Project Report

Strategic analysis of Hero MotoCorp

A report submitted as a part of the “Strategy Formulation” course requirements

By
Group 12
Akhil Anand (M22MS006)
Shrehit Agarwal (M22MS071)
Gaurav Nidhi Pandey (M22MS099)
Ankit Kumar Mehta (M22MS011)
Bandi Sai Dora Babu (M22MS021)
MBA’24

Faculty: Prof. Krishna Kumar Balaraman

School of Management and Entrepreneurship

Indian Institute of Technology, Jodhpur
 Table of contents
Topic Page Number

Acknowledgement 3

About the company 4

Vision and Mission 5

Objectives 6

Strategic intent 6-7

Competitor analysis 7-8

SWOT analysis 8

Porter's 5 forces model 9

PESTLE analysis 9 - 11

EFE matrix 12

IFE matrix 13

Competitive Profile Matrix (CPM) analysis 14

Resource based view 15

Product development strategy 15 - 17

Value chain analysis 18 - 19

Balanced scorecard 19 - 20

Porter's generic strategies analysis 20 - 21

Corporate strategies 21 - 22

Corporate governance 22

Diversification strategy 22

Social responsibility 23

Questions 23 - 26

Financial ratio analysis 27 - 31

References 32

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 ACKNOWLEDGEMENT

We consider ourselves fortunate enough to have gotten this guidance and assistance over the
course of our project because it was essential to the project's progress and its completion. We
would like to convey our thanks for his monitoring and assistance in helping us achieve what
we have.

We are thankful to Prof. Krishna Kumar Balaraman for giving us a chance to work on the
project, "Strategic analysis of Hero MotoCorp", as well as for giving us all the assistance
and guidance we required to finish the project effectively. We are appreciative to him for
providing such excellent aid and guidance despite his hectic schedule organizing college
courses.

We are appreciative and fortunate to have gotten constant support, encouragement, and
direction from coworkers, all of which allowed us to successfully finish our project task. The
report not only increased our awareness and understanding of the needed subject, but it was
also a valuable experience.

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 ABOUT THE COMPANY

One of the biggest motorcycle manufacturers in the world and a well-known two-wheeler
producer in India is Hero MotoCorp. The company was started in 1984 under the name Hero
Honda as a joint venture between Honda of Japan and Hero Cycles of India. However in
2010, Hero Group bought out Honda's 26% ownership stake in the company, and Hero
MotoCorp was granted a new name. The company, which is based in New Delhi, exports its
products to more than 40 countries and has a vast network of dealerships and service centers
spread all over India.

In order to satisfy the diverse needs of the Indian market, the company offers a wide range of
motorcycles and scooters. Among the company's well-known motorbike models are
Splendor, Passion, HF Deluxe, Glamour, and Xtreme. Among its well-known scooter models
are the Pleasure, Maestro Edge, and Destini. Hero MotoCorp's products are well-known for
their fuel efficiency, durability, and affordability, and Indian consumers like using them. The
corporation also makes large expenditures in R&D to remain competitive in the two-wheeler
industry, which is constantly evolving.

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 VISION AND MISSION

VISION
The vision of Hero MotoCorp is “Be the future of mobility.”

MISSION
The mission of Hero MotoCorp is to become a global leader in the motorcycle industry, by
providing products and services of the highest quality, at the most affordable prices, while
maintaining superior customer satisfaction. They aim to achieve this by continuously
innovating and improving their products, processes and services, while also being socially
and environmentally responsible. Hero MotoCorp's mission is to create value for all
stakeholders, including customers, employees, shareholders, suppliers and the society at
large, and to contribute to the growth and development of the communities in which they
operate.

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 OBJECTIVES

The following succinctly expresses Hero MotoCorp's objectives:

Global leadership: Hero MotoCorp has as one of its main goals to dominate the motorbike
business globally. This entails increasing their market share both domestically and abroad
and providing a diverse selection of items that cater to the tastes and wants of clients from all
over the world.
Customer satisfaction: Hero MotoCorp strives to deliver excellent customer satisfaction by
providing high-quality goods and services that go above and beyond client requirements. In
order to do this, businesses must continually improve their goods and services to satisfy the
needs, tastes, and expectations of their customers.
Innovation and technology: With investments in R&D and the use of cutting-edge
technologies, Hero MotoCorp aspires to continually innovate and enhance its products and
business practices. This makes it possible for them to provide goods that are both
technologically and environmentally sustainable.
Operational excellence: Hero MotoCorp works to achieve operational excellence by
increasing all of their operations' productivity, efficiency, and cost-effectiveness. To produce
the highest-quality goods and services at the most competitive pricing, this entails improving
their supply chain, production methods, and distribution systems.
Social and environmental responsibility: Hero MotoCorp is dedicated to conducting all of
its activities in an ethical and sustainable manner. This entails encouraging sustainable
practices, lowering their carbon impact, and helping the communities in which they operate
to grow.

