Submitted To Submitted By

Gagandeep Singh(84010)

Tavleen Bajaj(84055)

RIMT

Maharaja Aggrasen Engineering College

ACKNOWLEDGEMENT

We wish to thank DrJapneet Kwatra for her valuable editorial contribution during the preparation of this manuscript My special thanks to Lect Ms Urvashi Vashishtwho assisted in the preparation of this manuscript

We would also like to express our gratitude to all those who gave us the possibility to complete this report

We are also greatly indebted for the co-operation and guidance of our friends throughout the project report further we would also like to express our gratitude towards the university authority for beginning a program which enables us to learn a lot in this process

PREFACE

In this report the reader will encounter the entire journey of hero group starting from its evolution to its growth to achievements purpose of being formulated and the companies which they established and are the part of hero group today

Finally I wish to thank Mr ErHarinder Singh for reliving us of the burden of revising many of the topics in the report and contributing new material

We consider ourself lucky enough to go through this projectreallyit was a great learning experience In this report we have tried to give comprehensive picture of details of our project

The reason why we choose this topic was that the hero group is one o the most recognized business houses in India and we were really attracted to go through a complete study of this business group

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY

2 INTRODUCTION

3 COMPANY PROFILE

4 COMPANY PRODUCTS

5 EVOLUTION amp GROWTH

6 CONCLUSION

7 APPENDICES

8 BIBLIOGRAPHY

EXECUTIVE SUMMARY Hero group was established in 1944 in Amritsar as a bicycle spare parts business After independence and partition of India they shifted to Ludiana and commenced a business unit ldquoHERO CYCLESrdquo IN 1956

HERO is a brand name associated with two-wheelers in India and is being owned by Munjal brothers ie Mr Satyanand MunjalMr Omprakash MunjalThe Late Mr Dayanand Munjaland The Late Mr Ramankant Munjal

Hero group ranks amongst the top ten Indian business houses comprising 20 companies It is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs10000 crore turnovers annually

It is a group now being 50+years old and is a now one of the most widely recognized bands It has sold more than 15 million motor cycles and 100 million bicycles in the last 50 years It has a huge segmented market of its products and services and still are targeting towards potential customers They export their product to more than 90 countries Its market capitalization was 4179 USD million by 2006its revenue touched to 3188 US $Mn in 2006

INTRODUCTION

Hero the brand name synonymous with two-wheelers in India is a multi-unit multi-product geographically diversified Group of Companies - the reflection of the steely ambition and indomitable grit of the Munjal Family

Trace the saga of the Hero - through more than 50 years of Enterprise and Achievements of Vision and Planning

Always blazing through the trails of successhelliphelliphellip

The Hero Group has done business differently right from the inception and that is what has helped us to achieve break-through in whatever product category we have ventured in The Groups low key but focussed style of management has earned the plaudits amidst investors employees vendors and dealers as also worldwide recognition

The growth of the Group through the years has been influenced by the number of factors

The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory The Group boasts of superb operational efficiencies Every assembly line worker operates two machines simultaneously to save time and improve productivity The fact that most of the machines are either developed or fabricated in-house has resulted in low inventory levels

In Hero Cycles Limited the just-in-time inventory principle has been working since the beginning of production in the unit and is functional even till date The vendors bring in the raw material and by the end of the day the finished product is rolled out of the factory This is the Japanese style of production and in India Hero is the first company to have mastered the art of the just-in-time inventory principle

History

Hero group was started by the four Munjal brothers hailing from a small town called Kamalia now in Pakistan in the year 1944 by establishing bicycle spare parts business in Amritsar After independence and partition of India they moved to Ludhiana and started a bicycle unit called Hero Cycles in 1956 By 1975 Hero cycles became the largest bicycle manufacturer in India In 1984 Hero group joined Honda Motors of Japan to create Hero Honda Motors Limited which soon became one of the market leader in motor-cycle sales in India In 1986 Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world By the year 2004 Hero Honda became the world largest manufacturer of two-wheelers with over 48 market share in India In year 2006 Hero Honda entered the scooter production with launch of its new model - Pleasure

The Beginning

We look over our shoulders we see the past We use it to make a better present and a beautiful tomorrow as tomorrow isnrsquot just another day itrsquos another chance for us to better ourselves and to excel

Hero Cycles is a product of this philosophy The philosophy that instills commitment team work and foresight Herorsquos colossal journey started before independence The four Munjal brothers hailing from a small town called Kamalia now in Pakistan are the men who are behind the mission Brotherhood apart what knit the men together was the wealth of will integrity ambition amp determination In the year 1944 they decided to start a business of bicycle spare parts in Amritsar Its is modest beginning and the next 3 years saw the business grow rapidlyBut the dark clouds of partition eclipsed their plans of the future With renewed vigour and optimism the operational base was shifted to Ludhiana By 1956 the brothers had began manufacturing key components of bicycles and as a logical way forward began to assemble the entire cycle at their manufacturing plant in Ludhiana In the early days the plant had a capacity for 25 cycles per day Over the next few years the Bicycle Unit started growing in stature and size attracting skilled engineers technocrats administrators and entrepreneurs From a modest beginning of mere 639 bicycles in the year 1956 Hero Cycles products over 18500 cycles a day today the highest in global reckoning With the 48 share of the Indian market this volume has catapulted Hero in the lsquoGuinness Books of World Recordsrsquo in 1986 and edge over global players is being maintained since then

A tiny acorn has now become a mighty Oak From cycle to two - wheelers was a natural step and the Hero Group came into being The Hero Group today is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs

ACKNOWLEDGEMENT

We wish to thank DrJapneet Kwatra for her valuable editorial contribution during the preparation of this manuscript My special thanks to Lect Ms Urvashi Vashishtwho assisted in the preparation of this manuscript

We would also like to express our gratitude to all those who gave us the possibility to complete this report

We are also greatly indebted for the co-operation and guidance of our friends throughout the project report further we would also like to express our gratitude towards the university authority for beginning a program which enables us to learn a lot in this process

PREFACE

In this report the reader will encounter the entire journey of hero group starting from its evolution to its growth to achievements purpose of being formulated and the companies which they established and are the part of hero group today

Finally I wish to thank Mr ErHarinder Singh for reliving us of the burden of revising many of the topics in the report and contributing new material

We consider ourself lucky enough to go through this projectreallyit was a great learning experience In this report we have tried to give comprehensive picture of details of our project

The reason why we choose this topic was that the hero group is one o the most recognized business houses in India and we were really attracted to go through a complete study of this business group

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY

2 INTRODUCTION

3 COMPANY PROFILE

4 COMPANY PRODUCTS

5 EVOLUTION amp GROWTH

6 CONCLUSION

7 APPENDICES

8 BIBLIOGRAPHY

EXECUTIVE SUMMARY Hero group was established in 1944 in Amritsar as a bicycle spare parts business After independence and partition of India they shifted to Ludiana and commenced a business unit ldquoHERO CYCLESrdquo IN 1956

HERO is a brand name associated with two-wheelers in India and is being owned by Munjal brothers ie Mr Satyanand MunjalMr Omprakash MunjalThe Late Mr Dayanand Munjaland The Late Mr Ramankant Munjal

Hero group ranks amongst the top ten Indian business houses comprising 20 companies It is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs10000 crore turnovers annually

It is a group now being 50+years old and is a now one of the most widely recognized bands It has sold more than 15 million motor cycles and 100 million bicycles in the last 50 years It has a huge segmented market of its products and services and still are targeting towards potential customers They export their product to more than 90 countries Its market capitalization was 4179 USD million by 2006its revenue touched to 3188 US $Mn in 2006

INTRODUCTION

Hero the brand name synonymous with two-wheelers in India is a multi-unit multi-product geographically diversified Group of Companies - the reflection of the steely ambition and indomitable grit of the Munjal Family

Trace the saga of the Hero - through more than 50 years of Enterprise and Achievements of Vision and Planning

Always blazing through the trails of successhelliphelliphellip

The Hero Group has done business differently right from the inception and that is what has helped us to achieve break-through in whatever product category we have ventured in The Groups low key but focussed style of management has earned the plaudits amidst investors employees vendors and dealers as also worldwide recognition

The growth of the Group through the years has been influenced by the number of factors

The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory The Group boasts of superb operational efficiencies Every assembly line worker operates two machines simultaneously to save time and improve productivity The fact that most of the machines are either developed or fabricated in-house has resulted in low inventory levels

In Hero Cycles Limited the just-in-time inventory principle has been working since the beginning of production in the unit and is functional even till date The vendors bring in the raw material and by the end of the day the finished product is rolled out of the factory This is the Japanese style of production and in India Hero is the first company to have mastered the art of the just-in-time inventory principle

History

Hero group was started by the four Munjal brothers hailing from a small town called Kamalia now in Pakistan in the year 1944 by establishing bicycle spare parts business in Amritsar After independence and partition of India they moved to Ludhiana and started a bicycle unit called Hero Cycles in 1956 By 1975 Hero cycles became the largest bicycle manufacturer in India In 1984 Hero group joined Honda Motors of Japan to create Hero Honda Motors Limited which soon became one of the market leader in motor-cycle sales in India In 1986 Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world By the year 2004 Hero Honda became the world largest manufacturer of two-wheelers with over 48 market share in India In year 2006 Hero Honda entered the scooter production with launch of its new model - Pleasure

The Beginning

We look over our shoulders we see the past We use it to make a better present and a beautiful tomorrow as tomorrow isnrsquot just another day itrsquos another chance for us to better ourselves and to excel

Hero Cycles is a product of this philosophy The philosophy that instills commitment team work and foresight Herorsquos colossal journey started before independence The four Munjal brothers hailing from a small town called Kamalia now in Pakistan are the men who are behind the mission Brotherhood apart what knit the men together was the wealth of will integrity ambition amp determination In the year 1944 they decided to start a business of bicycle spare parts in Amritsar Its is modest beginning and the next 3 years saw the business grow rapidlyBut the dark clouds of partition eclipsed their plans of the future With renewed vigour and optimism the operational base was shifted to Ludhiana By 1956 the brothers had began manufacturing key components of bicycles and as a logical way forward began to assemble the entire cycle at their manufacturing plant in Ludhiana In the early days the plant had a capacity for 25 cycles per day Over the next few years the Bicycle Unit started growing in stature and size attracting skilled engineers technocrats administrators and entrepreneurs From a modest beginning of mere 639 bicycles in the year 1956 Hero Cycles products over 18500 cycles a day today the highest in global reckoning With the 48 share of the Indian market this volume has catapulted Hero in the lsquoGuinness Books of World Recordsrsquo in 1986 and edge over global players is being maintained since then

A tiny acorn has now become a mighty Oak From cycle to two - wheelers was a natural step and the Hero Group came into being The Hero Group today is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs

PREFACE

In this report the reader will encounter the entire journey of hero group starting from its evolution to its growth to achievements purpose of being formulated and the companies which they established and are the part of hero group today

Finally I wish to thank Mr ErHarinder Singh for reliving us of the burden of revising many of the topics in the report and contributing new material

We consider ourself lucky enough to go through this projectreallyit was a great learning experience In this report we have tried to give comprehensive picture of details of our project

The reason why we choose this topic was that the hero group is one o the most recognized business houses in India and we were really attracted to go through a complete study of this business group

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY

2 INTRODUCTION

3 COMPANY PROFILE

4 COMPANY PRODUCTS

5 EVOLUTION amp GROWTH

6 CONCLUSION

7 APPENDICES

8 BIBLIOGRAPHY

EXECUTIVE SUMMARY Hero group was established in 1944 in Amritsar as a bicycle spare parts business After independence and partition of India they shifted to Ludiana and commenced a business unit ldquoHERO CYCLESrdquo IN 1956

HERO is a brand name associated with two-wheelers in India and is being owned by Munjal brothers ie Mr Satyanand MunjalMr Omprakash MunjalThe Late Mr Dayanand Munjaland The Late Mr Ramankant Munjal

Hero group ranks amongst the top ten Indian business houses comprising 20 companies It is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs10000 crore turnovers annually

It is a group now being 50+years old and is a now one of the most widely recognized bands It has sold more than 15 million motor cycles and 100 million bicycles in the last 50 years It has a huge segmented market of its products and services and still are targeting towards potential customers They export their product to more than 90 countries Its market capitalization was 4179 USD million by 2006its revenue touched to 3188 US $Mn in 2006

INTRODUCTION

Hero the brand name synonymous with two-wheelers in India is a multi-unit multi-product geographically diversified Group of Companies - the reflection of the steely ambition and indomitable grit of the Munjal Family

Trace the saga of the Hero - through more than 50 years of Enterprise and Achievements of Vision and Planning

Always blazing through the trails of successhelliphelliphellip

The Hero Group has done business differently right from the inception and that is what has helped us to achieve break-through in whatever product category we have ventured in The Groups low key but focussed style of management has earned the plaudits amidst investors employees vendors and dealers as also worldwide recognition

The growth of the Group through the years has been influenced by the number of factors

The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory The Group boasts of superb operational efficiencies Every assembly line worker operates two machines simultaneously to save time and improve productivity The fact that most of the machines are either developed or fabricated in-house has resulted in low inventory levels

In Hero Cycles Limited the just-in-time inventory principle has been working since the beginning of production in the unit and is functional even till date The vendors bring in the raw material and by the end of the day the finished product is rolled out of the factory This is the Japanese style of production and in India Hero is the first company to have mastered the art of the just-in-time inventory principle

History

Hero group was started by the four Munjal brothers hailing from a small town called Kamalia now in Pakistan in the year 1944 by establishing bicycle spare parts business in Amritsar After independence and partition of India they moved to Ludhiana and started a bicycle unit called Hero Cycles in 1956 By 1975 Hero cycles became the largest bicycle manufacturer in India In 1984 Hero group joined Honda Motors of Japan to create Hero Honda Motors Limited which soon became one of the market leader in motor-cycle sales in India In 1986 Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world By the year 2004 Hero Honda became the world largest manufacturer of two-wheelers with over 48 market share in India In year 2006 Hero Honda entered the scooter production with launch of its new model - Pleasure

The Beginning

We look over our shoulders we see the past We use it to make a better present and a beautiful tomorrow as tomorrow isnrsquot just another day itrsquos another chance for us to better ourselves and to excel

Hero Cycles is a product of this philosophy The philosophy that instills commitment team work and foresight Herorsquos colossal journey started before independence The four Munjal brothers hailing from a small town called Kamalia now in Pakistan are the men who are behind the mission Brotherhood apart what knit the men together was the wealth of will integrity ambition amp determination In the year 1944 they decided to start a business of bicycle spare parts in Amritsar Its is modest beginning and the next 3 years saw the business grow rapidlyBut the dark clouds of partition eclipsed their plans of the future With renewed vigour and optimism the operational base was shifted to Ludhiana By 1956 the brothers had began manufacturing key components of bicycles and as a logical way forward began to assemble the entire cycle at their manufacturing plant in Ludhiana In the early days the plant had a capacity for 25 cycles per day Over the next few years the Bicycle Unit started growing in stature and size attracting skilled engineers technocrats administrators and entrepreneurs From a modest beginning of mere 639 bicycles in the year 1956 Hero Cycles products over 18500 cycles a day today the highest in global reckoning With the 48 share of the Indian market this volume has catapulted Hero in the lsquoGuinness Books of World Recordsrsquo in 1986 and edge over global players is being maintained since then

A tiny acorn has now become a mighty Oak From cycle to two - wheelers was a natural step and the Hero Group came into being The Hero Group today is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY

2 INTRODUCTION

3 COMPANY PROFILE

4 COMPANY PRODUCTS

5 EVOLUTION amp GROWTH

6 CONCLUSION

7 APPENDICES

8 BIBLIOGRAPHY

EXECUTIVE SUMMARY Hero group was established in 1944 in Amritsar as a bicycle spare parts business After independence and partition of India they shifted to Ludiana and commenced a business unit ldquoHERO CYCLESrdquo IN 1956

HERO is a brand name associated with two-wheelers in India and is being owned by Munjal brothers ie Mr Satyanand MunjalMr Omprakash MunjalThe Late Mr Dayanand Munjaland The Late Mr Ramankant Munjal

Hero group ranks amongst the top ten Indian business houses comprising 20 companies It is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs10000 crore turnovers annually

It is a group now being 50+years old and is a now one of the most widely recognized bands It has sold more than 15 million motor cycles and 100 million bicycles in the last 50 years It has a huge segmented market of its products and services and still are targeting towards potential customers They export their product to more than 90 countries Its market capitalization was 4179 USD million by 2006its revenue touched to 3188 US $Mn in 2006

INTRODUCTION

Hero the brand name synonymous with two-wheelers in India is a multi-unit multi-product geographically diversified Group of Companies - the reflection of the steely ambition and indomitable grit of the Munjal Family

Trace the saga of the Hero - through more than 50 years of Enterprise and Achievements of Vision and Planning

Always blazing through the trails of successhelliphelliphellip

The Hero Group has done business differently right from the inception and that is what has helped us to achieve break-through in whatever product category we have ventured in The Groups low key but focussed style of management has earned the plaudits amidst investors employees vendors and dealers as also worldwide recognition

The growth of the Group through the years has been influenced by the number of factors

The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory The Group boasts of superb operational efficiencies Every assembly line worker operates two machines simultaneously to save time and improve productivity The fact that most of the machines are either developed or fabricated in-house has resulted in low inventory levels

