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Hero Honda Case Analysis

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Hero Honda Environmental Analysis

Summary of the Hero Honda’s Environmental Analysis, Industry and Competitors.

External Environmental Analysis
Political: The United Progressive Alliance (UPA) lead by the Indian National Congress (Congress) was re-elected to a second five year term in 2009. The present political scene in India is quite exceptional due to the relatively strong position of the ruling coalition. Economic: India Ranks 11th (nominal) / 4th (PPP) has GDP growth 8.8% (2010, Q1), Inflation (CPI) 8.5% (August 2010) in spite of Global Meltdown and Population below poverty line is deceased to 37% (2010). Socio-cultural: Indians are religion, caste, family centric. Women work in companies but in day shifts only in big cities. Entrepreneurial trait in India is on a rise. Technological: Modern technologies in transport, communication, electricity, infrastructure, quality are available. A very favorable technological scenario. Environmental (Demographic): Population: 1,180,166,000(2010), Age structure: 15-64 years is 63.6% (male 381,446,079/female 359,802,209) (2009). India's per capita income (nominal) is $1016, ranked 142th in the world Wealth distribution in India is fairly uneven with top 10% of income groups earning 33% of the income. Legal: It takes 35 days to start a business in India. It has Quasi-federal, but unified judiciary. Taxation laws are very stringent and Corruption is also very much prevalent.








Internal Environmental Analysis
Hero Honda has ample resources like Capital equipment, Skills of employees, Brand name, Financial resources, Talented managers. Hero Honda is an innovator and first mover, has an ERP, takes help of Six sigma process .So it also has a very powerful capability to make technological innovations. It has Core competency in making most fuel efficient and robust engines and so it outsources all other parts to localized suppliers. This has driven Hero Honda to be the world’s top manufacturer of 2 wheelers. Internal Environment

KBSCMR | Hero Honda Environmental Analysis


Industry Environment Analysis
Threat of new entrants: Mahindra entering into 2 wheeler Category. Power of suppliers: Hero Honda has threat of forward integration form the localized suppliers from whom they get parts other than engine. Power of buyers: Customers want quality improvements fairly very fast. They have many options to buy from its competitors in the same segment. So Hero Honda has to take care of its customers as they have power to take Hero Honda out of market. Threat of product substitutes: Because of rise in the prices of petrol people are shifting to Local trains and Buses for travelling. Cars are getting cheaper. Intensity of rivalry among competitors: 2 Wheeler industries in India is a purely competitive. There are many players and because of globalization and liberalization of economy the number is increasing.

Industry Environment Analysis

Competitor Environment

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KBSCMR | Hero Honda Environmental Analysis


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