STRATEGIC INTENT

The strategic intent of Hero MotoCorp is to become a global leader in the two-wheeler
industry through sustainable growth, innovation, and customer satisfaction. The company's
mission is to "redefine mobility and transform lives" by providing affordable, reliable, and
eco-friendly transportation solutions.

Hero MotoCorp's strategic intent is supported by several key initiatives. First, the company

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has invested heavily in research and development to develop new products and technologies,
including electric vehicles. Second, Hero MotoCorp has expanded its global footprint by
establishing manufacturing facilities in several countries and expanding its distribution
network.

Third, the company has focused on building a strong brand reputation and customer loyalty
through its marketing efforts. Hero MotoCorp has launched several successful advertising
campaigns and has leveraged digital marketing to reach new customers.

Fourth, Hero MotoCorp has focused on sustainability and social responsibility as part of its
strategic intent. The company has implemented several initiatives to reduce its carbon
footprint and has supported various social and community development programs.

So we can say Hero MotoCorp's strategic intent is focused on becoming a global leader in the
two-wheeler industry through sustainable growth, innovation, and customer satisfaction. The
company's initiatives are aligned with this strategic intent, and Hero MotoCorp has
established itself as a significant player in the global two-wheeler market.

COMPETITOR ANALYSIS

Competitor analysis is an essential step in helping businesses comprehend their position in

the market and create winning strategies to achieve a competitive edge.
Following is a brief analysis of Hero MotoCorp's competitors:
Bajaj Auto: One of India's largest motorcycle producers and a key rival of Hero MotoCorp
is Bajaj Auto. They have a robust distribution network as well as a large variety of items that
appeal to various client groups.
TVS Motor Company: Another significant participant in the Indian motorcycle industry is
TVS Motor Corporation, which offers a number of goods that directly compete with Hero
MotoCorp. They have solid brand recognition in the industry and are renowned for their
inventiveness.
Honda Motorcycle and Scooter India (HMSI): A significant participant in the Indian
motorcycle market is HMSI, a division of Honda Motor Corporation. They are a formidable
rival to Hero MotoCorp because of their broad distribution network and strong product line.

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Yamaha Motor India: A significant competitor in the Indian motorcycle market is Yamaha
Motor India, a division of Yamaha Motor Corporation. They have a devoted following of
customers and a significant presence in the sports and performance market.
Royal Enfield: Popular in India, Royal Enfield is a name associated with vintage and antique
motorcycles. While serving a diverse consumer base, they might compete with Hero
MotoCorp given their rising popularity and broadening product line.

Generally, these firms present tough competition for Hero MotoCorp in the Indian
motorcycle industry. However they have managed to hold onto their market position and
remain in front of the competition because of their strong brand reputation, extensive
distribution network, and emphasis on customer happiness and innovation.

SWOT ANALYSIS

Strengths:
● Exceptional R&D and a large range of goods in every sector,
● Outstanding distribution (over 3000 dealerships and service centers),
● Substantial brand equity,
● Excellent rebranding from Hero Honda to Hero MotoCorp
Weaknesses:
● Lack of presence in the luxury bike market,
● High importation of spare parts, above 30%,
● Most models have identical characteristics and lack creativity and innovation,
● Hero leverages Honda's technology.
Opportunities:
● Two-wheeler categories are among the fastest-growing businesses,
● Bike exports are limited, which means there are unexplored overseas markets,
● Affordable products with feasible prices.
Threats:
● The fierce rivalry from domestic and foreign brands,
● The dependence on governmental regulations and the growing cost of gasoline,
● Sales of two-wheelers would be impacted by improved public transportation,
● Bajaj Motor is a tenacious competitor.

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 PORTER's 5 FORCES MODEL

Rivalry among competing firms (high):

● Honda, TVS, Mahindra, Bajaj
● High demand
● Increasing population
Potential entry of new competitors (high):
● Make in India
● Permission of 100% FDI in automobile sector
Potential development of substitute products (moderate):
● Public transport is more easily available
● Taxi services, private players like cab aggregators
Bargaining power of suppliers (low):
● Depends on their number of suppliers
● Most of the suppliers of Hero MotoCorp are from China (lights) and Germany
(engine parts)
Bargaining power of customers (moderate):
● Less switching costs. Easy availability of alternatives/substitutes
● Competitors (TVS, Honda and Bajaj) in almost same price range

PESTLE ANALYSIS

Political Factors:
● Government policies and regulations can have a significant impact on the automobile
industry. For example, changes in tax laws or import/export policies can affect Hero
MotoCorp's sales and profitability.
● Recently, the Indian government has announced several initiatives to promote electric
mobility and reduce carbon emissions, including tax incentives for electric vehicle
manufacturers. This can create opportunities for Hero MotoCorp to expand its electric
vehicle product line and capture market share.

