in 2018 by 185.14, again it reduced to 169.47.
Chart 5.2.3 Showing Earning per share
Earning per share

2
1 3
185.14 EPS
169.11 169.47
44
2017 2018 2019
Interpretation : EPS is useful to determine the net market price of equity shares. It also
shows the business ability to pay the dividend to its investors. EPS was 169.11 in the year
2017, then there was a increase in EPS in 2018 by 185.14, again it reduced to 169.47.
4) Price Earning Ratio

Price earning Ratio = Market price per share
Earnings per share
Table 5.2.4 Showing Price Earning Ratio


Market price per share 643.74 589.29 506.32
Earnings per share 169.47 185.14 169.11
Price earning Ratio 3.80 3.18 2.99
Analysis : Price earning Ratio was 2.99 in the year 2017, it increased to 3.18 in the year
2018 and again a increase in 2019 by 3.80. It helps the investors in deciding whether the
shares are fairly priced or not. High Price earning Ratio shows that firm will take longer to
cover its market price. It is also used for predicling the future market price of the share.
Chart 5.2.4 Showing Pricing Earning Ratio
Price earning ratio 4 4

3.8
3.18
2.99 3 3
2 2
1 1
2017 2018 2019
Interpretation : Price earning Ratio was 2.99 in the year 2017, it increased to 3.18 in the
year 2018 and again a increase in 2019 by 3.80. It helps the investors in deciding whether
the shares are fairly priced or not. High Price earning Ratio shows that firm will take
longer to cover its market price. It is also used for predicling the future market price of the
share.
5) Debt Equity Ratio

Debt Equity Ratio = Total Liabilities
Shareholders equity
Table 5.2.5 Showing Debt Equity Ratio


Total Liabilities 12857120 11768880 10111290
Shareholders equity 3995000 3994000 3994000
Debt Equity Ratio 3.21 2.95 2.53
Analysis : Debt Equity Ratio was 2.53 in 2017, in 2018 it was 2.95 and in 2019 it was
3.21. It is used to calculate the extent of debt in financing that has been used in the
business. High debt equity shows that the business is making use of debt funds and thus is
aggressive in its financial decisions.
Chart 5.2.5 Showing Debt Equity Ratio
Debt equity ratio

3.5
3 2109; 3.21
2108; 2.95
2.5
2017; 2.53
2
1.5
1
0.5
0
2017 2108 2109
Debt equity ratio
Interpretation : Debt Equity Ratio was 2.53 in 2017, in 2018 it was 2.95 and in 2019 it
was 3.21. It is used to calculate the extent of debt in financing that has been used in the
business. High debt equity shows that the business is making use of debt funds and thus is
aggressive in its financial decisions.
6) Rate On Equity
Rate on equity = Net profit after interest and tax × 100
Shareholders funds
Table 5.2.6 Showing Rate On Equity

Net profit interest and tax 3,38,48,700 3,69,73,600 3,37,71,200
Shareholders Funds 3,99,50,000 3,99,40,000 3,99,40,000
Returns on Equity 0.84 0.93 0.85
Analysis : Return on equity was 0.85 in the year 2017 which increased to 0.93 in 2018 and
later on decreased to 0.84 in 2019. It is calculated to know the firms profitability from
perspective of shareholders. It also helps to check if the company is performing well or
not.
Chart 5.2.6 Showing Return On Equity
retURN ON EQUITY
Return on equity
4
3
2
1 3 4
2
1
0.85 0.93 0.84
2017 2018 2019
Interpretation : Return on equity was 0.85 in the year 2017 which increased to 0.93 in
2018 and later on decreased to 0.84 in 2019. It is calculated to know the firms profitability
from perspective of shareholders. It also helps to check if the company is performing well
or not.
7) Gross Profit Ratio
Gross Profit Ratio = Gross Profit × 100

