HERO MOTO CORP

Hero Motocorp Ltd. (BSE: 500182, NSE: HEROMOTOCO) formerly Hero Honda is an Indian motorcycle and scooter manufacturer based in New Delhi, India. Hero Honda started in 1984 as a joint venture between Hero Cycles of India and Honda of Japan.The company is the largest two wheeler manufacturer in India.The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at 108.

In 2010, When Honda decided to move out of the joint venture,Hero Group bought the shares held by Honda.Subsequently, in August 2011 the company was renamed Hero MotoCorp with a new corporate identity.On 4th June 2012,Hero Motocorp approved a proposal to merge the investment arm of its parent-Hero Investment Pvt. Ltd. into the automaker.The decision comes after 18 months of its split from Honda Motor.

“Hero” is the brand name used by the Munjal brothers for their flagship company Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor Company was established in 1984 as the Hero Honda Motors Limited At Dharuhera India. Munjal family and Honda group both own 26% stake in the Company. In 2010, it was reported that Honda planned to sell its stake in the venture to the Munjal family.

COMPANY PROFILE :

During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it - Shut it - Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a double-digit pace since inception. The technology in the bikes of Hero Honda for almost 26 years (1984–2010) has come from the Japanese counterpart Honda

Hero MotoCorp has three manufacturing facilities based at Dharuhera, Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants together are capable of churning out 3 million bikes per year.Hero MotoCorp has a large sales and service network with over 3,000 dealerships and service points across India. Hero Honda has a customer loyalty program since 2000,called the Hero Honda Passport Program.

The company has a stated aim of achieving revenues of $10 billion and volumes of 10 million two-wheelers by 2016-17. This in conjunction with new countries where they can now market their two-wheelers following the disengagement from Honda, Hero MotoCorp hopes to achieve 10 per cent of their revenues from international markets, and they expected to launch sales in Nigeria by end-2011 or early-2012. In addition, to cope with the new demand over the coming half decade, the company was going to build their fourth factory in South India and their fifth factory in Western India. There is no confirmation where the factories would be built.

HISTORY :

Hero MotoCorp was started in 1984 as Hero Honda Motors Ltd.

    1956—Formation of Hero Cycles in Ludhiana(majestic auto limited)
    1975—Hero Cycles becomes largest bicycle manufacturer in India.
    1983—Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed Shareholders Agreement signed
    1984—Hero Honda Motors Ltd. incorporated
    1985—Hero Honda motorcycle CD 100 launched.
    1989—Hero Honda motorcycle Sleek launched.
    1991—Hero Honda motorcycle CD 100 SS launched.
    1994 -- Hero Honda motorcycle Splendor launched.
    1997—Hero Honda motorcycle Street launched.
    1999 -- Hero Honda motorcycle CBZ launched.
    2001 -- Hero Honda motorcycle Passion and Hero Honda Joy launched.
    2002—Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition launched.
    2003—Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor, Hero Honda motorcycle Passion Plus and Hero Honda motorcycle Karizma launched.
    2004—Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ launched.
    2005—Hero Honda motorcycle Super Splendor, Hero Honda motorcycle CD Deluxe, Hero Honda motorcycle Glamour, Hero Honda motorcycle Achiever and Hero Honda Scooter Pleasure.
    2007—New Models of Hero Honda motorcycle Splendor NXG, New Models of Hero Honda motorcycle CD Deluxe, New Models of Hero Honda motorcycle Passion Plus and Hero Honda motorcycle Hunk launched.
    2008—New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour, Glamour Fi and Hero Honda motorcycle Passion Pro launched.
    2009—New Models of Hero Honda motorcycle Karizma:Karizma - ZMR and limited edition of Hero Honda motorcycle Hunk launched
    2010—New Models of Hero Honda motorcycle Splendor Pro and New Hero Honda motorcycle Hunk and New Hero Honda Motorcycle Super Splendor launched.
    2011—New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ Xtreme, Karizma launched. New licensing arrangement signed between Hero and Honda. In August Hero and Honda parted company, thus forming Hero MotoCorp and Honda moving out of the Hero Honda joint venture. In November, Hero launched its first ever Off Road Bike Named Hero "Impulse".

Termination of Honda joint venture

In December 2010, the Board of Directors of the Hero Honda Group have decided to terminate the joint venture between Hero Group of India and Honda of Japan in a phased manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero Honda.Under the joint venture Hero Group could not export to international markets (except Sri Lanka) and the termination would mean that Hero Group can now export. Since the beginning, the Hero Group relied on their Japanese partner Honda for the technology in their bikes. So there are concerns that the Hero Group might not be able to sustain the performance of the Joint Venture alone.
Hero MotoCorp

The new brand identity and logo, Hero MotoCorp, was developed by the London firm Wolff Olins.The logo was revealed on 9 August 2011 in London, the day before the third test match between England and India.

