Submitted To: Submitted By:

Gagandeep Singh(84010)

Tavleen Bajaj(84055)

RIMT
Maharaja Aggrasen Engineering College
 ACKNOWLEDGEMENT

We wish to thank Dr.Japneet Kwatra for her valuable editorial contribution during the
preparation of this manuscript. My special thanks to Lect. Ms. Urvashi Vashisht,who assisted
in the preparation of this manuscript.

We would also like to express our gratitude to all those who gave us the possibility to
complete this report.

We are also greatly indebted for the co-operation and guidance of our friends throughout the
project report. further we would also like to express our gratitude towards the university
authority for beginning a program which enables us to learn a lot in this process.
 PREFACE

In this report the reader will encounter the entire journey of hero group, starting from its
evolution to, its growth, to achievements, purpose of being formulated, and the companies
which they established and are the part of hero group today.

Finally I wish to thank Mr Er.Harinder Singh for reliving us of the burden of revising many
of the topics in the report and contributing new material.

We consider ourself lucky enough to go through this project;really,it was a great learning
experience. In this report we have tried to give comprehensive picture of details of our
project.

The reason why we choose this topic was that the hero group is one o the most recognized
business houses in India and we were really attracted to go through a complete study of this
business group.
 TABLE OF CONTENTS

1. EXECUTIVE SUMMARY

2. INTRODUCTION

3. COMPANY PROFILE

4. COMPANY PRODUCTS

5. EVOLUTION & GROWTH.

6. CONCLUSION

7. APPENDICES

8. BIBLIOGRAPHY
 EXECUTIVE SUMMARY
Hero group was established in 1944 in Amritsar as a bicycle spare parts business. After
independence and partition of India they shifted to Ludiana and commenced a business unit
“HERO CYCLES” IN 1956.

HERO is a brand name associated with two-wheelers in India and is being owned by Munjal
brothers i.e Mr Satyanand Munjal,Mr Omprakash Munjal,The Late Mr Dayanand Munjaland The
Late Mr Ramankant Munjal.

Hero group ranks amongst the top ten Indian business houses comprising 20 companies. It is a vast
conglomerate of companies either in the form of collaborations, joint ventures or fully owned
subsidiaries with more than Rs10000 crore turnovers annually.

It is a group now being 50+years old and is a now one of the most widely recognized bands. It has
sold more than 15 million motor cycles and 100 million bicycles in the last 50 years. It has a huge
segmented market of its products and services and still are targeting towards potential customers.
They export their product to more than 90 countries. Its market capitalization was 4,179 USD
million by 2006its revenue touched to 3188 US $Mn. in 2006.
 INTRODUCTION

Hero, the brand name synonymous with two-wheelers in India, is a multi-unit, multi-product,
geographically diversified, Group of Companies - the reflection of the steely ambition and
indomitable grit of the Munjal Family ...

Trace the saga of the "Hero" - through more than 50 years of Enterprise and Achievements, of
Vision and Planning.

Always blazing through the trails of success………

The Hero Group has done business differently right from the inception and that is what has helped
us to achieve break-through in whatever product category we have ventured in. The Group's low
key, but focussed, style of management has earned the plaudits amidst investors, employees,
vendors and dealers, as also worldwide recognition.

The growth of the Group through the years has been influenced by the number of factors:

The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-
time inventory. The Group boasts of superb operational efficiencies. Every assembly line worker
operates two machines simultaneously to save time and improve productivity. The fact that most of
the machines are either developed or fabricated in-house, has resulted in low inventory levels.

In Hero Cycles Limited, the just-in-time inventory principle has been working since the beginning
of production in the unit and is functional even till date. The vendors bring in the raw material and
by the end of the day the finished product is rolled out of the factory. This is the Japanese style of
production and in India, Hero is the first company to have mastered the art of the just-in-time
inventory principle
 History
Hero group was started by the four Munjal brothers, hailing from a small town called Kamalia,
now in Pakistan in the year 1944 by establishing bicycle spare parts business in Amritsar. After
independence and partition of India, they moved to Ludhiana and started a bicycle unit called Hero
Cycles in 1956. 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. In 1986 Hero Cycles Limited
entered the Guinness Books of World Records as the largest bicycle manufacturer in the world. By
the year 2004, Hero Honda became the world' largest manufacturer of two-wheelers with over 48%
market share in India. In year 2006, Hero Honda entered the scooter production with launch of its
new model - Pleasure.

The Beginning
We look over our shoulders, we see the past. We use it to make a better present and a beautiful
tomorrow, as tomorrow isn’t just another day, it’s another chance for us to better ourselves and to
excel.

