HERO HONDA MOTORS

LTD

FILL IT. SHUT IT. FORGET IT

 World's single largest two wheeler company
 Most successful joint ventures worldwide
 Hero Honda ranked Number One in the two-
wheeler category on Environmental
Performance
 Hero Honda has managed to achieve
indigenization of over 95 percent
 World's largest bicycle manufacturer
 The Hero Group is recognized as a long term
partner
 Hero Group's partnership with Honda Motors, Japan
is over 21 years old
 Hero Group's Partnership with Showa
Manufacturing Corporation, Japan is over 19 years
old.
 Hero Cycles Limited is a Guinness Book Record
holder since 1986 as the world's largest
manufacturer of bicycles
 Technology Management
 There was no need for technology assessment
 HHML sees its core competence in absorbing process
technologies
 HHML Agenda-innovation in process technology, cost reduction
in indigenized components & value addition in to product
 Spends 1% of its total revenue on in-house R&D
 All design, material & manufacturing aspects are decide by
Honda
 90% testing is done at HHML itself
Technology Management
 Any change in product technology, Honda’s
approval is must
 In manufacturing technology HHML enjoy
complete freedom in innovation
 No technology waste
 Accurate technology forecasting
Technology Absorption Model
Low Technology Absorption High

Leapfrogging Innovation

Product
High

Incremental
Innovation
Technology

Core competence development

(Hard & Soft)
Technology Push Low

Testing
Technology
(Hard)
Manufacturing
Low Market Pull

Technology
(Hard)
Marketing
Technology
(Soft) Radical Innovation
High

Technology Transfer
Low Tech High Tech
Indigenization
 Imports 5% of its components from Japan
 Munjal Showa Ltd manufactures Shock absorbers
 Sunbeam Casting Private Cycle Industries Ltd
manufactures motorbike chains
 Developed CD100 SS model, Sleek
 Only hardware of human capital is utilised
 HHML started as technology driven company but
now it is more a market driven or customer driven
company
HHML Lags……..

 Technology Acquisition Flexibility

 Technology Innovation Flexibility
 Research Productivity
 Value of the firm
 Capability to exploit economies of scale &
scope
Prevailing Situation

 Expertise in indiginisation
 More demanding customers
 40%-45% market share
 Competition increased after liberalisation in
1991
Main Actors

 Top management as decision makers

 Honda as technology provider & joint venture
partner
 Engineers, Technologist & workers
 Customer & Competitors
Technology Management
Process
 Revised Technology Absorption Agenda
 Achieved Indigenization through vertical
integration & supplier development
 Honda provides active support on product &
testing technologies
 Innovation in process technology needs no
approval from Honda
Learning Issues
 Existence of core technology group is a pressing need of a
technology leader organization
 Organization must create developmental capabilities to be more
competitive
 Helpfulness of technology provider improve effectiveness of
technology alliance
 Innovation culture is essential for technological leadership
 Technology forecasting helps in technology acquisition,
absorption, innovation & phase out decision
Suggested Actions
 HHML needs to strenghten itself on product &
testing technology
 Direct interaction with Honda R&D should be
encouraged
 R&D budget to be enhanced
 Testing facility should be installed locally
 Merket expansion in countries where HHML
is not ventured so far
Expected Performance

 Dependence on imported components should

reduce over time
 Build core competence in technology
acquisition
 Wealth maximization through effective
technology management
Thank You