Net Sales
Gross Profit = Net Sales - Cost of goods consumed

Table 5.2.7 Showing Gross Profit Ratio
Gross Profit Ratio 4992.92 5239.45 4644.38
Net Sales 33650.54 32230.49 28500.46
Gross Profit Ratio (%) 14.83% 16.26% 16.30%
Analysis : Gross profit ratio in the year 2014 was 16.30% and it decreased to 16.26% in
2018 and 14.83% in 2019. Gross profit ratio shows the average margin on products scold.
This ratio is useful for making temporal analysis.
Chart 5.2.7 Showing Gross Profit Ratio
16.50%
16.00%
15.50%
Gross Profit Ratio (%)

15.00%
14.50%
14.00%
2017 2018 2019
Interpretation : Gross profit ratio in the year 2014 was 16.30% and it decreased to
16.26% in 2018 and 14.83% in 2019. Gross profit ratio shows the average margin on
products scold. This ratio is useful for making temporal analysis.
8) Net Profit Ratio
Net Profit Ratio = Net Profit × 100

Net Sales
Table 5.2.8 Showing Net Profit Ratio

Net Profit 3384.87 3697.36 3377.12
Net Sales 33650.54 32230.49 28500.46
Net Profit Ratio 10.06% 11.47% 11.85%
Analysis : Net profit ratio was 11.85% in the year 2017, it was decreased to 11.47% IN
2018 and 10.06% in 2019. It is useful to measure the overall profitability of business. The
ratio of one year can be compared with that of another year to measure the performance of
the company and also to take any measures for a ltainment of gaol.
Chart 5.2.8 Showing Net Profit Ratio
1 1 Net
2 Profit
2 Ratio 3 3 4 4
11.85%
11.47%
10.06%
2017 2018 2019
Interpretation : Net profit ratio was 11.85% in the year 2017, it was decreased to 11.47%
IN 2018 and 10.06% in 2019. It is useful to measure the overall profitability of business.
The ratio of one year can be compared with that of another year to measure the
performance of the company and also to take any measures for a ltainment of gaol
Chapter - 6
Learning Experience
6.1 Every student doing a professional course needs to undertake internship in his

respective field, which gives him a chance to explore his skills and suit himself in the work
environment.
The objective of the internship is to benefit both the students working as interns as well as
the company for which the student are working. The students get to learn the basis of their
education and them turning into realities, whereas the companies could add value to their
service through the creativity and the innovation skills possessed by the new generation.
The internship periods, also helps a student to judge himself, whether, he would be able to
adjust in the corporate environment or not.
The organization study at Hero MotoCorp (Sai Motors), Bangalore has given me the
opportunity to gain valuable industry related experience that would allow me to expand my
career options. The skills and knowledge I gained at BNMIT was quite differ from the
experience I gained at Hero MotoCorp (Sai Motors). I was able to utilize and engage the
knowledge and skills gained at BNMIT in a more practical approach at Hero MotoCorp
(Sai Motors). The guidance, support, feedback and useful suggestions provided by my
project guide helped me to successfully complete this Organization study.
The organization study definitely broadened my mind. What stood out during the
organization study at Hero MotoCorp (sai Motors) was the dedicated Hero MotoCorp king
environment.
CHAPTER- 7
Bibliography

Annexure
5.1 Balance Sheet of Hero Motocorp
Balance Sheet of Hero ------------------- in Rs. Cr. -------------------

