Comparative Analysis of Strategy Hero MotoCorp Ltd & TVS Motor Company Ltd. Business Strategy & Competitive Advantage
Table of Contents Industry Overview .................................................................................................................................... 3 Company Profile of Hero Moto Corp ....................................................................................................... 8 1.1 Vision .............................................................................................................................................. 8 1.2 Mission............................................................................................................................................ 8 1.3 Introduction ..................................................................................................................................... 8 1.4 Major Products ................................................................................................................................ 9 Company Profile of TVS Motor ............................................................................................................. 10 1.1. Mission......................................................................................................................................... 10 1.2. Vision ........................................................................................................................................... 10 1.3. Introduction .................................................................................................................................. 11 1.4. Subsidiaries of TVS Motor Company .......................................................................................... 12 1.5. Major products ............................................................................................................................. 12 Strategic Analysis of the Hero Moto Corp.............................................................................................. 13 Strategic Analysis of the TVS Motor ...................................................................................................... 13 Functional Level Strategies..................................................................................................................... 14 3.1 Marketing Strategies Followed By Hero MotoCorp ..................................................................... 14 3.1 Marketing Strategies Followed By TVS ....................................................................................... 16 3.2 Operational Strategy of Hero Moto Corp...................................................................................... 19 3.2 Operational Strategy of TVS Motor.............................................................................................. 22 3.3 Financial Strategy of Hero Moto Corp.......................................................................................... 24 3.3 Financial Strategy of TVS Motor.................................................................................................. 25 Industry Comparison............................................................................................................................... 26 Porter’s Five Forces Analysis ................................................................................................................. 26 Segmental Analysis Of The 2windustry ................................................................................................. 27 References ............................................................................................................................................... 33
Industry Overview Global Industry
Global motorcycles, scooters and mopeds market measured in volume terms is undoubtedly going Asia’s way, with a massive chunk of the total market concentrated in the Asia-Pacific region. Developing nations in Asia and Latin America, which perceive two-wheelers as a basic mode of transportation, are expected to remain the most promising markets for scooters, light motorcycles and mopeds. The last two decades have comprehensively transformed the powered two-wheeler industry worldwide. Demand has often outgrown expectations, beating the industry’s calculation, with changing market pattern being the accepted norm. Regional markets play a significant role in market evolution, wherein the wave of consumerism across the globe overhauled the structure of the powered two-wheeler industry worldwide. Motorcycles and scooters emerged favourites with the male customers, while mopeds and small scooters found ready acceptance with the female customers. In developed countries like the US, Canada, Japan, Germany and Italy, motorbikes and scooters are considered a premium purchase to be enjoyed by the wealthy and riding enthusiasts. In contrast, developing markets such as China, India and other South East Asia view motorcycles, scooters and mopeds as essential modes of transportation. The Chinese motorcycle industry has emerged as a formidable force in the global motorcycle and scooters market. The region’s emerging leadership has ignited a fierce competition, threatening to erode the monopoly hitherto enjoyed by the Japanese majors. Price competitiveness, vis-à-vis power, quality and comfort are key differentials in today’s motorcycle and scooter industry. Replacement sales as well as components and accessories demand remains a major factor driving the two-wheeler market. Economic growth and rapid urbanization levels also propel sales in the two-wheelers market. Fuel efficiency/mileage, emission levels, design & style, demographics, transportation system and engine power are some of the other critical growth motivators. In addition, regulatory environment and government policy play an important role in determining the future direction of the industry. The global motorcycle, scooters and mopeds industry was significantly impacted by the economic crisis that severely restricted disposable income as well as low-interest credit. The world market experienced a decline in growth rate to 6.6% in 2008, from a healthy 10.6% pace witnessed in 2007. The situation worsened in 2009, with a sharp fall in the market demand by a substantial 6.7% for the year, and the trend is estimated to continue for 2010 as well. The impact of the recession was much more severely felt in developed and mature markets of North America, Japan and Europe, featuring high double-digit declines in 2008 and 2009. On the other hand, developing economies namely Latin America and Asia-Pacific fared relatively better, recording marginal fall in growth rates. Stocks of unsold inventory piled up in warehouses, as sales of motorcycles regarded as pleasure equipment in the Western region almost stagnated. Several dealers resorted to deep discount
initiatives in order to overcome the scenario. Most of the 2-wheeler companies reduced, cancelled or postponed new product/model launches during the slowdown period. With the global economy beginning to turn around, there is demand for new models from customers, and motorcycle OEMs face a challenging task of restructuring their old business models to suit present day needs. The Asia-Pacific market literally reigns over the other world markets, as stated by the new market research report on Motorcycles, Scooters & Mopeds. Asia-Pacific, home to vast, untapped and fast growing markets of China, India, Indonesia, Taiwan, Vietnam, and Thailand presents a healthy picture for the global two-wheeler industry.. The Motorcycles segment comprises the largest and most popular category, accounting for a major share of the global two-wheelers industry. Demand for motorcycles far exceeds that of scooters and mopeds, the trend reflecting the highest compounded growth rate anticipated for the segment. The global market for motorcycles, scooters & mopeds is highly fragmented, with the players making continuous marketing efforts to sustain market shares and broaden their customer base. Key participants profiled in the report include Bajaj Auto Limited, BMW Group, China Jialing Industrial Co. Ltd., Chongqing Lifan Hongda Industry, Ducati Motor Holding SpA, HarleyDavidson, Inc., Hero Honda Motors Limited, Honda Motor Co., Ltd, Honda Italia Industriale S.p.A., Honda Motorcycle & Scooter India (Private) Ltd., S&T Motors Co. Ltd., Kawasaki Heavy Industries Ltd., Piaggio, Suzuki Motor Corporation, Triumph Motorcycle Limited, Yamaha Motor, MBK Industrie SA and Yamaha Motor India Private Limited. The graph below shows the production increase (in millions) on the horizontal axis:
2012 2011 Japan 2010
Europe Asia
2009
Other 2008 2007 0
20
40
60
80
Indian Industry
The Indian two-wheeler (2W) industry recorded sales volumes of 13.4 million units in 2011-121, a growth of 14.0% over the previous year. In a year wherein growth in other automobile segments particularly, passenger vehicle (PV) and medium & heavy commercial vehicle (M&HCV), slowed down to single digits - marred by demand slowdown due to northward movement of inflation, fuel prices and interest rates - the 14% growth recorded by the 2W industry remained steady. However, the momentum in the 2W industry’s volume growth too has been losing steam lately as evident from the relatively lower volume growth of 11.0% recorded in H2, 2011-12 (YoY) against a growth of 17.1% recorded in H1, 2011-12 (YoY). The deceleration in growth is largely attributable to the motorcycles segment which grew at a much lower rate of 7.8% (YoY) in H2, 2011-12 vis-à-vis 16.4% in H1, 2011-12; even as the scooters segment continued to post 20%+ (YoY) expansion during both halves of the last fiscal. With this, the share of the scooters segment in the domestic 2W industry volumes increased to 19.1% in 2011-12 from 17.6% in 2010-11. Overall, ICRA expects the domestic 2W industry to report a volume growth of 8-9% in 2012-13 as base effect catches up with the industry that has demonstrated a strong volume expansion over the last three years at cumulative annual growth rate (CAGR) of 21.8%. Over the medium term, the 2W industry is expected to report a volume CAGR of 9-11% to reach a size of 24-26 million units (domestic + exports) by 2016-17, as we believe the various structural positives associated with the domestic 2W industry including favourable demographic profile, moderate 2W penetration levels (in relation to several other emerging markets), under developed public transport system, growing urbanization, strong replacement demand and moderate share of financed purchases remain intact.
