16-11-2012, 05:44 PM
SWOT ANALYSIS HERO HONDA
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SHORT INTRO
Market leader in the two wheeler segment not only in India but
also is the number one two wheeler company in the world.
The company’s name is synonymous with fuel-efficient bikes and
longevity.
The company has a presence in all bike segments viz.
economy(CD 100SS,CD Dawn), executive(Super Splendor,
Splendor+) and premium (Karizma, CBZ & Hunk ).Splendor is the most successful product of the company and
accounts for almost 50% of the company’s turnover.
joint venture agreement between the Munjal family’s Hero Group
and Honda Motor Company (HMC) of Japan, each having 26%
stake in the company.
Strengths
Huge brand equity/reputation among customers
Research and development- joint venture with Japanese
giant – HONDA
Models/products in almost every bike segment
Healthy growth in profits
Brilliant relations with customers and dealers
Strong Resale Value
International Technology with international collaboration
Weakness
Hero is very much dependent on Honda
Low cash reserves due to massive dividend payouts
Very difficult to cop up if contract discontinues
Virtual absence in the highly lucrative bike segments
Imports >31% of its spare parts requirements
Slow to react to market changes- Slow innovation- late
entrants into the 125cc segment
Opportunities
Bikes Segment is still a fast growing sector
HHML can still make it up by launching a strong model in
150cc segment
125cc bike segment - This segment is yet to pick pace
Exports market is yet to be properly exploited
Cruiser bike segment is unexplored by HHML
Variants can be launched to increase the market share
Hero Honda is the most reliable bike manufacturer in India
Strong brand follower
Threats
Hero Honda will need to have a bigger presence in the
executive segment
It will be a great threat for Hero is the collaboration breaks
Up
All major bike makers in the world are lining up for India
Absence in 150cc could harm the growth plans of HHML as
future lies in the 150cc and 125cc markets
Low cash reserves
HHML is losing a foothold in the exports market which is
now dominated by Bajaj
Strong competition from Bajaj, Yamaha & TVS