In Hero Cycles Limited the just-in-time inventory principle has been working since the beginning of production in the unit and is functional even till date The vendors bring in the raw material and by the end of the day the finished product is rolled out of the factory This is the Japanese style of production and in India Hero is the first company to have mastered the art of the just-in-time inventory principle

History

Hero group was started by the four Munjal brothers hailing from a small town called Kamalia now in Pakistan in the year 1944 by establishing bicycle spare parts business in Amritsar After independence and partition of India they moved to Ludhiana and started a bicycle unit called Hero Cycles in 1956 By 1975 Hero cycles became the largest bicycle manufacturer in India In 1984 Hero group joined Honda Motors of Japan to create Hero Honda Motors Limited which soon became one of the market leader in motor-cycle sales in India In 1986 Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world By the year 2004 Hero Honda became the world largest manufacturer of two-wheelers with over 48 market share in India In year 2006 Hero Honda entered the scooter production with launch of its new model - Pleasure

The Beginning

We look over our shoulders we see the past We use it to make a better present and a beautiful tomorrow as tomorrow isnrsquot just another day itrsquos another chance for us to better ourselves and to excel

Hero Cycles is a product of this philosophy The philosophy that instills commitment team work and foresight Herorsquos colossal journey started before independence The four Munjal brothers hailing from a small town called Kamalia now in Pakistan are the men who are behind the mission Brotherhood apart what knit the men together was the wealth of will integrity ambition amp determination In the year 1944 they decided to start a business of bicycle spare parts in Amritsar Its is modest beginning and the next 3 years saw the business grow rapidlyBut the dark clouds of partition eclipsed their plans of the future With renewed vigour and optimism the operational base was shifted to Ludhiana By 1956 the brothers had began manufacturing key components of bicycles and as a logical way forward began to assemble the entire cycle at their manufacturing plant in Ludhiana In the early days the plant had a capacity for 25 cycles per day Over the next few years the Bicycle Unit started growing in stature and size attracting skilled engineers technocrats administrators and entrepreneurs From a modest beginning of mere 639 bicycles in the year 1956 Hero Cycles products over 18500 cycles a day today the highest in global reckoning With the 48 share of the Indian market this volume has catapulted Hero in the lsquoGuinness Books of World Recordsrsquo in 1986 and edge over global players is being maintained since then

A tiny acorn has now become a mighty Oak From cycle to two - wheelers was a natural step and the Hero Group came into being The Hero Group today is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs

EXECUTIVE SUMMARY Hero group was established in 1944 in Amritsar as a bicycle spare parts business After independence and partition of India they shifted to Ludiana and commenced a business unit ldquoHERO CYCLESrdquo IN 1956

HERO is a brand name associated with two-wheelers in India and is being owned by Munjal brothers ie Mr Satyanand MunjalMr Omprakash MunjalThe Late Mr Dayanand Munjaland The Late Mr Ramankant Munjal

Hero group ranks amongst the top ten Indian business houses comprising 20 companies It is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs10000 crore turnovers annually

It is a group now being 50+years old and is a now one of the most widely recognized bands It has sold more than 15 million motor cycles and 100 million bicycles in the last 50 years It has a huge segmented market of its products and services and still are targeting towards potential customers They export their product to more than 90 countries Its market capitalization was 4179 USD million by 2006its revenue touched to 3188 US $Mn in 2006

INTRODUCTION

Hero the brand name synonymous with two-wheelers in India is a multi-unit multi-product geographically diversified Group of Companies - the reflection of the steely ambition and indomitable grit of the Munjal Family

Trace the saga of the Hero - through more than 50 years of Enterprise and Achievements of Vision and Planning

Always blazing through the trails of successhelliphelliphellip

The Hero Group has done business differently right from the inception and that is what has helped us to achieve break-through in whatever product category we have ventured in The Groups low key but focussed style of management has earned the plaudits amidst investors employees vendors and dealers as also worldwide recognition

The growth of the Group through the years has been influenced by the number of factors

The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory The Group boasts of superb operational efficiencies Every assembly line worker operates two machines simultaneously to save time and improve productivity The fact that most of the machines are either developed or fabricated in-house has resulted in low inventory levels

In Hero Cycles Limited the just-in-time inventory principle has been working since the beginning of production in the unit and is functional even till date The vendors bring in the raw material and by the end of the day the finished product is rolled out of the factory This is the Japanese style of production and in India Hero is the first company to have mastered the art of the just-in-time inventory principle

History

Hero group was started by the four Munjal brothers hailing from a small town called Kamalia now in Pakistan in the year 1944 by establishing bicycle spare parts business in Amritsar After independence and partition of India they moved to Ludhiana and started a bicycle unit called Hero Cycles in 1956 By 1975 Hero cycles became the largest bicycle manufacturer in India In 1984 Hero group joined Honda Motors of Japan to create Hero Honda Motors Limited which soon became one of the market leader in motor-cycle sales in India In 1986 Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world By the year 2004 Hero Honda became the world largest manufacturer of two-wheelers with over 48 market share in India In year 2006 Hero Honda entered the scooter production with launch of its new model - Pleasure

The Beginning

We look over our shoulders we see the past We use it to make a better present and a beautiful tomorrow as tomorrow isnrsquot just another day itrsquos another chance for us to better ourselves and to excel

Hero Cycles is a product of this philosophy The philosophy that instills commitment team work and foresight Herorsquos colossal journey started before independence The four Munjal brothers hailing from a small town called Kamalia now in Pakistan are the men who are behind the mission Brotherhood apart what knit the men together was the wealth of will integrity ambition amp determination In the year 1944 they decided to start a business of bicycle spare parts in Amritsar Its is modest beginning and the next 3 years saw the business grow rapidlyBut the dark clouds of partition eclipsed their plans of the future With renewed vigour and optimism the operational base was shifted to Ludhiana By 1956 the brothers had began manufacturing key components of bicycles and as a logical way forward began to assemble the entire cycle at their manufacturing plant in Ludhiana In the early days the plant had a capacity for 25 cycles per day Over the next few years the Bicycle Unit started growing in stature and size attracting skilled engineers technocrats administrators and entrepreneurs From a modest beginning of mere 639 bicycles in the year 1956 Hero Cycles products over 18500 cycles a day today the highest in global reckoning With the 48 share of the Indian market this volume has catapulted Hero in the lsquoGuinness Books of World Recordsrsquo in 1986 and edge over global players is being maintained since then

A tiny acorn has now become a mighty Oak From cycle to two - wheelers was a natural step and the Hero Group came into being The Hero Group today is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs

INTRODUCTION

Hero the brand name synonymous with two-wheelers in India is a multi-unit multi-product geographically diversified Group of Companies - the reflection of the steely ambition and indomitable grit of the Munjal Family

Trace the saga of the Hero - through more than 50 years of Enterprise and Achievements of Vision and Planning

Always blazing through the trails of successhelliphelliphellip

The Hero Group has done business differently right from the inception and that is what has helped us to achieve break-through in whatever product category we have ventured in The Groups low key but focussed style of management has earned the plaudits amidst investors employees vendors and dealers as also worldwide recognition

The growth of the Group through the years has been influenced by the number of factors

The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory The Group boasts of superb operational efficiencies Every assembly line worker operates two machines simultaneously to save time and improve productivity The fact that most of the machines are either developed or fabricated in-house has resulted in low inventory levels

In Hero Cycles Limited the just-in-time inventory principle has been working since the beginning of production in the unit and is functional even till date The vendors bring in the raw material and by the end of the day the finished product is rolled out of the factory This is the Japanese style of production and in India Hero is the first company to have mastered the art of the just-in-time inventory principle

History

Hero group was started by the four Munjal brothers hailing from a small town called Kamalia now in Pakistan in the year 1944 by establishing bicycle spare parts business in Amritsar After independence and partition of India they moved to Ludhiana and started a bicycle unit called Hero Cycles in 1956 By 1975 Hero cycles became the largest bicycle manufacturer in India In 1984 Hero group joined Honda Motors of Japan to create Hero Honda Motors Limited which soon became one of the market leader in motor-cycle sales in India In 1986 Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world By the year 2004 Hero Honda became the world largest manufacturer of two-wheelers with over 48 market share in India In year 2006 Hero Honda entered the scooter production with launch of its new model - Pleasure

The Beginning

We look over our shoulders we see the past We use it to make a better present and a beautiful tomorrow as tomorrow isnrsquot just another day itrsquos another chance for us to better ourselves and to excel

Hero Cycles is a product of this philosophy The philosophy that instills commitment team work and foresight Herorsquos colossal journey started before independence The four Munjal brothers hailing from a small town called Kamalia now in Pakistan are the men who are behind the mission Brotherhood apart what knit the men together was the wealth of will integrity ambition amp determination In the year 1944 they decided to start a business of bicycle spare parts in Amritsar Its is modest beginning and the next 3 years saw the business grow rapidlyBut the dark clouds of partition eclipsed their plans of the future With renewed vigour and optimism the operational base was shifted to Ludhiana By 1956 the brothers had began manufacturing key components of bicycles and as a logical way forward began to assemble the entire cycle at their manufacturing plant in Ludhiana In the early days the plant had a capacity for 25 cycles per day Over the next few years the Bicycle Unit started growing in stature and size attracting skilled engineers technocrats administrators and entrepreneurs From a modest beginning of mere 639 bicycles in the year 1956 Hero Cycles products over 18500 cycles a day today the highest in global reckoning With the 48 share of the Indian market this volume has catapulted Hero in the lsquoGuinness Books of World Recordsrsquo in 1986 and edge over global players is being maintained since then

A tiny acorn has now become a mighty Oak From cycle to two - wheelers was a natural step and the Hero Group came into being The Hero Group today is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs

History

Hero group was started by the four Munjal brothers hailing from a small town called Kamalia now in Pakistan in the year 1944 by establishing bicycle spare parts business in Amritsar After independence and partition of India they moved to Ludhiana and started a bicycle unit called Hero Cycles in 1956 By 1975 Hero cycles became the largest bicycle manufacturer in India In 1984 Hero group joined Honda Motors of Japan to create Hero Honda Motors Limited which soon became one of the market leader in motor-cycle sales in India In 1986 Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world By the year 2004 Hero Honda became the world largest manufacturer of two-wheelers with over 48 market share in India In year 2006 Hero Honda entered the scooter production with launch of its new model - Pleasure

The Beginning

We look over our shoulders we see the past We use it to make a better present and a beautiful tomorrow as tomorrow isnrsquot just another day itrsquos another chance for us to better ourselves and to excel

Hero Cycles is a product of this philosophy The philosophy that instills commitment team work and foresight Herorsquos colossal journey started before independence The four Munjal brothers hailing from a small town called Kamalia now in Pakistan are the men who are behind the mission Brotherhood apart what knit the men together was the wealth of will integrity ambition amp determination In the year 1944 they decided to start a business of bicycle spare parts in Amritsar Its is modest beginning and the next 3 years saw the business grow rapidlyBut the dark clouds of partition eclipsed their plans of the future With renewed vigour and optimism the operational base was shifted to Ludhiana By 1956 the brothers had began manufacturing key components of bicycles and as a logical way forward began to assemble the entire cycle at their manufacturing plant in Ludhiana In the early days the plant had a capacity for 25 cycles per day Over the next few years the Bicycle Unit started growing in stature and size attracting skilled engineers technocrats administrators and entrepreneurs From a modest beginning of mere 639 bicycles in the year 1956 Hero Cycles products over 18500 cycles a day today the highest in global reckoning With the 48 share of the Indian market this volume has catapulted Hero in the lsquoGuinness Books of World Recordsrsquo in 1986 and edge over global players is being maintained since then

A tiny acorn has now become a mighty Oak From cycle to two - wheelers was a natural step and the Hero Group came into being The Hero Group today is a vast conglomerate of companies either in the form of collaborations joint ventures or fully owned subsidiaries with more than Rs

10000 Crore turnover annually Hero Group besides being the worldrsquos largest manufacturers of bicycles motorcycles and chains to this date has diversified into newer segments like Information Technology IT Enabled Services and Financial Service

The Vision

We at the Hero Group are continuously striving for synergy between technology systems and human resources to provide products and services that meet the quality performance and price aspirations of the customers While doing so we maintain the highest standards of ethics and societal responsibilities constantly innovate products and processes and develop teams that keep the momentum going to take the group to excellence in everything we do

The Mission Statement

Its our mission to strive for synergy between technology systems and human resources to produce products and services that meet the quality performance and price aspirations of our

customers While doing so we maintain the highest standards of ethics and societal responsibilities

This mission is what drives us to new heights in excellence and helps us forge a unique and mutually beneficial relationship with all our stakeholders We are committed to move ahead

resolutely on this path shown to us by visionaries like Mr Satyanand Munjal Mr Om Prakash Munjal the late Mr Dayanand Munjal and late Mr Raman Kant Munjal

Mr Brijmohan Lall Munjal Chairman amp MD - THE HERO GROUP

Company Profile

Hero the brand name symbolizing the steely ambition of the Munjal brothers came into being in the year 1956 From a modest manufacturer of bicycle components in the early 1940s to the

worlds largest bicycle manufacturer today the odyssey was fueled by one vision - to build long-lasting relationships with everyone including workers dealers and vendors This philosophy has

paid rich dividends through the years

Hero a name synonymous with two wheelers in India is today a multi-unit multi-product geographically diversified Group of companies Through fully integrated operations the Munjals roll their own steel make critical components such as free wheels for their bicycles and have the foresight to simultaneously diversify into myriad ventures like product designing IT enabled services finance and insurance just to name a few

Like every success story Heros saga contains an element of spirit and enterprise of achievement through grit and determination coupled with vision and meticulous planning Throughout its success trail the Hero Group and its members have displayed unwavering passion of setting higher standards for themselves and delivering simply the best to their customers

The Hero Group philosophy is To provide excellent transportation to the common man at easily affordable prices and to provide total satisfaction in all its spheres of activity Thus apart from being customer-centric the Hero Group also provides its employees with a fine quality of life and its business associates with a total sense of belonging

Engineering Satisfaction is the prime motive of the Hero Group and it has become a way of life and a part of the work culture of the Group This is what drives the Group to seek newer vistas adopt faster technology and create quality driven products to the utmost satisfaction of customers partners dealers and vendors

Today the Hero Group has a number of accolades and achievements to its credit hellip yet consumer requirements and newer technologies provide fresh challenges every day and at Hero the wheels of progress continue to turn

ProductsServices

MotorcyclesCycles Auto Components and Cold Rolled SteelShock AbsorbersAluminium Castings amp PistonsMopeds Scooterette and Health Care EquipmentInternational Trading ArmAuto ComponentsCycle and Auto ComponentsCycle Components Auto Components and Machine toolsFinancial ServicesTwo-WheelersNon Ferrous (Aluminium) CastingsSheet Metals and Fabricated Auto ComponentsFinancial ServicesIT Training amp Education InsuranceDistributionProduct amp Engineering DesignPayment ServicesIT Enabled ServicesAuto Components

GROWTH

One of the most widely recognized brands in India

Members ndash among the leaders in their business

Hero Cycles is the Worldrsquos largest bicycle maker

Hero Honda is the Worldrsquos largest two wheeler Manufacturer

Others include Auto components Engineering design Call Centre BPO Training amp Learning

Market capitalization of over euro343 billion (USD 418 bn)

Global partnerships Over 5000 business associates Over 23000 employees Sold more than 15 million motorcycles and 100 million bicycles in the last 50 years

Hero strategy that made hero cycles and hero Honda global leaders revolved around five themes

1048707 Hero Group NOT only as a ldquolow cost providerrdquo but also as ldquoVALUE FOR MONEYrdquo provider1048707 Build strong alliances and relationships with all stakeholders in the chain1048707 Benchmark against best global practices1048707 Product Innovation keeping in mind the sensitivities of the target market1048707 Strong culture of performanceHero Group has always believed in growth through

Hero group has always believed in growth through partnerships and sharing the fruits of growth

International partnershipHero Honda motors are most successful Honda joint venture worldwide functioning for now over two decadesThe relationship with SHOWA corporation japan is over 20 years old and Munjal Showa is the largest manufacturers of shock absorber in IndiaPartnership with other stakeholdersLarge number of five thousand has had a successful partnership with group for over four decadesThe group has helped develop a large number of venders who have grown along with companies and therefore have a strong commitment in success of the businessThe group enjoys a very healthy respect amongst institutions including banks central and state

government

RatiHero Grouprsquos Ability to Compete

bull The Group has a proven track record of managing long term relationships with its domestic as well as global partnersbull The Group has demonstrated capabilities to manage a large pool of people (23000+ employees) which is a pre-requisite for success in this businessbull The Group has consistently exceeded customer expectations by understanding their needs both expressed and impliedbull The Grouprsquo s value proposition is based on providing value for money by managing cost (without compromising on quality) and efficient use of resourcesbull The Group has attained leadership position through its service orientation

Financial Growth

Hero Honda has a strong record over nearly five decades

COMPTETIVE ADVANTAGE

1 Technological tie-up hero group ties-up with Honda motorsjapan give it edg over other domestic peers in two ways (a) company does not have to earmark funds for technological research and can concentrate more on market expansion(b) the companyrsquos access to ready-to-use technology of international standards give it the opportunity to enter in international market as wellThe company pays hero Honda a royality of approximately 24 per cent of net sales

