Evaluation of the history of the Hero Group

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We look over our shoulders, we see the past. We use it to make a better present and a beautiful tomorrow, as tomorrow isnt just another day, its 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 Services.

The vision

"All, 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, they maintain the highest standards of ethics and socieal responsibilities, constantly innovate products and processes, and develop teams that keep the momentum going to take the group to excellence in everything they do."

The mission statement

"All his 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, they maintain the highest standards of ethics and social responsebilities. 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. They 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. DayanandMunjal and late Mr. Raman Kant Munjal. Mr Brij mohan Lall Munjal, Chairman & MD - THE HERO GROUP.

The HERO group

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 they 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 world wide recognition. The growth of the Group through the years has been influenced by the number off actors:

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.


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






















Dr.Brijmohan Lall Munjal, patriarch of the US$ 3.19 billion Hero Group was born in 1923, in what is now Pakistan. After partition, the Munjal brothers started a small business of manufacturing bicycle components in Ludhiana in North India in the face of the bottlenecks15of industrial infrastructure and investments. Dr Lall led a small time manufacturer of 60 cycles a day to become a manufacturing giant, which churns out not only over 17,000 cycles per day but is also diversified into various domains. Undoubtedly, Dr.Lall is a first generation business entrepreneur of the 1950s'.

Dr.Lall has enriched the Hero Group with his vision of sound business governance and value driven management practices His foresight has made the Hero Group a leader in its business. Dr Brij mohan Lall is a role model for Indian Industry in corporate governance and ethical and value-driven management practices. His principle-based leadership has led the Group companies to receive the best industrial governance and safety awards and acquire stringent value certifications.

Dr.Lall was amongst the first Indian industrialists to effectively implement backward integration and he is acknowledged as the trend setter in the area.

Apart from the promotion of the Indian industry, he is the actively involved in many national associations such as CII, SIAM, ASSOCHAM and PHD and is a member of the Regional Board of the Reserve Bank of India. He is Honorary Fellow of the Indian Institute of Industrial Engineering.

Dr.Lall has received various accolades and awards for his immense

contribution to the Indian industry. He was adjudged Businessman

of the Year in 1994 by a leading business magazine - Business India.

In 1995, Dr.Lall received the National Award for outstanding contribution to the Development of Indian Small Scale Industry. (NSIC award - presented by the President of India)

In 1999, the Business Baron recognized him as the "Most Admired


The PHD Chamber of Commerce and Industry presented him with the Distinguished Entrepreneurship Award in 1997, in recognition of his outstanding exemplary entrepreneurship.

Xavier Labour Relations Institute (XLRI), a premier institution has conferred on him the honor of Sir Jehangir Ghandy Medal for Industrial Peace in 2000.

Ernst and Young has recognized him as the "Entrepreneur of the year 2001."

All India Management Association conferred him with the Lifetime

Achievement award for "Managment"(2003) Banaras Hindu University, Varanasi one of the most prestigious.

Universities of India conferred him with a Doctrate; degree of "Doctors of letters" Honoris Causa in October 2004.

The Government Of India honoured him with the prestigious "Padma Bhushan"in March 2005 for his contribution to Trade and Industry.


Hero success saga contains the element of courage, great, determination enterprises and preservation coupled with vision and meticoulas planning.


Hero cycles ltd. is established.


Rockman cycle industries ltd. established which is today the largest manufacturer of cycle chain &hub in the world.


Bicycles export take off from INDIA. A faray into international maket.


Highway cycle was set up.it is today the largest manufacturer of single speed & multi-speed free wheels in the country.


Hero cycle Ltd. Became the largest manufacturer of bicycles in india.


Majestic auto limted was formed and Hero majestic moped was introduced.


Munjal casting established.


Hero Honda motors limted established with joint ventures with Honda motors, japan to manufactures motorcycles. It is now the world largest producer of two wheeler.