Hero MotoCorp can now export to Latin America, Africa and West Asia.Hero is free to use any vendors for its components instead of just Honda-approved vendors.

Company performance

During the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12% over last year. In the same year, the company had a market share of 57% in the Indian market.Hero Honda sells more two wheelers than the second, third and fourth placed two-wheeler companies put together.Hero Honda's bike Hero Honda Splendor sells more than one million units per year.On 1st June 2012, Hero MotoCorp reported its highest ever monthly sales at 5,56,644 units in May, registering a growth of 11.28%.

LE 06 - Three Monks No water

Three Monks is a Chinese animated feature film produced by the Shanghai Animation Film Studio.

Background :

The film is based on the ancient Chinese proverb "One monk will shoulder two buckets of water, two monks will share the load, but add a third and no one will want to fetch water."The film does not contain any dialogues, allowing it to be watched by any culture, and a different music instrument was used to signify each monk.

Plot :

A young monk lives a simple life in a temple on top of a hill. He has one daily task of hauling two buckets of water up the hill. He tries to share the job with another monk, but the carry pole is only long enough for one bucket. The arrival of a third monk prompts everyone to expect that someone else will take on the chore. Consequently, no one fetches water though everybody is thirsty. At night, a rat comes to scrounge and then knocks the candleholder, leading to a devastating fire in the temple. The three monks finally unite together and make a concerted effort to put out the fire. Since then they understand the old saying "unity is strength" and begin to live a harmonious life. The temple never lacks water again.

Learnings:

Three Monks, No Water is based on the ancient Chinese proverb "One monk will shoulder two buckets of water, two monks will share the load, but add a third and no one will want to fetch water." The proverb is close in meaning to the saying "Let George do it," correctly noting how individuals shirk group responsibilities.
This story teaches a gentle, humorous lesson about Responsibility . Though this story was primarily made keeping in mind young children, it can be of great lesson to modern entreprenuers as well as business institutions. It iterates the fact that the responsibilities in any institutions must be divided clearly and the system should be developed such that any reluctance on any individual must be recognised quickly.

 It also aptly shows how responsibility can be realized by people in case of emergencies. But the lesson is to understand the value of unity before any calamity.

LE 04 - Valley Crossing - Key Learnings

"United we stand, Divided we fall" . The value of teamwork has been shown umpteen numbers of time in history. It has enabled man to come out of cages and reach the moon. What a single man cannot achieve individually can be easily achieved working as a team and that to with manifold increase in scale.

Explanation of valley crossing through this picture:

Learnings from this exercise:

Advantages and disadvantages of teamwork

Advantages

• ·         Teamwork can lead to better decisions, products, or services. The quality of teamwork may be measured by analyzing the following six components of collaboration among team members: communication, coordination, balance of member contributions, mutual support, effort, and cohesion. In one study, teamwork quality as measured in this manner correlated with team performance in the areas of effectiveness (i.e., producing high quality work) and efficiency (i.e., meeting schedules and budgets). A 2008 meta-analysis also found a relationship between teamwork and team effectiveness.
• ·         Team members’ ratings of their satisfaction with a team is correlated with the level of teamwork processes present.
• ·         In healthcare, teamwork is associated with increased patient safety.

Disadvantages

• ·         Teamwork may have an "unintended effect of fermenting hostility toward the managerial goal of making the teams fully self-managing." In one case study of a clothing manufacturer, a switch from production line work (with bonuses given for individual performance) to teamwork (in which an individual's earnings depended on team performance) caused workers to resent having to monitor each other. 
• ·         There is a potential of "social loafing" (i.e., an individual's doing less work in a team than what he/she would normally do working individually). In order to minimize social loafing, management can make individual performance more visible while in a team setting. This can be done by forming smaller teams, specializing specific tasks to certain individuals, and measuring individual performance. Social loafing can also be reduced by increasing employee motivation, by selecting employees who have previously shown themselves to be motivated, and increasing job enrichment. In experiments conducted in the 1990s, an increase in group cohesiveness appeared to decrease social loafing.

These are some of the learnings from this exercise.

LE 03 - Success of Khan Academy:Management Lesson Learnt

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LE 02 - Goal Setting....

Goal setting is one of the most defining attribute which a manager can have and which can decide the future course of any organization. All the goals should be SMART i.e. should be specific,measurable,achievable,realistic and time bound. To better understand the goal setting we had a very interesting play in our class.

Students was asked to create a tower using small identical cubes. Although most of the students were identical in their technical prowess , it was intriguing to see that there was a lot of difference in how the people were setting the goal for themselves. The range of cubes one can use to construct the tower without falling was almost varying from 10 to 35(some even said they can create using all the cubes but i assume that was only fun).