2 Dealer and service network the dealer and after sales service network forms a crucial part of success formula for any consumer product The same applies to two-wheeler industry It has the highest number of service centre approximately 3000 as well as highest sales per dealer

3 Concentration on rural areas The company currently derives approximately 60 of its revenues from rural areas The company is connected to over 18000 villages through its rural programs such as ldquo har gaon har anganrdquo Besides the company has employed over 500 special trained rural sales executive at the dealership level

4 Less dependence on credit sales It derives approximately 10 of its sales through financing

Two Wheeler Industry (Sales of 5090594 units in April-November 08)

Motorcycle (79) Scooters (15) Mopeds (6)

Industry Leaders Industry Leaders Industry Leaders

Hero Honda (58) HMSI (58) TVS Motors (99)

Bajaj Auto (24) TVS Motors (22)

TVS Motors (8) Hero Honda (12)

Kinetic Motors (05)

Growth in terms of revenues

Over the last couple of decades the main reason behind the growth of Hero Group is their

approach which is based on technology marketing and manufacturing expertise The main focus

of the group is on managing finance and resources It also focuses on high labour productivity and

low employee turnover [11]

Growth in revenue and net profits

The graph provided shows the grouprsquos growth in revenue (in US$ Mn) since 1997-98 till 2005-06

As is clearly visible from the graph the company has increased its revenue from $ 555 Mn in

1997-98 to $ 3188 Mn in 2005-06 ie an increase of $ 2633 in the span of 8 years [9]

Not only was there a tremendous rise in revenues but also in the net profits for the group

For the same time period the company witnessed a growth from $ 27 Mn in 1997-98 to $ 255 Mn

in 2005-06 [9]

Graph 1 Showing Growth of the Group in revenue and net profit [9]

YearsRevenues (US$ Mn) Profit (US$ Mn)

1997-98 555 27

1998-99 681 39

1999-00 829 55

2000-01 1110 70

2001-02 1455 120

2002-03 1810 137

2003-04 2269 203

2004-05 2751 218

2005-06 3188

Marketing Strategies

Hero Grouprsquos philosophy is based on the understanding of consumer demands market segments

and available opportunities The strategy is totally customer driven with nation wide network of

dealers making sure that the grouprsquos product is accessible throughout the country At the same

time upgrading to new technologies and committed service has been the main reason behind the

successful growth of the group [5]

Strategy

According to the Greg Fisher many International businesses especially MNCs develop strategies

for three distinct levels within the organization to cope with the complexities of the international

strategic management [6]

These levels of strategies are

1 Corporate strategy [61]

2 Business strategy [61]

3 Functional strategy [61]

Throughout the years of its growth Hero Group has actively looked at diversification The use of

Related Corporate Diversification strategy after companyrsquos growth in manufacturing activities led

to the establishment of the Hero Cycles Cold Rolling Division Munjal and Sunbeam Castings

Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing

units [11]

Then there were the expansion into the automotive segment with the setting up of Majestic Auto

Limited where the first indigenously designed moped Hero Majestic went into commercial

production in 1978 Then came Hero Motors which introduced Hero Puch in collaboration with

global technology leader Steyr Daimler Puch of Austria

Then the group looked into other industrial segments for its further growth and followed

Unrelated Diversification Strategy to enter into other segments like exports financial services

information technology which includes customer response services and software development

Further expansion is expected in the areas of Insurance and Telecommunication

Mode of entry in the international market

In the domestic market Hero cycles soon started giving good competition to already well-

established players in the market such as Hind cycles and Atlas cycles The major reason behind

this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable

giving the customers value for their money [5]

After the group success in the domestic market Munjal brothers looked for International market

for further growth to achieve additional sales and to extend its productrsquos life cycle To enter into

the Global market Hero Groups used one of the simpler and common modes of market entry ie

exporting [5]

Until 1960s there were not many Indian companies into exporting bicycles But after 1963 when

the Hero Group started exporting bicycles a new era of export started in the Indian bicycle

segment The Hero Group initially started exporting to Africa and Middle East but now there

major export is to Europe and America [3]

To meet the requirements in the international market this group has been constantly changing to

newer and better technologies It has also taken some extra measures like setting up a special

Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries

Limited) to cope up with requirements for international standards The main areas where this unit

exports its manufactured products is in the markets of developed countries like France Germany

United Kingdom etc where the requirements are of high standard [3]

Not only in the cyclersquos segment but the group also excelled in other fields in the international

market like the Hero Majestic Moped was a huge success not only in the Indian market but also

in the International market This eventually made the Hero group moped as the largest exported

moped from India Another bike ldquoHero Puchrdquo was the first Indian bike to be assembled outside

India It was first assembled in Spain and then had its assembly plants in Mauritius and Egypt

Now it has become quite popular in various countries like Paraguay Mexico Argentina Turkey

and Holland The Grouprsquos company Munjal Showa Limited is one of the largest suppliers of

shock absorbers to major auto giants in Japan US and the UK in developed markets [3]

Another division of the group was formed in 1993 ldquoHero Exportsrdquo which was responsible for the

International trading of the group for all the segments and was also recognized by the Government

of India as a trading house [3]

The recent development in International market for the group is in the field of Software

Development and the ITES industry through Hero Corporate Service Limited It provides services

to various corporations in the USA UK and Australia To further facilitate its exports it has set up

its offices in UK and USA to manage their corporate relationships [3]

International market

Fig 1 Different countries where lsquoHero Grouprsquo provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

Company Profile

Hero the brand name symbolizing the steely ambition of the Munjal brothers came into being in the year 1956 From a modest manufacturer of bicycle components in the early 1940s to the

worlds largest bicycle manufacturer today the odyssey was fueled by one vision - to build long-lasting relationships with everyone including workers dealers and vendors This philosophy has

paid rich dividends through the years

Hero a name synonymous with two wheelers in India is today a multi-unit multi-product geographically diversified Group of companies Through fully integrated operations the Munjals roll their own steel make critical components such as free wheels for their bicycles and have the foresight to simultaneously diversify into myriad ventures like product designing IT enabled services finance and insurance just to name a few

Like every success story Heros saga contains an element of spirit and enterprise of achievement through grit and determination coupled with vision and meticulous planning Throughout its success trail the Hero Group and its members have displayed unwavering passion of setting higher standards for themselves and delivering simply the best to their customers

The Hero Group philosophy is To provide excellent transportation to the common man at easily affordable prices and to provide total satisfaction in all its spheres of activity Thus apart from being customer-centric the Hero Group also provides its employees with a fine quality of life and its business associates with a total sense of belonging

Engineering Satisfaction is the prime motive of the Hero Group and it has become a way of life and a part of the work culture of the Group This is what drives the Group to seek newer vistas adopt faster technology and create quality driven products to the utmost satisfaction of customers partners dealers and vendors

Today the Hero Group has a number of accolades and achievements to its credit hellip yet consumer requirements and newer technologies provide fresh challenges every day and at Hero the wheels of progress continue to turn

ProductsServices

MotorcyclesCycles Auto Components and Cold Rolled SteelShock AbsorbersAluminium Castings amp PistonsMopeds Scooterette and Health Care EquipmentInternational Trading ArmAuto ComponentsCycle and Auto ComponentsCycle Components Auto Components and Machine toolsFinancial ServicesTwo-WheelersNon Ferrous (Aluminium) CastingsSheet Metals and Fabricated Auto ComponentsFinancial ServicesIT Training amp Education InsuranceDistributionProduct amp Engineering DesignPayment ServicesIT Enabled ServicesAuto Components

GROWTH

One of the most widely recognized brands in India

Members ndash among the leaders in their business

Hero Cycles is the Worldrsquos largest bicycle maker

Hero Honda is the Worldrsquos largest two wheeler Manufacturer

Others include Auto components Engineering design Call Centre BPO Training amp Learning

Market capitalization of over euro343 billion (USD 418 bn)

Global partnerships Over 5000 business associates Over 23000 employees Sold more than 15 million motorcycles and 100 million bicycles in the last 50 years

Hero strategy that made hero cycles and hero Honda global leaders revolved around five themes

1048707 Hero Group NOT only as a ldquolow cost providerrdquo but also as ldquoVALUE FOR MONEYrdquo provider1048707 Build strong alliances and relationships with all stakeholders in the chain1048707 Benchmark against best global practices1048707 Product Innovation keeping in mind the sensitivities of the target market1048707 Strong culture of performanceHero Group has always believed in growth through

Hero group has always believed in growth through partnerships and sharing the fruits of growth

International partnershipHero Honda motors are most successful Honda joint venture worldwide functioning for now over two decadesThe relationship with SHOWA corporation japan is over 20 years old and Munjal Showa is the largest manufacturers of shock absorber in IndiaPartnership with other stakeholdersLarge number of five thousand has had a successful partnership with group for over four decadesThe group has helped develop a large number of venders who have grown along with companies and therefore have a strong commitment in success of the businessThe group enjoys a very healthy respect amongst institutions including banks central and state

government

RatiHero Grouprsquos Ability to Compete

bull The Group has a proven track record of managing long term relationships with its domestic as well as global partnersbull The Group has demonstrated capabilities to manage a large pool of people (23000+ employees) which is a pre-requisite for success in this businessbull The Group has consistently exceeded customer expectations by understanding their needs both expressed and impliedbull The Grouprsquo s value proposition is based on providing value for money by managing cost (without compromising on quality) and efficient use of resourcesbull The Group has attained leadership position through its service orientation

Financial Growth

Hero Honda has a strong record over nearly five decades

COMPTETIVE ADVANTAGE

1 Technological tie-up hero group ties-up with Honda motorsjapan give it edg over other domestic peers in two ways (a) company does not have to earmark funds for technological research and can concentrate more on market expansion(b) the companyrsquos access to ready-to-use technology of international standards give it the opportunity to enter in international market as wellThe company pays hero Honda a royality of approximately 24 per cent of net sales

2 Dealer and service network the dealer and after sales service network forms a crucial part of success formula for any consumer product The same applies to two-wheeler industry It has the highest number of service centre approximately 3000 as well as highest sales per dealer

3 Concentration on rural areas The company currently derives approximately 60 of its revenues from rural areas The company is connected to over 18000 villages through its rural programs such as ldquo har gaon har anganrdquo Besides the company has employed over 500 special trained rural sales executive at the dealership level

4 Less dependence on credit sales It derives approximately 10 of its sales through financing

Two Wheeler Industry (Sales of 5090594 units in April-November 08)

Motorcycle (79) Scooters (15) Mopeds (6)

Industry Leaders Industry Leaders Industry Leaders

Hero Honda (58) HMSI (58) TVS Motors (99)

Bajaj Auto (24) TVS Motors (22)

TVS Motors (8) Hero Honda (12)

Kinetic Motors (05)

Growth in terms of revenues

Over the last couple of decades the main reason behind the growth of Hero Group is their

approach which is based on technology marketing and manufacturing expertise The main focus

of the group is on managing finance and resources It also focuses on high labour productivity and

low employee turnover [11]

Growth in revenue and net profits

The graph provided shows the grouprsquos growth in revenue (in US$ Mn) since 1997-98 till 2005-06

As is clearly visible from the graph the company has increased its revenue from $ 555 Mn in

1997-98 to $ 3188 Mn in 2005-06 ie an increase of $ 2633 in the span of 8 years [9]

Not only was there a tremendous rise in revenues but also in the net profits for the group

For the same time period the company witnessed a growth from $ 27 Mn in 1997-98 to $ 255 Mn

in 2005-06 [9]

Graph 1 Showing Growth of the Group in revenue and net profit [9]

YearsRevenues (US$ Mn) Profit (US$ Mn)

1997-98 555 27

1998-99 681 39

1999-00 829 55

2000-01 1110 70

2001-02 1455 120

2002-03 1810 137

2003-04 2269 203

2004-05 2751 218

2005-06 3188

Marketing Strategies

Hero Grouprsquos philosophy is based on the understanding of consumer demands market segments

and available opportunities The strategy is totally customer driven with nation wide network of

dealers making sure that the grouprsquos product is accessible throughout the country At the same

time upgrading to new technologies and committed service has been the main reason behind the

successful growth of the group [5]

Strategy

According to the Greg Fisher many International businesses especially MNCs develop strategies

for three distinct levels within the organization to cope with the complexities of the international

strategic management [6]

These levels of strategies are

1 Corporate strategy [61]

2 Business strategy [61]

3 Functional strategy [61]

Throughout the years of its growth Hero Group has actively looked at diversification The use of

Related Corporate Diversification strategy after companyrsquos growth in manufacturing activities led

to the establishment of the Hero Cycles Cold Rolling Division Munjal and Sunbeam Castings

Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing

units [11]

Then there were the expansion into the automotive segment with the setting up of Majestic Auto

Limited where the first indigenously designed moped Hero Majestic went into commercial

production in 1978 Then came Hero Motors which introduced Hero Puch in collaboration with

global technology leader Steyr Daimler Puch of Austria

Then the group looked into other industrial segments for its further growth and followed

Unrelated Diversification Strategy to enter into other segments like exports financial services

information technology which includes customer response services and software development

Further expansion is expected in the areas of Insurance and Telecommunication

Mode of entry in the international market

In the domestic market Hero cycles soon started giving good competition to already well-

established players in the market such as Hind cycles and Atlas cycles The major reason behind

this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable

giving the customers value for their money [5]

After the group success in the domestic market Munjal brothers looked for International market

for further growth to achieve additional sales and to extend its productrsquos life cycle To enter into

the Global market Hero Groups used one of the simpler and common modes of market entry ie

exporting [5]

Until 1960s there were not many Indian companies into exporting bicycles But after 1963 when

the Hero Group started exporting bicycles a new era of export started in the Indian bicycle

segment The Hero Group initially started exporting to Africa and Middle East but now there

major export is to Europe and America [3]

To meet the requirements in the international market this group has been constantly changing to

newer and better technologies It has also taken some extra measures like setting up a special

Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries

Limited) to cope up with requirements for international standards The main areas where this unit

exports its manufactured products is in the markets of developed countries like France Germany

United Kingdom etc where the requirements are of high standard [3]

Not only in the cyclersquos segment but the group also excelled in other fields in the international

market like the Hero Majestic Moped was a huge success not only in the Indian market but also

in the International market This eventually made the Hero group moped as the largest exported

moped from India Another bike ldquoHero Puchrdquo was the first Indian bike to be assembled outside

India It was first assembled in Spain and then had its assembly plants in Mauritius and Egypt

Now it has become quite popular in various countries like Paraguay Mexico Argentina Turkey

and Holland The Grouprsquos company Munjal Showa Limited is one of the largest suppliers of

shock absorbers to major auto giants in Japan US and the UK in developed markets [3]

Another division of the group was formed in 1993 ldquoHero Exportsrdquo which was responsible for the

International trading of the group for all the segments and was also recognized by the Government

of India as a trading house [3]

The recent development in International market for the group is in the field of Software

Development and the ITES industry through Hero Corporate Service Limited It provides services

to various corporations in the USA UK and Australia To further facilitate its exports it has set up

its offices in UK and USA to manage their corporate relationships [3]

International market

Fig 1 Different countries where lsquoHero Grouprsquo provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

ProductsServices

MotorcyclesCycles Auto Components and Cold Rolled SteelShock AbsorbersAluminium Castings amp PistonsMopeds Scooterette and Health Care EquipmentInternational Trading ArmAuto ComponentsCycle and Auto ComponentsCycle Components Auto Components and Machine toolsFinancial ServicesTwo-WheelersNon Ferrous (Aluminium) CastingsSheet Metals and Fabricated Auto ComponentsFinancial ServicesIT Training amp Education InsuranceDistributionProduct amp Engineering DesignPayment ServicesIT Enabled ServicesAuto Components

GROWTH

One of the most widely recognized brands in India

Members ndash among the leaders in their business

Hero Cycles is the Worldrsquos largest bicycle maker

Hero Honda is the Worldrsquos largest two wheeler Manufacturer

Others include Auto components Engineering design Call Centre BPO Training amp Learning

Market capitalization of over euro343 billion (USD 418 bn)

Global partnerships Over 5000 business associates Over 23000 employees Sold more than 15 million motorcycles and 100 million bicycles in the last 50 years

Hero strategy that made hero cycles and hero Honda global leaders revolved around five themes

1048707 Hero Group NOT only as a ldquolow cost providerrdquo but also as ldquoVALUE FOR MONEYrdquo provider1048707 Build strong alliances and relationships with all stakeholders in the chain1048707 Benchmark against best global practices1048707 Product Innovation keeping in mind the sensitivities of the target market1048707 Strong culture of performanceHero Group has always believed in growth through

Hero group has always believed in growth through partnerships and sharing the fruits of growth

International partnershipHero Honda motors are most successful Honda joint venture worldwide functioning for now over two decadesThe relationship with SHOWA corporation japan is over 20 years old and Munjal Showa is the largest manufacturers of shock absorber in IndiaPartnership with other stakeholdersLarge number of five thousand has had a successful partnership with group for over four decadesThe group has helped develop a large number of venders who have grown along with companies and therefore have a strong commitment in success of the businessThe group enjoys a very healthy respect amongst institutions including banks central and state

government

RatiHero Grouprsquos Ability to Compete

bull The Group has a proven track record of managing long term relationships with its domestic as well as global partnersbull The Group has demonstrated capabilities to manage a large pool of people (23000+ employees) which is a pre-requisite for success in this businessbull The Group has consistently exceeded customer expectations by understanding their needs both expressed and impliedbull The Grouprsquo s value proposition is based on providing value for money by managing cost (without compromising on quality) and efficient use of resourcesbull The Group has attained leadership position through its service orientation