Hero Cycles is a product of this philosophy. The philosophy that instills commitment, team work
and foresight. Hero’s colossal journey started before independence. The four Munjal brothers,
hailing from a small town called Kamalia, now in Pakistan, are the men who are behind the
mission. Brotherhood apart, what knit the men together was the wealth of will, integrity, ambition
& determination. In the year 1944, they decided to start a business of bicycle spare parts in
Amritsar. Its is modest beginning and the next 3 years saw the business grow rapidly.But the dark
clouds of partition eclipsed their plans of the future. With renewed vigour and optimism, the
operational base was shifted to Ludhiana. By 1956, the brothers had began manufacturing key
components of bicycles and as a logical way forward, began to assemble the entire cycle at their
manufacturing plant in Ludhiana. In the early days, the plant had a capacity for 25 cycles per day.
Over the next few years, the Bicycle Unit started growing in stature and size, attracting skilled
engineers, technocrats, administrators and entrepreneurs. From a modest beginning of mere 639
bicycles in the year 1956, Hero Cycles products over 18500 cycles a day today, the highest in
global reckoning. With the 48% share of the Indian market, this volume has catapulted Hero in the
‘Guinness Books of World Records’ in 1986 and edge over global players is being maintained
since then.

A tiny acorn has now become a mighty Oak. From cycle to two - wheelers was a natural step, and
the Hero Group came into being. The Hero Group, today, is a vast conglomerate of companies,
either in the form of collaborations, joint ventures or fully owned subsidiaries, with more than Rs.
10000 Crore turnover annually. Hero Group, besides being the world’s largest manufacturers of
bicycles, motorcycles and chains to this date, has diversified into newer segments like Information
Technology, IT Enabled Services and Financial Service
 The Vision
"We, at the Hero Group are continuously striving for synergy between technology, systems and
human resources to provide products and services that meet the quality, performance, and price
aspirations of the customers. While doing so, we maintain the highest standards of ethics and
societal responsibilities, constantly innovate products and processes, and develop teams that keep
the momentum going to take the group to excellence in everything we do."

The Mission Statement

"Its our mission to strive for synergy between technology, systems and human resources, to
produce products and services that meet the quality, performance and price aspirations of our
customers. While doing so, we maintain the highest standards of ethics and societal
responsibilities. "

This mission is what drives us to new heights in excellence and helps us forge a unique and
mutually beneficial relationship with all our stakeholders. We are committed to move ahead
resolutely on this path, shown to us by visionaries like Mr. Satyanand Munjal, Mr. Om Prakash
Munjal, the late Mr. Dayanand Munjal and late Mr. Raman Kant Munjal.
Mr Brijmohan Lall Munjal, Chairman & MD - THE HERO GROUP.

Company Profile
"Hero", the brand name symbolizing the steely ambition of the Munjal brothers, came into being in
the year 1956. From a modest manufacturer of bicycle components in the early 1940's to the
world's largest bicycle manufacturer today, the odyssey was fueled by one vision - to build long-
lasting relationships with everyone, including workers, dealers and vendors. This philosophy has
paid rich dividends through the years.

Hero, a name synonymous with two wheelers in India is today a multi-unit, multi-product,
geographically diversified Group of companies. Through fully integrated operations, the Munjals
roll their own steel, make critical components such as free wheels for their bicycles, and have the
foresight to simultaneously diversify into myriad ventures, like product designing, IT enabled
services, finance and insurance, just to name a few.

Like every success story, Hero's saga contains an element of spirit and enterprise; of achievement
through grit and determination, coupled with vision and meticulous planning. Throughout its
success trail, the Hero Group and its members have displayed unwavering passion of setting higher
standards for themselves and delivering simply the best to their customers.

The Hero Group philosophy is: "To provide excellent transportation to the common man at
easily affordable prices and to provide total satisfaction in all its spheres of activity." Thus
apart from being customer-centric, the Hero Group also provides its employees with a fine quality
of life and its business associates with a total sense of belonging.

"Engineering Satisfaction" is the prime motive of the Hero Group and it has become a way of
life and a part of the work culture of the Group. This is what drives the Group to seek newer vistas,
adopt faster technology and create quality driven products to the utmost satisfaction of customers,
partners, dealers and vendors.

Today the Hero Group has a number of accolades and achievements to its credit … yet consumer
requirements and newer technologies provide fresh challenges every day, and at Hero the wheels
of progress continue to turn ...

Products/Services
 Motorcycles
Cycles, Auto Components, and Cold Rolled Steel
Shock Absorbers
Aluminium Castings & Pistons
Mopeds, Scooterette, and Health Care Equipment
International Trading Arm
Auto Components
Cycle and Auto Components
Cycle Components, Auto Components, and Machine tools
Financial Services
Two-Wheelers
Non Ferrous (Aluminium) Castings
Sheet Metals and Fabricated Auto Components
Financial Services
IT, Training & Education , Insurance
Distribution
Product & Engineering Design
Payment Services
IT Enabled Services
Auto Components

GROWTH
One of the most widely recognized brands in India

Members – among the leaders in their business

Hero Cycles is the World’s largest bicycle maker

Hero Honda is the World’s largest two wheeler

Manufacturer

Others include Auto components, Engineering

design, Call Centre/ BPO, Training & Learning

Market capitalization of over €3.43 billion (USD 4.18 bn)

Global partnerships:
Over 5,000 business associates
Over 23,000 employees

Sold more than 15 million motorcycles and 100 million

bicycles in the last 50 years:

Hero strategy that made hero cycles and hero Honda global
leaders, revolved around five themes
Hero Group NOT only as a “low cost provider” but
also as “VALUE FOR MONEY” provider
Build strong alliances and relationships with all
stakeholders in the chain
Benchmark against best global practices
Product Innovation keeping in mind the sensitivities of
the target market
Strong culture of performance
Hero Group has always believed in growth through

Hero group has always believed in growth through

partnerships and sharing the fruits of growth
International partnership
Hero Honda motors are most successful Honda joint venture, worldwide functioning for now over
two decades.
The relationship with SHOWA corporation, japan is over 20 years old and Munjal Showa is the
largest manufacturers of shock absorber in India.
Partnership with other stakeholders.
Large number of five thousand has had a successful partnership with group for over four decades.
The group has helped develop a large number of venders who have grown along with companies
and therefore have a strong commitment in success of the business.
The group enjoys a very healthy respect amongst institutions including banks, central and state
government.

RatiHero Group’s Ability to Compete

• The Group has a proven track record of managing long term relationships with its
domestic as well as global partners
• The Group has demonstrated capabilities to manage a large pool of people (23,000+
employees) which is a pre-requisite for success in this business
• The Group has consistently exceeded customer expectations by understanding their needs both
expressed and implied
• The Group’ s value proposition is based on providing value for money by managing cost (without
compromising on quality) and efficient use of resources
• The Group has attained leadership position through its service orientation

Financial Growth
Hero Honda has a strong record over nearly five decades.

COMPTETIVE ADVANTAGE

1 Technological tie-up: hero group ties-up with Honda motors,japan give it edg over other
domestic peers in two ways:
(a) company does not have to earmark funds for technological research and can concentrate more
on market expansion.
(b) the company’s access to ready-to-use technology of international standards give it the
opportunity to enter in international market as well.
The company pays hero Honda a royality of approximately 2.4 per cent of net sales.
2 Dealer and service network: the dealer and after sales service network forms a crucial part of
success formula for any consumer product. The same applies to two-wheeler industry. It has the
highest number of service centre approximately 3000 as well as highest sales per dealer.

3 Concentration on rural areas: The company currently derives approximately 60% of its
revenues from rural areas. The company is connected to over 18000 villages through its rural
programs such as “ har gaon har angan”. Besides the company has employed over 500 special
trained rural sales executive at the dealership level.

4 Less dependence on credit sales: It derives approximately 10% of its sales through financing.

Two Wheeler Industry (Sales of 5090594 units in April-November 08)

Motorcycle (79%) Scooters (15%) Mopeds (6%)

Industry Leaders: Industry Leaders: Industry Leaders

Hero Honda (58%) HMSI (58%) TVS Motors (99%)
Bajaj Auto (24%) TVS Motors (22%)

TVS Motors (8%) Hero Honda (12%)

Kinetic Motors (0.5%)
Growth in terms of revenues
Over the last couple of decades, the main reason behind the growth of Hero Group is their
approach, which is based on technology, marketing and manufacturing expertise. The main focus
of the group is on managing finance and resources. It also focuses on high labour productivity and
low employee turnover. [11]

Growth in revenue and net profits

The graph provided, shows the group’s growth in revenue (in US$ Mn) since 1997-98 till 2005-06.
As is clearly visible from the graph, the company has increased its revenue from $ 555 Mn in
1997-98, to $ 3188 Mn in 2005-06, i.e. an increase of $ 2633 in the span of 8 years. [9]

Not only was there a tremendous rise in revenues, but also in the net profits for the group.

For the same time period, the company witnessed a growth from $ 27 Mn in 1997-98 to $ 255 Mn
in 2005-06. [9]

Graph 1: Showing Growth of the Group in revenue and net profit. [9]

Revenues (US$ Mn) Profit (US$ Mn)

Years
1997-98 555 27
1998-99 681 39
1999-00 829 55
2000-01 1110 70
2001-02 1455 120
2002-03 1810 137
2003-04 2269 203
2004-05 2751 218
2005-06 3188

Marketing Strategies
Hero Group’s philosophy is based on the understanding of consumer demands, market segments
and available opportunities. The strategy is totally customer driven, with nation wide network of
dealers, making sure that the group’s product is accessible throughout the country. At the same
time, upgrading to new technologies and committed service has been the main reason behind the
successful growth of the group. [5]

Strategy:

According to the Greg Fisher, many International businesses, especially MNCs, develop strategies
for three distinct levels within the organization to cope with the complexities of the international
strategic management. [6]

These levels of strategies are:

1. Corporate strategy. [6.1]

2. Business strategy. [6.1]

3. Functional strategy. [6.1]

Throughout the years of its growth, Hero Group has actively looked at diversification. The use of
Related Corporate Diversification strategy after company’s growth in manufacturing activities led
to the establishment of the Hero Cycles Cold Rolling Division, Munjal and Sunbeam Castings,
Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing
units. [11]

Then there were the expansion into the automotive segment with the setting up of Majestic Auto
Limited, where the first indigenously designed moped, Hero Majestic, went into commercial
production in 1978. Then came Hero Motors which introduced Hero Puch, in collaboration with
global technology leader Steyr Daimler Puch of Austria.