Munjal showa Ltd. established to manufacture shock absorber and struts and it is one of the largest shock absorver company in this country.100 cc hero Honda motor cycles was launched which later on in 1988 which become no1 in motor cycles in India.


Hero Cycles Limited entered the Guinness Books of World Records as the Largest bicycle manufacturer in the world.


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

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.


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


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


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


Hero Cycles introduces Impact, the first citibike in India.

Munjal Showa Ltd. received national safety award.


Hero Exports was established as International Trading Division for group & non-group products.


- Hero Corporate Services Ltd. was established.

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


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

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


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


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.


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


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

Fastener World established.


Easy Bills Limited established to offer utility bill collection and retail services.


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

Super Starter Series Launched by Hero Cycles Limited.

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


Hero Retail Insurance Business established.

Super Smart Series introduced by Hero Cycles Limited.


Hero ITES strengthens its relationship with ACS, USA USD 5 BILLION-market cap and fortune 500 companies.


Hero Honda crosses a unit sales threshold of 3 MILLION motorcycles.


Hero Honda enters the scooters segment, launches 100 cc "pleasure".


Hero group celebrates GOLDEN JUBILLEE YEAR since inception. It was commemorated by sales of over 15 million motorcycles & over 100 million bicycles.


Hero group has made 13 models of e-bikes.


By Definition, a Super brand offers consumers significant emotional and physical advantages over its competitors, which consciously or subconsciously consumers want, recognize and are willing to pay a premium for. A Super brand cannot be substituted. It

is part of our life. It has become one with us.

In the morning, we want a familiar flavour of tea, brush with a familiar toothbrush, using a familiar taste of toothpaste. The soap we use has a familiar smell.

The shaving cream and the shaving razor are familiar and so is the tang of the aftershave. And so through the day, we reach out for familiars. In a departmental store, we go to familiar sections and shop familiar brands. When a new one appears in the racks, we stop and look at it suspiciously. Often, we postpone the decision to try a new for another day, another time. When a brand embeds itself into our lives and we are willing to go to next shop, to look for it, we are longer looking for a brand. We are searching for a Super brand.

What makes a Super brand? Own the years; the Indian market place has been witness to the emergence of a wide variety of Super brands. Many have followed the 'Standard rules' of becoming a Super brand: great product energy to exploit the market, relevance to consumer needs of wants, edge in business technology, superb distribution and superbly chain and consistent quality. It is a leap from branding to brand leadership.

Considered as "Oscars of Branding", in 25 countries of the world, the Super Brands in India were bought by the finest marketing guru of all times Late Shunu Sen and the unbiased rating agency 'Super Brands India' is now headed by advertising in India - Mr. Dilip Sehgal, Mr. KMS Ahluwalia, Mr. Mike Khanna, Mr. Nabankur Gupta, Mr. Piyush Pandey, Mr. Raghav Bahl, Mr. Sunil k Alagh, Mrs. Tara Sinha and Mr. Yogi C Deveshwar, besides others.

Globally, a select few, exceptionally powerful brands, are recognized as Super Brands. Some of the Indian brands have made it into this unique hall of fame, and amongst that coveted group features Hero Cycles. Super Brands are actually the big ideas, which 23 provoke us to explore the realms of our dreams and inspire us to live satisfying life styles. Anchored in omnipotent consumer insights, the super brands go beyond mere functional promises as they trigger deeply embedded emotional chords.

Hero Cycles has been one of the most progressive and dynamic brands for the decades now. More than 3200 dealers, 4800 employees and more than 9.6 crore satisfied customers, have directly or indirectly, endeavored tirelessly to make Hero Cycles a phenomenal success and are the true guardians of this brand.

Ambitions, belief, empathy and a strong culture of sensitivity are at the heart of Hero Cycles brand. Each of these values is reflected in the company's products, its communication and its dealings with suppliers, employees, dealers and customers. Be it company's environment friendly manufacturing processes or the brand initiatives for the lower income customers, leadership is all about capturing the hearts & minds of the people- the way a true Hero always does.