Financial Growth

Hero Honda has a strong record over nearly five decades

COMPTETIVE ADVANTAGE

1 Technological tie-up hero group ties-up with Honda motorsjapan give it edg over other domestic peers in two ways (a) company does not have to earmark funds for technological research and can concentrate more on market expansion(b) the companyrsquos access to ready-to-use technology of international standards give it the opportunity to enter in international market as wellThe company pays hero Honda a royality of approximately 24 per cent of net sales

2 Dealer and service network the dealer and after sales service network forms a crucial part of success formula for any consumer product The same applies to two-wheeler industry It has the highest number of service centre approximately 3000 as well as highest sales per dealer

3 Concentration on rural areas The company currently derives approximately 60 of its revenues from rural areas The company is connected to over 18000 villages through its rural programs such as ldquo har gaon har anganrdquo Besides the company has employed over 500 special trained rural sales executive at the dealership level

4 Less dependence on credit sales It derives approximately 10 of its sales through financing

Two Wheeler Industry (Sales of 5090594 units in April-November 08)

Motorcycle (79) Scooters (15) Mopeds (6)

Industry Leaders Industry Leaders Industry Leaders

Hero Honda (58) HMSI (58) TVS Motors (99)

Bajaj Auto (24) TVS Motors (22)

TVS Motors (8) Hero Honda (12)

Kinetic Motors (05)

Growth in terms of revenues

Over the last couple of decades the main reason behind the growth of Hero Group is their

approach which is based on technology marketing and manufacturing expertise The main focus

of the group is on managing finance and resources It also focuses on high labour productivity and

low employee turnover [11]

Growth in revenue and net profits

The graph provided shows the grouprsquos growth in revenue (in US$ Mn) since 1997-98 till 2005-06

As is clearly visible from the graph the company has increased its revenue from $ 555 Mn in

1997-98 to $ 3188 Mn in 2005-06 ie an increase of $ 2633 in the span of 8 years [9]

Not only was there a tremendous rise in revenues but also in the net profits for the group

For the same time period the company witnessed a growth from $ 27 Mn in 1997-98 to $ 255 Mn

in 2005-06 [9]

Graph 1 Showing Growth of the Group in revenue and net profit [9]

YearsRevenues (US$ Mn) Profit (US$ Mn)

1997-98 555 27

1998-99 681 39

1999-00 829 55

2000-01 1110 70

2001-02 1455 120

2002-03 1810 137

2003-04 2269 203

2004-05 2751 218

2005-06 3188

Marketing Strategies

Hero Grouprsquos philosophy is based on the understanding of consumer demands market segments

and available opportunities The strategy is totally customer driven with nation wide network of

dealers making sure that the grouprsquos product is accessible throughout the country At the same

time upgrading to new technologies and committed service has been the main reason behind the

successful growth of the group [5]

Strategy

According to the Greg Fisher many International businesses especially MNCs develop strategies

for three distinct levels within the organization to cope with the complexities of the international

strategic management [6]

These levels of strategies are

1 Corporate strategy [61]

2 Business strategy [61]

3 Functional strategy [61]

Throughout the years of its growth Hero Group has actively looked at diversification The use of

Related Corporate Diversification strategy after companyrsquos growth in manufacturing activities led

to the establishment of the Hero Cycles Cold Rolling Division Munjal and Sunbeam Castings

Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing

units [11]

Then there were the expansion into the automotive segment with the setting up of Majestic Auto

Limited where the first indigenously designed moped Hero Majestic went into commercial

production in 1978 Then came Hero Motors which introduced Hero Puch in collaboration with

global technology leader Steyr Daimler Puch of Austria

Then the group looked into other industrial segments for its further growth and followed

Unrelated Diversification Strategy to enter into other segments like exports financial services

information technology which includes customer response services and software development

Further expansion is expected in the areas of Insurance and Telecommunication

Mode of entry in the international market

In the domestic market Hero cycles soon started giving good competition to already well-

established players in the market such as Hind cycles and Atlas cycles The major reason behind

this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable

giving the customers value for their money [5]

After the group success in the domestic market Munjal brothers looked for International market

for further growth to achieve additional sales and to extend its productrsquos life cycle To enter into

the Global market Hero Groups used one of the simpler and common modes of market entry ie

exporting [5]

Until 1960s there were not many Indian companies into exporting bicycles But after 1963 when

the Hero Group started exporting bicycles a new era of export started in the Indian bicycle

segment The Hero Group initially started exporting to Africa and Middle East but now there

major export is to Europe and America [3]

To meet the requirements in the international market this group has been constantly changing to

newer and better technologies It has also taken some extra measures like setting up a special

Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries

Limited) to cope up with requirements for international standards The main areas where this unit

exports its manufactured products is in the markets of developed countries like France Germany

United Kingdom etc where the requirements are of high standard [3]

Not only in the cyclersquos segment but the group also excelled in other fields in the international

market like the Hero Majestic Moped was a huge success not only in the Indian market but also

in the International market This eventually made the Hero group moped as the largest exported

moped from India Another bike ldquoHero Puchrdquo was the first Indian bike to be assembled outside

India It was first assembled in Spain and then had its assembly plants in Mauritius and Egypt

Now it has become quite popular in various countries like Paraguay Mexico Argentina Turkey

and Holland The Grouprsquos company Munjal Showa Limited is one of the largest suppliers of

shock absorbers to major auto giants in Japan US and the UK in developed markets [3]

Another division of the group was formed in 1993 ldquoHero Exportsrdquo which was responsible for the

International trading of the group for all the segments and was also recognized by the Government

of India as a trading house [3]

The recent development in International market for the group is in the field of Software

Development and the ITES industry through Hero Corporate Service Limited It provides services

to various corporations in the USA UK and Australia To further facilitate its exports it has set up

its offices in UK and USA to manage their corporate relationships [3]

International market

Fig 1 Different countries where lsquoHero Grouprsquo provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

GROWTH

One of the most widely recognized brands in India

Members ndash among the leaders in their business

Hero Cycles is the Worldrsquos largest bicycle maker

Hero Honda is the Worldrsquos largest two wheeler Manufacturer

Others include Auto components Engineering design Call Centre BPO Training amp Learning

Market capitalization of over euro343 billion (USD 418 bn)

Global partnerships Over 5000 business associates Over 23000 employees Sold more than 15 million motorcycles and 100 million bicycles in the last 50 years

Hero strategy that made hero cycles and hero Honda global leaders revolved around five themes

1048707 Hero Group NOT only as a ldquolow cost providerrdquo but also as ldquoVALUE FOR MONEYrdquo provider1048707 Build strong alliances and relationships with all stakeholders in the chain1048707 Benchmark against best global practices1048707 Product Innovation keeping in mind the sensitivities of the target market1048707 Strong culture of performanceHero Group has always believed in growth through

Hero group has always believed in growth through partnerships and sharing the fruits of growth

International partnershipHero Honda motors are most successful Honda joint venture worldwide functioning for now over two decadesThe relationship with SHOWA corporation japan is over 20 years old and Munjal Showa is the largest manufacturers of shock absorber in IndiaPartnership with other stakeholdersLarge number of five thousand has had a successful partnership with group for over four decadesThe group has helped develop a large number of venders who have grown along with companies and therefore have a strong commitment in success of the businessThe group enjoys a very healthy respect amongst institutions including banks central and state

government

RatiHero Grouprsquos Ability to Compete

bull The Group has a proven track record of managing long term relationships with its domestic as well as global partnersbull The Group has demonstrated capabilities to manage a large pool of people (23000+ employees) which is a pre-requisite for success in this businessbull The Group has consistently exceeded customer expectations by understanding their needs both expressed and impliedbull The Grouprsquo s value proposition is based on providing value for money by managing cost (without compromising on quality) and efficient use of resourcesbull The Group has attained leadership position through its service orientation

Financial Growth

Hero Honda has a strong record over nearly five decades

COMPTETIVE ADVANTAGE

1 Technological tie-up hero group ties-up with Honda motorsjapan give it edg over other domestic peers in two ways (a) company does not have to earmark funds for technological research and can concentrate more on market expansion(b) the companyrsquos access to ready-to-use technology of international standards give it the opportunity to enter in international market as wellThe company pays hero Honda a royality of approximately 24 per cent of net sales

2 Dealer and service network the dealer and after sales service network forms a crucial part of success formula for any consumer product The same applies to two-wheeler industry It has the highest number of service centre approximately 3000 as well as highest sales per dealer

3 Concentration on rural areas The company currently derives approximately 60 of its revenues from rural areas The company is connected to over 18000 villages through its rural programs such as ldquo har gaon har anganrdquo Besides the company has employed over 500 special trained rural sales executive at the dealership level

4 Less dependence on credit sales It derives approximately 10 of its sales through financing

Two Wheeler Industry (Sales of 5090594 units in April-November 08)

Motorcycle (79) Scooters (15) Mopeds (6)

Industry Leaders Industry Leaders Industry Leaders

Hero Honda (58) HMSI (58) TVS Motors (99)

Bajaj Auto (24) TVS Motors (22)

TVS Motors (8) Hero Honda (12)

Kinetic Motors (05)

Growth in terms of revenues

Over the last couple of decades the main reason behind the growth of Hero Group is their

approach which is based on technology marketing and manufacturing expertise The main focus

of the group is on managing finance and resources It also focuses on high labour productivity and

low employee turnover [11]

Growth in revenue and net profits

The graph provided shows the grouprsquos growth in revenue (in US$ Mn) since 1997-98 till 2005-06

As is clearly visible from the graph the company has increased its revenue from $ 555 Mn in

1997-98 to $ 3188 Mn in 2005-06 ie an increase of $ 2633 in the span of 8 years [9]

Not only was there a tremendous rise in revenues but also in the net profits for the group

For the same time period the company witnessed a growth from $ 27 Mn in 1997-98 to $ 255 Mn

in 2005-06 [9]

Graph 1 Showing Growth of the Group in revenue and net profit [9]

YearsRevenues (US$ Mn) Profit (US$ Mn)

1997-98 555 27

1998-99 681 39

1999-00 829 55

2000-01 1110 70

2001-02 1455 120

2002-03 1810 137

2003-04 2269 203

2004-05 2751 218

2005-06 3188

Marketing Strategies

Hero Grouprsquos philosophy is based on the understanding of consumer demands market segments

and available opportunities The strategy is totally customer driven with nation wide network of

dealers making sure that the grouprsquos product is accessible throughout the country At the same

time upgrading to new technologies and committed service has been the main reason behind the

successful growth of the group [5]

Strategy

According to the Greg Fisher many International businesses especially MNCs develop strategies

for three distinct levels within the organization to cope with the complexities of the international

strategic management [6]

These levels of strategies are

1 Corporate strategy [61]

2 Business strategy [61]

3 Functional strategy [61]

Throughout the years of its growth Hero Group has actively looked at diversification The use of

Related Corporate Diversification strategy after companyrsquos growth in manufacturing activities led

to the establishment of the Hero Cycles Cold Rolling Division Munjal and Sunbeam Castings

Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing

units [11]

Then there were the expansion into the automotive segment with the setting up of Majestic Auto

Limited where the first indigenously designed moped Hero Majestic went into commercial

production in 1978 Then came Hero Motors which introduced Hero Puch in collaboration with

global technology leader Steyr Daimler Puch of Austria

Then the group looked into other industrial segments for its further growth and followed

Unrelated Diversification Strategy to enter into other segments like exports financial services

information technology which includes customer response services and software development

Further expansion is expected in the areas of Insurance and Telecommunication

Mode of entry in the international market

In the domestic market Hero cycles soon started giving good competition to already well-

established players in the market such as Hind cycles and Atlas cycles The major reason behind

this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable

giving the customers value for their money [5]

After the group success in the domestic market Munjal brothers looked for International market

for further growth to achieve additional sales and to extend its productrsquos life cycle To enter into

the Global market Hero Groups used one of the simpler and common modes of market entry ie

exporting [5]

Until 1960s there were not many Indian companies into exporting bicycles But after 1963 when

the Hero Group started exporting bicycles a new era of export started in the Indian bicycle

segment The Hero Group initially started exporting to Africa and Middle East but now there

major export is to Europe and America [3]

To meet the requirements in the international market this group has been constantly changing to

newer and better technologies It has also taken some extra measures like setting up a special

Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries

Limited) to cope up with requirements for international standards The main areas where this unit

exports its manufactured products is in the markets of developed countries like France Germany

United Kingdom etc where the requirements are of high standard [3]

Not only in the cyclersquos segment but the group also excelled in other fields in the international

market like the Hero Majestic Moped was a huge success not only in the Indian market but also

in the International market This eventually made the Hero group moped as the largest exported

moped from India Another bike ldquoHero Puchrdquo was the first Indian bike to be assembled outside

India It was first assembled in Spain and then had its assembly plants in Mauritius and Egypt

Now it has become quite popular in various countries like Paraguay Mexico Argentina Turkey

and Holland The Grouprsquos company Munjal Showa Limited is one of the largest suppliers of

shock absorbers to major auto giants in Japan US and the UK in developed markets [3]

Another division of the group was formed in 1993 ldquoHero Exportsrdquo which was responsible for the

International trading of the group for all the segments and was also recognized by the Government

of India as a trading house [3]

The recent development in International market for the group is in the field of Software

Development and the ITES industry through Hero Corporate Service Limited It provides services

to various corporations in the USA UK and Australia To further facilitate its exports it has set up

its offices in UK and USA to manage their corporate relationships [3]

International market

Fig 1 Different countries where lsquoHero Grouprsquo provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

Hero group has always believed in growth through partnerships and sharing the fruits of growth

International partnershipHero Honda motors are most successful Honda joint venture worldwide functioning for now over two decadesThe relationship with SHOWA corporation japan is over 20 years old and Munjal Showa is the largest manufacturers of shock absorber in IndiaPartnership with other stakeholdersLarge number of five thousand has had a successful partnership with group for over four decadesThe group has helped develop a large number of venders who have grown along with companies and therefore have a strong commitment in success of the businessThe group enjoys a very healthy respect amongst institutions including banks central and state

government

RatiHero Grouprsquos Ability to Compete

bull The Group has a proven track record of managing long term relationships with its domestic as well as global partnersbull The Group has demonstrated capabilities to manage a large pool of people (23000+ employees) which is a pre-requisite for success in this businessbull The Group has consistently exceeded customer expectations by understanding their needs both expressed and impliedbull The Grouprsquo s value proposition is based on providing value for money by managing cost (without compromising on quality) and efficient use of resourcesbull The Group has attained leadership position through its service orientation

Financial Growth

Hero Honda has a strong record over nearly five decades

COMPTETIVE ADVANTAGE

1 Technological tie-up hero group ties-up with Honda motorsjapan give it edg over other domestic peers in two ways (a) company does not have to earmark funds for technological research and can concentrate more on market expansion(b) the companyrsquos access to ready-to-use technology of international standards give it the opportunity to enter in international market as wellThe company pays hero Honda a royality of approximately 24 per cent of net sales

2 Dealer and service network the dealer and after sales service network forms a crucial part of success formula for any consumer product The same applies to two-wheeler industry It has the highest number of service centre approximately 3000 as well as highest sales per dealer

3 Concentration on rural areas The company currently derives approximately 60 of its revenues from rural areas The company is connected to over 18000 villages through its rural programs such as ldquo har gaon har anganrdquo Besides the company has employed over 500 special trained rural sales executive at the dealership level

4 Less dependence on credit sales It derives approximately 10 of its sales through financing

Two Wheeler Industry (Sales of 5090594 units in April-November 08)

Motorcycle (79) Scooters (15) Mopeds (6)

Industry Leaders Industry Leaders Industry Leaders

Hero Honda (58) HMSI (58) TVS Motors (99)

Bajaj Auto (24) TVS Motors (22)

TVS Motors (8) Hero Honda (12)

Kinetic Motors (05)

Growth in terms of revenues

Over the last couple of decades the main reason behind the growth of Hero Group is their

approach which is based on technology marketing and manufacturing expertise The main focus

of the group is on managing finance and resources It also focuses on high labour productivity and

low employee turnover [11]

Growth in revenue and net profits

The graph provided shows the grouprsquos growth in revenue (in US$ Mn) since 1997-98 till 2005-06

As is clearly visible from the graph the company has increased its revenue from $ 555 Mn in

1997-98 to $ 3188 Mn in 2005-06 ie an increase of $ 2633 in the span of 8 years [9]

Not only was there a tremendous rise in revenues but also in the net profits for the group

For the same time period the company witnessed a growth from $ 27 Mn in 1997-98 to $ 255 Mn

in 2005-06 [9]

Graph 1 Showing Growth of the Group in revenue and net profit [9]

YearsRevenues (US$ Mn) Profit (US$ Mn)

