ATLAS HONDA

PRESENTATION
 STRATEGIC MANAGEMENT

PRESENTED BY: PRESENTED TO:

 N a b a Te h s e e n S I R FA R O O Q S H E I K H
 Sheerin Sultan 07-04-2019

 Rehana Moin Rajput

 M u h a m m a d Wa s e e m
 THE COMPANY
• Atlas Honda Limited is a public listed company which was incorporated on October 16, 1962. It is a joint
collaboration between Honda Motor Company Limited Japan, the largest and most reputed motorcycle brand in the
world, and Atlas Group, one of Pakistan’s most renowned business conglomerates. The Company is principally
engaged in progressive manufacturing and marketing of motorcycles and spare parts.
• The Company currently has a production capacity of over 1.35 million units per annum and continues to maintain its
status as market leader both in terms of volume and quality. It also exports its motorcycles and spare parts to
Bangladesh and Afghanistan.
• With highest quality products, state of the art manufacturing facilities, largest dealership network & impeccable after
sales service, Atlas Honda Limited is today considered a benchmark for two wheeler manufacturing. It has been
proudly and successfully fulfilling its role as the flag bearer of motorcycle industry in Pakistan.
• As one of the largest tax payers in the private sector and being one of the best employers in the country, Atlas Honda
Limited stands as a beacon of light for the corporate, social and intellectual sectors of Pakistan.

• Manufacturing Facilities:
 Sheikhupura plant
 Karachi plant
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“ STEP 1 - VISION MISSON

STEP 2 - OBJECTIVES AND
STRATEGIES
Vision

“Market leader in the motorcycle industry, emerging as a global competitive centre of

production and exports.”
Mission

“A dynamic growth oriented company through market leadership, excellence in quality

and service and maximizing export, ensuring attractive returns to equity holders,
rewarding associates according to their ability and performance, fostering a network of
engineers and researchers ensuing unique contribution to the development of the industry,
customer satisfaction and protection of the environment by producing emission friendly
green products as a good corporate citizen fulfilling its social responsibilities in all
respects.”
Atlas Honda

STRATEGIC GOALS
1. Customers
Our customers are the reason and the source of our business. It is our joint aim with our dealers to ensure that the customers enjoy
the highest level of satisfaction from use of Honda motorcycles

2. Quality
To ensure that our products and services meet the set standards of excellence

3. Local Manufacturing
To be the industry leader in indigenization of motorcycle parts.

4. Technology
To develop and maintain distinct business advantages through continuous induction of improved hard and soft technologies.

5. Shareholders
To ensure health and viability of business and thus safeguarding shareholders’ interest by maximizing profit. Payment of regular
satisfactory dividends and adding value to the shares.

6. Employees
To enhance and continuously update each member’s capabilities and education and to provide an environment which encourages
practical expression of the individual potential in goal directed team efforts and compensate them attractively according to their
abilities and performance.

7. Corporate Citizen
To comply with all Government laws, rules and regulations and to maintain a high standard of ethics in all operations and to act
as a responsible member of the society
1- OBJECTIVE

To expand sales in two wheeler industry

Strategy
Sales expansion through focus on product quality & innovation, expanding dealers' network, efficient after
sales services and availability of financial solutions to boost customers' purchasing power.

2- OBJECTIVE

To maintain industry leadership in two wheeler industry

Strategy
We continuously focus on upgrading production facilities to maximize efficiency and to ensure compliance
with international standards and latest technology.

3- OBJECTIVE

To ensure continuity of operations without disruptions in supply

Strategy
From the outset, production structures and processes are designed with a view to minimize any potential
damage and its probability of occurrence. In order to ensure uninterrupted and smooth supplies of raw
material and components, more than one supplier are inducted which share its production and delivery plan
on B2B network.
4- OBJECTIVE

To recruit and retain the best people and provide adequate training to ensure high quality skilled force

Strategy
We have developed comprehensive and well-structured procedures for recruitment, training, compensation,
periodic appraisals and succession planning in order to ensure staff development and retention

5- OBJECTIVE

To ensure health and safety of employees in workplaces

Strategy
We recognize the importance of a healthy working environment and therefore safety of employees is our top
priority. We have developed a documented Health and Safety policy according to which it is mandatory for
every employee to go through the Company's safety awareness program. The employees are informed about
best HSE practices through regular internal communication channels such as transformation forums and
internal safety workshops. Each employee is also trained to follow safety rules and to exercise caution in all
work activities. We conduct risk assessments that address all the hazards that might cause harm in workplace.
Extraction and evacuation drills are conducted regularly and staff is frequently trained for crisis management
6- OBJECTIVE

To ensure environment friendly products and processes

Strategy
Our defined policy for the protection of environment from emissions and hazardous discharges, ongoing monitoring and
maintenance activities coupled with investment in new technology, efficiency enhancing measures, continuous measurements,
follow ups and reporting are carried out to ensure we achieve our desired goals. Solid hazardous waste is disposed-off through
Environmental Protection Agency's legitimate contractors. Recycling is also done, to the maximum extent, where possible.

