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Hero Honda Case

Autor:   •  December 22, 2016  •  Case Study  •  539 Words (3 Pages)  •  594 Views

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Hero Honda

-Ranganathan.R

P162056

Hero Honda Motors Limited was a joint venture between Hero Group of companies of India and Honda Motor Company of Japan. Honda the largest producer motor cycles and technology giant joined hands with Indian cycle giant Hero, the reason being their high labour productivity, distribution network, low employee turnover and strong ethical and moral culture. The case shows the bond between the two companies and reasons for dissolving the relationship in between the companies that lasted 27 years.

A ten year agreement was first entered in the year 1984, whereby HMC brought in Technical expertise and Hero brought in local talent to manage all other function including Marketing, Finance and Human resources. Hero Honda relied on Honda for technology and design requirements but relied on Munjal family’s Hero Group model for supply and distribution network. The Hero group had a strong supplier and dealer network based on mutual trust between family and friends. Brijmohan Lal held the position of chairman and managing director, his sons Raman Kant and Pawan Kant held the positions of managing director and whole-time director respectively. Also, Brijmohan Lal’s brother Om Prakash held the position of non-executive director. So, basically Hero had four representatives as directors on the original twelve-member Hero Honda board. As in Indian culture younger generations are supposed to listen and follow their elders. Similarly, whatever decisions were taken by the elders was accepted by the younger ones.

Hero Honda had a strong supplier and vendors who were majorly family members and friends, which led to high degree of co-ordination between HHM and its suppliers. They had very good control over cost and quality of components and very good supply chain too .Thus they minimised their inventory.

HHM had a good rapport with dealers wherein they considered dealers as family and took a personal care too. This nurture and care made the bonds stronger. Hero Honda opened up in rural market which their market shares and growth. The then most strong and successful joint venture ended in 2010.

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