1997-98 555 27

1998-99 681 39

1999-00 829 55

2000-01 1110 70

2001-02 1455 120

2002-03 1810 137

2003-04 2269 203

2004-05 2751 218

2005-06 3188

Marketing Strategies

Hero Grouprsquos philosophy is based on the understanding of consumer demands market segments

and available opportunities The strategy is totally customer driven with nation wide network of

dealers making sure that the grouprsquos product is accessible throughout the country At the same

time upgrading to new technologies and committed service has been the main reason behind the

successful growth of the group [5]

Strategy

According to the Greg Fisher many International businesses especially MNCs develop strategies

for three distinct levels within the organization to cope with the complexities of the international

strategic management [6]

These levels of strategies are

1 Corporate strategy [61]

2 Business strategy [61]

3 Functional strategy [61]

Throughout the years of its growth Hero Group has actively looked at diversification The use of

Related Corporate Diversification strategy after companyrsquos growth in manufacturing activities led

to the establishment of the Hero Cycles Cold Rolling Division Munjal and Sunbeam Castings

Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing

units [11]

Then there were the expansion into the automotive segment with the setting up of Majestic Auto

Limited where the first indigenously designed moped Hero Majestic went into commercial

production in 1978 Then came Hero Motors which introduced Hero Puch in collaboration with

global technology leader Steyr Daimler Puch of Austria

Then the group looked into other industrial segments for its further growth and followed

Unrelated Diversification Strategy to enter into other segments like exports financial services

information technology which includes customer response services and software development

Further expansion is expected in the areas of Insurance and Telecommunication

Mode of entry in the international market

In the domestic market Hero cycles soon started giving good competition to already well-

established players in the market such as Hind cycles and Atlas cycles The major reason behind

this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable

giving the customers value for their money [5]

After the group success in the domestic market Munjal brothers looked for International market

for further growth to achieve additional sales and to extend its productrsquos life cycle To enter into

the Global market Hero Groups used one of the simpler and common modes of market entry ie

exporting [5]

Until 1960s there were not many Indian companies into exporting bicycles But after 1963 when

the Hero Group started exporting bicycles a new era of export started in the Indian bicycle

segment The Hero Group initially started exporting to Africa and Middle East but now there

major export is to Europe and America [3]

To meet the requirements in the international market this group has been constantly changing to

newer and better technologies It has also taken some extra measures like setting up a special

Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries

Limited) to cope up with requirements for international standards The main areas where this unit

exports its manufactured products is in the markets of developed countries like France Germany

United Kingdom etc where the requirements are of high standard [3]

Not only in the cyclersquos segment but the group also excelled in other fields in the international

market like the Hero Majestic Moped was a huge success not only in the Indian market but also

in the International market This eventually made the Hero group moped as the largest exported

moped from India Another bike ldquoHero Puchrdquo was the first Indian bike to be assembled outside

India It was first assembled in Spain and then had its assembly plants in Mauritius and Egypt

Now it has become quite popular in various countries like Paraguay Mexico Argentina Turkey

and Holland The Grouprsquos company Munjal Showa Limited is one of the largest suppliers of

shock absorbers to major auto giants in Japan US and the UK in developed markets [3]

Another division of the group was formed in 1993 ldquoHero Exportsrdquo which was responsible for the

International trading of the group for all the segments and was also recognized by the Government

of India as a trading house [3]

The recent development in International market for the group is in the field of Software

Development and the ITES industry through Hero Corporate Service Limited It provides services

to various corporations in the USA UK and Australia To further facilitate its exports it has set up

its offices in UK and USA to manage their corporate relationships [3]

International market

Fig 1 Different countries where lsquoHero Grouprsquo provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

1 Technological tie-up hero group ties-up with Honda motorsjapan give it edg over other domestic peers in two ways (a) company does not have to earmark funds for technological research and can concentrate more on market expansion(b) the companyrsquos access to ready-to-use technology of international standards give it the opportunity to enter in international market as wellThe company pays hero Honda a royality of approximately 24 per cent of net sales

2 Dealer and service network the dealer and after sales service network forms a crucial part of success formula for any consumer product The same applies to two-wheeler industry It has the highest number of service centre approximately 3000 as well as highest sales per dealer

3 Concentration on rural areas The company currently derives approximately 60 of its revenues from rural areas The company is connected to over 18000 villages through its rural programs such as ldquo har gaon har anganrdquo Besides the company has employed over 500 special trained rural sales executive at the dealership level

4 Less dependence on credit sales It derives approximately 10 of its sales through financing

Two Wheeler Industry (Sales of 5090594 units in April-November 08)

Motorcycle (79) Scooters (15) Mopeds (6)

Industry Leaders Industry Leaders Industry Leaders

Hero Honda (58) HMSI (58) TVS Motors (99)

Bajaj Auto (24) TVS Motors (22)

TVS Motors (8) Hero Honda (12)

Kinetic Motors (05)

Growth in terms of revenues

Over the last couple of decades the main reason behind the growth of Hero Group is their

approach which is based on technology marketing and manufacturing expertise The main focus

of the group is on managing finance and resources It also focuses on high labour productivity and

low employee turnover [11]

Growth in revenue and net profits

The graph provided shows the grouprsquos growth in revenue (in US$ Mn) since 1997-98 till 2005-06

As is clearly visible from the graph the company has increased its revenue from $ 555 Mn in

1997-98 to $ 3188 Mn in 2005-06 ie an increase of $ 2633 in the span of 8 years [9]

Not only was there a tremendous rise in revenues but also in the net profits for the group

For the same time period the company witnessed a growth from $ 27 Mn in 1997-98 to $ 255 Mn

in 2005-06 [9]

Graph 1 Showing Growth of the Group in revenue and net profit [9]

YearsRevenues (US$ Mn) Profit (US$ Mn)

1997-98 555 27

1998-99 681 39

1999-00 829 55

2000-01 1110 70

2001-02 1455 120

2002-03 1810 137

2003-04 2269 203

2004-05 2751 218

2005-06 3188

Marketing Strategies

Hero Grouprsquos philosophy is based on the understanding of consumer demands market segments

and available opportunities The strategy is totally customer driven with nation wide network of

dealers making sure that the grouprsquos product is accessible throughout the country At the same

time upgrading to new technologies and committed service has been the main reason behind the

successful growth of the group [5]

Strategy

According to the Greg Fisher many International businesses especially MNCs develop strategies

for three distinct levels within the organization to cope with the complexities of the international

strategic management [6]

These levels of strategies are

1 Corporate strategy [61]

2 Business strategy [61]

3 Functional strategy [61]

Throughout the years of its growth Hero Group has actively looked at diversification The use of

Related Corporate Diversification strategy after companyrsquos growth in manufacturing activities led

to the establishment of the Hero Cycles Cold Rolling Division Munjal and Sunbeam Castings

Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing

units [11]

Then there were the expansion into the automotive segment with the setting up of Majestic Auto

Limited where the first indigenously designed moped Hero Majestic went into commercial

production in 1978 Then came Hero Motors which introduced Hero Puch in collaboration with

global technology leader Steyr Daimler Puch of Austria

Then the group looked into other industrial segments for its further growth and followed

Unrelated Diversification Strategy to enter into other segments like exports financial services

information technology which includes customer response services and software development

Further expansion is expected in the areas of Insurance and Telecommunication

Mode of entry in the international market

In the domestic market Hero cycles soon started giving good competition to already well-

established players in the market such as Hind cycles and Atlas cycles The major reason behind

this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable

giving the customers value for their money [5]

After the group success in the domestic market Munjal brothers looked for International market

for further growth to achieve additional sales and to extend its productrsquos life cycle To enter into

the Global market Hero Groups used one of the simpler and common modes of market entry ie

exporting [5]

Until 1960s there were not many Indian companies into exporting bicycles But after 1963 when

the Hero Group started exporting bicycles a new era of export started in the Indian bicycle

segment The Hero Group initially started exporting to Africa and Middle East but now there

major export is to Europe and America [3]

To meet the requirements in the international market this group has been constantly changing to

newer and better technologies It has also taken some extra measures like setting up a special

Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries

Limited) to cope up with requirements for international standards The main areas where this unit

exports its manufactured products is in the markets of developed countries like France Germany

United Kingdom etc where the requirements are of high standard [3]

Not only in the cyclersquos segment but the group also excelled in other fields in the international

market like the Hero Majestic Moped was a huge success not only in the Indian market but also

in the International market This eventually made the Hero group moped as the largest exported

moped from India Another bike ldquoHero Puchrdquo was the first Indian bike to be assembled outside

India It was first assembled in Spain and then had its assembly plants in Mauritius and Egypt

Now it has become quite popular in various countries like Paraguay Mexico Argentina Turkey

and Holland The Grouprsquos company Munjal Showa Limited is one of the largest suppliers of

shock absorbers to major auto giants in Japan US and the UK in developed markets [3]

Another division of the group was formed in 1993 ldquoHero Exportsrdquo which was responsible for the

International trading of the group for all the segments and was also recognized by the Government

of India as a trading house [3]

The recent development in International market for the group is in the field of Software

Development and the ITES industry through Hero Corporate Service Limited It provides services

to various corporations in the USA UK and Australia To further facilitate its exports it has set up

its offices in UK and USA to manage their corporate relationships [3]

International market

Fig 1 Different countries where lsquoHero Grouprsquo provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

Over the last couple of decades the main reason behind the growth of Hero Group is their

approach which is based on technology marketing and manufacturing expertise The main focus

of the group is on managing finance and resources It also focuses on high labour productivity and

low employee turnover [11]

Growth in revenue and net profits

The graph provided shows the grouprsquos growth in revenue (in US$ Mn) since 1997-98 till 2005-06

As is clearly visible from the graph the company has increased its revenue from $ 555 Mn in

1997-98 to $ 3188 Mn in 2005-06 ie an increase of $ 2633 in the span of 8 years [9]

Not only was there a tremendous rise in revenues but also in the net profits for the group

For the same time period the company witnessed a growth from $ 27 Mn in 1997-98 to $ 255 Mn

in 2005-06 [9]

Graph 1 Showing Growth of the Group in revenue and net profit [9]

YearsRevenues (US$ Mn) Profit (US$ Mn)

1997-98 555 27

1998-99 681 39

1999-00 829 55

2000-01 1110 70

2001-02 1455 120

2002-03 1810 137

2003-04 2269 203

2004-05 2751 218

2005-06 3188

Marketing Strategies

Hero Grouprsquos philosophy is based on the understanding of consumer demands market segments

and available opportunities The strategy is totally customer driven with nation wide network of

dealers making sure that the grouprsquos product is accessible throughout the country At the same

time upgrading to new technologies and committed service has been the main reason behind the

successful growth of the group [5]

Strategy

According to the Greg Fisher many International businesses especially MNCs develop strategies

for three distinct levels within the organization to cope with the complexities of the international

strategic management [6]

These levels of strategies are

1 Corporate strategy [61]

2 Business strategy [61]

3 Functional strategy [61]

Throughout the years of its growth Hero Group has actively looked at diversification The use of

Related Corporate Diversification strategy after companyrsquos growth in manufacturing activities led

to the establishment of the Hero Cycles Cold Rolling Division Munjal and Sunbeam Castings

Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing

units [11]

Then there were the expansion into the automotive segment with the setting up of Majestic Auto

Limited where the first indigenously designed moped Hero Majestic went into commercial

production in 1978 Then came Hero Motors which introduced Hero Puch in collaboration with

global technology leader Steyr Daimler Puch of Austria

Then the group looked into other industrial segments for its further growth and followed

Unrelated Diversification Strategy to enter into other segments like exports financial services

information technology which includes customer response services and software development

Further expansion is expected in the areas of Insurance and Telecommunication

Mode of entry in the international market

In the domestic market Hero cycles soon started giving good competition to already well-

established players in the market such as Hind cycles and Atlas cycles The major reason behind

this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable

giving the customers value for their money [5]

After the group success in the domestic market Munjal brothers looked for International market

for further growth to achieve additional sales and to extend its productrsquos life cycle To enter into

the Global market Hero Groups used one of the simpler and common modes of market entry ie

exporting [5]

Until 1960s there were not many Indian companies into exporting bicycles But after 1963 when

the Hero Group started exporting bicycles a new era of export started in the Indian bicycle

segment The Hero Group initially started exporting to Africa and Middle East but now there

major export is to Europe and America [3]

To meet the requirements in the international market this group has been constantly changing to

newer and better technologies It has also taken some extra measures like setting up a special

Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries

Limited) to cope up with requirements for international standards The main areas where this unit

exports its manufactured products is in the markets of developed countries like France Germany

United Kingdom etc where the requirements are of high standard [3]

Not only in the cyclersquos segment but the group also excelled in other fields in the international

market like the Hero Majestic Moped was a huge success not only in the Indian market but also

in the International market This eventually made the Hero group moped as the largest exported

moped from India Another bike ldquoHero Puchrdquo was the first Indian bike to be assembled outside

India It was first assembled in Spain and then had its assembly plants in Mauritius and Egypt

Now it has become quite popular in various countries like Paraguay Mexico Argentina Turkey

and Holland The Grouprsquos company Munjal Showa Limited is one of the largest suppliers of

shock absorbers to major auto giants in Japan US and the UK in developed markets [3]

Another division of the group was formed in 1993 ldquoHero Exportsrdquo which was responsible for the

International trading of the group for all the segments and was also recognized by the Government

of India as a trading house [3]

The recent development in International market for the group is in the field of Software

Development and the ITES industry through Hero Corporate Service Limited It provides services

to various corporations in the USA UK and Australia To further facilitate its exports it has set up

its offices in UK and USA to manage their corporate relationships [3]

International market

Fig 1 Different countries where lsquoHero Grouprsquo provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

Marketing Strategies

Hero Grouprsquos philosophy is based on the understanding of consumer demands market segments

and available opportunities The strategy is totally customer driven with nation wide network of

dealers making sure that the grouprsquos product is accessible throughout the country At the same

time upgrading to new technologies and committed service has been the main reason behind the

successful growth of the group [5]

Strategy

According to the Greg Fisher many International businesses especially MNCs develop strategies

for three distinct levels within the organization to cope with the complexities of the international

strategic management [6]

These levels of strategies are

1 Corporate strategy [61]

2 Business strategy [61]

3 Functional strategy [61]

Throughout the years of its growth Hero Group has actively looked at diversification The use of

Related Corporate Diversification strategy after companyrsquos growth in manufacturing activities led

to the establishment of the Hero Cycles Cold Rolling Division Munjal and Sunbeam Castings

Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing

units [11]

Then there were the expansion into the automotive segment with the setting up of Majestic Auto

Limited where the first indigenously designed moped Hero Majestic went into commercial

production in 1978 Then came Hero Motors which introduced Hero Puch in collaboration with

global technology leader Steyr Daimler Puch of Austria

Then the group looked into other industrial segments for its further growth and followed

Unrelated Diversification Strategy to enter into other segments like exports financial services

information technology which includes customer response services and software development

Further expansion is expected in the areas of Insurance and Telecommunication

Mode of entry in the international market

In the domestic market Hero cycles soon started giving good competition to already well-

established players in the market such as Hind cycles and Atlas cycles The major reason behind

this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable

giving the customers value for their money [5]

After the group success in the domestic market Munjal brothers looked for International market

for further growth to achieve additional sales and to extend its productrsquos life cycle To enter into

the Global market Hero Groups used one of the simpler and common modes of market entry ie

exporting [5]

Until 1960s there were not many Indian companies into exporting bicycles But after 1963 when

the Hero Group started exporting bicycles a new era of export started in the Indian bicycle

segment The Hero Group initially started exporting to Africa and Middle East but now there

major export is to Europe and America [3]

To meet the requirements in the international market this group has been constantly changing to

newer and better technologies It has also taken some extra measures like setting up a special

Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries

Limited) to cope up with requirements for international standards The main areas where this unit

exports its manufactured products is in the markets of developed countries like France Germany

United Kingdom etc where the requirements are of high standard [3]

Not only in the cyclersquos segment but the group also excelled in other fields in the international

market like the Hero Majestic Moped was a huge success not only in the Indian market but also

in the International market This eventually made the Hero group moped as the largest exported

moped from India Another bike ldquoHero Puchrdquo was the first Indian bike to be assembled outside

India It was first assembled in Spain and then had its assembly plants in Mauritius and Egypt

Now it has become quite popular in various countries like Paraguay Mexico Argentina Turkey

and Holland The Grouprsquos company Munjal Showa Limited is one of the largest suppliers of

shock absorbers to major auto giants in Japan US and the UK in developed markets [3]

Another division of the group was formed in 1993 ldquoHero Exportsrdquo which was responsible for the

International trading of the group for all the segments and was also recognized by the Government

of India as a trading house [3]

The recent development in International market for the group is in the field of Software

Development and the ITES industry through Hero Corporate Service Limited It provides services

to various corporations in the USA UK and Australia To further facilitate its exports it has set up

its offices in UK and USA to manage their corporate relationships [3]

International market

Fig 1 Different countries where lsquoHero Grouprsquo provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

production in 1978 Then came Hero Motors which introduced Hero Puch in collaboration with

global technology leader Steyr Daimler Puch of Austria

Then the group looked into other industrial segments for its further growth and followed

Unrelated Diversification Strategy to enter into other segments like exports financial services

information technology which includes customer response services and software development

