SPLIT OF HERO HONDA.pptx

In this ppt, there are all the genuine reasons for splitting of HERO HONDA joint venture.

1. UNIVERSITY OF JAMMU NAME : DHEERAJ SINGH ANDOTRA ROLL NO. : 0002MBIB21 SUB. TITTLE : INTERNATIONAL HUMAN RESOURSE MANAGMENT SUB. CODE : PSIBTC213 SUBMITTED TO : Mrs. Isha Sharma

2. MERGERS & ACQUISITIONS

3. MERGERS Merger refers to consolidation of two or more companies to form an all-new entity with a new name. Merger arises the companies in uniting their strengths, resources and weaknesses. Merger leads to a reduction in trade barriers and competition. TYPES OF MERGER Horizontal Vertical Congeneric Conglomerate

4. ACQUISITION Acquisition is the purchase of an entity by another entity. This can be done either by acquiring ownership over 51% of its share capital or by taking over the assets of the company. The acquiring company is more influential in terms of structure, operations and size as compare to target company. TYPES OF ACQUISITION Hostile Friendly Buyout

5. ISSUES IN INTERNATIONAL HRM Cultural differences. Environmental differences. Managing international assignments. Language and Communication. Selecting the right person for foreign assignments.

6. Hero MotoCorp Hero MotoCorp Limited , formerly  Hero Honda , is an Indian  multinational   motorcycle  and  scooter  manufacturer headquartered in  New Delhi . The company is one of the largest two-wheeler manufacturers in the world as well as in India. Type : Public Founder : Brij Mohan Lall Munjal Headquarters : New Delhi, India Founded : 19 January, 1984 Revenue : 31,517 Crore (US $4.1billion) Products : Motorcycles & Scooters

7. Honda Motorcycle and Scooters India Honda Motorcycle and Scooter India, Private Limited (HMSI)  is the wholly owned Indian subsidiary of  Honda Motor Company, Limited ,  Japan . Founded in 1999, it was the fourth Honda automotive venture in India. Type : Private Founder : Atsushi Ogata, President and CEO Headquarters : Gurgaon, Haryana, India Founded : 20 August, 1999 Products : Motorcycles & Scooters

8. SPLIT OF HERO HONDA Munjal brothers started their flagship company named the Hero Cycles Ltd. They established a joint venture between the Hero Group and Honda Motor Company in 1984, as the  Hero Honda Motors Ltd. at Dharuhera, India . Honda Motor Company was the world’s largest manufacturer of two-wheelers. Both the companies owned  26% stake  in the company respectively. During the 1980s Hero-Honda Motor Company brought the concept of two-wheeler motorcycles in India. Their motorcycles were popular in the Indian market because of their fuel economy and low cost.  By 2010, Hero Honda Motor Company was regarded as the world’s largest manufacturer of two-wheelers .

9. REASONS FOR THE SPLIT OF HERO-HONDA Conflict in Exports Both the companies went into a joint venture with an agreement that it was only for domestic production and consumption. As Hero Honda Motor Company was one of the largest manufacturers of two-wheelers, it wanted to expand itself by exporting to other countries. Subsequently, the agreement was modified and allowed the exports to a few countries like Nepal, Bangladesh, Sri Lanka and Columbia. Now, Honda had its subsidiary companies in many countries.  The issues arose when Hero Honda came up with exporting its motorbikes to other countries in 2008, where Honda already had its subsidiaries.  Honda made a opinion that Hero Honda will have to compete on its own in the other countries because Honda could not influence its subsidiaries to import their JV’s products.

10. 2. Conflict of Interests It was basically related to the  Board Representation . The four members of the board included two executive directors who were the heads of Honda in India and Bangkok, and two other members nominated by Honda, which made the Honda Group have access to all their plans and strategies while Hero Honda did not have access to any of Honda’s plans. 3. Conflict in Visions When the joint venture was started in 1984, it was a totally different world then, and in 2010,  the visions of both the companies, Hero Honda and Honda begged to differ  form  each other . Hero Honda wanted to expand its business and scale it up by entering into the next growth phase by focusing on manufacturing its own products. So, it needed to invest in its own Research & development for which they had to get approval from the head office in Japan, with which Honda was not comfortable.

11. 4. Conflict in Competition Honda Motorcycles and Scooters India Pvt. Ltd. (HMSIPL) a 100% subsidiary company of Honda, entered India in 1999 which mandated the company to take a No Objection Certificate (NOC) from its existing JV partner, Hero Honda. The NOC was given, on a clause that Honda will not make products that would compete directly with its partner.

12. THANKS