Medium Term Demand Drivers Stay Put An analysis of the mix of Indian populace and the structure of the Indian 2W industry brings to the fore several key attributes namely, India’s demographic advantage, moderate 2W penetration levels and shrinking of replacement cycle; factors that have combined to propel the industry’s volumes over the last 10 years from 4 million units in 2001 to 13 million units in 2011. In ICRA’s view, these growth drivers are likely to remain relevant over the medium term and continue to provide impetus to the industry’s volumes.
Rising Per Capita GDP
Penetration increases scope
Favourable Demographics
Growing Urbanization
Swelling Replacement Demand
Demographic Advantage In the age bracket of 20-40 years, which is the key target segment for 2W, around 77 million youth got added to the Indian population mix in the last decade, which has been the key contributor to the 2W industry’s volume growth over the last 10 years. India’s demography continues to remain favourably on its side with average age of 25 years, which is 9 years younger than China, and more than 12 years and 19 years younger than the US and Japan, respectively. Over the next five years, the incremental addition in India’s youth population is estimated to be ~41 million, a fairly large number that is likely to sustain the strong demand for 2W. The 20-40 years age group is characterized by a combination of earning power and high spending propensity, which should increase the likelihood of conversion of potential ownership into actual ownership. Underpenetrated Market The 2W penetration level in Indian households was 12% in 2001. This low 2W penetration provided the structural thrust to the domestic industry’s volume growth over the last decade whose annualized volumes expanded by a factor of 3.4x during this period. As of 2011, the 2W penetration levels in Indian households,
while having increased to 21%, continue to remain moderate and much lower than in some of the other emerging markets such as Brazil, Indonesia, Thailand and Taiwan. Also, the penetration rates differ vastly between India’s rural and urban areas, with rural areas being under-penetrated by a factor of 2.5x as compared to urban areas. Additionally, the social trend in favour of nuclear families is expected to further increase the number of households which could be potential targets for the 2W industry. Shrinking Replacement Cycle While the 2W population in India has more than doubled over the last decade, the replacement cycle is estimated to have reduced from around 7 years (in 2001) to around 5 years (in 2011). The reduction in 2W replacement cycle implies that the average annual mileage covered per 2W has been on the rise, given that (distance run multiplied by age) of 2Ws is unlikely to have changed much over the years. As per industry estimates, around 50% of the total domestic sales of 2W are now made to first-time buyers, 30% to customers looking to upgrade from their existing vehicle, and 20% to buyers seeking a second vehicle for the household. The break-up suggests that currently around 50% of the sales in the domestic 2W market are made to replacement buyers. Considering that the industry has sold around 49 million 2W in the domestic market in the last five years, the total replacement demand works out to be a fairly large number. Add to this the healthy growth in sales to first-time buyers in recent years, driven in particular by sales to the rural market, the replacement opportunity could only increase in the future. From the consumer perspective, although replacement involves fresh capital spending, the inducement of upgrading to an improved technology 2W, having better performance, features and more attractive styling; complemented with increased spending propensity are expected to be the prime ingredients feeding replacement demand.
Company Profile of Hero Moto Corp
1.1 Vision
The story of Hero Honda began with a simple vision - the vision of a mobile and an empowered India, powered by its bikes. Hero MotoCorp Ltd., company's new identity, reflects its commitment towards providing world class mobility solutions with renewed focus on expanding company's footprint in the global arena. 1.2 Mission
Hero MotoCorp mission is to become a global enterprise fulfilling its customers' needs and aspirations for mobility, setting benchmarks in technology, styling and quality so that it converts its customers into its brand advocates. The company will provide an engaging environment for its people to perform to their true potential. It will continue its focus on value creation and enduring relationships with its partners. 1.3 Introduction
What started out as a Joint Venture between Hero Group, the world's largest bicycle manufacturers and the Hero Moto Corp Company of Japan, is today the leading manufacturer of India's largest selling motorcycle. Coming into existence on January 19, 1984, Hero Moto Corp gave India nothing less than a revolution on two-wheels made even more famous by the 'Fill it Shut it - Forget it' campaign. Driven by the trust of over 30 lakh customers, the Hero Moto Corp product range today commands as much as 47% making it a veritable giant in the industry. Add to that technological excellence, an expansive dealer network, and reliable after sales service, and you have one of the most customer-friendly companies. In fact, every second bike sold in India today is a Hero Moto Corp! Customer satisfaction, a high quality product, the strength of Hero technology and the Hero group's dynamism have helped HML scale new frontiers and exceed limits. In the words of Mr. Brijmohan Lall Munjal, the Chairman and Managing Director, ―We will continue to make every effort required for the development of the motorcycle industry, through new product development, technological innovation, and investment in equipment and facilities and through and through efficient management." The joint venture between India’s hero group and Hero Moto Corp Company has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide. During the 80s, Hero Moto Corp became the first company in India to prove
that it was possible to drive a vehicle without polluting the roads. The company introduced new generation motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary 'fill it - shut it - forget it' campaign captured the imagination of commuters across India, and Hero Moto Corp sold millions of bikes purely on the commitment of increased mileage .Over 20 million Hero Moto Corp two wheelers tread Indian roads today. These are almost as many as the number of people in Finland, Ireland and Sweden put together! Hero Moto Corp has consistently grown at double digits since inception; and today, every second motorcycle sold in the country is a Hero Moto Corp. Every 30 seconds, someone in India buys Hero Moto Corp's top -selling motorcycle – splendour. This festive season, the company sold half a million two wheelers in a single month—a feat unparalleled in global automotive history. Hero Moto Corp bikes currently roll out from its three globally benchmarked manufacturing facilities. Two of these are based at Dharuhera and Gurgaon in Haryana and the third state of the art manufacturing facility was inaugurated at Haridwar, Uttarakhand in April this year. These plants together are capable of producing out 4.4 million units per year. Hero Moto Corp’s extensive sales and service network now spans over 3000 customer touch points. These comprise a mix of dealerships, service and spare points, spare parts stockiest and authorized representatives of dealers located across different geographies. Hero Moto Corp values its relationship with customers. Its unique crm initiative - Hero Moto Corp passport program, one of the largest programs of this kind in the world, has over 3 million members on its roster. The program has not only helped Hero Moto Corp understand its customers and deliver value at different price points, but has also created a loyal community of brand ambassadors. Having reached an unassailable pole position in the Indian two wheeler market, Hero Moto Corp is constantly working towards consolidating its position in the market place. The company believes that changing demographic profile of India, increasing urbanization and the empowerment of rural India will add millions of new families to the economic mainstream. This would provide the growth ballast that would sustain Hero Moto Corp in the years to come. As Brijmohan Lall Munjal, the chairman, Hero Moto Corp motors succinctly points out, "we pioneered India’s motorcycle industry, and it's our responsibility now to take the industry to the next level. We'll do all it takes to reach there.'' 1.4 Major Products
