Hero Honda

I. PROBLEM SITUATION

India had the largest population of two-wheelers in the world. No wonder a world leader in manufacturing, Hero Honda Motors Ltd. (HHM), emerged as the largest two-wheeler company in India and in the world in volume terms. Quarter after quarter, and year after year, HHM had continued to grow, delivering superb performance in India’s two-wheeler marketplace and becoming a world leader in 2001.
Mr. Brijmohan Lal Munjal, the Chairman and Managing Director of Hero Honda Motors (HHM), had not only earned the credit of heading the world’s largest two-wheeler company in the world but also the glory of presiding over one of the most successful joint ventures in India. But this success seems not enough.
The Munjals were gearing for Operation One Billion, targeting $1 billion revenues in 2002-2003. However, the new objective was being threatened by the predatory moves made by its Japanese partner, Honda Motors Company (HMC). The problem first appeared in August 1999 when HMC announced that it would be setting up a 100% subsidiary that will make its own scooters and motorcycles. HHM’s stocks plummeted by 30% on the day of the announcement.
Further heightened by an increasing intensity of rivalry as domestic rivals became well equipped and foreign interlopers challenged HHM for supremacy, doubts arose as to whether HHM could sustain its impressive performance record and achieve the 1 billion revenues. HHM is thus compelled to do something, if not everything, to achieve $1 billion sales revenue because the years to come won’t definitely be a time to rest on past laurels.

II. OBJECTIVES

General Objective

To generate $1 Billion revenues in fiscal year 2002-2003 through continued market leadership in the motorcycle industry.

III. SITUATIONAL ANALYSIS

Presented at the following pages is a SWOT Analysis and a Balanced Scorecard of Hero Honda Motorcycles.


A. SWOT Analysis

Strengths Weaknesses

1. Highest market share
2. In... [continues]

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