Managmen Perspective on hero honda and bajaj Report

8/14/2019 Managmen Perspective on hero honda and bajaj Report

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MAN AGEM ENT PER SP EC TIV ES

2 T WO W HEELER GIA NTS IN I ND IA

GROUP- 7

COU RSE FACILITATOR - GROUPMEMBERS D im pl e Gr ove r

KRI T KR .V ERMA (0 86 09 052 )

AMIT KUMAR ( 08 60 905 3)

ROHI T JAI N

(08609054)RA CHY JAIN

(08609056)

AD IT YA AST HANA

(08609057)


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BAJAJ STRATEGI C P LAN NI NG

INTR ODU CTION-

BAJAJ AUTO Ltd is one of the oldest and largestmanufacturers of automobiles in India and has beenthe market leader in scooters. It is the flagship of theBAJAJ group of companies .BAJAJ is currently Indiaslargest two and three wheeler manufacturer and one of the biggest in the world.

TURNOVER-

72 MILLION (1968) --------------- 81.06 (BILLION)

CURRENT PERFORMANCE-

32% growth in 2004-05 US industry growth of 19%

Increase from 28% to 31% in year 2005-06 inmotorcycle segment

Annual turnover is of Rs.81.06

It is present in all those segment

PRICE SEGMENT


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VALUE SEGMENT

PERFORMANCE SEGMENT

Selling more than 1.20 lakh motorcycle annually

COMPARATIVE ANALYSIS OF BAJAJ ON BASISOF TOWS MATRIX

SO (Maxi-Maxi)-

With the upper hand in high performance segment

with several variants BAJAJ can perform very well inthe market of high ended motorcycle i.e.(150 cc)

BAJAJ is pioneer in launching new technology of DTSi which stands for digital twin spark ignitionwhich delivers more power and efficiency whichcan be very helpful in delivering the demand of

technology based bikes.With the concept of free riding it can easily attractthe young generation.

Can use the existing R&D capabilities for newmodels and new segment.

The company is sitting on cash pool and can easilyproduce the battery operated two wheelers with


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higher efficiency for which the demand is expectedto be very high in future.

Can use its Kawasaki distribution network tocapture the world market.

WO(Mini-Maxi)-

Must employ the cash in production and productcapabilities to match competitors and forcontinuous export growth.

Must hire the brand ambassador with higher facevalue to attract customer because there is higherdemand of a product if celebrity advertise for it.

Engage itself in the production of heavy andmore high ended bikes to overcome theweakness in the world market segment and had

a opportunity of capturing the market segmentMaintain and deliver the quality service to itscustomer for capturing the market in terms of quality product service and service provider.

ST(Maxi-Mini)-

Can use its excellent R&D department to catchup with the new innovation & technologicalchange

Due to its already established customer base itcan easily remove the threat of customerdisloyalty

Can also use its various wings i.e; BAJAJ FINANCEand BAJAJ INSURANCE


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Provides high performance product across allcategories all categories that will build image of the company

WT(Mini-Mini)-

Invest in building world class bikes to sustain theinternational market

Tie up with different companies in foreign toexport there production.

BAJAJS PORTER ANALYSISRIVALRY-


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BAJAJ has a competitive advantage over its competitorin following respects;

Own R & D facilities

Low maintenance cost

Innovative design

Large product lines

High performance bikes

Advantage of self owned finance and insurancecompany.

THREATS OF SUBSTITUTES -

Bajaj Pulsar 225 DTSFi has a threat as itscompetitor Hero Honda will decrease the price of Karizma

Lowering cost of second hand cars.

Substitute of every model is available in one orother company.

BUYERS POWER

As bajaj auto is a major player in market and itproduces different range of products withinnovative features which is very well demandedby the buyers.

Individual buyer cannot affect the price of thecompany so they are less powerful

This can be shown by the fact that thesale of bike pulsar has grown to 40000 vehicle per


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month and increase of 24% over last year despite of high cost.

SUPPLIER POWER-

Manufacturing of bikes need various kind of spare partsand this spares parts are supplied to bajaj by varioussuppliers ie;-

MINDA- ignition locks,fuel tank locks etc.

LUMAX- head light,tail light,indicators etc.

EXIDE- battery

DEE OVERSEAS- clutch plates,gasket,air filters etc.

As these suppliers are very renowned and they havethe power to affect market supply and BAJAJ cannoteasily switch to other suppliers because they use thesecompanies spare parts in various range of products.

THREATS OF ENTRY-

If BAJAJ want to enter other segment of market thenthese are the barriers-

Bajaj entering in car market is a high barrier entryas already there are so many competitors in themarket.

Patent on proprietary knowhow is necessary forbajaj in order to prevent the products from beingcopied.


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Bajaj scooters entry is low as the business isindependent and now scooters are being lesspreferred by gents.

BCG MAP FOR BAJAJ

PULSAR 220 DTSFi IS STAR DISCOVER 135 ISQUESTION MARK

PULSAR 150 IS CASH COW

WAVE DTSi IS LIKE DOGS


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HERO HONDAINTRODUCTION -

HERO HONDA MOTORS ltd. Established in 1984 is in a joint venture between Hero group, the worlds largestbicycle manufacturers and the Honda motor companyof Japan. Hero Honda manufactures a range of motorcycle like CD Dawn, Splendor, Passion, CBZ,Karizma etc.Its splendour bike is one of the largestselling bikes in the country. Its world largest twowheeler manufacturer in the world.