The various products of Hero MotoCorp are categorized as: Two Wheelers& Hero Merchandize The two wheelers are: Passion XPRO Super Splendor Ignitor Glamour Impulse Splendor Pro HF Dawn Glamour PGM Fi HF Deluxe Achiever Pleasure Xtreme Splendor+ Hunk Splendor NXG Karizma Passion Pro Karizma ZMR Scooterettes: Maestro & Pleasure
Company Profile of TVS Motor
1.1. Mission
We are committed to being a highly profitable, socially responsible, and leading manufacturer of high value for money, environmentally friendly, lifetime personal transportation products under the TVS brand, for customers predominantly in Asian markets and to provide fulfilment and prosperity for employees, dealers and suppliers. 1.2. Vision
TVS Motor - Driven by the customer TVS Motor will be responsive to customer requirements consonant with its core competence and profitability. TVS Motor will provide total customer satisfaction by giving the customer the right product, at the right price, at the right time. TVS Motor - The Industry Leader TVS Motor will be one among the top two two-wheeler manufacturers in India and one among the top five two-wheeler manufacturers in Asia. TVS Motor - Global overview TVS Motor will have profitable operations overseas especially in Asian markets, capitalizing on the expertise developed in the areas of manufacturing, technology and marketing. The thrust will be to achieve a significant share for international business in the total turnover. TVS Motor - At the cutting edge TVS Motor will hone and sustain its cutting edge of technology by constant benchmarking against international leaders. TVS Motor - Committed to Total Quality TVS Motor is committed to achieving a self-reviewing organization in perpetuity by adopting TQM as a way of life. TVS Motor believes in the importance of the process. People and projects will be evaluated both by their end results and the process adopted.
TVS Motor - The Human Factor TVS Motor believes that people make an organization and that its well-being is dependent on the commitment and growth of its people. There will be a sustained effort through systematic training and planning career growth to develop employees’ talents and enhance job satisfaction. TVS Motor will create an enabling ambience where the maximum self-actualization of every employee is achieved. TVS Motor will support and encourage the process of self-renewal in all its employees and nurture their sense of self-worth. TVS Motor - Responsible Corporate Citizen TVS Motor firmly believes in the integration of Safety, Health and Environmental aspects with all business activities and ensures protection of employees and environment including development of surrounding communities. TVS Motor strives for long-term relationships of mutual trust and interdependence with its customers, employees, dealers and suppliers. 1.3. Introduction
TVS Motor Company is the third largest two-wheeler manufacturer in India and one among the top ten in the world, with annual turnover of more than USD 1 billion in 2008-2009, and is the flagship company of the USD 4 billion TVS Group. TVS Motor Company Ltd. was established in 1911 by T. V. Sundaram Iyengar in India. The TVS group of companies is mainly situated in Padi, Tamil Nadu, in the outskirts of Chennai (formerly Madras). TVS Motor Company Limited is the flagship company of TVS Group, the USD 2.2 billion group. The Group is the third largest two-wheeler manufacturer in India and globally among the top ten, with an annual turnover of over USD 650 million. TVS manufactures a wide range of two-wheelers including motorcycles, scooters, and mopeds. The company also manufactures three-wheelers, TVS King, in two variants, two-stroke petrol and two-stroke liquid petroleum gas (LPG). It also offers automobile spares and accessories. The company operates in India, Singapore, Indonesia and the Netherlands. It is headquartered in Chennai. Currently the group has more than 30 companies and employees over 40,000 people worldwide. TVS Motor Company, India employs about 4,285 people. With steady growth, expansion and diversification, it commands a strong presence in the manufacturing of twowheelers, auto components and computer peripherals. They also have vibrant businesses in the distribution of heavy commercial vehicles (HCV) passenger cars, finance and insurance. 1980 is the red letter year for TVS when India's first two-seater moped rolled out that redefined the realm of personal transportation. In 1982, the company entered into a technical collaboration with Suzuki Motor Corporation of Japan which helped the fledgling joint venture gain from the expertise of a global two-wheeler giant like Suzuki. In 2000, the TVS group and Suzuki Motor Corporation parted ways from their joint venture with the former buying out the 25.97 per cent stake of the Japanese company for Rs 9 crore. Globally, TVS Motor Company is the first two-wheeler manufacturer to be honoured with the hallmark of Japanese Quality - The Deming Prize for Total Quality Management. It is the only
automotive manufacturer in India to get the prestigious Deming Prize. One of its subsidiaries Sundaram Clayton was the first company in India to receive the Deming followed by Sundaram Brake Linings also getting the Deming Prize. This prize is "given to organizations or divisions of organizations that have achieved distinctive performance improvement through the application of TQM in a designated year."Sundaram Clayton went on to be awarded the Japan Quality Medal. 1.4. Subsidiaries of TVS Motor Company
With steady growth; expansion and diversification, today TVS commands a strong presence in various fields - two wheelers, automotive components, automotive spares, computer peripherals and finance. The following is the list of different companies under the group:
Sundaram Auto Components Ltd TVS Energy Ltd TVS Housing Ltd TVS Motor Company (Europe) B.V. TVS Motor (Singapore) Pte. Ltd PT. TVS Motor Company Indonesia
1.5. Major products Following are the products launched in Indian market trying to cover every segment of the population. Motorcycles TVS Star Sport TVS Fiero F2 TVS Centra TVS Victor TVS Victor GLX TVS Victor EDGE TVS Flame TVS Apache TVS Apache RTR 160
TVS Apache RTR 160 EFI Scooters Spectra Dx Spectra Ax
Scooterettes TVS Scooty ES TVS Scooty KS TVS Scooty Pep TVS Scooty Pep + TVS Teenz
Strategic Analysis of the Hero Moto Corp
The central focus of the company has always been on Cost Leadership. Its key strategies are to build a robust product portfolio across categories, explore growth opportunities globally, continuously improve its operational efficiency, aggressively expand its reach to customers, continue to invest in brand building activities and ensure customer and shareholder delight. Growth Strategies adopted
Concentrating on Rural Market Fuel Efficient Vehicles with low maintenance Advertisements through exchange Melas, Radio, Magazines Foreign Collaboration to assist in new design & production process Organize free service camps Offers cheapest motorcycle in range of Rs 37,000 to Rs 95,000 (―Bike for All‖)
Strategic Analysis of the TVS Motor
The motorcycle industry is such that the uniqueness couldn't exist for a long period of time and the technology is also imitable. So, the only strategy for a company having a competitive scope of broad target and cost as a competitive advantage ought to have cost leadership as its primary strategy. In order to capture the market share and to have the economy of scale and scope they needed to have a broad target as their competitive scope. Even if they try to have a differentiation, that would be imitable. So they finally zeroed in for the integrated price leadership/differentiation strategy. So they had technologically advanced products, greater than 100 cc, that too at a price just slightly higher than a 100 cc motorcycle. They also observed that volume wise the 100 cc generates a lot of volumes, but if seen in terms of profitability it did not add value to the segment. As a result, in 100 cc the profits are less but the hassles are more. On contrary to this, the 125cc+ segment is the most profitable, in which the profit is also higher with less hassles. Even though the total industry size is 40% for the 125cc+, the profit share contributed by this segment is whopping 65%. So, TVS decided to focus on both 100 cc and 125 cc segment and started producing 125cc+ motorcycle. The prices were set competitively so that the switch from 100 cc to 125 cc+ could be easy and the consumers could easily be convinced.
