Operational Strategy of Bal and Hmc
TOPIC:
To study the operational strategies of companies in 2 wheeler industry and decide whether the operational strategies are aligned to the competitive priorities of that company.
The companies chosen for this study are Hero MotoCorp and Bajaj Auto Limited.
INDUSTRY ANALYSIS:
India is the second largest two wheeler market in the world, next only to China. The two wheeler industry segment largely comprises motor cycles, mopeds, and automatic scooters. The yearly sales are pegged at around 13.5 million units.
The Indian two-wheeler (2W) industry recorded a growth of 14% in 2011-12. Although the YoY volume growth of the industry remained in double digits, the pace of growth during the last quarter was at its lowest gear in the last three years. The deceleration in growth was contributed mainly by the motorcycles segment which grew at a much lower rate of 9.2% (YoY) in Q3, 2011-12; even as the scooters segment continued to post 20%+ (YoY) expansion. Overall, the domestic 2W industry is expected to report a volume growth of around 13% in 2011-12 as the growth is expected to fade further in Q4, 2011-12 due to base effect.
In an environment where the northward movement of inflation, fuel prices and interest rates has been the nemesis of the Indian automobile industry at large, the 2W industry has been the most resilient which is reflected in its healthy volume growth of 15.0% (YoY). The growth has been supported by 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 and expected strong replacement demand, besides moderate share of financed purchases.
The landscape of the Indian 2W industry is set to evolve as several new players are keen to enter into the Indian market which would further intensify competition; most existing players plan to extend/ strengthen
To study the operational strategies of companies in 2 wheeler industry and decide whether the operational strategies are aligned to the competitive priorities of that company.
The companies chosen for this study are Hero MotoCorp and Bajaj Auto Limited.
INDUSTRY ANALYSIS:
India is the second largest two wheeler market in the world, next only to China. The two wheeler industry segment largely comprises motor cycles, mopeds, and automatic scooters. The yearly sales are pegged at around 13.5 million units.
The Indian two-wheeler (2W) industry recorded a growth of 14% in 2011-12. Although the YoY volume growth of the industry remained in double digits, the pace of growth during the last quarter was at its lowest gear in the last three years. The deceleration in growth was contributed mainly by the motorcycles segment which grew at a much lower rate of 9.2% (YoY) in Q3, 2011-12; even as the scooters segment continued to post 20%+ (YoY) expansion. Overall, the domestic 2W industry is expected to report a volume growth of around 13% in 2011-12 as the growth is expected to fade further in Q4, 2011-12 due to base effect.
In an environment where the northward movement of inflation, fuel prices and interest rates has been the nemesis of the Indian automobile industry at large, the 2W industry has been the most resilient which is reflected in its healthy volume growth of 15.0% (YoY). The growth has been supported by 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 and expected strong replacement demand, besides moderate share of financed purchases.
The landscape of the Indian 2W industry is set to evolve as several new players are keen to enter into the Indian market which would further intensify competition; most existing players plan to extend/ strengthen
References: http://en.wikipedia.org/wiki/Bajaj_Auto www.bajaj.com http://tejas-iimb.org/articles/21.php http://www.sap.com/india/about/events/worldtour09/pdf/WT_Mumbai_Track5_06_Demand%20Driven%20Supply%20Networks_Anil%20Khopkar,%20Bajaj%20Auto.pdf http://www.business-standard.com/india/news/bajaj-auto-revamps-organisational-structure/290128/ http://220.227.161.86/20077ipcc_paper7B_vol1_cp3.pdf www.icra.in www.heromotocorp.com