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Case Study Of Hero Motocorp

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Title: Group End Term Assignment
Subject: Consumers, Firms and Markets
Batch: 2017-19 Section: G Group No: 3
Total words in the assignment: 843 Total pages: 6
Group Members:
Sr.no Name Roll No.
1 Akash Basa 2017232011
2 Aman Srivastava 2017232015
3 Anindhya Sharma 2017232023
4 Anuankit Panda 2017232028
5 Chitwan Singh 2017232039
6 Tejas Bhosale 2017231103
Submitted to: Dr. Veena K. Pailwar
Date of Submission: 12/09/2017

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NEWS ARTICLE:
“The country’s largest two-wheeler manufacturer Hero Motocorp has surpassed cumulative sales of erstwhile joint venture Hero Honda within six years of commencing its solo journey in
August 2011.
Hero Motocorp sold a total of 38.9 million units till the end of July 2017, thereby overtaking cumulative sales …show more content…

Splendor, which with sales of 2,550,830 units contributed nearly 40% to overall sales of the company last fiscal.”
FIGURE 1:
Source: Economic Times, 10/07/2017.
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TABLE 1:
Terms used in table below: OEM: Original equipment manufacturer, CY2016: Calendar year
2016 sales
Source: http://auto.economictimes.indiatimes.com/news/two-wheelers/scooters-mopeds/top-10- two-wheeler-manufacturers-in-2016/56491780 Analysis using CFM Concepts:
TABLE 2: Conversion of Figure 1 data into table using the concepts of Production analysis:
(*) Note 1: Employee data taken from Annual reports of Hero Motocorp Note 2: For short run analysis assuming Capital (K), for the firm, is constant.
Average product of labor (APL): It is measure of output (i.e. no. of units of Hero Motocorp bikes sold) produced per unit of input (i.e. no.of employees)
Marginal product of labor (MPL): It is change in total output (i.e. change in quantity of units of Hero Motocorp bikes sold) divided by the change in labor
Year No. of units sold
(Q)
Employee*
(L)
APL
(Q/L)
MPL
(Change in Q/ change in L)
Production
Elasticity
(MPL/APL)
2012-13 5912538 5800 1019.403103 0 …show more content…

 Concentration ratios show the extent of market control of the largest firms in the industry and to illustrate the degree to which an industry is oligopolistic.
 The fraction of total industry sales generated by the four largest firms in the industry is called four-firm concentration ratio
 From table 2, we derive that the four largest firms (C4) in the industry i.e. Hero, HMSI,
TVS Motors and Bajaj Auto account for 89.61% of total industry output.
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 Market structure : It refers to factors that affect managerial decisions, including the number of firms competing in a market, the relative size of firms, technological and cost considerations, demand conditions, and the ease with which firms can enter or exit the industry.
 The companies mentioned in table 2 operate in Oligopolistic market, wherein few large firms tend to dominate the market.
 Hero captures maximum percentage of market area with a market share of 37.20%
References:
 News article from Economic times, dated 10th August 2017
 http://auto.economictimes.indiatimes.com/news/two-wheelers/scooters-mopeds/top-10- two-wheeler-manufacturers-in-2016/56491780 

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