Functional Level Strategies 3.1 Marketing Strategies Followed By Hero MotoCorp 3.1.1 Rural Marketing- Splendor Success The slogan of this has been ―Har Gaon, Har aangan‖.To strengthen their network in rural area the company had started sales, servicing and spare part outlets in small towns and villages across India. The achieved a rural penetration of 10% as soon as they started the campaign. The most successful product has been ―Splendor‖ in rural market & hence they came up with new variants of Splendor as well. For being successful, the dealers met the Sarpanches, Headmasters, Aanganwadi workers and other opinion leaders to understand rural consumer behaviour. They organised Skits, Dramas to promote their product. They believe that once the rural customer’s loyalty is achieved it’s a tough competition for te competitors. 3.1.2 Brand Building The new Hero is rising and is poised to shine on the global arena. Company's new identity "Hero MotoCorp Ltd." is truly reflective of its vision to strengthen focus on mobility and technology and creating global footprint. Building and promoting new brand identity will be central to all its initiatives, utilizing every opportunity and leveraging its strong presence across sports, entertainment and ground- level activation. Hero focusses on a comprehensive approach. Sales Promotion Direct Response
Media Advertising
Direct Marketing
Brand Value
Publicity & Public Relations
Point of Sales Event Marketing
3.1.3 Marketing Approaches Followed
Packaging & Designing
Integrated Marketing o Fuel Efficient to marketing led campaigns o Advertising Campaigns
o Product Refreshes o Building Brand Health Emotional Branding Segmentation & Sub branding ―Youngistan‖ Focus through sponsoring Cricket Matches and MTV Roadies Advertisements o Celebrity Advertisements o Print & Outdoor Advertisement o Covert Advertisement – Adopted for CBZ models o Public Service Advertisement – ―Desh ki Dhadkan, Dhak Dhak Go‖ o Broadcast Advertisements – shows like Roadies, Sa Re Ga Ma Pa, Dadagiri Sales Promotion – Passport Program Pleasure Promotion - 6 free services, 9 shades of colour etc.
3.1.4 Corporate Social Responsibility Stakeholder Ties at the Grassroots- Integrated Rural Development Hero MotoCorp takes considerable pride in its stakeholder relationships, especially ones developed at the grassroots. The Company believes it has managed to bring an economically and socially backward region in Dharuhera, Haryana, into the national economic mainstream. An Integrated Rural Development Centre has been set up on 40 acres of land along the DelhiJaipur Highway. The Centre-complete with wide approach roads, clean water and education facilities for both adults and children-now nurtures a vibrant, educated and healthy community. The Foundation has adopted various villages located within vicinity of the Hero MotoCorp factory at Dharuhera for integrated rural development. This includes:
Installation of deep bore hand pumps to provide clean drinking water. Constructing metalled roads and connecting these villages to the National Highway (NH 8). Renovating primary school buildings and providing hygienic water and toilet facilities. Ensuring a proper drainage system at each of these villages to prevent water-logging. Promoting non-conventional sources of energy by providing a 50 per cent subsidy on biogas plants.
Other key projects taken up by the Foundation include: 1. Raman munjal vidya mandir 2. Raman munjal memorial hospital 3. Raman munjal sports complex 4. Vocational training centre 5. Adult literacy mission 6. Marriages of underprivileged girls 7. Rural health care 8. Supporting physically challenged people by organizing camps 9. Safe ride program
3.1 Marketing Strategies Followed By TVS 3.1.1 Star and Apache - Key volume drivers "Much of the volume growth is being contributed by the Star and Apache along with a fillip from the Victor variants. For the period April - October 06, the company recorded 937,405 units of two-wheelers compared to 770,841 units recorded in the previous year, at a growth of 22%. The motorcycles during this period clocked 584,155 units at a growth rate of 30%. TVS Star brand crossed the 1 million sales mark since its launch and with the launch of the electric start variant the demand for the vehicle has grown further in the coming months. Apache continues to be in demand and has captured sizeable share in the premium segment of the motorcycle market." 3.1.2. Brand Building - Focus to sustain "The company has been spending whole-heartedly in creating its key model brands. The company plans to capitalize on the sizable success achieved by top brands in respective segments. The Star, Victor and Apache in respective segments have done well and all future efforts would be directed towards keeping the brand image live and fresh by introducing newer variants of the existing successful bikes." 3.1.3. Capturing the imagination of people TVS Motors, the country's third largest two-wheeler manufacturer, launched seven products in a first-of-its-kind rollout in the Indian automobile industry. The seven products include a completely new 125 cc motorcycle FLAME, an all-new 110 cc Star City, an Apache variant with fuel injection technology and the electric variant of a Scooty. The other three products were the petrol, CNG and LPG version of a three-wheeler passenger vehicle that will compete with the Bajaj group, the only player in that segment. ―This is the first step to make the announcement of TVS as a young Indian multinational company. TVS have done significant amount of hard work in the last few years and now forthcoming years will mark the emergence of new TVS," said Venu Srinivasan, chairman and managing director of TVS Motors. He added that the simultaneous rollouts are a tribute to the engineering skill of the research and development wing of TVS, making it the first two-wheeler company to make multiple rollouts in a single day. ―Each new rollout signals avowed intent on the part of TVS to regain market share and momentum within the industry. The new offerings are targeted at different segments of the two-and three-wheeler customers with emphasis on superior technology, styling and engine capabilities," said Srinivasan. In its bid to make more environment-friendly vehicle, TVS also announced the launch of its new CCVTi (controlled combustion variable timing intelligent) engine, which will be integrated in the newly launched 125cc FLAME. "The CCVTi engine not only reduces the carbon dioxide but also cuts down carbon monoxide production by 70 per cent. The Indian auto industry has to make its best effort to make a green revolution," said Srinivasan.