Then the group looked into other industrial segments for its further growth, and followed
Unrelated Diversification Strategy to enter into other segments like exports, financial services,
information technology, which includes customer response services and software development.
Further expansion is expected in the areas of Insurance and Telecommunication.

Mode of entry in the international market

In the domestic market, Hero cycles soon started giving good competition to already well-
established players in the market such as Hind cycles and Atlas cycles. The major reason behind
this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable,
giving the customers value for their money. [5]

After the group success in the domestic market, Munjal brothers looked for International market
for further growth, to achieve additional sales, and to extend its product’s life cycle. To enter into
the Global market, Hero Groups used one of the simpler and common modes of market entry i.e.
exporting [5]

Until 1960s there were not many Indian companies, into exporting bicycles. But, after 1963, when
the Hero Group started exporting bicycles, a new era of export started in the Indian bicycle
segment. The Hero Group initially started exporting to Africa and Middle East, but now there
major export is to Europe and America. [3]

To meet the requirements in the international market, this group has been constantly changing to
newer and better technologies. It has also taken some extra measures like setting up a special
Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries
Limited), to cope up with requirements for international standards. The main areas where this unit
exports its manufactured products is in the markets of developed countries like France, Germany,
United Kingdom, etc , where the requirements are of high standard. [3]

Not only in the cycle’s segment, but the group also excelled in other fields in the international
market, like the Hero Majestic Moped was a huge success not only in the Indian market, but also
in the International market. This eventually made the Hero group moped as the largest exported
moped from India. Another bike “Hero Puch” was the first Indian bike to be assembled outside
India. It was first assembled in Spain, and then had its assembly plants in Mauritius and Egypt.
Now it has become quite popular in various countries like Paraguay, Mexico, Argentina, Turkey
and Holland. The Group’s company, Munjal Showa Limited is one of the largest suppliers of shock
absorbers to major auto giants in Japan, U.S., and the U.K. in developed markets. [3]
Another division of the group was formed in 1993, “Hero Exports”, which was responsible for the
International trading of the group for all the segments, and was also recognized by the Government
of India as a trading house. [3]

The recent development in International market for the group is in the field of Software
Development and the ITES industry through Hero Corporate Service Limited. It provides services
to various corporations in the USA, UK, and Australia. To further facilitate its exports it has set up
its offices in UK and USA to manage their corporate relationships. [3]

International market:

Fig 1: Different countries where ‘Hero Group’ provide their services and products [3]

Hero cycles

Hero Honda motors

Hero Motors

Hero Corporate Service Limited

Hero Management Service Limited (Hero ITES)

Munjal Showa Limited

Other then exporting, hero group has also actively participated in joint ventures with many
companies located in international as well as local market; Hero entered a joint venture for
technical and financial participation with one of the world's largest automotive makers, Honda
Motor Company Limited, Japan, in 1984. This joint venture was formed to manufacture the
companies’ first 100cc motorcycle for the Indian market. [4]

In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into
technical collaboration with Steyr Damiler Punch, Austria in 1987
Another company of hero group which is named as Munjal Showa Limited was formed when
group collaborates financially and technically with Showa Corporation, Japan in order to
manufacture front forks, shock absorbers, and gas struts. [4]

In order to grow its bicycle segments and to improve its production hero cycle’s cold rolling
division was set up with technical collaboration with Wean United, USA. And Kawasaki Steel
Corporation, Japan. [4]

After the successful joint ventures and market growth in bicycles and two-wheelers, Hero Group’s
Munjal-eSystems, which is a Microsoft Gold certified partner and also a ISO 9001:2000 certified
company, started expanding in Enterprise-oriented and Software Solutions division. [4]

Another sector Hero Mindmine, has provided extensive services in the BPO/Customer service for
various sectors such as Airlines,IT, Pharma, FMCG, etc. For training purpose for the same, it has
alliance with two other companies:

1. DynEd Corporation, that provides classroom coaching for English and Multimedia. [4]
2. ACS Incorporated, USA, which is a fortune 500 company, that helps HeroITES to provide
services in customer acquisition and customer interaction for the BPO industry. Combined
they provide services to countries like the US, Canada, Argentina and India. [4]

It also has various alliances in Production Engineering industry. Hero Global Design is the
exclusive representative of Porsche Design GesmbH (studio) in India. For industrial and
automobile design, it has venture with German company Target Design. [4]

Marketing Mix
To appeal to the customer in a powerful way, it is necessary to analyze the marketing mix or the
four P’s of marketing, that are,

1. Product Strategies
 2. Place or Distribution Strategies.
3. Pricing Decision.
4. Promotion Strategies.

Product Strategies

In order to develop its product strategy the group relies on the 3 R's-- Reach, Research and
Reliability as its basic building blocks. Using feedback from the market, a fully-equipped R&D
center has consistently created best practices in designing, testing and harmonization. This
emphasis has helped Hero group to build the products that are ahead of their time. [6.2, 7]

Place or Distribution strategies

Distribution is nothing but the link between the company and the end users. Place strategy involves
consideration of distribution, that the product or service takes between the production and the final
consumer. This strategy is different for different countries, so group spends a considerable amount
of time in examining the different systems that are in place, criteria to choose distributors and
channels and how the distribution segmentation can be accomplished. [6.2, 7]

However it is difficult to standardize the distribution system and to use the same approach in every
country, so there are many differences to be considered while developing the distribution strategy.