1. Specific areas in which R&D carried out by the company: -Increasing competition in the market place has brought into sharp focus importance of differentiation. Ourin-house Research & Development Centre, which is recognized by DSIR Govt. of India, plays a pivotal role in launch of innovative product models on continuous basis. Our product models excel in meeting expectations from extremely demanding customers of today's modern era.

2. Benefits derived as a result of the above R & D activities: -This brought the concept of high quality low cost/fancy bicycles.

3. Future plan of action: - Though the domestic market for standard bicycles is shrinking since last three years but the fancy segment has shown a significant upsurge in the demand. Moreover India has a very small share of Global Market. The up graduation of technology through in-house research will assist the company in design development to capture the vast untapped market potential.

Technology Absorption, Adaptation and Innovation

(i) The company is upgrading technology absorption and innovation to enhance its range of product both in domestic and export. Some of new designs developed through in house research and registered under Design Act with Controller General of Patents Design and Trade Marks are Anaconda, wizard, crusader, DTB, Miss India, Twinkle (Brat) and Tech Team.

(ii) While in Indian market it is directed towards introducing products at lower cost e.g. Wonder Years and Brat series to the benefit of masses or high-end technology products like Street Racer, Fusion, Yiking Hero and Miss India Series (for the ladies) which completes the total product range.

(iii) The company has not imported any technology in the last 5 years. However, it has entered into a technical assistance agreement with national Bicycle Industrial Co. Ltd. Kashiwara City, Osaka, Japan in 2002 for upgrading its technology.


During the year 2006-07 the economy has shown further improvements and the GDP has also increased. Your directors are pleased to inform you that despite the volatility in the prices of main inputs i.e. steel and nickel your company has increased its production by 5.47% vis a vis previous year by introducing new era light alloy bicycles and powered cycles as well as bikes with a sincere focus on students.

Industry producing the rolling steel strips can be broadly classified into two categories i.e. narrow (400mm) and wide (1650mm). Your company comes under mid segment with a capacity to produce up to 800mm wide strips. The industry is further classified into Stand Alone manufacturer and Integrated manufacturer. Though the Stand Alone manufacturer are putting up a stiff competition , your directors are hopeful that company's C.R.Division will do well by putting emphasis on special grades, narrow and thinner strips with short delivery period and fast customization.


Born out of Passion

The ore goes into fire only to shed off its impurities. Similar is the man whose virtues shine when he is tried by the fire of life. Taking upon 'Novelty' itself as a competitor, the Hero Cycles, has been always striving for perfection and innovation in every aspect of their dealings. The pursuit to innovate is endless at Hero, so much so that

'innovation' has become a buzz word in Hero premises. Hero Cycles has been able to use changes and new trends to its advantage by identifying emerging need gaps and expanding its product portfolio to appeal to different kinds of customers. In its endeavour to keep a step-ahead of times, Hero's most advanced & modern R & D department continuously creates innovative products having functional attributes & aesthetics, meeting the aspirational needs of its proud customers around the globe. As a result, Hero Cycles was able to launch several new concepts and models in bicycles like the Mountain Bikes, Racer Bikes, Dirt Terrain Bikes & D-frame bikes besides creating a variety of cycles for different user segments and sub-segments - including women and children, students, adventure seekers, labourers, city customers and fitness conscious.

Rolling out nineteen new models in just one year, itself speaks volume for Hero's emphasis on innovations & designs.