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CURRENT SCENARIO-

Hero Honda produces largest number of twowheelers in India

Sales of 314567 two wheeler in September

Consolidated over 50% share in the domesticmotorcycle market

Crossed half a million retail sales in the festiveseason.

THE TOWS MATRIX FOR STRATEGY FORMULATION

SO(Maxi-Maxi)-

Regular production of good quality two wheeler

with efficient & skilled worker producing 13000motorcycle a day approximately it can cover thehuge demand from the market.

High performance in the festival season.

Without increasing its cost it can supply largemotorcycle to curtail the opportunity of transportand mobility since public transport is not efficient.

Large coverage in tier2 &tier3 cities where thedemand for two wheeler is increasing.

Positive image of the company can help it toincrease its sales in rural areas due to the growthof road network in rural area by intiative of government.


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WT(Mini-Mini)-

Take away the products from the market for whichthere is very less sale.

Came in joint venture with the foreign company fornew innovation

Joint venture partner Honda motors Japan,forbringing in the next generation engines, whichinclude fuel injection and other features into India.

PORTERS ANALYSIS

RIAVALRY-

Hero Honda has competitive advantage over itscompetitor Bajaj in following are as follows;

Huge customer base

High sale i n tier1 and tier2 cities and also in ruralareas.

Large distribution network

Technical knowledge to the mechanics.

Large service centre across whole country

Stable prices

Resale value of Hero Honda Bike is more thanBajaj.


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THREATS OF SUBSTITUTES -Hero Honda face threatof substitute in many segment.

Splendor with Discover

Pulsar 220 DTSFi with Karizma

Pleasure with Scooty pep

Substitute of high ended bikes like Avenger

Lowering price of second hand cars-The car price

is low which gives the switching power tobuyers.Due to availability of substitute demand ismore elastic.

BUYERS POWER -

Buyers are less powerful because Hero Honda hasits own distribution channel.

Buyers are fragmented in the market so noparticular group of buyer had a significance onsale of motorcycle or its price so buyer are lesspowerful.

SUPPLIER POWER -

Rolex IPEX Company provides the engine,suspension, brakes etc for hero Honda.

Saicom International provide electrical parts, headlight, tail lights, switches.

In case of Hero Honda its suppliershave the power to bargain because in all theproduct line the same spare part is used by thecompany so it cannot early switch it. But the


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supplier maintains relationship with the companybecause they regularly receive the order from thecompany in bulk.

BARRIER TO ENTRY AND EXIT -

If Hero Honda wants to enter into other segmentmarket ie; producing scooters, cars, three wheelersetc.

It has to take patent or proprietary knowhow.

It has to explore new distribution channels.Product would be successful or not

Switching to other segment will affect the industryor not.

It is not easy to exit two wheeler segments becauseHero Honda has not set up many specialised plantsetc.

Very high exit cost from industry.

BOSTON CONSULTING GROUP MAP FOR HEROHONDA

KARIZMA IS STAR

HUNK IS QUESTION MARK

SPLENDOR IS CASH COW ACHIEVER IS DOGS

BOSTON CONSULTING GROUP (BCG) MAP


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The business portfolio matrix was developed byBoston consulting group (BCG).The map shows thelink between the growth rate of business and the

market share. Question marks in business are withweak market share and high growth rate; usuallyrequire cash investment so that they can becomestars. The businesses with high growth and strongcompetitive position. These kinds of businesses haveopportunities for growth and profit. The cash cows,with a strong competitive position and low growth

rate, are usually well established in the market andsuch enterprises are in the position of making theirproducts at low cost. The dogs are the businesseswith a low growth rate and a weak market share.

These businesses are usually not profitable andgenerally should be disposed of.

TOWS MATRIX-

The tows matrix was developed for analysing thecompetitive situation of the company or even of anation. The tows matrix is a conceptual frameworkfor a systematic analysis that facilitates matching theexternal threats and opportunities

with the internal weaknesses and strengths of theorganisation. The word tows comprises of T standsfor threat, O stands for opportunities,W standsfor weakness & S stands for strength.

INTERPRETATION


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From the above analysis we can say that Bajaj twowheelers will capture the martek share of Hero Hondaalso incoming years and will perform extreamly well

in the industry because of the following facts:1. It has its own R & D facilities.

2. It varies its bike from time to time .

3. Bajaj bike produce statement on road.

4. Bajaj has opportunities of providing extra

services to its customers by using its finance andinsurance company.

5. It can easily target the young age group moreefficiently due to its design and technology.

LIMITATIONS

1. Difficulty in finding the numeric data.

2. Difficulty in finding the recent knowledge about thecompany.

3. Difficulty in adjusting the material into the limitednumber of slides.


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REFERENCES

Tekemeong.com

Bajaj.com

HeroHonda.com

Essential of Management by Koontz& Weihrich.

Managementparadize.com

Equitymaster.com

Davegelber.com Coolavenues.com

Managmen Perspective on hero honda and bajaj Report

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