Some of the approaches that the group considers for developing this strategy are consumer
spending habits, location where consumers are used to buying, selecting the best possible
distributor to carry their product, checking the financial strength of the distributor, considering the
nature of the market and the competition etc. [6.2, 7]

Pricing strategy

Again pricing strategy of the group differs from country to country. The different factors that the
group considers for developing there pricing strategy are government control, market diversity,
currency fluctuations, and price escalation forces.
For developing countries like India, they have come up with special economical product to suit
everyone’s need. For instance, they manufacture motorcycles for different sections. To attract more
customers and make it accessible to everyone the pricing for these bikes starts from as low as AUD
$800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD $2500
and so on. [6.2, 7]

Promotion Strategies

The Hero Group promotes their goods and services through advertising and personal selling.
However, specific approach differs as per the products nature.

They have promoted their product with advertising in different ways right from print media to
slogans and campaigns. Through sponsoring different events, such as Hero Honda Sa Re Ga Ma Pa
or Campus Rock Idols, which generally involve common people, they have become very popular
in the public. [7, 8]

They also actively participate in social activities, to gain the trust and confidence of their
customers. They have done a lot of work of socio-humanitarian nature in different fields such as
healthcare, education, environment, public amenities, sports and entertainment, donations in both
cash and kind, employment generating programs, adult literacy mission, rural health care and
safety awareness programs. [6.2, 7, 8]

SWOT Analysis
Strength Weakness
Latest Upgraded Technology, Comparatively new in other industries like
the ITES industry.
Well known Brand name,
Very few services and products offered to the
Good Public Image,
higher income group.

Strong Market Share,

Long lasting Business relationship with

workers, dealers and Vendors,

Strong dealer network across the world,

Skilled Workforce,

High labor productive rate in the world,

Constantly Innovated Products and ideas,

Has strong R&D department,

Has strong marketing & management team,

Reputation for production of high quality

goods,

Collaborations with most advance players

in the market,
Opportunities Threats

Still can diversify further in many areas High competition from other companies in
like Four wheeler Industry, the same industry, like from Bajaj
Telecommunication sector, Bank sector, Automobiles in the two-wheeler industry, or
FMCG products, Retail industries, etc. TI in the bicycle manufacturing department in
 India.

Demand of bicycles is decreasing

Milestones

Hero’s success saga contains the element of courage, great, determination, enterprises and
perseverance coupled with vision and meticulous planning:

1956
Hero Cycles Ltd. is established.

1961
Rockman Cycle Industries Ltd. Established, which is today the largest manufacturer of bicycle
chains & hubs in the world.

1963
Bicycles exports take off from India – a faray into the international market.

1971
Highway Cycles was set up. It is today the largest manufacturer of single speed & multi-speed
freewheels in the country.

1975
Hero Cycles Limited became the largest manufacturer of bicycles in India.

1978
Majestic Auto Limited was formed and Hero Majestic Moped was introduced.

1981
Munjal Casting established.

1984
Hero Honda Motors Limited established in joint venture with Honda Motors, Japan to manufacture
Motorcycles. It is now the world’s largest producer of two-wheelers.

1985
Munjal Showa Ltd. established to manufacture shock absorbers and sturts and is today one of the
topmost shock absorber manufacturer companies in this country.

1985
100 cc Hero Honda Motorcycle was launched, which, later on in 1988, became No.1 among all
motorcycles in India.
1986
Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle
manufacturer in the world.

1987
Hero Motors, a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch
of Austria.

1987
Gujarat Cycles Limited, now known as Munjal Auto Centre Ltd. was established to manufacture
and export state-of-the-art bicycles and light products in its full automated plant at Wagodia.

1987
Sunbeam Auto Limited, earlier a unit of Highway Cycle Ind.Ltd., established as an ancillary to
Hero Honda. It has the largest die casting plant in India.

1988
Hero Puch was introduced by Hero Motors Ltd. which was a revolutionary machine to set new
records of petrol efficiency in 50 to 65 cc engines.

1989
Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles
Limited.

1990
Hero Cold Rolling Division established, which is one of the most modern steel cold rolling plants
in India.

1991
Hero Honda received National Productivity Council Award and also the Economic Times –
Harvard Business School Association Award against 200 contenders.

1991
Hero Cycles introduced Kidd – the first branded bike in children’s segment.

1992
Hero Cycles introduces Impact, the first citibike in India.

1992
Munjal Showa Ltd. received national safety award.
1993
Hero Exports was established as International Trading Division for group & non-group products.

1995
Hero Corporate Services Ltd. was established.

1995
The first exerbike from Hero Group was introduced with the name – Allegro.

1996
Hero Winner, a large wheeled scooter with a choice of 50 cc & 75 cc engines was launched by
Hero Motors Ltd.

1996
Munjal Showa Ltd. received British Council’s National Safety Award.

1998
Hero Briggs & Stratton Auto (P) Ltd. was set up to produce 4-stroke two wheeler engines in
various cubic capacities.