Economic Factors:

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● Economic conditions such as GDP growth, inflation rates, and currency exchange
rates can impact Hero MotoCorp's sales and profitability.
● The COVID-19 pandemic has had a significant impact on the global economy and the
automobile industry. Hero MotoCorp experienced a decline in sales and revenue during the
pandemic due to supply chain disruptions and decreased demand for two-wheelers.

Social Factors:
● Changing consumer preferences and lifestyles can impact the demand for
two-wheelers. For example, as more people move to urban areas, the demand for
fuel-efficient and compact two-wheelers may increase.
● Recently, there has been a growing trend towards sustainable and eco-friendly
transportation options. Hero MotoCorp's focus on electric vehicle technology and
sustainability initiatives can help the company capture this growing market.

Technological Factors:
● Technological advancements in the automobile industry can impact Hero MotoCorp's
product development and manufacturing processes. For example, the adoption of automation
and robotics can improve manufacturing efficiency and reduce costs.
● Hero MotoCorp has recently launched several new electric vehicle models, including
the Hero Photon HX and the Hero Electric Optima. The company's focus on electric vehicle
technology can help it stay competitive in a rapidly evolving market.

Legal Factors:
● Changes in laws and regulations related to labor, safety, and environmental protection
can impact Hero MotoCorp's operations and business decisions.
● Recently, the Indian government has announced new safety regulations for
two-wheelers, including mandatory anti-lock braking systems (ABS) and electronic stability
control (ESC). Hero MotoCorp's compliance with these regulations can improve its brand
reputation and customer trust.

Environmental Factors:
● Environmental factors such as climate change and air pollution can impact the
automobile industry. As more governments around the world implement regulations to

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reduce carbon emissions, companies like Hero MotoCorp will need to adapt to remain
competitive.
● Hero MotoCorp has implemented several sustainability initiatives, including reducing
its carbon footprint, implementing renewable energy solutions, and supporting social and
community development programs. These initiatives can help the company stay ahead of
environmental regulations and capture market share in a growing sustainable transportation
market.

Overall, PESTLE analysis shows that Hero MotoCorp faces several external factors that can
impact its operations and business decisions. However, the company's focus on innovation,
sustainability, and customer satisfaction can help it stay competitive in a rapidly evolving
market.

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 EXTERNAL FACTOR EVALUATION (EFE) MATRIX

S.No OPPORTUNITIES WEIGHT RATING WEIGHTED

SCORE

1. Salaries in urban India are likely to grow at 0.15 3 0.45

10.3% in 2023.

2. Growth in the Indian middle class population 0.07 2 0.14

will peak till 2030.

3. Diversification and increase in variety of 0.08 4 0.32

suppliers.

4. Strategic focus to increase market share in the 0.05 1 0.05

international market.

5. Benefits of National Logistics Policy for low 0.13 3 0.39

cost and quick supply of raw materials,
machines and equipment.

6. Use of high end promotions, advertising and 0.06 4 0.24

marketing strategies for increase in demand of
Hero MotoCorp two-wheelers.

7. Technological advances for electric scooters and 0.04 4 0.16

bikes to ensure sustainability.

S.No THREATS WEIGHT RATING WEIGHTED

SCORE

1. Increasing number of competitors in the 0.08 3 0.24

two-wheeler industry.

2. Fall in share price at 14.63% during the 0.12 3 0.36

previous 6 months.

3. Decrease in consumer demand due to fears of 0.07 2 0.14

economic recession.

4. Declining service quality based on the IJEST 0.04 3 0.12

report in 2015.

5. Loss of potential revenue due to less exports in 0.03 1 0.03

the International Market.

6. Increasing governmental and bureaucratic 0.04 2 0.08

regulation.

7. Improved public transportation may lead to 0.04 3 0.12

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 decrease in sales.

TOTAL WEIGHTED SCORE 1 2.84

INTERNAL FACTOR EVALUATION (IFE) MATRIX

S.No STRENGTHS WEIGHT RATING WEIGHTED

SCORE

1. Attain 8% annual growth rate in sales for 0.15 4 0.60

FY23.

2. Good customer service support. 0.08 2 0.16

3. Exceptional R&D and increasing 0.05 2 0.10

diversification of products.

4. Excellent distribution facilities and service 0.12 3 0.36

centers lead to more customer satisfaction.

5. High Inventory Turnover. 0.04 4 0.16

6. Good advertising strategies to increase demand 0.07 4 0.28

in products offered.

7. Good brand recognition in India. 0.09 3 0.27

S.No WEAKNESSES WEIGHT RATING WEIGHTED

SCORE

1. Products are not much attractive in the 0.07 1 0.07

high-end consumer segment due to lack of
presence in the luxury bike market.

2. Many spare parts are imported from foreign 0.09 1 0.09

countries like China and Germany.

3. Lack of creativity and innovation leads to 0.08 2 0.16

identical characteristics in different models of
bikes and scooters.

