Economic Analysis of Hero Honda

Essay Info: 15155 words.

Managerial   Economics Case Study

EMP OCT 2008

Term 1

Case Report on Hero Honda

Team Members

Pavitar Singh – 41

Uttam Kotdiya – 59

Bimal Luthra – 16

Kamlakar – 33

Gaurav Yadav – 27

Janmejay Gupta – 32

Introduction to Hero Honda 3

Hero Honda Mission 4

Hero Honda Mandate 5

Factors influencing growth 5

[ Just-in-Time ] 5

[ Ancillarisation ] 5

[ Dealer Network ] 6

[ Financial Planning ] 6

[ Quality ] 6

[ Diversification ] 6

Models 7

Competitor Analysis 8

Market Overview 11

Two Wheeler Market in India 11

CURRENT SCENARIO 13

Domestic Trends 13

EXPORT TRENDS 13

MOTORCYCLE SALES 16

Cost theory 18

Various type of cost 18

Cost analysis of Hero Honda Motors Ltd 19

Cost Analysis 20

Trend for Sales, cost and profit 21

Initiatives for cost reduction by Hero Honda 22

Economic Analysis 24

Economic Reasons Behind this De-Growth: 24

Higher Interest Rates 25

Availability of Finance 25

Hero Honda Champion in De-Growth 26

Long Term Strategy 27

Rural Economy 27

Hero Honda’s stress on Rural Economy 27

Is this really Paying 27

Effective Working Capital Management 28

Financial Analysis 30

Sales 31

Sales Volume 33

Growth in Sales Volume 34

Net Total Income 35

Profit Before Tax 37

EVA with Investment 40

EVA Without Investment 42

SWOT Analysis 43

Strengths 43

Weaknesses 44

Opportunities 45

Threats 45

References 46

Introduction to Hero Honda

|                                                                                         |

|Hero Honda Motorcycle Ltd.                                                               |

|[pic]                                                                                     |

|Type                   |Public company BSE:HEROHONDA M                                     |

|Founded               |January 19, 1984 in Gurgaon, Haryana, India                       |

|Headquarters           |[pic]Haryana, India                                               |

|Key people             |[pic]Om Prakash Munjal, Founder