Further expansion is expected in the areas of Insurance and Telecommunication

Mode of entry in the international market

In the domestic market Hero cycles soon started giving good competition to already well-

established players in the market such as Hind cycles and Atlas cycles The major reason behind

this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable

giving the customers value for their money [5]

After the group success in the domestic market Munjal brothers looked for International market

for further growth to achieve additional sales and to extend its productrsquos life cycle To enter into

the Global market Hero Groups used one of the simpler and common modes of market entry ie

exporting [5]

Until 1960s there were not many Indian companies into exporting bicycles But after 1963 when

the Hero Group started exporting bicycles a new era of export started in the Indian bicycle

segment The Hero Group initially started exporting to Africa and Middle East but now there

major export is to Europe and America [3]

To meet the requirements in the international market this group has been constantly changing to

newer and better technologies It has also taken some extra measures like setting up a special

Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries

Limited) to cope up with requirements for international standards The main areas where this unit

exports its manufactured products is in the markets of developed countries like France Germany

United Kingdom etc where the requirements are of high standard [3]

Not only in the cyclersquos segment but the group also excelled in other fields in the international

market like the Hero Majestic Moped was a huge success not only in the Indian market but also

in the International market This eventually made the Hero group moped as the largest exported

moped from India Another bike ldquoHero Puchrdquo was the first Indian bike to be assembled outside

India It was first assembled in Spain and then had its assembly plants in Mauritius and Egypt

Now it has become quite popular in various countries like Paraguay Mexico Argentina Turkey

and Holland The Grouprsquos company Munjal Showa Limited is one of the largest suppliers of

shock absorbers to major auto giants in Japan US and the UK in developed markets [3]

Another division of the group was formed in 1993 ldquoHero Exportsrdquo which was responsible for the

International trading of the group for all the segments and was also recognized by the Government

of India as a trading house [3]

The recent development in International market for the group is in the field of Software

Development and the ITES industry through Hero Corporate Service Limited It provides services

to various corporations in the USA UK and Australia To further facilitate its exports it has set up

its offices in UK and USA to manage their corporate relationships [3]

International market

Fig 1 Different countries where lsquoHero Grouprsquo provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

Not only in the cyclersquos segment but the group also excelled in other fields in the international

market like the Hero Majestic Moped was a huge success not only in the Indian market but also

in the International market This eventually made the Hero group moped as the largest exported

moped from India Another bike ldquoHero Puchrdquo was the first Indian bike to be assembled outside

India It was first assembled in Spain and then had its assembly plants in Mauritius and Egypt

Now it has become quite popular in various countries like Paraguay Mexico Argentina Turkey

and Holland The Grouprsquos company Munjal Showa Limited is one of the largest suppliers of

shock absorbers to major auto giants in Japan US and the UK in developed markets [3]

Another division of the group was formed in 1993 ldquoHero Exportsrdquo which was responsible for the

International trading of the group for all the segments and was also recognized by the Government

of India as a trading house [3]

The recent development in International market for the group is in the field of Software

Development and the ITES industry through Hero Corporate Service Limited It provides services

to various corporations in the USA UK and Australia To further facilitate its exports it has set up

its offices in UK and USA to manage their corporate relationships [3]

International market

Fig 1 Different countries where lsquoHero Grouprsquo provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

Other then exporting hero group has also actively participated in joint ventures with many

companies located in international as well as local market Hero entered a joint venture for

technical and financial participation with one of the worlds largest automotive makers Honda

Motor Company Limited Japan in 1984 This joint venture was formed to manufacture the

companiesrsquo first 100cc motorcycle for the Indian market [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into

technical collaboration with Steyr Damiler Punch Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when

group collaborates financially and technically with Showa Corporation Japan in order to

manufacture front forks shock absorbers and gas struts [4]

In order to grow its bicycle segments and to improve its production hero cyclersquos cold rolling

division was set up with technical collaboration with Wean United USA And Kawasaki Steel

Corporation Japan [4]

After the successful joint ventures and market growth in bicycles and two-wheelers Hero Grouprsquos

Munjal-eSystems which is a Microsoft Gold certified partner and also a ISO 90012000 certified

company started expanding in Enterprise-oriented and Software Solutions division [4]

Another sector Hero Mindmine has provided extensive services in the BPOCustomer service for

various sectors such as AirlinesIT Pharma FMCG etc For training purpose for the same it has

alliance with two other companies

1 DynEd Corporation that provides classroom coaching for English and Multimedia [4]

2 ACS Incorporated USA which is a fortune 500 company that helps HeroITES to provide

services in customer acquisition and customer interaction for the BPO industry Combined

they provide services to countries like the US Canada Argentina and India [4]

It also has various alliances in Production Engineering industry Hero Global Design is the

exclusive representative of Porsche Design GesmbH (studio) in India For industrial and

automobile design it has venture with German company Target Design [4]

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

Marketing Mix

To appeal to the customer in a powerful way it is necessary to analyze the marketing mix or the

four Prsquos of marketing that are

1 Product Strategies

2 Place or Distribution Strategies

3 Pricing Decision

4 Promotion Strategies

Product Strategies

In order to develop its product strategy the group relies on the 3 Rs-- Reach Research and

Reliability as its basic building blocks Using feedback from the market a fully-equipped RampD

center has consistently created best practices in designing testing and harmonization This

emphasis has helped Hero group to build the products that are ahead of their time [62 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users Place strategy involves

consideration of distribution that the product or service takes between the production and the final

consumer This strategy is different for different countries so group spends a considerable amount

of time in examining the different systems that are in place criteria to choose distributors and

channels and how the distribution segmentation can be accomplished [62 7]

However it is difficult to standardize the distribution system and to use the same approach in every

country so there are many differences to be considered while developing the distribution strategy

Some of the approaches that the group considers for developing this strategy are consumer

spending habits location where consumers are used to buying selecting the best possible

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

distributor to carry their product checking the financial strength of the distributor considering the

nature of the market and the competition etc [62 7]

Pricing strategy

Again pricing strategy of the group differs from country to country The different factors that the

group considers for developing there pricing strategy are government control market diversity

currency fluctuations and price escalation forces

For developing countries like India they have come up with special economical product to suit

everyonersquos need For instance they manufacture motorcycles for different sections To attract

more customers and make it accessible to everyone the pricing for these bikes starts from as low as

AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD

$2500 and so on [62 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling

However specific approach differs as per the products nature

They have promoted their product with advertising in different ways right from print media to

slogans and campaigns Through sponsoring different events such as Hero Honda Sa Re Ga Ma Pa

or Campus Rock Idols which generally involve common people they have become very popular

in the public [7 8]

They also actively participate in social activities to gain the trust and confidence of their

customers They have done a lot of work of socio-humanitarian nature in different fields such as

healthcare education environment public amenities sports and entertainment donations in both

cash and kind employment generating programs adult literacy mission rural health care and

safety awareness programs [62 7 8]

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

SWOT Analysis

Strength

Latest Upgraded Technology

Well known Brand name

Good Public Image

Strong Market Share

Long lasting Business relationship with

workers dealers and Vendors

Strong dealer network across the world

Skilled Workforce

High labor productive rate in the world

Constantly Innovated Products and ideas

Has strong RampD department

Has strong marketing amp management team

Reputation for production of high quality

goods

Collaborations with most advance players

in the market

Weakness

Comparatively new in other industries like

the ITES industry

Very few services and products offered to

the higher income group

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

Opportunities

Still can diversify further in many areas

like Four wheeler Industry

Telecommunication sector Bank sector

FMCG products Retail industries etc

Threats

High competition from other companies in

the same industry like from Bajaj

Automobiles in the two-wheeler industry

or TI in the bicycle manufacturing

department in India

Demand of bicycles is decreasing

Milestones

Herorsquos success saga contains the element of courage great determination enterprises and perseverance coupled with vision and meticulous planning

1956Hero Cycles Ltd is established

1961Rockman Cycle Industries Ltd Established which is today the largest manufacturer of bicycle chains amp hubs in the world

1963Bicycles exports take off from India ndash a faray into the international market

1971Highway Cycles was set up It is today the largest manufacturer of single speed amp multi-speed freewheels in the country

1975Hero Cycles Limited became the largest manufacturer of bicycles in India

1978Majestic Auto Limited was formed and Hero Majestic Moped was introduced

1981Munjal Casting established

1984Hero Honda Motors Limited established in joint venture with Honda Motors Japan to manufacture Motorcycles It is now the worldrsquos largest producer of two-wheelers

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

1985Munjal Showa Ltd established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country

1985100 cc Hero Honda Motorcycle was launched which later on in 1988 became No1 among all motorcycles in India

1986Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world

1987Hero Motors a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria

1987Gujarat Cycles Limited now known as Munjal Auto Centre Ltd was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia

1987Sunbeam Auto Limited earlier a unit of Highway Cycle IndLtd established as an ancillary to Hero Honda It has the largest die casting plant in India

1988Hero Puch was introduced by Hero Motors Ltd which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines

1989Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited

1990Hero Cold Rolling Division established which is one of the most modern steel cold rolling plants in India

1991Hero Honda received National Productivity Council Award and also the Economic Times ndash Harvard Business School Association Award against 200 contenders

1991Hero Cycles introduced Kidd ndash the first branded bike in childrenrsquos segment

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

1992Hero Cycles introduces Impact the first citibike in India

1992Munjal Showa Ltd received national safety award

1993Hero Exports was established as International Trading Division for group amp non-group products

1995Hero Corporate Services Ltd was established

1995The first exerbike from Hero Group was introduced with the name ndash Allegro

1996Hero Winner a large wheeled scooter with a choice of 50 cc amp 75 cc engines was launched by Hero Motors Ltd

1996Munjal Showa Ltd received British Councilrsquos National Safety Award

1998Hero Briggs amp Stratton Auto (P) Ltd was set up to produce 4-stroke two wheeler engines in various cubic capacities

1998Munjal Auto Components established to manufacture gear shaft amp gear blanks for motorcycles

2000The first fully automated bicycles by the name lsquoPOWERBIKErsquo was introduced by Hero Cycles LimitedHero Corporate diversified into IT and IT Enabled Services through its services segment Hero Corporate Services Limited

2001Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47

2001Hero Global Design established to offer engineering services in CADCAMCAE related to new product development design engineering manufacturing

2002Hero Cycles Limited ties up with National Bicycle Industries a part of Matsushita Group Japan to manufacture high end bicycles

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

2002Fastener World established

2002Easy Bills Limited established to offer utility bill collection and retail services

2003Super Starter Series launched by Hero Cycles Limited

2003Tie-up with Live Bridge Inc USA Aprilia Scooters Haly amp Bombardier Rotax GmbH of Germany

2003Hero Honda continues to be the worldrsquos largest manufacturer of two-wheelers with the market of more than 48

2004Hero Retail Insurance Business established

2004Super Smart Series introduced by Hero Cycles Limited

The Achievements

The Group and its management have acquired a number of accolades and achievements over the years

Hero Group Management style has been acclaimed internationally by World Bank and BBC UK Hero Group is discussed as a case study at London Business School UK and INSEAD France World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-wide study The London Business School UK has done a case study on the Group as model of entrepreneurship

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value in India

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Hero Cycles is the Worlds largest manufacturer of Bicycles with annual sales volume of over 48 million cycles

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the worlds largest manufacturer of bicycles with annual sales volume of 52 million bicycles in FY 2004

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies with an estimated turnover of US$18 billion during the fiscal year 2003-2004

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports

LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

BOARD OF DIRECTORS

No Name of the Directors Designation

1 Mr Brijmohan Lall Munjal Chairman amp Whole-time Director

2 Mr Pawan Munjal Managing Director amp CEO

3 Mr Toshiaki Nakagawa Joint Managing Director

4 Mr Sumihisa Fukuda Technical Director

5 Mr Om Prakash Munjal Non-executive Director

6 Mr Sunil Kant Munjal Non-executive Director

7 Mr Masahiro Takedagawa Non-executive Director

8 Mr Satoshi Matsuzawa(Alternate Director to Mr Takashi Nagai)

Non-executive Director

9 Mr Pradeep Dinodia Non-executive amp Independent Director

10 Gen(Retd) Ved Prakash Malik Non-executive amp Independent Director

11 Mr Analjit Singh Non-executive amp Independent Director

12 Dr Pritam Singh Non-executive amp Independent Director

13 Ms Shobhana Bhartia Non-executive amp Independent Director

14 Mr Sunil Bharti Mittal Non-executive amp Independent Director

15 Mr Meleveetil Damodaran Non-executive amp Independent Director

16 Mr Arun Nath Maira Non-executive amp Independent Director

BRIEF PROFILE OF DIRECTORS

MR BRIJMOHAN LALL MUNJAL

Mr Brijmohan Lall Munjal is the founder Director and Chairman of the Company and the $ 28 billion Hero Group He is the Past President of Confederation of Indian Industry (CII) Society of Indian Automobile Manufacturers (SIAM) and was a Member of the Board of the Countrys Central Bank (Reserve Bank of India ) In recognition of his contribution to industry Mr Lall was conferred the Padma Bhushan Award by the Union Government Mr Brijmohan Lall Munjal is currently on the board of the following companies

No Name of Company Nature of Office

1 Hero Honda Motors Limited Chairman and Whole-time Director

2 Hero Cycles Limited Chairman and Director

3 Hero Honda Finlease Limited Chairman and Director

4 Munjal Showa Limited Chairman and Director

5 Sunbeam Auto Limited Chairman and Director

6 Easy Bill Limited Director

7 Hero Financial Services Limited Director

8 Munjal Auto Industries Limited Director

9 Shivam Autotech Limited Director

10 Daimler Hero Commercial Vehicles Limited Director

MR PAWAN MUNJAL

Mr Pawan Munjal is the Managing Director and CEO of the Company He is responsible for growth and strategic planning for the entire Group A graduate in mechanical engineering Mr Munjal has been instrumental in bringing about technological and managerial excellence in the Companys operations He has been the Chairman of several Committees of CII

He is also on the board of Indian Institute of Management Lucknow An avid golfer Mr Munjal is Past Chairman of the Asian PGA Tour Board of Directors and the Past President of Professional Golfers Association of India (PGAI) Under his guidance Hero Honda launched the Hero Indian Sports Academy (HISA) in collaboration with Laureus Foundation to provide equal opportunities in sports to various communities and to reward talent in the country

Mr Pawan Munjal is currently on the Board of the following companies

No Name of Company Nature of Office

1 Hero Honda Motors Limited Managing Director

2 Hero Honda Finlease Limited Director

3 Daimler Hero Commercial Vehicles Limited Director

MR TOSHIAKI NAKAGAWA

Mr Toshiaki Nakagawa joined the Company as Joint Managing Director on February 1 2006

He joined Honda Motor Co Ltd Japan in April 1973 and later on took various assignments at Senior Positions in world wide Honda net work such as staff member of UK Hongkong and President of Honda Czech Republic Honda France and General Manager of Honda Beijing Office

Before joining the Company he held the position as General Manager of Operating Office of China ASEAN succeeding by Operating Office No1 (North America South America and Europe) at Honda Head Office Japan

His specialization is ldquoOverseas Sales of Automobiles and Motorcyclesrdquo

Mr Nakagawa is currently on the Board of the following companies

No Name of Company Nature of Office

1 Hero Honda Motors Limited Joint Managing Director

2 Hero Honda Finlease Limited Director MR SUMIHISA FUKUDA

Mr Sumihisa Fukuda was appointed as an Additional and Technical Director in the Whole-time employment of the Company by way of passing a resolution by Circulation on May 13 2008 Mr Fukuda was born on December 12 1955 at Nagasaki Japan and after completing a course in Mechanical Engineering he joined Honda Motor Co Ltd Japan as an Engineer amp has completed various assignments in Honda In recent past he was working as Manager ndash Asian Autoparts Co Ltd Thailand He brings with him rich experience of more than 30 years

Mr Fukuda is currently on the Board of the following companies

No Name of Company Nature of Office

1 Hero Honda Motors Limited Whole-time Director

MR OM PRAKASH MUNJAL

Mr Om Prakash Munjal is also founder Director of the Company He is the Co-Chairman and CEO of Hero Cycles Limited the largest producer of bicycles and bicycle components in the world Under his leadership Hero Cycles has found its way into the Guinness Book of World Records In 1990 Mr Munjal was awarded the Indira Gandhi National Unity Award by the President of India

Mr Om Prakash Munjal is currently on the Board of the following companies No Name of Company Nature of Office

1 Hero Cycles Limited Co-Chairman and Managing Director

2 Majestic Auto Limited Chairman amp Director

3 Hero Financial Services Limited Chairman amp Director

4 Hero Motors Limited Director

5 Munjal Auto Industries Limited Director

6 Shivam Autotech Limited Director

7 Highway Industries Limited Director

8 Hero Global Design Limited Director

9 Easy Bill Limited Director

10 Hero Honda Motors Limited Director

11 Hero Honda Finlease Limited Director

MR SUNIL KANT MUNJAL Mr Sunil Kant Munjal born on December 14 1957 at Ludhiana is aged 49 years After his graduation he underwent training in the field of Mechanical Engineering Presently

he is Managing Director of Hero Cycles Ltd (CR Division) and Hero Corporate Services Limited

In 2004-05 Mr Munjal became the President of Confederation of Indian Industry (CII) India s premier business association He is also on the Board of Indian School of Business Hyderabad and is visiting faculty at various Business Schools and Corporate His specialization is in Business Studies and Holistic Management Practices Apart from the above he is a member of Prime Ministers Council on Trade and Industry Consultative Group on Industry Planning Commission