1998
Munjal Auto Components established to manufacture gear shaft & gear blanks for motorcycles.

2000
The first fully automated bicycles by the name ‘POWERBIKE’ was introduced by Hero Cycles
Limited.
Hero Corporate diversified into I.T. and I.T. Enabled Services through its services segment Hero
Corporate Services Limited.

2001
Hero Honda emerges as the market leader in motorcycles with the sales of over a million
motorcycles and a market share of 47%.

2001
Hero Global Design established to offer engineering services in CAD/CAM/CAE related to new
product development design, engineering, manufacturing.

2002
Hero Cycles Limited ties up with National Bicycle Industries, a part of Matsushita Group, Japan,
to manufacture high end bicycles.

2002
Fastener World established.

2002
Easy Bills Limited established to offer utility bill collection and retail services.
2003
Super Starter Series launched by Hero Cycles Limited.

2003
Tie-up with Live Bridge Inc., U.S.A., Aprilia Scooters, Haly & Bombardier Rotax GmbH of
Germany.

2003
Hero Honda continues to be the world’s largest manufacturer of two-wheelers with the market of
more than 48%.

2004
Hero Retail Insurance Business established.

2004
Super Smart Series introduced by Hero Cycles Limited.

The Achievements
The Group and its management have acquired a number of accolades and achievements over the
years:

Hero Group Management style has been acclaimed internationally by World Bank and BBC, UK.
Hero Group is discussed as a case study at London Business School, UK and INSEAD, France.
World Bank has acclaimed Hero Cycles as a role model in vendor development based on a world-
wide study. The London Business School, UK, has done a case study on the Group as model of
entrepreneurship.

Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on
Economic value, in India.

HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five
years 2001-05.

The Hero Group is recognized as a long term partner and an ideal employer:

-- Hero Group's partnership with Honda Motors, Japan is over 20 years old

-- Hero Group's Partnership with Showa Manufacturing Corporation, Japan is over 18 years old.

Group Chairman, Mr Brijmohan Lall Munjal received the coveted "Ernst & Young Entrepreneur of
the Year" award for 2001.
Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asia's leading
companies award (2003) by Far Eastern Economic Review.

Hero Cycles is the World's largest manufacturer of Bicycles with annual sales volume of over 4.8
million cycles.

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the world's largest
manufacturer of bicycles, with annual sales volume of 5.2 million bicycles in FY 2004.

Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award
for the last 28 years in succession.

Hero Group of Companies

Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies, with an
estimated turnover of US$1.8 billion during the fiscal year 2003-2004.
 Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports
LO GO

Majestic Auto Limited

Rockman Cycle Industries

LOG O

Highway Cycle Industries

LOG O

Sunbeam Auto Limited

LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

BOARD OF DIRECTORS
No. Name of the Directors Designation
1 Mr. Brijmohan Lall Munjal Chairman & Whole-time Director
2 Mr. Pawan Munjal Managing Director & CEO
3 Mr. Toshiaki Nakagawa Joint Managing Director
4 Mr. Sumihisa Fukuda Technical Director
5 Mr. Om Prakash Munjal Non-executive Director
6 Mr. Sunil Kant Munjal Non-executive Director
7 Mr. Masahiro Takedagawa Non-executive Director
8 Mr. Satoshi Matsuzawa Non-executive Director
(Alternate Director to Mr. Takashi Nagai)
9 Mr. Pradeep Dinodia Non-executive & Independent Director
10 Gen.(Retd.) Ved Prakash Malik Non-executive & Independent Director
11 Mr. Analjit Singh Non-executive & Independent Director
12 Dr. Pritam Singh Non-executive & Independent Director
13 Ms. Shobhana Bhartia Non-executive & Independent Director
14 Mr. Sunil Bharti Mittal Non-executive & Independent Director
15. Mr. Meleveetil Damodaran Non-executive & Independent Director
16. Mr. Arun Nath Maira Non-executive & Independent Director

BRIEF PROFILE OF DIRECTORS

MR. BRIJMOHAN LALL MUNJAL

Mr. Brijmohan Lall Munjal is the founder Director and Chairman of the Company and the $ 2.8
billion Hero Group. He is the Past President of Confederation of Indian Industry (CII), Society of
Indian Automobile Manufacturers (SIAM) and was a Member of the Board of the Country's
Central Bank (Reserve Bank of India ). In recognition of his contribution to industry, Mr. Lall was
conferred the Padma Bhushan Award by the Union Government.
 Mr. Brijmohan Lall Munjal is currently on the board of the following companies:

No. Name of Company Nature of Office

1 Hero Honda Motors Limited Chairman and Whole-time Director
2 Hero Cycles Limited Chairman and Director
3 Hero Honda Finlease Limited Chairman and Director
4 Munjal Showa Limited Chairman and Director
5 Sunbeam Auto Limited Chairman and Director
6 Easy Bill Limited Director
7 Hero Financial Services Limited Director
8 Munjal Auto Industries Limited Director
9 Shivam Autotech Limited Director
10 Daimler Hero Commercial Vehicles Limited Director

MR. PAWAN MUNJAL

Mr. Pawan Munjal is the Managing Director and CEO of the Company. He is responsible for
growth and strategic planning for the entire Group. A graduate in mechanical engineering, Mr.
Munjal has been instrumental in bringing about technological and managerial excellence in the
Company's operations. He has been the Chairman of several Committees of CII.