4. High logistics and supply chain cost. 0.08 4 0.32

5. New models not readily available at various 0.04 3 0.12

dealerships.

6. Less productivity in employees. 0.02 3 0.06

7. Not much diversification of products offered. 0.02 2 0.04

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 TOTAL WEIGHTED SCORE 1 2.79

COMPETITIVE PROFILE MATRIX (CPM) ANALYSIS

Hero MotoCorp Honda Bajaj Auto
CRITICAL Weight Rating Score Rating Score Rating Score
SUCCESS
FACTORS
Advertising 0.10 3 0.30 3 0.30 2 0.20
Supply Chain 0.15 2 0.30 3 0.45 2 0.30
Service Quality 0.10 2 0.20 1 0.10 4 0.40
Price 0.10 4 0.40 3 0.30 3 0.30
Competitiveness
Financial Position 0.10 3 0.30 4 0.40 2 0.20
Customer Loyalty 0.15 4 0.60 2 0.30 1 0.15
Global Expansion 0.05 2 0.10 4 0.20 2 0.10
Market Share 0.15 4 0.60 3 0.45 2 0.30
Product Portfolio 0.10 2 0.20 4 0.40 3 0.30

TOTAL 1 3.00 2.90 2.25

The rating values are as follows: Major Weakness = 1, Minor Weakness = 2, Minor Strength
= 3, Major Strength = 4.

As seen in the table, The highest possible weights of 0.15 are given to the following factors
that are Supply Chain, Customer Loyalty and Market Share. This means that these factors are
the most important ones in evaluating the competitive profile matrix (CPM). Also, The
lowest possible weight of 0.05 is given to Global Expansion. Hero MotoCorp gives tough
competition to its competitors for the factors of Price Competitiveness, Customer Loyalty
and Market Share. It may be due to the strong brand image of Hero MotoCorp in the Indian
two-wheeler market. Honda leads in Supply Chain, Financial Position, Global Expansion and
Product Portfolio may be due to more financial resources and technological competitiveness
as most Japanese companies are known for their advanced technologies. Bajaj Auto leads in
Service Quality as it seems to have better overall service.

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 RESOURCE BASED VIEW

The case study "Hero MotoCorp: The World's Largest Two-wheeler Maker's Transition from
Family to Professional Management" by Ruchi Sinha and Ravi Chinta is an example of RBV
in action. The case study explores how Hero MotoCorp's resources and capabilities, such as
its brand reputation, manufacturing expertise, and distribution network, have contributed to
its success over the years. The case study also highlights how the company's management
team has leveraged these resources to drive growth and improve profitability.

Another example of RBV in action is the case study "Hero MotoCorp: Revving Up the
Growth Engine" by Debapratim Purkayastha and Namrata Rana. This case study examines
how Hero MotoCorp's resources and capabilities, such as its strong brand reputation, R&D
capabilities, and manufacturing expertise, have helped the company expand into new markets
and develop new products. The case study also highlights how the company has leveraged its
resources to drive innovation and sustainability in its business model.

Finally, the case study "Hero MotoCorp: Decoding Rural Marketing" by Piyush Kumar and
Prashant Salwan is an example of how RBV can be used to analyze a company's marketing
strategy. The case study explores how Hero MotoCorp's marketing resources and capabilities,
such as its distribution network, advertising campaigns, and digital marketing initiatives,
have helped the company reach customers in rural areas of India. The case study also
highlights how the company has leveraged technology to improve its marketing efforts and
gain a competitive advantage over its rivals.

PRODUCT DEVELOPMENT STRATEGY

Hero MotoCorp has a strong focus on product development, with a commitment to

innovation and a focus on meeting the changing needs of its customers. The company has
implemented several strategies to ensure that its products remain competitive in the
marketplace.

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One key area of focus for Hero MotoCorp's product development strategy is electric vehicles.
The company has recognized the growing demand for electric vehicles and has been working
to develop a range of electric motorcycles and scooters. In 2021, Hero MotoCorp announced
a partnership with Taiwanese electric scooter maker Gogoro to develop and market electric
scooters in India.

Another key area of focus for Hero MotoCorp's product development strategy is the premium
motorcycle segment. The company has been working to expand its product line in this
segment, with the launch of new models such as the Xtreme 200R and the XPulse 200. These
models are aimed at capturing market share in the premium segment, which is a key growth
area for the company.

Hero MotoCorp has also been investing in research and development to ensure that its
products remain at the cutting edge of technology. The company has established a
state-of-the-art research and development center in Jaipur, India, which is focused on
developing new technologies and improving existing products.

In addition to these strategies, Hero MotoCorp has also been working to improve the design
and performance of its products. The company has implemented a number of initiatives to
improve the quality and reliability of its motorcycles and scooters, including the use of
advanced materials and components.