So one student who has set his individual goal as 10 was asked to come and start constructing the tower. To the utter surprise of himself and the whole class, he constructed the tower using 17 cubes  without falling. later he was asked to set a new goal if he was blind folded. He reduced his goal again this time to 10(Back Folder).

Learning from  this play was that most of the times managers tend to set a goal which is far less than what can be achieved and real potential of the employees. This underestimation not only results in low productivity but also refrains employees from knowing their true self potential.

So the Goal setting should be always done keeping in mind the achievable target and should be higher than it. This would ensure that the final achieved target will be higher than achievable target and each and every time this achievable umbrella will increase. Since the real potential of any human being cannot be measured we must try to bring the set goal as close as possible to the real potential.

LE 01 - Insight of different kind of managers

Though i have described the managers as two different types, but, the demarcation for managers is based on their attitudes and has nothing to do with their attributes. The basis of this division is purely how a manager treats/assumes his workers to be.

In 1960's Douglas McGregor came with two different types of attitudes generally found in managers:

1) Theory X : The managers who assume that the people working under them are lazy and are bound to avoid work if they get a chance. The only way to make people work is by threat and use of power. More often than not this theory not only proves to be counterproductive but also initiates the blame game among the employees.

2) Theory Y : Contrary to Theory X , lies the motto for Theory Y . This management style assumes that the employees are self motivated and are ambitious. A Theory Y manager believes that, given the right conditions, most people will want to do well at work. This management style also faces difficulties but the Y manager tries to find the root cause and motivates the employees to work accordingly, instead of blaming the employees.

Although the described attitudes are different from each other, yet they can exist simultaneously in same human being. We need to try and overcome Theory X traits and replace it with Theory Y. Let's try to understand the implications/results these attitudes can bring in our lives with few examples.

Though, in day to day life there are plethora of examples for both of these management styles but i would like to take the examples from sports/movies to better understand these styles and their consequences. Also to understand better the impact these traits have on different types of scenarios we would also like to distinguish workers as being Lazy and ambitious. So in total we have four scenarios combining two type of managers and two type of workers. Let's try to understand them one by one :

1) The workers are lazy and the manager is of Y type :  The movie "Chak de India" can be aptly considered as an example of this type of combination. The Hockey players though were talented but were lacking self confidence and were not willing to go that extra mile which was required from them to be world champions. On the contrary , the role played by Sharukh Khan was that of manager Y who believed in his players and motivated them to work hard and achieve the unachievable(as it was percieved by the hockey board, the public and the players itself.) . Clearly, the motivation from Y manager, Sharukh in this case, ensured that the employees achieve the performance which was much higher than achievable performance.

2) The workers are lazy and the manager is of X type :   This is the most dangerous combination where not only the workers are lazy or are not willing to work due to certain factors, the manager also assumes them as lazy and is only involved in the blame game. Though i cannot find any real life example for this scenario, the movie Chak de India can also be example of this. The only difference would be the manager this time will be the board who was managing players before the induction of Sharukh Khan. The plight of women's hockey in general and players in particular was well captured as the goal set for them was too low than both achievable and achieved earlier.

3)  The workers are ambitious and the manager is of Y type : The australian cricket team led by Ricky ponting in early 21st century will be the best example to understand this scenario. The australian team at that point of time was full of some great talents who have ever played the game and  was led by one of the most successful batsman and fielder in the history of the game. Ponting not only was an exceptional player but also had a great belief in his team . Obviously his work was simplified by the presence of some ambitious players playing under him. Australian team in this era won 3 consecutive world cup and were a team to beat wherever they played throughout the globe. So the combination of ambitious and hard working employees combined with Y manager can create wonders and excellence. The potential of the players is well harnessed in this case and it helps the overall organization in a positive manner.

4) The workers are ambitious and the manager is of X type : We don't have to go very far searching for an example of this combination. The plight of Indian hockey team in last few decades is testimony enough to prove that even if the workers might be ambitious and talented, if the managers do not believe them and assume that the only way to make them perform is by threat, the organization will fall. The Indian hockey team is considered as one of the most talented and ambitious in whole world. Once considered as masters of the game , they now are extinct in the darkness of anonymity and hopelessness. And blaming IHF for this would not be an wrong thing to do. The way the hockey has been managed in this country can be easily made out from the fact that ,once the world champions ,the team was unable to even qualify for olympics last time. This comes as most prominent example of what an X manager can do to an organization even if the players are hard working and talented. So in this case the achieved goal was too much lower than achievable goal and far lesser than the potential.

So based on these examples i can conclude that even if the workers are of any kind, it all depends on the managers, their belief in employees , their goal setting techniques and their eagerness and ambition to achieve those goals, which decides how the future course of an organization is going to be.