He is also on the board of Indian Institute of Management, Lucknow . An avid golfer, Mr. Munjal
is Past Chairman of the Asian PGA Tour Board of Directors and the Past President of Professional
Golfers Association of India (PGAI). Under his guidance, Hero Honda launched the Hero Indian
Sports Academy (HISA) in collaboration with Laureus Foundation to provide equal opportunities
in sports to various communities and to reward talent in the country.

Mr. Pawan Munjal is currently on the Board of the following companies:

No. Name of Company Nature of Office

1 Hero Honda Motors Limited Managing Director
2 Hero Honda Finlease Limited Director
3 Daimler Hero Commercial Vehicles Limited Director

MR. TOSHIAKI NAKAGAWA

Mr. Toshiaki Nakagawa joined the Company as Joint Managing Director on February 1, 2006.

He joined Honda Motor Co., Ltd, Japan in April 1973 and later on took various assignments at
Senior Positions in world wide Honda net work, such as staff member of UK, Hongkong and
President of Honda Czech Republic, Honda France and General Manager of Honda Beijing Office.

Before joining the Company, he held the position as General Manager of Operating Office of
China, ASEAN succeeding by Operating Office No.1 (North America, South America and Europe)
at Honda Head Office, Japan.

His specialization is “Overseas Sales of Automobiles and Motorcycles.”

Mr. Nakagawa is currently on the Board of the following companies:

No. Name of Company Nature of Office

1 Hero Honda Motors Limited Joint Managing Director
2 Hero Honda Finlease Limited Director

MR. SUMIHISA FUKUDA

Mr. Sumihisa Fukuda was appointed as an Additional and Technical Director in the Whole-time
employment of the Company by way of passing a resolution by Circulation on May 13, 2008 . Mr.
Fukuda was born on December 12, 1955 at Nagasaki , Japan and after completing a course in
Mechanical Engineering, he joined Honda Motor Co., Ltd., Japan as an Engineer & has completed
various assignments in Honda. In recent past, he was working as Manager – Asian Autoparts Co.
Ltd., Thailand . He brings with him rich experience of more than 30 years.

Mr. Fukuda is currently on the Board of the following companies:

No. Name of Company Nature of Office

1 Hero Honda Motors Limited Whole-time Director

MR. OM PRAKASH MUNJAL

Mr. Om Prakash Munjal is also founder Director of the Company. He is the Co-Chairman and
CEO of Hero Cycles Limited, the largest producer of bicycles and bicycle components in the
world. Under his leadership, Hero Cycles has found its way into the Guinness Book of World
Records. In 1990, Mr. Munjal was awarded the "Indira Gandhi National Unity Award" by the
President of India.

Mr. Om Prakash Munjal is currently on the Board of the following companies:

No. Name of Company Nature of Office

1 Hero Cycles Limited Co-Chairman and Managing Director
2 Majestic Auto Limited Chairman & Director
3 Hero Financial Services Limited Chairman & Director
4 Hero Motors Limited Director
5 Munjal Auto Industries Limited Director
6 Shivam Autotech Limited Director
7 Highway Industries Limited Director
8 Hero Global Design Limited Director
9 Easy Bill Limited Director
10 Hero Honda Motors Limited Director
11 Hero Honda Finlease Limited Director

MR. SUNIL KANT MUNJAL Mr.

Sunil Kant Munjal born on December 14, 1957 , at Ludhiana is aged 49 years. After his graduation
he underwent training in the field of Mechanical Engineering. Presently

he is Managing Director of Hero Cycles Ltd. (C.R. Division) and Hero Corporate Services
Limited.

In 2004-05, Mr. Munjal became the President of Confederation of Indian Industry (CII), India 's
premier business association. He is also on the Board of Indian School of Business, Hyderabad and
is visiting faculty at various Business Schools and Corporate. His specialization is in Business
Studies and Holistic Management Practices. Apart from the above he is a member of Prime
Minister's Council on Trade and Industry, Consultative Group on Industry, Planning Commission,
Government of India and SEBI Committee on Disclosures. He has made significant contributions
to some of the National-level Economic and Labour reforms in India either by chairing some of the
reforms Committee or as a member.
Mr. Sunil Kant Munjal is currently on the board of the following companies:

No. Name of Company Nature of Office

1 Hero Management Service Limited Chairman & Managing Director
2 Hero Corporate Service Limited Chairman
3 Shivam Autotech Limited Chairman
4 Hero Cycles Limited Managing Director
5 DCM Shriram Consolidated Limited Director
6 Easy Bill Limited Director
7 Hero Honda Motors Limited Director
8 Hero Motors Limited Director
9 Satyam Auto Components Limited Director
10 Flourish Manufacturing & Automotive Ltd. Director
11 Daimler Hero Commercial Vehicles Limited Director
12 Abhayuday Manufacturing & Automotive Ltd Director
13 Arrow Infrastructure Limited Director
14 Hero Mindmine Institute Limited Director
15 Hero Ergo Life Insurance Company Limited Director
Social Activities Undertaken By The
Company:
Hero Group's humane approach is manifested in all aspects of commercial production.