Hero MotoCorp's product development strategy is focused on innovation, quality, and

meeting the changing needs of its customers. By continuing to invest in research and
development and focusing on emerging trends such as electric vehicles, the company is
well-positioned to remain competitive in the marketplace and continue to grow its market
share.

Hero MotoCorp has a well-established distribution strategy in place that has helped the
company to grow its market share and expand its reach to new customers. The company's
distribution strategy is focused on developing strong partnerships with dealers and
distributors, optimizing its supply chain, and leveraging technology to improve efficiency.

One key aspect of Hero MotoCorp's distribution strategy is its focus on developing strong

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partnerships with dealers and distributors. The company has established a wide network of
dealerships and distributors across India and other countries, which enables it to reach a large
customer base. Hero MotoCorp has also implemented several initiatives to support its dealers
and distributors, such as training programs, marketing support, and financial assistance.

Another key aspect of Hero MotoCorp's distribution strategy is its focus on optimizing its
supply chain. The company has implemented several initiatives to improve efficiency and
reduce costs, such as implementing lean manufacturing techniques and optimizing its
logistics and transportation networks.

Hero MotoCorp has also been leveraging technology to improve its distribution strategy. The
company has implemented several digital initiatives to improve its sales and distribution
processes, such as the implementation of a dealer management system and the launch of an
e-commerce platform for spare parts.

In addition to these strategies, Hero MotoCorp has also been exploring new distribution
channels to reach new customers. For example, the company has been expanding its presence
in the online marketplace, partnering with e-commerce platforms such as Amazon and
Flipkart to sell its products.

One example of Hero MotoCorp's distribution strategy in action can be seen in the company's
partnership with Walmart India. In 2019, Hero MotoCorp announced that it had partnered
with Walmart India to sell its motorcycles and scooters through Walmart India's Best Price
Modern Wholesale stores. This partnership enabled Hero MotoCorp to reach new customers
in rural and semi-urban areas where Walmart India has a strong presence.

Overall, Hero MotoCorp's distribution strategy is focused on developing strong partnerships,

optimizing its supply chain, leveraging technology, and exploring new distribution channels.
By continuing to focus on these strategies, the company is well-positioned to continue to
grow its market share and expand its reach to new customers.

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 VALUE CHAIN ANALYSIS

Below is Hero MotoCorp's value chain analysis according to Porter’s value chain model:

Inbound Logistics: Hero MotoCorp purchases premium raw materials and parts from
domestic and foreign vendors for its inbound logistics. To guarantee a consistent supply of
materials at reasonable rates, the firm has a solid network of suppliers and built long-lasting
ties with them.
Operations: In India, Hero MotoCorp has a sizable and effective production network. To
increase productivity and cut costs, the firm has automated its manufacturing processes and
incorporated cutting-edge technology. The business also emphasizes environmentally
friendly production techniques and has adopted green technology like solar energy and
rainwater collecting.
Outbound Logistics: Hero MotoCorp has a sizable distribution network that consists of
more than 6,000 dealerships in India and 40 other nations. The business controls inventory
levels and makes sure that consumers receive their orders on schedule.
Sales and Marketing: Hero MotoCorp promotes their goods using a number of platforms,
including print, online media, television, and events. The business makes research and
development investments to create new goods that cater to shifting consumer demands. Hero
MotoCorp has a wide network of dealerships that offer assistance and servicing to customers.
Service: Hero MotoCorp has an extensive after-sales network that spans more than 5,000
service locations in India. The business offers its clients warranty services, maintenance
services, and replacement components. To promote a seamless and trouble-free ownership
experience for its consumers, Hero MotoCorp also provides roadside assistance and 24/7
customer support.
Procurement: Hero MotoCorp monitors supplier relationships, selects dependable suppliers,
and negotiates rates to make sure the business gets high-quality products and services at
reasonable costs.
Technology Development: To create new products that satisfy shifting consumer tastes,
Hero MotoCorp invests in research and development. The business uses green technology for
sustainable production processes and embraces innovative manufacturing technologies.

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Human Resource Management: Hero MotoCorp recruits and keeps competent workers,
offers chances for training and development, maintains a safe and healthy workplace, and
fosters employee engagement and wellbeing.
The value chain of Hero MotoCorp is centered on providing premium bikes at affordable
rates while guaranteeing sustainability and customer happiness. The firm has grown to be a
major motorcycle manufacturer in India and throughout the world thanks to its strong
emphasis on innovation, efficiency, and customer service.