Motocorp
Mar '19 Mar '18 Mar '17
Sources Of Funds
Total Share Capital 39.95 39.94 39.94
Equity Share Capital 39.95 39.94 39.94
Reserves 12,817.17 11,728.94 10,071.35
Net worth 12,857.12 11,768.88 10,111.29
Total Liabilities 12,857.12 11,768.88 10,111.29
Mar '19 Mar '18 Mar '17
12 months 12 months 12 months
Application Of Funds
Gross Block 7,994.83 7,573.79 6,857.99
Less: Accum. Depreciation 3,376.25 2,919.25 2,462.40
Net Block 4,618.58 4,654.54 4,395.59
Capital Work in Progress 541.86 318.39 465.05
Investments 5,968.61 7,525.20 5,889.85
Inventories 1,072.37 823.58 656.31
Sundry Debtors 2,821.57 1,520.18 1,561.87
Cash and Bank Balance 136.46 141.34 136.73
Total Current Assets 4,030.40 2,485.10 2,354.91
Loans and Advances 2,481.74 1,755.57 1,588.86
Total CA, Loans & Advances 6,512.14 4,240.67 3,943.77
Current Liabilities 4,607.84 4,795.19 4,468.66
Provisions 176.23 174.73 114.31
Total CL & Provisions 4,784.07 4,969.92 4,582.97
Net Current Assets 1,728.07 -729.25 -639.20
Total Assets 12,857.12 11,768.88 10,111.29
Contingent Liabilities 821.50 437.86 480.68
Book Value (Rs) 643.74 589.29 506.33
5.2 Profit & Loss account of Hero

------------ in Rs. Cr ------------
Motocorp
Mar 19 Mar 18 Mar 17
12 months 12 months 12 months
INCOME

Revenue From Operations [Gross] 33,124.53 32,230.84 30,540.67
Less: Excise/Service Tax/Other Levies 0.00 641.33 2,371.13
Revenue From Operations [Net] 33,124.53 31,589.51 28,169.54
Other Operating Revenues 526.01 640.98 330.92
Total Operating Revenues 33,650.54 32,230.49 28,500.46
Other Income 691.25 525.82 522.43
Total Revenue 34,341.79 32,756.31 29,022.89
EXPENSES
Cost Of Materials Consumed 23,346.10 21,857.79 18,974.11
Changes In Inventories Of FG,WIP

-28.38 -23.15 63.17
And Stock-In Trade
Employee Benefit Expenses 1,730.24 1,540.13 1,396.01
Finance Costs 8.60 6.25 6.05
Depreciation And Amortisation

602.01 555.60 492.73
Expenses
Other Expenses 3,672.49 3,575.53 3,432.36
Total Expenses 29,331.06 27,512.15 24,364.43

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CHAPTER-1

INTRODUCTION TO THE INDUSTRY

1.1 INDUSTRY PROFILE

Indian Automobiles Industry includes the manufacture of trucks, buses, passengers

The major two wheeler manufactures are:

1. Hero Moto Crop

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Hero MotoCorp Limited

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2:2.6 Product Profile

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Splendor i-smart 110cc:

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Hero XF3R 300cc: ( Up coming)

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2:4.1 Organization Pattern

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2:5.1 Milestones achieved by Hero Motocorp.

 1,00,000th motorcycle produced in 1987.

2:6.1 Major highlights :

 Benefited 2,707 girls through Hero ‘Mobile Science Lab' project.

 Supported 517 girls by distributing books at ShishuShikshaSadanBalika School,

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 Helped 96 girls at MatraAnchal Girls Hostel, Haridwar, through building an additional

2:7.1 Work Flow Model

2:8.1 Awards won by Hero MotoCorp.

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2:9.1 Hero MotoCorp Future

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3.1 The base of the 7S Framework

7S Framework by Mckinsey - Hero

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 Examine the likely effects of future changes within a company.

 Determine how best to implement a proposed strategy.

The training provide by the company to employees is

 Off - job training

 30 days of induction is conducted to each and every employee of an organization.

 One year monitoring program by senior offers of the different department

 Three kinds of learning are thought to employees

 Acquire the huge public service.

 Service maximization as well as staff maximization

 Increase the turn to the next year

 Facing the cut thought the competition

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 Serving the customers as well as retaining the customers

The structure typically hierarchical arrangement of lines of authority. Communication,

A structure depends on the organization objectives and strategy. In a centralized structure,

3.8 Shared values

The values are:

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2. High concern for quality, safety and work environment.

3. Self service subsidized canteen, common for all

4. To sustain an organization of able and committed employees and opportunities for

3:3.1 Hero MotoCorp Porter Five Forces Analysis

Porter Five (5) Forces Model

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3:3.2 Threats of new entrants

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Hero MotoCorp will be facing high new entrants threat if