Government of India and SEBI Committee on Disclosures He has made significant contributions to some of the National-level Economic and Labour reforms in India either by chairing some of the reforms Committee or as a member

Mr Sunil Kant Munjal is currently on the board of the following companies

No Name of Company Nature of Office

1 Hero Management Service Limited Chairman amp Managing Director

2 Hero Corporate Service Limited Chairman

3 Shivam Autotech Limited Chairman

4 Hero Cycles Limited Managing Director

5 DCM Shriram Consolidated Limited Director

6 Easy Bill Limited Director

7 Hero Honda Motors Limited Director

8 Hero Motors Limited Director

9 Satyam Auto Components Limited Director

10 Flourish Manufacturing amp Automotive Ltd Director

11 Daimler Hero Commercial Vehicles Limited Director

12 Abhayuday Manufacturing amp Automotive Ltd Director

13 Arrow Infrastructure Limited Director

14 Hero Mindmine Institute Limited Director

15 Hero Ergo Life Insurance Company Limited Director

Social Activities Undertaken By The Company

Hero Groups humane approach is manifested in all aspects of commercial production

The Group undertakes various projects and activities of socio-humanitarian nature to contribute to the National Mainstream Group Companies Hero Cycles Limited and Hero Honda Motors Limited have been pioneers within the Group in undertaking socially productive work of myriad nature

Healthcare

Raman Munjal Memorial Hospital is a 100-bed hospital with a well-equipped laboratory a fully functional operation theatre an out patient department as well as a casualty section

A fully equipped mobile clinic provides comprehensive health care to the rural masses in Dharuhera

The medical centre on the factory premises of the Group Companies is open for the sub-urban and rural communities of the surrounding areas The medical centre is also equipped to provide First Aid and ambulance facility for road accident victims

Other efforts under the auspices of Hero Cycles Limited include

Eye Camps With over 15000 patients examined and about 1700 cataract operations performed so far these Eye Camps have also aided patients with free accommodation food and medicines

Family Planning Camps Held since 1993 at the Civil Hospital Rewari and Bawal these camps offer monetary incentives to the masses to adopt family planning measures

Blood Donations Camps These camps are being organised on a regular basis since 1992 464 units have been donated to Indian Red Cross Society in the last camps

ENT Check up Camps Conducted by specialists from AIIMS these camps have been organized since November 1997

Heart Check-up Camps Since July 1988 free camps are being organized in collaboration with Escorts Heart Institute and Research Centre where specialised diagnosis methods like Echocardiography and ECG are used

Rehabilitation Camps Conducted with the assistance of the District Rehabilitation Centre Red Cross Society Rewari these camps help physically challenged villagers to rehabilitate and re-employ themselves Many patients have found a new lease of life on account of the physical aids given to them

Conclusion

Results of Group initiativesThe Grouprsquos philosophy of empowering and training human capital use of appropriate technologies constantly being close to the customer and maintaining a healthy work environment with the highest standards of ethics and corporate governance has resulted in the Group companies excelling in their chosen field through a service attitude year after year leading to impressive financials and healthy returns to all stakeholders

Hero group has build leadership positions primarily due to its belief in the following principles1 Understanding stakeholders (incl international partners and customers) expectations and

delivering value for money2 Managing relation3 Creating a performance culture4 ldquopartnership approachrdquo with ancillaries5 Efficient current asset management6 Accepting and using ever changing technology as a facilitator7 Strong quality and process orientation

The constant and the determined effort to gain customerrsquos trust and satisfaction along with the zeal

to provide the best product to the customer through innovation and latest technology has been the

primary reason behind the remarkable growth of the Hero Group The other factors such as

understanding of customerrsquos needs and choice a close watch on the market corporate excellence

and understanding of corporate social responsibility and stronger relationships with the investors

partners vendors and dealers along with the customer have been equally important in their

achievement [11]

Due to all these reasons the Hero Group has been able to excel especially in the bicycles and

motorcycles manufacturing They have received numerous awards including the ldquoBike Maker of

the year awardrdquo for continuously 6 years from 2001-2006 by Overdrive magazine Their effort and

hard work in every field can be seen as it was ranked 4th in ldquoOverall Best Managed Companyrdquo

category ranked 3rd in ldquoBest Financial Managementrdquo and ldquoBest Operational Efficiencyrdquo category

ranked 6th in ldquoOverall Best Investor Relationsrdquo category by Asiamoney in the year 2002 [12]

The management style adopted by the Hero Group has been commended internationally as well by

different organizations such as World Bank and BBC UK acclaiming it as a role model in vendor

development internationally At London Business School UK and Insead France it is studied as

case studies as a model of entrepreneurship [12]

The Hero Group has been considered as one of the top ten Business Houses on Economic value in

India by the Boston Consulting Group [12]

The two-wheeler department that is Hero Honda Motors has received the highest ratings for

Corporate Governance in 2003 and Best Governed Company award in private sector in 2004 by

CRISIL which is Indiarsquos Leading Ratings Risks and Advisory Company [12]

Hero Group has received awards not only in the domestic market but it has also received awards

for its excellence in international trade Engineering Exports Promotion Council has awarded Hero

Cycles with the Best Exporter Award for the last 28 years in succession [12]

Appendix

1 HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

2 The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

3 Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

4 Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Bibliography

1 Fare east economic review April 20042 Magazines India today Competitive success review3 Websites wwwherogroupcom wwwtheherocyclescom

3 Daimler Hero Commercial Vehicles Limited Director

MR TOSHIAKI NAKAGAWA

Mr Toshiaki Nakagawa joined the Company as Joint Managing Director on February 1 2006

He joined Honda Motor Co Ltd Japan in April 1973 and later on took various assignments at Senior Positions in world wide Honda net work such as staff member of UK Hongkong and President of Honda Czech Republic Honda France and General Manager of Honda Beijing Office

Before joining the Company he held the position as General Manager of Operating Office of China ASEAN succeeding by Operating Office No1 (North America South America and Europe) at Honda Head Office Japan

His specialization is ldquoOverseas Sales of Automobiles and Motorcyclesrdquo

Mr Nakagawa is currently on the Board of the following companies

No Name of Company Nature of Office

1 Hero Honda Motors Limited Joint Managing Director

2 Hero Honda Finlease Limited Director MR SUMIHISA FUKUDA

Mr Sumihisa Fukuda was appointed as an Additional and Technical Director in the Whole-time employment of the Company by way of passing a resolution by Circulation on May 13 2008 Mr Fukuda was born on December 12 1955 at Nagasaki Japan and after completing a course in Mechanical Engineering he joined Honda Motor Co Ltd Japan as an Engineer amp has completed various assignments in Honda In recent past he was working as Manager ndash Asian Autoparts Co Ltd Thailand He brings with him rich experience of more than 30 years

Mr Fukuda is currently on the Board of the following companies

No Name of Company Nature of Office

1 Hero Honda Motors Limited Whole-time Director

MR OM PRAKASH MUNJAL

Mr Om Prakash Munjal is also founder Director of the Company He is the Co-Chairman and CEO of Hero Cycles Limited the largest producer of bicycles and bicycle components in the world Under his leadership Hero Cycles has found its way into the Guinness Book of World Records In 1990 Mr Munjal was awarded the Indira Gandhi National Unity Award by the President of India

Mr Om Prakash Munjal is currently on the Board of the following companies No Name of Company Nature of Office

1 Hero Cycles Limited Co-Chairman and Managing Director

2 Majestic Auto Limited Chairman amp Director

3 Hero Financial Services Limited Chairman amp Director

4 Hero Motors Limited Director

5 Munjal Auto Industries Limited Director

6 Shivam Autotech Limited Director

7 Highway Industries Limited Director

8 Hero Global Design Limited Director

9 Easy Bill Limited Director

10 Hero Honda Motors Limited Director

11 Hero Honda Finlease Limited Director

MR SUNIL KANT MUNJAL Mr Sunil Kant Munjal born on December 14 1957 at Ludhiana is aged 49 years After his graduation he underwent training in the field of Mechanical Engineering Presently

he is Managing Director of Hero Cycles Ltd (CR Division) and Hero Corporate Services Limited

In 2004-05 Mr Munjal became the President of Confederation of Indian Industry (CII) India s premier business association He is also on the Board of Indian School of Business Hyderabad and is visiting faculty at various Business Schools and Corporate His specialization is in Business Studies and Holistic Management Practices Apart from the above he is a member of Prime Ministers Council on Trade and Industry Consultative Group on Industry Planning Commission

Government of India and SEBI Committee on Disclosures He has made significant contributions to some of the National-level Economic and Labour reforms in India either by chairing some of the reforms Committee or as a member

Mr Sunil Kant Munjal is currently on the board of the following companies

No Name of Company Nature of Office

1 Hero Management Service Limited Chairman amp Managing Director

2 Hero Corporate Service Limited Chairman

3 Shivam Autotech Limited Chairman

4 Hero Cycles Limited Managing Director

5 DCM Shriram Consolidated Limited Director

6 Easy Bill Limited Director

7 Hero Honda Motors Limited Director

8 Hero Motors Limited Director

9 Satyam Auto Components Limited Director

10 Flourish Manufacturing amp Automotive Ltd Director

11 Daimler Hero Commercial Vehicles Limited Director

12 Abhayuday Manufacturing amp Automotive Ltd Director

13 Arrow Infrastructure Limited Director

14 Hero Mindmine Institute Limited Director

15 Hero Ergo Life Insurance Company Limited Director

Social Activities Undertaken By The Company

Hero Groups humane approach is manifested in all aspects of commercial production

The Group undertakes various projects and activities of socio-humanitarian nature to contribute to the National Mainstream Group Companies Hero Cycles Limited and Hero Honda Motors Limited have been pioneers within the Group in undertaking socially productive work of myriad nature

Healthcare

Raman Munjal Memorial Hospital is a 100-bed hospital with a well-equipped laboratory a fully functional operation theatre an out patient department as well as a casualty section

A fully equipped mobile clinic provides comprehensive health care to the rural masses in Dharuhera

The medical centre on the factory premises of the Group Companies is open for the sub-urban and rural communities of the surrounding areas The medical centre is also equipped to provide First Aid and ambulance facility for road accident victims

Other efforts under the auspices of Hero Cycles Limited include

Eye Camps With over 15000 patients examined and about 1700 cataract operations performed so far these Eye Camps have also aided patients with free accommodation food and medicines

Family Planning Camps Held since 1993 at the Civil Hospital Rewari and Bawal these camps offer monetary incentives to the masses to adopt family planning measures

Blood Donations Camps These camps are being organised on a regular basis since 1992 464 units have been donated to Indian Red Cross Society in the last camps

ENT Check up Camps Conducted by specialists from AIIMS these camps have been organized since November 1997

Heart Check-up Camps Since July 1988 free camps are being organized in collaboration with Escorts Heart Institute and Research Centre where specialised diagnosis methods like Echocardiography and ECG are used

Rehabilitation Camps Conducted with the assistance of the District Rehabilitation Centre Red Cross Society Rewari these camps help physically challenged villagers to rehabilitate and re-employ themselves Many patients have found a new lease of life on account of the physical aids given to them

Conclusion

Results of Group initiativesThe Grouprsquos philosophy of empowering and training human capital use of appropriate technologies constantly being close to the customer and maintaining a healthy work environment with the highest standards of ethics and corporate governance has resulted in the Group companies excelling in their chosen field through a service attitude year after year leading to impressive financials and healthy returns to all stakeholders

Hero group has build leadership positions primarily due to its belief in the following principles1 Understanding stakeholders (incl international partners and customers) expectations and

delivering value for money2 Managing relation3 Creating a performance culture4 ldquopartnership approachrdquo with ancillaries5 Efficient current asset management6 Accepting and using ever changing technology as a facilitator7 Strong quality and process orientation

The constant and the determined effort to gain customerrsquos trust and satisfaction along with the zeal

to provide the best product to the customer through innovation and latest technology has been the

primary reason behind the remarkable growth of the Hero Group The other factors such as

understanding of customerrsquos needs and choice a close watch on the market corporate excellence

and understanding of corporate social responsibility and stronger relationships with the investors

partners vendors and dealers along with the customer have been equally important in their

achievement [11]

Due to all these reasons the Hero Group has been able to excel especially in the bicycles and

motorcycles manufacturing They have received numerous awards including the ldquoBike Maker of

the year awardrdquo for continuously 6 years from 2001-2006 by Overdrive magazine Their effort and

hard work in every field can be seen as it was ranked 4th in ldquoOverall Best Managed Companyrdquo

category ranked 3rd in ldquoBest Financial Managementrdquo and ldquoBest Operational Efficiencyrdquo category

ranked 6th in ldquoOverall Best Investor Relationsrdquo category by Asiamoney in the year 2002 [12]

The management style adopted by the Hero Group has been commended internationally as well by

different organizations such as World Bank and BBC UK acclaiming it as a role model in vendor

development internationally At London Business School UK and Insead France it is studied as

case studies as a model of entrepreneurship [12]

The Hero Group has been considered as one of the top ten Business Houses on Economic value in

India by the Boston Consulting Group [12]

The two-wheeler department that is Hero Honda Motors has received the highest ratings for

Corporate Governance in 2003 and Best Governed Company award in private sector in 2004 by

CRISIL which is Indiarsquos Leading Ratings Risks and Advisory Company [12]

Hero Group has received awards not only in the domestic market but it has also received awards

for its excellence in international trade Engineering Exports Promotion Council has awarded Hero

Cycles with the Best Exporter Award for the last 28 years in succession [12]

Appendix

1 HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

2 The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

3 Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

4 Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Bibliography

1 Fare east economic review April 20042 Magazines India today Competitive success review3 Websites wwwherogroupcom wwwtheherocyclescom

MR OM PRAKASH MUNJAL

Mr Om Prakash Munjal is also founder Director of the Company He is the Co-Chairman and CEO of Hero Cycles Limited the largest producer of bicycles and bicycle components in the world Under his leadership Hero Cycles has found its way into the Guinness Book of World Records In 1990 Mr Munjal was awarded the Indira Gandhi National Unity Award by the President of India

Mr Om Prakash Munjal is currently on the Board of the following companies No Name of Company Nature of Office

1 Hero Cycles Limited Co-Chairman and Managing Director

2 Majestic Auto Limited Chairman amp Director

3 Hero Financial Services Limited Chairman amp Director

4 Hero Motors Limited Director

5 Munjal Auto Industries Limited Director

6 Shivam Autotech Limited Director

7 Highway Industries Limited Director

8 Hero Global Design Limited Director

9 Easy Bill Limited Director

10 Hero Honda Motors Limited Director

11 Hero Honda Finlease Limited Director

MR SUNIL KANT MUNJAL Mr Sunil Kant Munjal born on December 14 1957 at Ludhiana is aged 49 years After his graduation he underwent training in the field of Mechanical Engineering Presently

he is Managing Director of Hero Cycles Ltd (CR Division) and Hero Corporate Services Limited

In 2004-05 Mr Munjal became the President of Confederation of Indian Industry (CII) India s premier business association He is also on the Board of Indian School of Business Hyderabad and is visiting faculty at various Business Schools and Corporate His specialization is in Business Studies and Holistic Management Practices Apart from the above he is a member of Prime Ministers Council on Trade and Industry Consultative Group on Industry Planning Commission

Government of India and SEBI Committee on Disclosures He has made significant contributions to some of the National-level Economic and Labour reforms in India either by chairing some of the reforms Committee or as a member

Mr Sunil Kant Munjal is currently on the board of the following companies

No Name of Company Nature of Office

1 Hero Management Service Limited Chairman amp Managing Director

2 Hero Corporate Service Limited Chairman

3 Shivam Autotech Limited Chairman

4 Hero Cycles Limited Managing Director

5 DCM Shriram Consolidated Limited Director

6 Easy Bill Limited Director

7 Hero Honda Motors Limited Director

8 Hero Motors Limited Director

9 Satyam Auto Components Limited Director

10 Flourish Manufacturing amp Automotive Ltd Director

11 Daimler Hero Commercial Vehicles Limited Director

12 Abhayuday Manufacturing amp Automotive Ltd Director

13 Arrow Infrastructure Limited Director

14 Hero Mindmine Institute Limited Director

15 Hero Ergo Life Insurance Company Limited Director

Social Activities Undertaken By The Company

Hero Groups humane approach is manifested in all aspects of commercial production

The Group undertakes various projects and activities of socio-humanitarian nature to contribute to the National Mainstream Group Companies Hero Cycles Limited and Hero Honda Motors Limited have been pioneers within the Group in undertaking socially productive work of myriad nature

Healthcare

Raman Munjal Memorial Hospital is a 100-bed hospital with a well-equipped laboratory a fully functional operation theatre an out patient department as well as a casualty section

A fully equipped mobile clinic provides comprehensive health care to the rural masses in Dharuhera

The medical centre on the factory premises of the Group Companies is open for the sub-urban and rural communities of the surrounding areas The medical centre is also equipped to provide First Aid and ambulance facility for road accident victims

Other efforts under the auspices of Hero Cycles Limited include

Eye Camps With over 15000 patients examined and about 1700 cataract operations performed so far these Eye Camps have also aided patients with free accommodation food and medicines