BALANCED SCORECARD

Following is the study of Hero MotoCorp's balanced scorecard:

Financial Perspective: Hero MotoCorp wants to expand profitably and sustainably. In this
perspective, the key performance indicators (KPIs) include revenue growth, profitability,
return on investment (ROI), and cash flow. To make sure it meets its objectives and
maintains its financial viability, the organization continually assesses its financial
performance.
Customer Perspective: Hero MotoCorp is committed to provide high-quality motorcycles
that satisfy its clients' expectations. In this perspective, consumer happiness, brand loyalty,
and market share are key performance indicators (KPIs). In order to comprehend client
preferences and wants, the organization regularly tracks customer feedback and does market
research.
Internal Processes Perspective: To maintain effectiveness and quality in its operations,
Hero MotoCorp regularly assesses and enhances its internal processes. In this perspective,
production effectiveness, product development speed, and supply chain management are key
performance indicators (KPIs). The business also places a strong emphasis on sustainability
and works hard to minimize its negative environmental effects.

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Learning and Growth Perspective: Hero MotoCorp is aware that it has to learn new things
constantly in order to stay ahead of the competition. In this approach, employee happiness,
training and development, and innovation are key performance indicators (KPIs). The
business promotes innovation, invests in staff training and development initiatives, and
promotes a culture of lifelong learning.
The firm has a strong focus on providing value to its consumers while maintaining
sustainable development and profitability, according to Hero MotoCorp's balanced scorecard
report. To accomplish its objectives and keep its competitive edge, the organization regularly
assesses and enhances the performance of its employees, operations, and procedures.

PORTER’S GENERIC STRATEGIES ANALYSIS

Porter’s generic strategies analysis of Hero MotoCorp is as following:

Cost Leadership: In order to achieve a competitive edge in the industry, Hero MotoCorp has
implemented a cost leadership approach. The firm focuses on adopting effective production
methods, improving supply chain management, and lowering overheads in order to produce
high-quality bikes at affordable costs. Hero MotoCorp is able to sell its motorcycles at
reasonable costs as a result, luring clients who care about pricing.
Differentiation: Hero MotoCorp has implemented a differentiation strategy to set its
products apart from those of its rivals in the market. The business specializes in offering
premium bikes with distinctive features, designs, and technology. Hero MotoCorp makes
significant investments in R&D to create cutting-edge goods that adapt to evolving consumer
tastes.
Focus: In order to target particular market consumer categories, Hero MotoCorp has
implemented a focus approach. The company's primary goal is to produce bikes that meet the
demands of niche markets including commuters, sports fans, and explorers. Hero MotoCorp
has also increased its worldwide reach by targeting specialized markets in nations like Africa
and South America.

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Overall, Hero MotoCorp's Porter's study of its generic strategies reveals that the firm places a
major emphasis on providing high-quality bikes at affordable rates while distinguishing its
offerings from those of rivals and concentrating on certain consumer segments. The firm has
grown to be a major motorcycle manufacturer in India and throughout the world because of
its emphasis on innovation, cost-effectiveness, and market segmentation.

CORPORATE STRATEGIES

Following are the corporate strategies of Hero MotoCorp:

Diversification: Hero MotoCorp has implemented a diversification strategy to increase the
scope of its product offering and tap into new markets. The company has added premium
bikes, electric vehicles, and scooters to its product lineup. By its expansion into new areas in
Latin America, Europe, and Africa, Hero MotoCorp has also increased its global footprint.
Innovation: In order to set itself apart from the competitors and differentiate its products,
Hero MotoCorp has developed an innovation approach. To create new technologies, features,
and designs, the corporation makes significant investments in research and development.
Additionally, Hero MotoCorp has collaborated with industry giants like Bosch and Magneti
Marelli to create cutting-edge technologies like electronic control systems and fuel injection
systems.
Sustainability: In order to lessen its influence on the environment and foster social
responsibility, Hero MotoCorp has implemented a sustainability plan. The business has
adopted eco-friendly practices in waste disposal, solar energy, and rainwater collection.
Moreover, Hero MotoCorp promotes social programmes in the areas of healthcare,
education, and traffic safety.
Partnerships and Collaborations: In order to improve its market position and take use of
the strengths of other businesses, Hero MotoCorp has chosen a partnership and cooperation
strategy. To diversify its product offering and access new markets, the company has formed
partnerships with organizations like Harley-Davidson and Gogoro. To promote innovation,
Hero MotoCorp has also worked with academic institutions and research organizations.

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Hero MotoCorp's corporate strategies suggest that the corporation has a significant focus on
diversification, innovation, sustainability, and partnerships. The business' initiatives have
enabled it to keep a competitive advantage and grow into a major motorbike producer in
India and throughout the world.

CORPORATE GOVERNANCE
The corporate governance structure of Hero MotoCorp is in line with international best
practices and Indian regulatory standards, encouraging openness, responsibility, and moral
behavior at all levels of the business. The Board of Directors is responsible for overseeing
the company's financial performance, risk management, and strategic direction. The business
has also created a thorough code of conduct and ethics policy to guarantee compliance with
all applicable laws and regulations. Hero MotoCorp constantly interacts with its shareholders
and has a strong investor relations programme to guarantee efficient stakeholder
communication. The company's initiatives for social development, renewable energy, and
green technology all demonstrate its dedication to sustainability. Hero MotoCorp's dedication
to fostering long-term value development for all stakeholders is highlighted by its focus on
improving road safety and awareness among its consumers and stakeholders.