"The auto industry has to make its best effort to make a green revolution by developing the technology of the future," said Srinivasan. The TVS chief added the company has plans for a "hybrid vehicle" but it would take a long time as the cost is significantly high and the market is niche. TVS Motor has set the stage for entry into the three - wheeler market with the setting up of a new plant at Nanjangud, near Mysore in Karnataka. We understand that the company would be targeting the sub - one tonne passenger and goods carriers segment of the market. It will cater to both passenger and cargo segments with an investment of about Rs. 50 crore in phase-I. The total investment for the three - wheeler and four - wheeler quadricycle project are expected to be in the range of Rs 500 crore in the next 2 to 3 years. It plans to go with the petrol version of three wheelers and expects higher demand to come from B class towns. 3.1.4. Customer satisfaction and quality The continued improvement in quality of its products has resulted in the company winning several quality awards as well as bringing in more value for its customers. TVS was the first Indian company to win Deming Quality Award. Company's adoption of Total Quality management has made this possible. Company has adopted policy of employee involvement in the best possible manner. Large number of quality circles has been formed. Equal attention has been given to both process and end product. Every employee ranging from manager to worker has a say as to how the quality can be improved. TVS has always focussed on business reengineering. Philosophies like JIT have enabled TVS to manufacture the product in the most efficient manner. This is one of the strategic advantages that TVS enjoys over its competitor in the market. 3.1.6. Increasing nationwide network and reach TVS Motor Company is aggressively increasing its national reach of its sales and service footprint through increased national network for customer access. Currently the products of the company can be purchased and serviced from over 4000 points. 3.1.7. Creating goodwill in the market - Serving the society This extended arm of the company believes in social responsibility and has involved itself in several community development initiatives that have significantly improved the standard of living of the people in 51 adopted villages across the country. The CSR activities of TVS focus on following fronts of the society:
Economic development - The program enables people below the poverty line in these adopted villages to earn their livelihood by involving them in activities that generate income.
Health - Health is one of the main focus areas of the Srinivasan Services Trust. Dental care camps; eye camps, health check-up and nutrition programs are conducted. The initiative also focuses on primary health, maternal health, child-care and leprosy eradication.
Infrastructure Development - The Company is actively involved in the community development of the villages by providing infrastructure facilities such as housing, sanitation, roads, drains, bus shelters, medical centre and natural resources management.
Rebuilding Quake Hit Villages - Supported by Rural Agro Research & Development Society and Kutch Nav Nirman Abhiyan, the Company has rebuilt "Goyersama" a village in the District of Gujarat, which was hit by an earthquake of unprecedented scale and magnitude on 26th January 2001.
Education and Literacy - In addition to providing infrastructure facilities like new buildings for school, the Company helps establish computer education programs for school children. The Srinivasan Services Trust has successfully achieved 98% primary school enrolment in the adopted villages.
3.2 Operational Strategy of Hero MotoCorp 3.2.1 Inventory Management The Hero Group through the Hero Cycles Division was the first to introduce the concept of justin-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.. This is the Japanese style of production and in India; Hero is probably the only company to have mastered the art of the just-in-time inventory principle. 3.2.2 Supply Chain Management The concept of supply chain management is also referred to in the ISO 14001 standards under the clause ―Operational Control‖ which specifies ―establishing, implementing and maintaining procedures related to the identifiable significant environmental aspects of goods and services used by the organization and communicating applicable procedures and requirements to suppliers including contractors‖. The identification of aspects and significant environmental impacts of industry’s activities, products and services would also include activities of suppliers over which industry is expected to have some influence. Additional objective is to help the suppliers recognize the importance of environmental issues and support them in their own programs for improvements. The function of Supply chain is picturized below:
3.2.3 Green Supply Chain Management
Consistently meet specified environmental performance criterion among the participants of the supply chain Ensures more consistent corporate environmental behaviour among all players in the chain of products and services Greener production is leaner production-do more with less Increases market acceptability and reach Reduces all round liability & long-term risk Improves inventory control Reduces packaging costs and improves recycling & reuse Improves status with regulatory agencies Improves public relations and corporate image Improves supplier relations and productivity
Buyers Gain Sellers Gain Mutual Gains Multiplier effect of Reduced production costMarket competitiveness supplier gains resource optimization Assured client Reduced purchase commitment/ potential for Public image costs more clients Improved relations-secured Improved image Reduced liability ties Improved market Improved relations with Reduced production costs reach regulatory agencies greater margins Reduced liability
Competitive over others
advantage
Greater assurance of Improved management consistent & reliable systems at marginal costs supply Lower cost of waste treatment Improved control
inventory
Elimination of unresponsive/ noncommittal suppliers 3.2.4 Green Vendor Development Program The Green Vendor Development Program of Hero MotoCorp is the supply chain initiative drive taken to extend the corporate environment responsibility down the supply chain. It is based on one-to-many mentoring program. As the production is increasing at Hero MotoCorp facilities,
the manufacturing activities at the vendor’s end are also increasing in the same proportion, thus giving rise to the environmental load. In an order to improve the vendor environmental performance Hero MotoCorp has developed this exclusive vendor development program, which is a collaborative effort between the Hero MotoCorp Environmental group and the materials department, in order to influence the vendors to adopt pre-specified environmental requirements and undertake environmental initiatives.