7- OBJECTIVE

To ensure optimum cost level

Strategy
We keep our cost at an optimum level through strict governance policies and cost reduction measures

8- OBJECTIVE

To operate in a stable market being compliant with all relevant laws of the Country

Strategy
Maintain team of qualified and experienced professionals to ensure compliance with all applicable laws, rules and regulations
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“ STEP 3 - OPPORTUNITIES
THREATS
STEP 4 - CPM
STEP 5 - EFE
 Opportunities Threats

1. “5S” CONCEPT 1. MARKET CONDITIONS

2. POOR QUALITY OF OF KARACHI
CHINESE BRANDS 2. NEW CHINESE BRANDS
3. GOVERNMENT RULE OF 3. INSTABLITY OF
LOCALIZATION GOVERNMENT
REGULATIONS
4. EXPLORTAION OF NEW
MARKET 4. COMPETITORS
APPROACHING AHL’S
5. NEWLY DEVELOPED
DEALERS
AREAS AND MARKETS
 COMPETITIVE PROFILE MATRIX

 CPM Identifies Honda’s major competitors and their strengths & weaknesses and the total weighted score
shows its strategic positions is stronger than Yamaha and Suzuki
 EFE MATRIX

 Organization response is excellent to threats and capitalizing opportunities as its total weighted score is between
3.0 to 4.0.
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“ STEP 6 - STRENGTHS
WEEKNESSES
STEP 7 - IFE
 STRENGTH WEAKNESS

1. QUALITY PRODUCT 1. HIGH PRICE

2. GOOD IMAGE 2. LACK OF NEW MODEL
3. EXCELLENT SERVICES 3. LESSER PROMOTIONAL
4. FINANCIAL STRENGTH ACTIVITIES
5. INTENSIVE DISTRIBUTION 4. DIFFICULT TO MINIMIZE COST
NETWORK OF INPUT
6. COMMITTED EMPLOYEES
7. Four STROKE TECHNOLOGY
8. AVAILABILITY OF PARTS
9. LARGEST SERVICE NETWORK
10.RESEARCH AND DEVELOPMENT
11.MARKET RESEARCH
12.LATEST PRODUCTION FACILITIES
13.INNOVATIVE CULTURE
14.VENDOR IMPROVEMENT
PROGRAM
15.LOCALIZATION
 IFE MATRIX

 Total weighted score is between 3.0 to 4.0 , this shows the organization performance is excellent in
response to strength and minimizing weaknesses
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“ STEP 8 - SWOT
SPACE
BCG
IE
GSM
QSPM
SWOT – TOWS MATRIX
SPACE MATRIX
SPACE MATRIX
 BCG

QUESTION MARK STAR

1. MP 100 1. CG 125

2. CD DREAM 70

DOG CASH COW

1. CG EURO 2 1. HONDA CD 70
 IE MATRIX

 On the x-axis of the IE Matrix, an IFE total weighted score of 3.0 to 4.0 is strong

 The prescription for divisions that fall into cells I, II, or IV can be described as grow and build. Intensive
(product development) or integrative (backward integration) strategies can be most appropriate for these
divisions
GRAND STRATEGY MATRIX
QSPM MATRIX
Strategy 1 get a higher score as compare to strategy 2 so we will prefer strategy 1
 ADVANTAGES AND DISADVANTAGE OF
ALTERNATIVE STRATEGIES

MARKET DEVELOPMENT

• ADVANTAGES • DISADVANTAGES
1. By entring in new segment Sales will increase 1. Risk of Increasing Cost
2. Opportunity to capture this segment by taking
first mover advantage
3. Already have brand image and product
awareness in the mind of consumer, so it
doesn't need extra promotions.
4. Increase company's revanue and growth
5. Increase competetive advantage
 MARKET PENETRATION

• ADVATAGES • DISADVANTAGES

1. Can decrease prices to gain more market 1. To gain more market share can leads to
share decrease profit

2. Increase volume sales will decrease cost 2. Might loose Customers who prefer luxury
item
3. Increase promotions can generate more
revenue 3. Hurts brand reputation