The Group undertakes various projects and activities of socio-humanitarian nature to contribute to
the National Mainstream. Group Companies, Hero Cycles Limited and Hero Honda Motors
Limited have been pioneers within the Group, in undertaking socially productive work of myriad
nature.

Healthcare

Raman Munjal Memorial Hospital is a 100-bed hospital with a well-equipped laboratory, a fully
functional operation theatre, an out patient department as well as a casualty section.

A fully equipped mobile clinic provides comprehensive health care to the rural masses in
Dharuhera.

The medical centre on the factory premises of the Group Companies is open for the sub-urban
and rural communities of the surrounding areas. The medical centre is also equipped to provide
First Aid and ambulance facility for road accident victims.

Other efforts, under the auspices of Hero Cycles Limited include:

Eye Camps: With over 15,000 patients examined and about 1700 cataract operations performed
so far, these Eye Camps have also aided patients with free accommodation, food and medicines.

Family Planning Camps: Held since 1993 at the Civil Hospital, Rewari and Bawal, these camps
offer monetary incentives to the masses to adopt family planning measures.

Blood Donations Camps: These camps are being organised on a regular basis since 1992. 464
units have been donated to Indian Red Cross Society in the last camps.

ENT Check up Camps: Conducted by specialists from AIIMS, these camps have been organized
since November 1997

Heart Check-up Camps: Since July 1988, free camps are being organized in collaboration with
Escorts Heart Institute and Research Centre, where specialised diagnosis methods like
Echocardiography and ECG are used.

Rehabilitation Camps: Conducted with the assistance of the District Rehabilitation Centre, Red
Cross Society, Rewari, these camps help physically challenged villagers to rehabilitate and re-
employ themselves. Many patients have found a new lease of life on account of the physical aids
given to them.
 Conclusion

Results of Group initiatives

The Group’s philosophy of empowering and training human capital, use of appropriate
technologies, constantly being close to the customer and maintaining a healthy work environment
with the highest standards of ethics and corporate governance has resulted in the Group companies
excelling in their chosen field through a service attitude year after year, leading to impressive
financials and healthy returns to all stakeholders.

Hero group has build leadership positions primarily due to its belief in the following principles:
1. Understanding stakeholders (incl. international partners and customers) expectations and
delivering value for money.
2. Managing relation
3. Creating a performance culture
4. “partnership approach” with ancillaries
5. Efficient current asset management
6. Accepting and using ever changing technology as a facilitator
7. Strong quality and process orientation.

The constant and the determined effort to gain customer’s trust and satisfaction along with the zeal
to provide the best product to the customer through innovation and latest technology, has been the
primary reason behind the remarkable growth of the Hero Group. The other factors such as
understanding of customer’s needs and choice, a close watch on the market, corporate excellence
and understanding of corporate social responsibility and stronger relationships with the investors,
partners, vendors and dealers along with the customer have been equally important in their
achievement. [11]

Due to all these reasons, the Hero Group has been able to excel especially in the bicycles and
motorcycles manufacturing. They have received numerous awards including the “Bike Maker of
the year award” for continuously 6 years from 2001-2006 by Overdrive magazine. Their effort and
hard work in every field can be seen as it was ranked 4th in “Overall Best Managed Company”
category, ranked 3rd in “Best Financial Management” and “Best Operational Efficiency” category,
ranked 6th in “Overall Best Investor Relations” category by Asiamoney in the year 2002. [12]
The management style adopted by the Hero Group has been commended internationally as well by
different organizations such as World Bank and BBC, UK, acclaiming it as a role model in vendor
development internationally. At London Business School, UK, and Insead, France it is studied as
case studies as a model of entrepreneurship. [12]

The Hero Group has been considered as one of the top ten Business Houses on Economic value in
India by the Boston Consulting Group. [12]

The two-wheeler department that is Hero Honda Motors has received the highest ratings for
Corporate Governance in 2003, and Best Governed Company award in private sector in 2004 by
CRISIL, which is India’s Leading Ratings, Risks and Advisory Company. [12]

Hero Group has received awards not only in the domestic market but it has also received awards
for its excellence in international trade. Engineering Exports Promotion Council has awarded Hero
Cycles with the Best Exporter Award for the last 28 years in succession. [12]
 Appendix
1 HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five
years 2001-05.

2 The Hero Group is recognized as a long term partner and an ideal employer:

-- Hero Group's partnership with Honda Motors, Japan is over 20 years old

-- Hero Group's Partnership with Showa Manufacturing Corporation, Japan is over 18 years old.

3 Group Chairman, Mr Brijmohan Lall Munjal received the coveted "Ernst & Young Entrepreneur
of the Year" award for 2001.

4 Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asia's leading
companies award (2003) by Far Eastern Economic Review.
 Bibliography
1 Fare east economic review April, 2004
2 Magazines:
India today
Competitive success review
3 Websites:
www.herogroup.com
www.theherocycles.com