3.2.5 Dealer Network The relationship of Hero Group with their dealers is unique in its closeness. The dealers are considered a part of the Hero family. A nation-wide dealer network comprising of over 5,000 outlets, and have a formidable distribution system in place. Sales agents from Hero travels to all the corners of the country, visiting dealers and send back daily postcards with information on the stock position that day, turnover, fresh purchases, anticipated demand and also competitor action in the region. The manufacturing units have a separate department to handle dealer complaints and problems and the first response is always given in 24 hours. 3.2.6 Quality Management Quality at Hero is attained not just by modern plants and equipment and through latest technology, but by enforcing a strict discipline. At the Group factories, attaining quality standards is an everyday practice - a strictly pursued discipline. It comes from an amalgamation of the latest technology with deep-rooted experience derived from nearly four decades of hard labor. It is an attitude that masters the challenge of growth and change - change in consumers'
perceptions about products and new aspirations arising from a new generation of buyers. Constant technology up gradation ensures that the Group stays in the global mainstream and maintains its competitive edge. With each of its foreign collaborations, the Group goes onto strengthen its quality measures as per the book. The Group also employs the services of independent experts from around the world to assist in new design and production processes. 3.2 Operational Strategy of TVS Motor 3.2.1 Inventory management TVS Motors has adopted the JIT technique. Quality and productivity improvement targets of plants were achieved through the lean manufacturing systems and JIT projects. Significant improvements were achieved in productivity, quality and cost through application of Total Productive Maintenance (TPM). Lean and TPM were two key initiatives undertaken under the TQM umbrella for rapid improvements in quality, productivity and cost. The initiatives on ebuying and global sourcing resulted in substantial cost savings. 3.2.2 Quality management Total Quality Management (TQM): The Company has been using the philosophies of TQM as the cornerstone of its management since 1987. Based on the "TVS Way" manual created in 2010-11, diagnosis was conducted to refine the understanding and application of different processes in 2011-12. Focus on application of statistical tools in problem solving and improved rigor in analysis, helped in completion of continuous improvement projects which yielded good results. These projects have also won awards both in national and state level competitions. The Company has continued to benefit from 100% participation of employees in TQM activities, for the sixth year in succession. The employees have completed & presented more than 1800 projects through QC Circles and Cross Functional Teams for the year 2011-12 towards achieving Company / Department objectives. During 2011-12, the Company received and implemented an average of 54 suggestions per employee. The Company’s QCC teams participated in state / national / international level conventions and were recognized with "par excellence" awards. 3.2.1. Research and development The Company's strong Research and Development (R&D) team is supported by modern computer aided laboratory, capable of developing new and innovative products. It has state-of-art facilities for engine testing, Noise, Vibration and Harshness (NVH) measurements and life testing. At present, nearly 600 engineers are working on development of new products and in other advanced areas of technology. The Company works with leading technological research laboratories and institutions. The Company is also working on development of fuel-efficient technologies and CO2 reduction technologies to remain ahead of needs of consumers and environment regulations. R&D has developed and launched 3-wheelers with alternate fuels like LPG and CNG. India's first motorcycle with auto clutch technology, a motorcycle which runs on ethanol blended fuel
for Brazilian market, a two wheeler with music system for ASEAN market are the innovations in the current year. R&D has developed and demonstrated a motorcycle with Anti-Lock brake system technology, a scooter and a 3-wheeler with hybrid technology. R&D has also ensured that during 2010-11 all products will meet new emission norms. R&D team has so far published 58 technical papers in national and international conferences. 3.2.2. Changing technology when needed After the controversial legal duel with Bajaj Auto on ignition technology, TVS Motors launched its 125cc motorcycle 'Flame' with a new and modified engine. It incorporated a single-spark ignition engine based on controlled combustion variable timing intelligent (CC-VTi) technology. The engine has been developed and patented by Austria-based AVL and has been licensed to TVS in India. AVL is the world leader in internal combustion engine technology and develops power train systems. It is a leading provider of technology to the global engine and automotive industry. The 125cc segment has blurred the line between the 100cc and 125cc segments and it has been reckoned as the new entry level of the bike riders, considering the element of youth and style attached to it. TVS Motors, considering this approach and segment and its increasing wide acceptance, has pitched 'Flame' against the current rage, 'Bajaj Exceed'. It is the combination of two factors, which would determine the acceptance of 'Flame'. First, it is the time and then there are the features. Flame comes with the already accepted single-spark ignition. Its launch was to coincide with the 'Exceed'. However, due to a legal duel with Bajaj Auto, its launch was delayed. In this span, the Exceed has been branded and promoted as a motorcycle having premium features (mileage-108km and disc brakes). Hence, a lot would depend on the company's branding strategy and Flame's fight with the features present in the Exceed (almost of a 150cc bike). TVS Motors’ OPM has been hovering around 4-5%. 3.2.3. Launch goods carrier, gearless scooter TVS Motor Company Ltd has ventured into commercial vehicle segment with launching TVS King 200cc three-wheeler. It was also said that the company would launch a gearless scooter, a segment that is logging growth even when the motorcycles are registering slide in sales. Apart from the domestic market, TVS Motor will also export its TVS King to countries like Sri Lanka, Bangladesh, Latin America, Nigeria and others. TVS motors, the Deming medal-winning company, which has a turnover of Rs.39.28 billion ($969 million), has invested around Rs.1.2 billion in developing its two-stroke three-wheeler in three versions - petrol, LPG and CNG. "There is lot of commonality of components between our three-wheeler and two-wheeler engines. There will be around five-seven percent cost savings due to common parts," Srinivasan said.
3.3 Financial Strategy of Hero Moto Corp
Over the last five years, this company’s income has grown at a compounded annual rate of 36 percent Post-tax profit (PAT) grew by over 25 percent to Rs. 581 crore in 2002-03. the compounded annual growth rate of PAT in the last five years has been 48 percent Return on average capital employed has increased from 55 percent in 19998-99 to 95 percent in 2001-02 and further to 100 percent in 2002-03 Return on average equity has also risen significantly over the last five years. While it was at 49 percent in 1998-99, it rose to 72 percent in 2001-02 and further to 76 percent in 2002-03.
3.3 Financial Strategy of TVS Motor The company has strong financials which can be seen below. The company which used to be conservative about debt has shown an increase in the debt taken as compared to the equity capital of the company. The effectiveness of employing JIT is evident from the very high inventory turnover ratio. Key Financial ratios for Five Years: Particular Liquidity Ratios
2011-12
2010-11
2009-10
2008-09
2007-08
Debt/Equity Ratio
1.14
0.96
0.80
0.65
0.40
Current Ratio
1.37
1.41
1.34
1.22
1.07
Inventory Turnover Ratio
15.34
11.04
9.19
11.86
12.63
Fixed Assets Turnover Ratio
2.48
2.19
2.25
3.13
2.80
Debtors Turnover Ratio
23.29
29.76
36.97
52.76
76.35
Interest Coverage Ratios
2.01
1.48
4.08
3.59
9.03
Operating Profit Margin
5.43
4.95
3.84
4.77
7.59
PAT/Total Income
1.83
0.77
0.83
1.48
3.02
NPM (Net Profit Margin)
1.88
0.78
0.86
1.49
3.14
Return on Capital Employed
8.45
5.97
3.20
9.71
18.79
Return on Net worth
10.51
3.81
3.90
8.46
16.19
Turnover Ratios
Profitability Ratios
Industry Comparison Porter’s Five Forces 2 Wheeler Industry Analysis
Bargaining Power of Suppliers
•High competition among suppliers : High levels of competition among suppliers acts to reduce prices to producers. •Diverse distribution channel : The more diverse distribution channels become the less bargaining power a single distributor will have. •Volume is critical to suppliers : When suppliers are reliant on high volumes, they have less bargaining power, because a producer can threaten to cut volumes and hurt the supplier’s profits. •Low cost of switching suppliers :The easier it is to switch suppliers, the less bargaining power they have..