4. Combating with competitors 4. Already competitors doing this

 RELATED DIVERSIFICATION

• ADVANTAGES • DISADVANTAGES
1. Spreading the risk by way of producing similar 1. High Risk
and/or related goods
2. Expensive
2. company starts producing part of the raw materials
(components) for its main production line, it 3. Time consuming
guarantees better quality, lower prices and regular
supplies;
3. Better usage of opportunities to share technologies,
skills and expertise, common distribution channels,
similar management techniques and adapting
resources
4. when two activities are integrated, the result is
greater than the sum of the results of two
individual activities
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“
STEP 9 - RECOMMENDATION
STRATEGIES
LONG TERM OBJECTIVE
COST
COMPARISON

STEP 10 - IMPLEMENTATION
EXPECTED RATIOS
 How Recommendation Will Time Table Agenda for
S.NO Result
Implement ? Action

By Initiating new production It will take about 4 - 5

1 Sales will strengthen
facility. minimum years to initiate.

Through increasing budget of The new market can capture

2 Forth going year
capital expenditure by 27 billion. for CB 150F and CB 125F.
Age Group Male Female Total % Got Job Number of Targeted males

25–29 5 268 436 5 564 656 10 833 092 7,23 35% 1843952
20–24 6 824 723 6 733 861 13 558 584 9,05 52% 3548855
 EXPECTED RATIOS
PROFITABILITY RATIOS MARGINS
FOR THE YEARS ENDED

YEARS
2019 2018 2017 2016 2015
GROSS PROFIT MARGIN 44.57% 48.20% 52.49% 39.43% 40.68%
OPERATING PROFIT MARGIN 8.12% 7.93% 7.38% 7.10% 6.06%
NET PROFIT MARGIN 6.02% 5.81% 5.46% 5.14% 4.50%
PRETAX PROFIT MARGIN 8.09% 7.89% 7.35% 7.09% 6.05%

2019 2018 2017 2016 2015

GROSS PROFIT 34,532,039 31,103,438 28881654 18049646 18093203
TOTAL REVENUE 77,478,845 64,534,021 55,022,415 45,772,177 44,478,713
OPERATING PROFIT 6,287,571 5,118,595 4,059,709 3,251,828 2,697,454
NET PROFIT 4,663,635 3,752,479 3,001,799 2,350,891 2,001,560
EARNING BEFORE TAXES 6,264,846 5,092,742 4,044,429 3,243,638 2,689,418
 PROFITABILITY RATIOS RETURN

FOR THE YEARS ENDED

YEARS

2018 2017 2016 2015

2019
OPERATING RETURN ON ASSETS
39.51% 39.92% 39.86% 41.21% 37.56%

RETURN ON ASSETS
29.31% 29.27% 29.47% 29.79% 27.87%
RETURN ON EQUITY
58.29% 21.28% 20.37% 18.76% 19.03%

2018 2017 2016 2015

2019
OPERATING INCOME
6,287,571 5,118,595 4,059,709 3,251,828 2,697,454

AVERAGE TOTAL ASSETS

15913670 12821375 10184481 7890837 7182595
NET INCOME
4,663,635 3,752,479 3001799 2350891 2001560
AVERAGE TOTAL EQUITY
8000360 17630890 14739607 12532586 10516817
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“
STEP 11 - ANNUAL
OBJECTIVES
STRATEGIES

STEP 12 - STRATEGY
REVIEW AND
EVALUATION.
 ANNUAL OBJECTIVES and STRATEGIES

1. To maintain leadership in two wheeler industry (forward

integration)
 By removing the third parties, the company has ownership of the
distribution processes thus having a greater control over the flow of
the products.
2. Cater more market by using related diversification
 Using the existing basic competences of the company and
expanding from existing markets into new ones and starting new
lines of production.
3. Maintain or increase the market share of current products (market
penetration)
 This can be achieved by a combination of competitive pricing
strategies, advertising, sales promotion and perhaps more resources
dedicated to personal selling
4. Maintain or increase the market (market development)
 Different pricing policies to attract different customers or create
new market segments

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Strategy Review, Evaluation, and Control

1. Consistency
2. Feasibility
3. Advantage

Measuring Organizational Performance

Compare expected to actual results

Investigate deviations(Change , Abnormality, fluctuation)
from plan
Evaluate individual performance
Examine progress toward stated objectives
Quantitative Criteria for Strategy Evaluation

Strategists use financial ratios to:

Compare a firm’s performance over different time periods
Compare a firm’s performance to competitors’
performance
Compare a firm’s performance to industry averages

Taking Corrective Action

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