Until 1986, the company had no need for mass communication. But as competition started growing, Hero Cycles begun to feel the need for creating lasting impression on the customer's mind. In the mid 1980s Hero was perceived to be the manufacturer of the basic black bicycles. The company required an image change. It needed to communicate to customers the vast portfolio of products that it had, particularly in the recreational segment. The launch of innovative products and their use as image builders happened simultaneously. Since 1986, the communication strategy has been to build each product separately and create a unique positioning for them. In this way the Ranger was positioned as the bike for outdoor fun, Impact was the preferred choice among city riders and Jet was projected as the lightest running roadster while Hawk was the racer's edge. Each of these launches and their promotion, gave the Hero brand a new meaning. The brand has also used celebraties - including film stars Sanjay Dutt, Rani Mukherjee, Hrithik Roshan and Ameesha Patel. The latest is India's new bowling sensation, Irfan Pathan who has also been a real life Hero cycle user.


The Hero Cycles Ltd. Manufactures cycles, rims , free wheels ,hubs & chains and cold rolled strips as a main product. Company has long portfolio of different range of cycles. Company has 132models in the list , covers all the three section-gents, ladies and kids. It also manufactures cycles parts for its own requirements. After fulfilling the requirements of company ,it can export its remaining quantity.


i) Cycles

ii) Rims

iii) Free wheels

iv) Hubs and Chains

v) Cold Rolled strips

vi) E-Bikes





· TI










Ball and Brown (1968) were the first to highlight the relationship between stock prices and information disclosed in the financial statements. Empirical research on the value relevance has its roots in the theoretical framework on equity valuation models. Ohlson(1995) depicted in his work that the value of a firm can be expressed as a linear function of book value, earnings and other value relevant information. Financial statement lending is rarely used for small business lending as it looks at the audited financial statement of companies that have an access to public credit market. In contrast, relationship lending, is based on "soft" information about the potential borrower. In other words, banks rely on the subjective information about a borrower that they received out of the lasting relationships rather than on financial condition of the borrowers. Another indication of relationship lending as reported by Cavalluzzo, Cavalluzzo, and Wolken (2001) is that 84 percent of the loans received by small businesses came from lending institutions located in the same city. The median distance between the firm and the lender was just three miles. Allen Berger (1999) defines three conditions that should be met for relationship based

finance to occur. First, information other than data from financial statements, collateral and other public resources is collected. Second, the information is collected via continuous communication between the lender and the small business, the customers of the small business, and local community. Third, the information is confidential and can be used only for making further lending decisions.



1.Good brand equity….

2.High quality standerd

3.High production capacity

4.Own research & development centre


1.The composition of current assets is not good.

2.Inventory control is not proper.

3.Non up gradation of foreign technology.

4.Advertisement of the product are not done regularly.

1.Export of cycles from india have high growth potential..

2.government is also helping in promoting their business as its R&d.


1.Export of cycle from india have high growth potential.

2.government is also helping in promoting their business as its R&D development centre is being recognized by government.

3.HCL has a became a genric name for cycle.. so company has great opportunities in such markets.

4.company can secure more share in international market.


1.Smaller player in the market are using Hero's prices as a shield to push their products at lower prices.

2.growing competition in unorganized sector,which are able to rice their product cheaper because of low overheads.

3.increase in steal prices.


1. To analyze the liquidity position of the firm.

2. To analyze the solvency position of the firm.

3. To study and analyze the overall profitability of the firm.

4. To study and analyze the changes in working capital and fund flow position.

5. To relate the various items of profit and loss account with sales.

6. To compare the assets and liabilities of the current year and previous year.

7. To study the and analyze the capital structure of the firm.

8. To determine the efficiency with which the current assets are managed.


1. The Company is enjoying a good current position. It should take steps to further improve its position by repositioning the composition of current assets as large amount has been block in debtors and inventories.

2. Large amounts of funds are blocked in debtors. Company should reduce its debtors so that the blocked amount is properly utilized.

3. Inventory control is not proper. The Company has not defined the minimum and the maximum stock level scientifically. Therefore there is blockage of funds.

Moreover, the safety stock level is also not defined. So the company should apply the proper Inventory Control System so that there is no wastage of funds.