1. Presented by
HARRY
SHALS
JOE

2. BICYCLE INDUSTRY
• Market-Consolidated(Hero Cycles-40%, TI-22%, Avon-
17% & Atlas-10%)
• Competition-Oligopoly
• Market structure-2nd Leader in world, India produces
approximately 10% of the world annual bicycle
production, which is estimated at 125 Million units.
• The annual domestic demand of bicycles in India is
approximately 10 million units out of which around 2.5
million units is a government demand for the various
welfare schemes.

3. HERO CYCLES
• Hero group was established by the four Munjal
brothers ,Established a business of bicycle spare parts
in the year 1944 in Amritsar
• In 1956 in started a bicycle unit called Hero Cycles
• By 1975, Hero cycles became the largest bicycle
manufacturer in India
• In 1984, Hero group joined Honda Motors of Japan to
create Hero Honda Motors Limited which soon
became one of the market leader in motor-cycle sales
in India
• With a turnover of Rs. 1450 crore

4. Industry Environment Analysis/
Industry attractiveness
Rivalry among
existing one’s
Threat of
New
entrants
Bargaining
power of
buyer
Threat of
Substitutes
Bargaining
power of
suplier
LOW
LOW High
High

5. INTERNAL ENVIRONMENT
• Employs 4800 workers, produces 18,500 bicycles/day at its
3 state of the art plants, 3000 dealers connect it to its final
customer.
• Present in 56 countries including US, UK, germany spain & in
Europien continent.
• A striking feature within the Hero Group is that there is no
organised labour union and family members of employees
find ready employment within Hero. The philosophy with
regard to labour management is "Hero is growing, grow
with Hero.“
• Best Exporter (the company has won the Engineering Export
Promotion Council Best Exporter Award continuously for the
last 28 years.)
• Range-Gents, ladies, kids and high end to Road bikes,
Mountain bikes, Tourers, Hybrids, BMX

6. SUSTAINABLE COMPETITIVE
ADVANTAGE
• Valuable-The Hero Brand connect
• Costly to Imitate- Ancillaries owned by Hero
group are also World Leaders(eg. Rockman,
Highway)
• Rare- 1 cycle per 5.6 sec (Volume of
production)
• Unsubstitutable-?

7. VALUE CHAIN ANALYSIS
Hero Atlas Avon TI
IBL 9 8 7 8
Operation 9 8 7 8
OBL 8 7 7 9
M&S 6 6 5 7
Service 6 6 6 7
Total 38 35 32 39

8. INTEGRATION
HERO CYCLES(1956)
ROCKMAN CYCLE INDUSTRIES LTD.(1961) Bicycle chains & hubs
HIGHWAY CYCLES LTD.(1971) Freewheels
JV WITH HONDA
(1984)
MAJESTIC AUTO LTD.(1978) STEYR DAIMLER
PUCH,AUSTRIA(1987)
Collaboration
HERO EXPORTS(1993) Export state of
the art bicycles
NATIONAL BICYCLE
INDUSTRIES,JAPAN(2002)
High End bicycles

9. ANSOFF MATRIX
ALLEGRO-Fitness
cycle
SUPER STARTER
SUPER SMART
RETAIL
INSURANCE
HERO GLOBAL
DESIGN
EXCLUSIVE OUTLETS FOR
PREMIUM CYCLES IN US
& UK

10. Diversification
• Related Diversification
• Hero Global Design(2001)
• Hero cycles-national bicycles which manufactures High End
Bicycles(National bicycle is part of Matsushita grp.)
• Unrelated Diversification
• Easy Bills(2002)
• Retail Insurance Buisness(2004)

11. MERGER & ACQUISITION
• Hero Eco, the newly formed umbrella entity
comprising of Hero Electric, Hero Exports, Hero
Cycles, Mediva, Winn and Hero Ecotech has
acquired UK based Ultra Motors aiming to
strengthen its presence globally in the electric
vehicle segment.
• Hero Group's Partnership with Showa
Manufacturing Corporation, Japan is over 18
years old.
• Hero Group’s partnership with the recently
separated Honda Motors was 25 years old.