Bargaining Power of Customers
•Low buyer price sensitivity : When buyers are less sensitive to prices, prices can increase and buyers will still buy the product. •Product is important to customer : When customers cherish particular products they end up paying more for that one product. •Large number of customers : When there are large numbers of customers, no one customer tends to have bargaining leverage.
Intensity of Existing Rivalry
•Large industry size : Large industries allow multiple firms and produces to prosper without having to steal market share from each other •Fast industry growth rate : When industries are growing revenue quickly, they are less likely to compete, because the total industry size is also growing •Relatively few competitors : Few competitors mean fewer firms are competing for the same customers and resources, which is a positive for one prduct •Exit barriers are low : When exit barriers are low, weak firms are more likely to leave the market, which will increase the profits for the remaining firms
Threat of Substitutes
•Unlimited number of substitutes •Substitute product is inferior : An inferior product means a customer is less likely to switch from one product to another product or service.
Threat of New Competitors
•Strong brand names are important •Strong distribution network required •High capital requirements •Geographic factors limit competition •Patents limit new competition •Customers are loyal to existing brands •High switching costs for customers (
Future Strategy/Expansion Plans (Inclusive of Rural & Global Growth)
Key determinants for the margins, profitability & growth of the two-wheeler industry are:
Change in realisation - Change in prices & Change in product mix Change in input costs Change in other costs
The Indian market for motorcycles, scooters & mopeds is expected to increase in future due to reduction in raw material prices and benefits of increased production from excise-free zones. The Global market for motorcycles, scooters & mopeds is forecast to reach 75 million units by the year 2015, driven by growing urbanization, rising population and government policies. Fuel efficiency, pricing and style are other factors powering growth in the worldwide two-wheelers market. Hero MotoCorp
Present Rural market of 60% is occupied with less dependence on other finances as majority is from banks & Non-Banking Financial Institutions thus has expansion plans. Global Market Plans: In order to increase the exports volume, the country's largest twowheeler maker Hero MotoCorp on Monday said it will begin selling its products in 8-10 new markets in Latin America and Africa by the end of March this year. The company aims to export one million units across the world by 2016-17. Earlier in 2011, Hero MotoCorp had announced its global brand launch and had planned to expand its international business to 30 countries, spanning across Africa, Latin America, America and South-East Asia in a bid to garner 10% of its total sales from overseas operations in the following five-six years.
TVS Motor
Present Rural market share of only 40% shared along with Bajaj. The company plans to add 65 to 70 owned outlets across the country by 2013-14. Highly Dependent on Finance hence got affected during the recessionary times. Company may approach for fresh private equity to support the expansion plans. Global Market Plans: TVS and Sons Ltd plans to take its multi-brand car service solutions business to the UK, the US and Thailand. TVS spearheads car service business through unlisted subsidiary TVS Automobile Solutions Ltd. Dinesh was in Kolkata to launch TVS Automobile’s first outlet in Eastern India in joint venture with the Rajgarhia Group. TVS plans to invest nearly Rs 500 crore over the next two years for a national foray in car servicing segment.
Segmental Analysis of the 2W industry The motorcycles segment accounts for a bulk of 2W industry’s sales volumes; however, the scooters segment has grown relatively faster over the last five years.
With sales volumes of 10.1 million units, the motorcycles segment is the largest subsegment of the domestic 2W industry accounting for a bulk of its volumes. However, over the last five years, the motorcycles segment has seen its volume share in the domestic 2W industry slide down to 75.1% in 2011-12 from the highs of 83.5% recorded in 2006-07. Although domestic motorcycle volumes grew at 9.0% CAGR during the last five years, both the scooters segment as well as the mopeds segment grew at a much faster CAGR of 22.2% and 17.0%, respectively; contributing to reduction in the motorcycle segment’s volume share. The three 2W sub-segments are targeted at distinct consumer categories. The motorcycles are targeted at the male population in both rural areas as well as urban areas (with further segmentation based on usage pattern – family bike or individual bike, consumer profile - commuter Vs performance seeker etc); the scooters are more of an urban phenomenon targeted at the female population (TVS Scooty, Hero Pleasure), male population (Hero Maestro) as well as unisex offerings (Honda Activa, TVS Wego); mopeds are targeted at the lower middle-class segment and derive a large part of their volume share from the rural sector where they are used as a utility vehicle bearing heavy loads on rough village roads. While each of the three sub-segments has distinctive growth drivers, we expect the scooters segment to maintain its pace of growth faster than that of the 2W industry as a whole. The faster volume growth of the scooters segment is expected to be driven by (a) growing acceptability of gearless scooters, particularly by women; (b) rising urbanization and increasing proportion of working women; (c) expanding product offerings in the scooters segment; and (d) comparatively lower base. Accordingly, ICRA expects the scooters segment to gradually increase its share in the domestic 2W market from 19.1% in 2011-12 to ~27% by 2016-17E. With this, the volumes in the domestic scooters market are estimated to get doubled by 2016-17E over the current levels.