Family Planning Camps Held since 1993 at the Civil Hospital Rewari and Bawal these camps offer monetary incentives to the masses to adopt family planning measures

Blood Donations Camps These camps are being organised on a regular basis since 1992 464 units have been donated to Indian Red Cross Society in the last camps

ENT Check up Camps Conducted by specialists from AIIMS these camps have been organized since November 1997

Heart Check-up Camps Since July 1988 free camps are being organized in collaboration with Escorts Heart Institute and Research Centre where specialised diagnosis methods like Echocardiography and ECG are used

Rehabilitation Camps Conducted with the assistance of the District Rehabilitation Centre Red Cross Society Rewari these camps help physically challenged villagers to rehabilitate and re-employ themselves Many patients have found a new lease of life on account of the physical aids given to them

Conclusion

Results of Group initiativesThe Grouprsquos philosophy of empowering and training human capital use of appropriate technologies constantly being close to the customer and maintaining a healthy work environment with the highest standards of ethics and corporate governance has resulted in the Group companies excelling in their chosen field through a service attitude year after year leading to impressive financials and healthy returns to all stakeholders

Hero group has build leadership positions primarily due to its belief in the following principles1 Understanding stakeholders (incl international partners and customers) expectations and

delivering value for money2 Managing relation3 Creating a performance culture4 ldquopartnership approachrdquo with ancillaries5 Efficient current asset management6 Accepting and using ever changing technology as a facilitator7 Strong quality and process orientation

The constant and the determined effort to gain customerrsquos trust and satisfaction along with the zeal

to provide the best product to the customer through innovation and latest technology has been the

primary reason behind the remarkable growth of the Hero Group The other factors such as

understanding of customerrsquos needs and choice a close watch on the market corporate excellence

and understanding of corporate social responsibility and stronger relationships with the investors

partners vendors and dealers along with the customer have been equally important in their

achievement [11]

Due to all these reasons the Hero Group has been able to excel especially in the bicycles and

motorcycles manufacturing They have received numerous awards including the ldquoBike Maker of

the year awardrdquo for continuously 6 years from 2001-2006 by Overdrive magazine Their effort and

hard work in every field can be seen as it was ranked 4th in ldquoOverall Best Managed Companyrdquo

category ranked 3rd in ldquoBest Financial Managementrdquo and ldquoBest Operational Efficiencyrdquo category

ranked 6th in ldquoOverall Best Investor Relationsrdquo category by Asiamoney in the year 2002 [12]

The management style adopted by the Hero Group has been commended internationally as well by

different organizations such as World Bank and BBC UK acclaiming it as a role model in vendor

development internationally At London Business School UK and Insead France it is studied as

case studies as a model of entrepreneurship [12]

The Hero Group has been considered as one of the top ten Business Houses on Economic value in

India by the Boston Consulting Group [12]

The two-wheeler department that is Hero Honda Motors has received the highest ratings for

Corporate Governance in 2003 and Best Governed Company award in private sector in 2004 by

CRISIL which is Indiarsquos Leading Ratings Risks and Advisory Company [12]

Hero Group has received awards not only in the domestic market but it has also received awards

for its excellence in international trade Engineering Exports Promotion Council has awarded Hero

Cycles with the Best Exporter Award for the last 28 years in succession [12]

Appendix

1 HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

2 The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

3 Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

4 Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Bibliography

1 Fare east economic review April 20042 Magazines India today Competitive success review3 Websites wwwherogroupcom wwwtheherocyclescom

Government of India and SEBI Committee on Disclosures He has made significant contributions to some of the National-level Economic and Labour reforms in India either by chairing some of the reforms Committee or as a member

Mr Sunil Kant Munjal is currently on the board of the following companies

No Name of Company Nature of Office

1 Hero Management Service Limited Chairman amp Managing Director

2 Hero Corporate Service Limited Chairman

3 Shivam Autotech Limited Chairman

4 Hero Cycles Limited Managing Director

5 DCM Shriram Consolidated Limited Director

6 Easy Bill Limited Director

7 Hero Honda Motors Limited Director

8 Hero Motors Limited Director

9 Satyam Auto Components Limited Director

10 Flourish Manufacturing amp Automotive Ltd Director

11 Daimler Hero Commercial Vehicles Limited Director

12 Abhayuday Manufacturing amp Automotive Ltd Director

13 Arrow Infrastructure Limited Director

14 Hero Mindmine Institute Limited Director

15 Hero Ergo Life Insurance Company Limited Director

Social Activities Undertaken By The Company

Hero Groups humane approach is manifested in all aspects of commercial production

The Group undertakes various projects and activities of socio-humanitarian nature to contribute to the National Mainstream Group Companies Hero Cycles Limited and Hero Honda Motors Limited have been pioneers within the Group in undertaking socially productive work of myriad nature

Healthcare

Raman Munjal Memorial Hospital is a 100-bed hospital with a well-equipped laboratory a fully functional operation theatre an out patient department as well as a casualty section

A fully equipped mobile clinic provides comprehensive health care to the rural masses in Dharuhera

The medical centre on the factory premises of the Group Companies is open for the sub-urban and rural communities of the surrounding areas The medical centre is also equipped to provide First Aid and ambulance facility for road accident victims

Other efforts under the auspices of Hero Cycles Limited include

Eye Camps With over 15000 patients examined and about 1700 cataract operations performed so far these Eye Camps have also aided patients with free accommodation food and medicines

Family Planning Camps Held since 1993 at the Civil Hospital Rewari and Bawal these camps offer monetary incentives to the masses to adopt family planning measures

Blood Donations Camps These camps are being organised on a regular basis since 1992 464 units have been donated to Indian Red Cross Society in the last camps

ENT Check up Camps Conducted by specialists from AIIMS these camps have been organized since November 1997

Heart Check-up Camps Since July 1988 free camps are being organized in collaboration with Escorts Heart Institute and Research Centre where specialised diagnosis methods like Echocardiography and ECG are used

Rehabilitation Camps Conducted with the assistance of the District Rehabilitation Centre Red Cross Society Rewari these camps help physically challenged villagers to rehabilitate and re-employ themselves Many patients have found a new lease of life on account of the physical aids given to them

Conclusion

Results of Group initiativesThe Grouprsquos philosophy of empowering and training human capital use of appropriate technologies constantly being close to the customer and maintaining a healthy work environment with the highest standards of ethics and corporate governance has resulted in the Group companies excelling in their chosen field through a service attitude year after year leading to impressive financials and healthy returns to all stakeholders

Hero group has build leadership positions primarily due to its belief in the following principles1 Understanding stakeholders (incl international partners and customers) expectations and

delivering value for money2 Managing relation3 Creating a performance culture4 ldquopartnership approachrdquo with ancillaries5 Efficient current asset management6 Accepting and using ever changing technology as a facilitator7 Strong quality and process orientation

The constant and the determined effort to gain customerrsquos trust and satisfaction along with the zeal

to provide the best product to the customer through innovation and latest technology has been the

primary reason behind the remarkable growth of the Hero Group The other factors such as

understanding of customerrsquos needs and choice a close watch on the market corporate excellence

and understanding of corporate social responsibility and stronger relationships with the investors

partners vendors and dealers along with the customer have been equally important in their

achievement [11]

Due to all these reasons the Hero Group has been able to excel especially in the bicycles and

motorcycles manufacturing They have received numerous awards including the ldquoBike Maker of

the year awardrdquo for continuously 6 years from 2001-2006 by Overdrive magazine Their effort and

hard work in every field can be seen as it was ranked 4th in ldquoOverall Best Managed Companyrdquo

category ranked 3rd in ldquoBest Financial Managementrdquo and ldquoBest Operational Efficiencyrdquo category

ranked 6th in ldquoOverall Best Investor Relationsrdquo category by Asiamoney in the year 2002 [12]

The management style adopted by the Hero Group has been commended internationally as well by

different organizations such as World Bank and BBC UK acclaiming it as a role model in vendor

development internationally At London Business School UK and Insead France it is studied as

case studies as a model of entrepreneurship [12]

The Hero Group has been considered as one of the top ten Business Houses on Economic value in

India by the Boston Consulting Group [12]

The two-wheeler department that is Hero Honda Motors has received the highest ratings for

Corporate Governance in 2003 and Best Governed Company award in private sector in 2004 by

CRISIL which is Indiarsquos Leading Ratings Risks and Advisory Company [12]

Hero Group has received awards not only in the domestic market but it has also received awards

for its excellence in international trade Engineering Exports Promotion Council has awarded Hero

Cycles with the Best Exporter Award for the last 28 years in succession [12]

Appendix

1 HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

2 The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

3 Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

4 Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Bibliography

1 Fare east economic review April 20042 Magazines India today Competitive success review3 Websites wwwherogroupcom wwwtheherocyclescom

Social Activities Undertaken By The Company

Hero Groups humane approach is manifested in all aspects of commercial production

The Group undertakes various projects and activities of socio-humanitarian nature to contribute to the National Mainstream Group Companies Hero Cycles Limited and Hero Honda Motors Limited have been pioneers within the Group in undertaking socially productive work of myriad nature

Healthcare

Raman Munjal Memorial Hospital is a 100-bed hospital with a well-equipped laboratory a fully functional operation theatre an out patient department as well as a casualty section

A fully equipped mobile clinic provides comprehensive health care to the rural masses in Dharuhera

The medical centre on the factory premises of the Group Companies is open for the sub-urban and rural communities of the surrounding areas The medical centre is also equipped to provide First Aid and ambulance facility for road accident victims

Other efforts under the auspices of Hero Cycles Limited include

Eye Camps With over 15000 patients examined and about 1700 cataract operations performed so far these Eye Camps have also aided patients with free accommodation food and medicines

Family Planning Camps Held since 1993 at the Civil Hospital Rewari and Bawal these camps offer monetary incentives to the masses to adopt family planning measures

Blood Donations Camps These camps are being organised on a regular basis since 1992 464 units have been donated to Indian Red Cross Society in the last camps

ENT Check up Camps Conducted by specialists from AIIMS these camps have been organized since November 1997

Heart Check-up Camps Since July 1988 free camps are being organized in collaboration with Escorts Heart Institute and Research Centre where specialised diagnosis methods like Echocardiography and ECG are used

Rehabilitation Camps Conducted with the assistance of the District Rehabilitation Centre Red Cross Society Rewari these camps help physically challenged villagers to rehabilitate and re-employ themselves Many patients have found a new lease of life on account of the physical aids given to them

Conclusion

Results of Group initiativesThe Grouprsquos philosophy of empowering and training human capital use of appropriate technologies constantly being close to the customer and maintaining a healthy work environment with the highest standards of ethics and corporate governance has resulted in the Group companies excelling in their chosen field through a service attitude year after year leading to impressive financials and healthy returns to all stakeholders

Hero group has build leadership positions primarily due to its belief in the following principles1 Understanding stakeholders (incl international partners and customers) expectations and

delivering value for money2 Managing relation3 Creating a performance culture4 ldquopartnership approachrdquo with ancillaries5 Efficient current asset management6 Accepting and using ever changing technology as a facilitator7 Strong quality and process orientation

The constant and the determined effort to gain customerrsquos trust and satisfaction along with the zeal

to provide the best product to the customer through innovation and latest technology has been the

primary reason behind the remarkable growth of the Hero Group The other factors such as

understanding of customerrsquos needs and choice a close watch on the market corporate excellence

and understanding of corporate social responsibility and stronger relationships with the investors

partners vendors and dealers along with the customer have been equally important in their

achievement [11]

Due to all these reasons the Hero Group has been able to excel especially in the bicycles and

motorcycles manufacturing They have received numerous awards including the ldquoBike Maker of

the year awardrdquo for continuously 6 years from 2001-2006 by Overdrive magazine Their effort and

hard work in every field can be seen as it was ranked 4th in ldquoOverall Best Managed Companyrdquo

category ranked 3rd in ldquoBest Financial Managementrdquo and ldquoBest Operational Efficiencyrdquo category

ranked 6th in ldquoOverall Best Investor Relationsrdquo category by Asiamoney in the year 2002 [12]

The management style adopted by the Hero Group has been commended internationally as well by

different organizations such as World Bank and BBC UK acclaiming it as a role model in vendor

development internationally At London Business School UK and Insead France it is studied as

case studies as a model of entrepreneurship [12]

The Hero Group has been considered as one of the top ten Business Houses on Economic value in

India by the Boston Consulting Group [12]

The two-wheeler department that is Hero Honda Motors has received the highest ratings for

Corporate Governance in 2003 and Best Governed Company award in private sector in 2004 by

CRISIL which is Indiarsquos Leading Ratings Risks and Advisory Company [12]

Hero Group has received awards not only in the domestic market but it has also received awards

for its excellence in international trade Engineering Exports Promotion Council has awarded Hero

Cycles with the Best Exporter Award for the last 28 years in succession [12]

Appendix

1 HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

2 The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

3 Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

4 Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Bibliography

1 Fare east economic review April 20042 Magazines India today Competitive success review3 Websites wwwherogroupcom wwwtheherocyclescom

Conclusion

Results of Group initiativesThe Grouprsquos philosophy of empowering and training human capital use of appropriate technologies constantly being close to the customer and maintaining a healthy work environment with the highest standards of ethics and corporate governance has resulted in the Group companies excelling in their chosen field through a service attitude year after year leading to impressive financials and healthy returns to all stakeholders

Hero group has build leadership positions primarily due to its belief in the following principles1 Understanding stakeholders (incl international partners and customers) expectations and

delivering value for money2 Managing relation3 Creating a performance culture4 ldquopartnership approachrdquo with ancillaries5 Efficient current asset management6 Accepting and using ever changing technology as a facilitator7 Strong quality and process orientation

The constant and the determined effort to gain customerrsquos trust and satisfaction along with the zeal

to provide the best product to the customer through innovation and latest technology has been the

primary reason behind the remarkable growth of the Hero Group The other factors such as

understanding of customerrsquos needs and choice a close watch on the market corporate excellence

and understanding of corporate social responsibility and stronger relationships with the investors

partners vendors and dealers along with the customer have been equally important in their

achievement [11]

Due to all these reasons the Hero Group has been able to excel especially in the bicycles and

motorcycles manufacturing They have received numerous awards including the ldquoBike Maker of

the year awardrdquo for continuously 6 years from 2001-2006 by Overdrive magazine Their effort and

hard work in every field can be seen as it was ranked 4th in ldquoOverall Best Managed Companyrdquo

category ranked 3rd in ldquoBest Financial Managementrdquo and ldquoBest Operational Efficiencyrdquo category

ranked 6th in ldquoOverall Best Investor Relationsrdquo category by Asiamoney in the year 2002 [12]

The management style adopted by the Hero Group has been commended internationally as well by

different organizations such as World Bank and BBC UK acclaiming it as a role model in vendor

development internationally At London Business School UK and Insead France it is studied as

case studies as a model of entrepreneurship [12]

The Hero Group has been considered as one of the top ten Business Houses on Economic value in

India by the Boston Consulting Group [12]

The two-wheeler department that is Hero Honda Motors has received the highest ratings for

Corporate Governance in 2003 and Best Governed Company award in private sector in 2004 by

CRISIL which is Indiarsquos Leading Ratings Risks and Advisory Company [12]

Hero Group has received awards not only in the domestic market but it has also received awards

for its excellence in international trade Engineering Exports Promotion Council has awarded Hero

Cycles with the Best Exporter Award for the last 28 years in succession [12]

Appendix

1 HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

2 The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

3 Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

4 Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Bibliography

1 Fare east economic review April 20042 Magazines India today Competitive success review3 Websites wwwherogroupcom wwwtheherocyclescom

The management style adopted by the Hero Group has been commended internationally as well by

different organizations such as World Bank and BBC UK acclaiming it as a role model in vendor

development internationally At London Business School UK and Insead France it is studied as

case studies as a model of entrepreneurship [12]

The Hero Group has been considered as one of the top ten Business Houses on Economic value in

India by the Boston Consulting Group [12]

The two-wheeler department that is Hero Honda Motors has received the highest ratings for

Corporate Governance in 2003 and Best Governed Company award in private sector in 2004 by

CRISIL which is Indiarsquos Leading Ratings Risks and Advisory Company [12]

Hero Group has received awards not only in the domestic market but it has also received awards

for its excellence in international trade Engineering Exports Promotion Council has awarded Hero

Cycles with the Best Exporter Award for the last 28 years in succession [12]

Appendix

1 HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

2 The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

3 Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

4 Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Bibliography

1 Fare east economic review April 20042 Magazines India today Competitive success review3 Websites wwwherogroupcom wwwtheherocyclescom

Appendix

1 HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05

2 The Hero Group is recognized as a long term partner and an ideal employer

-- Hero Groups partnership with Honda Motors Japan is over 20 years old

-- Hero Groups Partnership with Showa Manufacturing Corporation Japan is over 18 years old

3 Group Chairman Mr Brijmohan Lall Munjal received the coveted Ernst amp Young Entrepreneur of the Year award for 2001

4 Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asias leading companies award (2003) by Far Eastern Economic Review

Bibliography

1 Fare east economic review April 20042 Magazines India today Competitive success review3 Websites wwwherogroupcom wwwtheherocyclescom

Bibliography

1 Fare east economic review April 20042 Magazines India today Competitive success review3 Websites wwwherogroupcom wwwtheherocyclescom