Hero Motocorp Ltd and Its New Product - Case Study Example

Hero Motocorp Ltd. and Its New Product Introduction: Hero Motocorp Ltd. is a renowned Indian motorcycle manufacture company, headquartered in New Delhi. It is the largest manufacture of two wheelers in the world. It has been estimated that the current market capitalization of the company is 308 billion (USD 5.66 billion). It has a subsidiary of 49.2 % in Eric bull racing which is a motorcycle sport company of USA. The company has three manufacturing units in different part of India such as Dharuhera, Gurgaon, and Haridwar. The company sells around 17 different models of motorcycles which have different engine capacity such as 100 cc, 125 cc, 150 cc, 225 cc. Some of the popular ranges of bikes are the following, Achiever: It is a 149 cc motorcycle which started its production in 2006 CBZ xtreme: It is a 150 cc motorcycle and it was introduced in the year 2008 Karizma: It is a 223 cc motorcycle and it has many updated variant. Passion: It is one of the largest selling motorcycles in world which has 97.2 cc engines. Splendor: It has 110 cc engines and has a record selling of 1 million per year. Hero Impulse: It is a 150 cc bike and launched in 2011 Hero Ignitor: It is 124.7 cc bikes and one of the most recent models of hero motor group (Heromotocorp.com, n.d.). Now this company wants a fresh capacity creation and focus on its business growth by attracting new customer segment that likes and wants Sport-tour motorcycle with 1100 cc engine capacity or more. But as the company used to engage in middle weight motor cycle so it is difficult for them to plan the business growth strategy. The targeted market should have the income range of $55,000 to 100,000 and mainly males of 35 yrs. to 60 yrs. age are targeted in global market. Process: As the expectations and technologies changes organizations also need to find effective ways to sustain in the competitive market. Following are the steps of the process which can be taken by the organization to develop the motorcycle: To develop a new motorcycle, the process involves extensive research on the target market and existing customers to know their further needs on the existing product and whether the new concept is welcomed by them or not. On the basis of response of the company the employees of R & D department should emphasis on the following segment to develop a new motorcycle, Ergonomics: It is a kind of science which deals with human psychology, physiology to deliver maximum comfort to the customer. So to develop motorcycle for tour purpose or sport purpose ergonomics need to be considered for seat design, seat height, handle design, grip of handle, handlebars, stand, kick stand, wind shield, mirror, and the parts which are usually handled manually. Styling: It also can be termed as design. There are many software which helps the designer to design the model in 3D and illustrate is as a real life gear for better understanding of the component. Tires: This is a most important part of bike which ensures safety, speed and the overall performance of the bike also. So it needs proper research and development to provide proper safety to the customer. For tour bikes it needs special care as the objective is to provide proper balancing, turning and safety to the rider. Designer also should give importance to proper breaking and the anti damage component of the tire also. Engine: Engine capacity need to be upgraded with increase in number of cylinders to ensure the better performance which is required for a tour bike. It also ensures the less consumption of fuel with greater millage. Fuel Tank: Fuel tank needs to be upgraded in size. Strategy to Balance Short Term and Long Term Needs: As the organization till now concentrated on the business of medium scale production of the motorbikes so it can face difficulties for growth of its business and handling new market segment but to balance needs they can adopt some strategies which are the following Matrix organization: The structure of the organization should be matrix structure which can be defined by dual command rather than single chain of command. It will facilitate the project driven concept of the organization and balance the short term and long term needs of the company. Matrix organization is characterized by two different reporting hierarchies such as project manager and functional manager. So the department cannot be need to segregated as the primary resources are same for the existing product and the new product but project wise employees can be divided for better management (Harvard Business Review, n.d.). Obtaining Commitment and Support: Ensure commitment of the employees and senior management to mitigate the barriers and ensuring the managerial support. Necessary changes need to be done in the context of the improvement recommendation. Supply Chain Management: Durability of supply chain is essential to balance strategy of short term and long term effect. Cost Leadership: To sustain in the industry, it is necessary to become a cost leader which also ensure optimum use of resources of the world. Attracting and Retaining Potential Existing and New Customer: Organization needs to ensure, the retaining of existing customer, and attracting of new potential customers for its new product range in new market segment as well as in existing market segment. Innovation: It is the most useful way that an organization can apply to satisfy its customer, motivate its staff, and facilitate suppliers need and providing innovative approaches and alternatives to problems. Crucial Resources to Run Existing Business Change in Production: As the organization ensures its growth by designing same category of product but the only difference is now, it is a larger scale production as the motorcycles will be equipped by large motors. So to facilitate this new production for the purpose of business growth following resources are crucial to run the business. Technology: Upgraded technological support is needed to facilitate research and development for the purpose of launching environment and consumer friendly product to customers. It will also ensure work in a smarter way and improve consistency in product quality. Efficient Workforce: Efficient large scale of work force is needed to facilitate the process of new production. As the tour motor cycle needs larger engine, special kind of tire, mirror etc so the work force should be trained with newer technology to make effective vehicle which the management promises to launch. Factory: To incorporate large scale of production the organization needs a large factory. Modern facilities should be provided in warehouse to assemble the parts of the motor cycle. Project Management Leadership Style: It has been seen that the culture of the organization ensure the leadership style which will be more effective for the organization (Badke-Schaub, Stempfle & others, 2004). According to the context of the project as the organization is going to launch a new product and want to incorporate the target within next 5 years ,So it is necessary to incorporate democratic kind of leadership which can be characterized by the following, Focus of power is distributed within the team member Workers has positive involvement in decision making system Emphasis will be on consultation Most effective when this kind of leadership is partnered with skilled, experienced, and free thinking workers. Risk Mitigation Strategies To address project plan there are some risks which can be overlooked are the following, Insurance of the Parts of the Motor Cycle: It has been seen that there are some risks involved with the motorcycle when it is transferred to ware house to the display sores. But these damages can be mitigated if insurance coverage is there to protect the equipments so that risk of being irresponsible handling and accident can be decreased. Fuel Price: International fuel price and its effect on domestic market can be overlooked though it can be considered as a risk as number of customer can be decrease due to this. But as the bike focuses on the persons who are sports and tour lover so it has a very less significance. Change in Laws and Regulation: As environment related laws and regulations are changing continuously so it has been evident for the part of the management to ignore the forecasted new regulations though it can be considered as a risk. It also has a solution that to incorporate the new updated rules in new production only or provide equipment according to new upgraded rules to the existing products. Conclusion: To develop a new product it is necessary to identify the barriers and the blockages to reach the goal. In the present context as Hero Motocorp Ltd. is developing the new product on the basis of its existing product so it is feasible for them to use the same suppliers as resources are almost same, using same technology, same workforce etc. which will ultimately decrease there overhead cost of the production and ensure a successful approach to launching a new product. References Badke-Schaub, P., Stempfle, J., & others,. (2004). Analysing leadership activities in design: how do leaders manage different types of requirements? Harvard Business Review,. (n.d.). Problems of Matrix Organizations. Retrieved from http://hbr.org/1978/05/problems-of-matrix-organizations/ar/1 Heromotocorp.com,. (n.d.). Hero MotoCorp New Two Wheelers , Motorcycles, Two Wheelers in India. Retrieved from http://www.heromotocorp.com Read More