Trend In Sales Volumes And Market Share In Motorcycles
Sales Volumes Analysis –Motorcycles Based on SIAM data, around 70% of the motorcycles sold in India in 2011-12 belonged to the 75-125cc (engine capacity) segment, bikes which are positioned for the mass commuter segment where better fuel economy and low price are the prime customer considerations. However, the volume share of this segment has been coming down over the years with the share gradually being taken away by bikes in the 125cc and 150cc segments. While the domestic motorcycles segment recorded a volume growth of 11.9%, the >125cc sub-segment grew at a relatively faster rate of 17.4% in 2011-12. With this, the contribution of the >125 cc segment to the total motorcycle segment volumes increased from 26.0% in 2009-10 to 29.7% in 2011-12. Market Share Trends The Indian motorcycles segment continues to be dominated by Hero MotoCorp which has maintained its market share at ~55% in the domestic motorcycles segment over the last several years, despite intensifying competition. The top three players accounted for 89.0% of the industry’s volumes in 2011-12 (92.0% in 2007-08), with Honda emerging as the third largest player, having overtaken TVS since 2010-11. In the 75-125cc segment of motorcycles (that represented 70.3% of total motorcycles sales volumes in 2011-12), Hero MotoCorp continues to be a strong market leader with a share of 75.0% in 2011-12 (71.0% in 2010- 11). In the >125cc segment of motorcycles, while Bajaj Auto continues to account for nearly half the segment’s volumes (48.0% in 2011-12), it has been ceding market share to Honda and Yamaha, whose volumes in the >125cc segment grew significantly by 27.9% and 38.8%, respectively in 2011-12. Medium Term Outlook
ICRA expects the entry segment (bikes having price less than Rs. 40,000) volumes in the domestic market to grow at a much slower pace than the overall 2W industry and volume growth in this segment to be driven mainly by exports. This is because the segment is no
longer a key focus area of OEMs due to limited scope for margin expansion and high interest rate sensitivity. While the executive segment (bikes in the Rs. 40,000-50,000 price range) is expected to maintain its steady growth, competition is likely to intensify following aggressive model refurbishment and new model launch plans of most OEMs. The premium segment (bikes having price greater than Rs. 50,000) is expected to remain the fastest growing over the medium term, given the strong growth in purchasing power in the hands of middle-class urbanites, especially in the age group of 20-30 years. This should also translate into superior profit margins for players that are stronger in the premium segment
Trend In Sales Volumes And Market Share In Scooters
Sales Volumes Analysis – Scooters Barring Q1, 2011-12, the growth in scooter segment’s sales volumes has generally outperformed that of the motorcycles segment, partly due to the former’s smaller base. In 2011-12, the sales volumes of the domestic scooters segment at 2.6 million units recorded a growth of 23.6% (YoY), higher than the 11.9% growth in motorcycle sales. With this, the share of the scooters segment in the total domestic two-wheeler volumes increased to 19.1% in 2011-12 from 17.6% in 2010-11. Market Share Trends Overall, Honda continues to maintain its leadership position in the scooters segment through its flagship brand Activa (besides Aviator and Dio) enjoying a market share of 47.8% in 2011-12 (43.1% in 2010-11). While capacity shortfall at the company’s plant at Manesar (Haryana) had restricted its volume growth in the recent past, the company began commercial production at its new plant at Tapukara (Rajasthan) in July 2011. This allowed the company to consolidate its market position during the last three quarters of 2011-12. However, Hero MotoCorp demonstrated success in improving market share (through its sole brand Pleasure) coupled with
new scooter models launched by Hero MotoCorp (Maestro), TVS (Wego), Suzuki (Swish) in the recent past could imply shrinkage of market share gap between the market leader and others over time. Medium Term Outlook ICRA expects the scooters segment to gradually increase its share in the domestic 2W market from 19.1% in 2011-12 to ~27% by 2016-17, growing at 16% CAGR during this period. With this, the domestic scooters market is estimated to nearly double in size by 2016-17 over the current levels. Thus, even as a multitude of brands already dot the segment’s landscape and more are expected to follow, the likely expansion in the pie should offer sufficient volumes for the industry to grow profitably. For the new entrants, a faster gain in market share could hasten the process of profitability improvement.
Recommendations Hero MotoCorp
Hero MotoCorp needs to strengthen R&D operations to churn out new models and upgrade vehicles for the next level of emission norms. Due to the end of Joint Venture with Honda, the advertising and other expenditure has increased which needs to be minimized for more profitability. The product launches have also slowed down after the end of JV due to production constrains so emphasis has to be on increasing Sales growth. Honda poses a huge competition intensity which needs to be handled carefully.
TVS Motor
TVS motor should focus on rural market penetration as the customers show brand loyalty in this region. Indian 2W industry sees a major acceptance of scooters as family vehicle, so TVS should leverage on this fact and increase its market presence in this sector. Its entry into 3 wheeler industry showed success, this can be used as a competitive advantage. It can spend some more expenditure for advertisements and CSR activities to mark its presence strongly among the people.
References Hero MotoCorp Company Website: http://www.heromotocorp.com/en-in/aboutus/thecompany Annual Report: http://www.heromotocorp.com/en-in/investors/financials Hero MotoCorp New Products & Strategies http://www.heromotocorp.com/en-in/maestro# http://www.heromotocorp.com/gvdp/green-charter.php http://mediapanther.co.in/branding/hero-motocorp-begins/ http://www.stockmarketsreview.com/extras/two_wheeler_companies_in_India_are_adopting_inn ovative_strategies_to_improve_sales_and_beat_competition_20111114_192787/ http://www.whatsthebeef.net/post/8690263901/a-new-identity-for-hero-motocorp http://www.bajajcapital.com/research/admin/pdf/Hero%20MotoCorp_%2020120307_133112197 6.pdf Hero MotoCorp in news http://www.2wheelsindia.com/2007/06/indian-two-wheeler-industry-evolution.html http://economictimes.indiatimes.com/hero-motocorp-ltd/stocks/companyid-13636.cms http://www.indiansportsnews.com/top-stories/20422-hero-motocorp-fih-announce-new-4-yearlong-partnership.html http://www.moneycontrol.com/news/business/will-start-selling10-new-mkts-by-mar-heromotocorp_817905.html http://www.business-standard.com/article/companies/honda-overtakes-hero-motocorp-in-125150cc-segment-112112600068_1.html http://www.thehindubusinessline.com/companies/hero-motocorp-q2-net-skids-on-weakdemand/article4025661.ece http://news.yahoo.com/hero-motocorp-q3-net-profit-falls-20-4-105527057--sector.html TVS Motor Company Ltd. http://www.tvsmotor.in/index.asp http://www.reuters.com/finance/stocks/TVSM.NS/key-developments http://en.wikipedia.org/wiki/TVS_Motors http://bullshouse.com/blog/?p=1486 http://www.tvsmotor.in/news.asp?id=103&yr=2005 http://www.icra.in/Files/ticker/Two-Wheeler%20Industry%20Note,%20June%202011.pdf http://www.kpmg.de/docs/Auto_survey.pdf Annual Reports: http://www.tvsmotor.in/annual-reports.asp
TVS news: http://businesstoday.intoday.in/story/tvs-group-labour-problem/1/15784.html http://www.livemint.com/Companies/OYqYHeZLXndfh9eXI8bw6L/TVS-Motor-to-focus-onrural-market-entrylevel-segment.html http://www.livemint.com/Money/uW1yXkCG0HsTBLIjI5rHKL/TVS-Motor-changes-financingstrategy.html http://www.rediff.com/money/2008/mar/13bajaj.htm http://www.telegraphindia.com/1120423/jsp/northeast/story_15401290.jsp#.UReLuaUWIas http://www.business-standard.com/article/companies/sbi-to-fund-tvs-motor-company-dealers110022200133_1.html TVS in CSR: https://mitsloan.mit.edu/LearningEdge/CaseDocs/11-113.SST.Kelly.pdf E-books excerpts: http://books.google.co.in/books?id=az8D9OOvfF0C&pg=PA221&lpg=PA221&dq=tvs+motor+ company+strategy&source=bl&ots=AEhhbaPkWa&sig=jU6B5YbojTG0PfXfraiICSp2aQ&hl=en&sa=X&ei=BIsXUbCHoasrAem_YCYAQ&ved=0CEAQ6AEwAjgK#v=onepage&q=tvs%20motor%20company%2 0strategy&f=false