DIVERSIFICATION STRATEGY

Concentric strategy: The purchase of stake in Ather Energy by Hero MotoCorp is an

illustration of the business' concentric approach. A corporation may diversify through the use
of a concentric strategy, which entails expanding into adjacent areas or sectors.

Electric scooters are designed and produced by Ather Energy, a company in the electric
vehicle industry. The investment by Hero MotoCorp in Ather Energy is a calculated effort to
enter the expanding electric vehicle industry and broaden the company's product line beyond
conventional bikes fueled by gasoline. Hero MotoCorp may access Author's experience in
electric vehicle technology and take advantage of its cutting-edge design and engineering
capabilities by investing in Ather Energy. Hero MotoCorp's sustainability policy, which
strives to lessen the company's environmental effect and promote social responsibility, is in
line with the investment in Ather Energy.

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 SOCIAL RESPONSIBILITY

Hero MotoCorp's Hero MotoCorp Foundation supports several schools and clinics around
India with an emphasis on healthcare and education. To encourage skill development and
employment prospects, the organization has also built vocational training facilities.

With a number of programmes and activities, Hero MotoCorp encourages road safety and
awareness among its stakeholders and consumers. For instance, the business' "Ride Safe
India" campaign tries to educate motorcycle riders on the value of adhering to traffic laws,
donning helmets, and steering clear of intoxicated drivers.

QUESTIONS

What are the present dynamics of the company?

Mobility is changing fast and at a tremendous pace keeping in mind the challenge Hero
MotoCorp will transition its leadership in the internal combustion engine (ICE) industry into
the electric vehicle area while keeping in mind how quickly mobility is evolving. The new
brand name for upcoming mobility solutions is Vida - Powered by Hero. Vida, which means
'life',Hero moto corp is seeking to get into the electric mobility area. Hero MotoCorp keeps
using its relationships to improve its capacities. In order to provide the largest
battery-swapping network to India, Hero Moto Corp. is preparing its partnership with
Taiwan's Gogoro Inc. Additionally, they are in talks with Bharat Petroleum Corporation
Limited to establish EV battery charging infrastructure across the nation. With the investment
in Ather Energy, starting from 2016, Hero MotoCorp is also quickening its transition to
electric vehicles and offering value-adding sustainable mobility solutions to its stakeholders.
The "R4" global business plan, which Hero MotoCorp adopted in 2021, has been
revolutionary and has produced excellent results. Recalibrate, Revitalize, Revolutionize, and
Revive our Global Company was the R4 objective. This initiative has been quite effective,
and during the reviewed year, our Global Business delivered 300,624 two-wheelers in 43
regions.This was a remarkable growth of 57% compared to total units sold in the previous
year.During FY 2021-22, Hero moto corp significantly expanded its presence in the Central

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and South American markets through strategic partnerships. Having already commenced
retail sales in Mexico, in partnership with Grupo Salinas, the main aim is to become a key
player in that market. New strategic partnerships with Gilera Motors in Argentina, which is
one of the leading automotive companies in the country and in Central America with Grupo
Casa Pellas in Nicaragua and Movesa S.S. in Honduras are also extremely promising and
should deliver results. We further expanded our presence in El Salvador and reinvigorated
our strategy in Nigeria, with a goal to attain market leadership in the African markets. Our
new dealership in Dubai will help us tap into the growing market in the Gulf region.

What are the expansion strategies of Hero MotoCorp for expansion in foreign markets?

Joint ventures: In order to take advantage of local partners' knowledge and get access to
regional markets, Hero MotoCorp has formed joint ventures with local partners in a number
of different nations. For instance, the business collaborates with AIM Group in Nigeria and
Magna Steyr in Austria.
Acquisitions:To improve its position and get access to new markets, JHero MotoCorp has
bought a number of businesses in overseas countries. For instance, in 2015, the business
purchased American racing team Erik Buell Racing.
Localization of products: Hero MotoCorp has been adapting its offerings to the unique
requirements and tastes of consumers in international areas. This involves modifying its
products to comply with legal specifications and regional road conditions.
Brand building: Hero MotoCorp has been spending money on various marketing and
promotional initiatives in global markets. This involves supporting charitable causes, running
advertising campaigns, and interacting with clients on social media.

Distribution network expansion: Hero MotoCorp has been adding additional dealerships and
servicing facilities in overseas countries to increase its distribution network there. This
enables the business to contact more clients and offer superior post-sale assistance

• 360 degree campaign on Eid in Bangladesh

Campaigns on product refresh mileage campaigns across regions.
Aggressive efforts in Nigeria, Uganda and Kenya have helped in gaining the market share
and a strong momentum for next FY.

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• Tie-ups with micro financiers have helped increase reach in the markets.

What are the Risks and Challenges for the company?

Political and regulatory risks, such as shifting laws and regulations, trade restrictions, and
geopolitical conflicts, are a concern for the corporation in overseas markets.

Economic risks: The company's profitability in international markets may be affected by

economic variables such currency fluctuations, inflation, and changes in tax laws.

Hero MotoCorp is up against fierce competition from national and international businesses in
several global countries. Competitors might be more knowledgeable about the regional
market, have more robust distribution systems, and enjoy higher levels of brand awareness.

Operational difficulties: Establishing operations in international markets can be difficult and

complex. The business must address logistical issues like supply chain management,
localizing the product, and hiring and educating local people.

What are the future prospects of the company?

● Expansion into foreign markets: Hero MotoCorp has already made a name for itself
in a number of foreign areas, and there is substantial room for more growth. The business can
enter new areas by utilizing its understanding of and experience in emerging markets.
● Introduction of electric vehicles: Hero MotoCorp is well-positioned to benefit from
this trend since the Indian government has set lofty goals for the adoption of electric
vehicles. The company has already introduced electric scooters, and additional electric cars
are anticipated in the future.
● Diversification into new segmentsHero MotoCorp has historically concentrated on
the commuter market, but there is opportunity for the business to diversify into new markets
including high-end motorbikes and high-performance scooters.
● Technical developments: To incorporate new technology and features into its
products, Hero MotoCorp has been investing in research and development. Advanced safety
features, fuel-efficient engines, and linked technology are included in this.

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 How will the company tackle global challenges to ensure a safe transition to green
energy?

Investing in R&D: Hero MotoCorp is spending money on R&D to create innovative products
and technology that support green energy. This involves creating fuel-efficient hybrid
and electric vehicles that produce fewer climate pollutants.

Hero MotoCorp is aggressively raising awareness among the general public about the
advantages of renewable energy sources and the necessity of making the transition to
a more sustainable future. This covers programmes like awareness campaigns,
instruction, and teaching about the advantages of green energy.

Cooperation and partnerships: In order to develop and promote green energy, Hero
MotoCorp is partnering with numerous organizations, governments, and business
entities. This involves collaborations to create new technology, systems, and laws that
facilitate a secure switch to renewable energy.

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FINANCIAL RATIO ANALYSIS

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1. Operating Margin of 0.134 shows that the company is making Rs 0.13 per Rupee sales.

2. Net Profit Margin 8.45%

3. Return on Equity 15.67%, Providing an excellent return on shareholders.

4. Return on Capital Employed 19.69%, shows that the company is using its capital
efficiently.

5. Current Ration 1.99, Indicates adequacy of long-term funding to meet working capital.

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Source: Hero MotoCorp Official Website “FINANCIAL YEAR 2021-22”

Source: Hero MotoCorp Official Website “FINANCIAL YEAR 2021-22”

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Maker's Transition from Family to Professional Management. Ivey Business
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2. Purkayastha, D., & Rana, N. (2018). Hero MotoCorp: Revving Up the Growth
Engine. Ivey Business Journal, 82(1), 1-10.
3. Kumar, P., & Salwan, P. (2019). Hero MotoCorp: Decoding Rural Marketing. Ivey
Business Journal, 83(2), 1-10.
4. Nigam, A. (2021, February 5). Hero MotoCorp reports 3.5% YoY increase in
January 2021 sales. ETAuto.com.
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otocorp-reports-3-5-yoy-increase-in-january-2021-sales/80623692
5. Raman, R. (2019, December 17). How Hero MotoCorp achieved a smooth transition
from being a family-run business to a professionally managed one. YourStory.com.
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usiness
6. Chauhan, K. (2021, March 3). Hero MotoCorp invests in Ather Energy as part of
EV focus. LiveMint.com.
https://www.livemint.com/companies/news/hero-motocorp-invests-in-ather-energy-
as-part-of-ev-focus-11614785405472.html
7. Banerjee, N. (2018, September 4). Hero MotoCorp to launch 3 new motorcycles in
September. Business Standard.
https://www.business-standard.com/article/companies/hero-motocorp-to-launch-3-n
ew-motorcycles-in-september-118090401060_1.html
8. Rajpal, R. (2020, July 30). Hero MotoCorp reports Q1FY21 loss of Rs 772 crore.
Business Today.
https://www.businesstoday.in/sectors/auto/hero-motocorp-reports-q1fy21-loss-of-rs-
772-crore/story/411394.html
9. Hero MotoCorp. (2022, March 10). Corporate Overview.
https://www.heromotocorp.com/en-in/the-company/corporate-overview.html
10. Hero MotoCorp. (2021, December 14). Hero MotoCorp Launches India's First
125cc Scooter with FI Technology: Maestro Edge 125.
https://www.heromotocorp.com/en-in/news-events/news-updates/hero-motocorp

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