Table of Contents

EXECUTIVE SUMMARY: ............................................................................................................. 2

1.0.

Introduction about organization Business sector (Automobile Industry): .......................................... 3 2.0. 2.1. 2.2. 2.4. 2.5. 3.0. 3.1. 3.2. 3.3. 4.0. 4.1. 4.2. 4.3. 5.0. 5.1. 5.2. 5.3. 5.4. 6.0. 6.1. 6.2. 7.0. 8.0. Overview of the Organization: ...................................................................................................... 3 Company: .................................................................................................................................... 3 Company location: ..................................................................................................................... 5 Vision:............................................................................................................................................... 7 Mission: ............................................................................................................................................ 7 Products and services: .............................................................................................................. 7 Products and services description: .......................................................................................... 7 Competitive Comparison: .......................................................................................................... 9 Production and operation staretegy: ..................................................................................... 10 Market Analysis: ........................................................................................................................... 11 Market Segmentation: ............................................................................................................. 11 Customer Type: ........................................................................................................................ 11 The analysis of five forces for motorcycle industry of Pakistan ........................................ 11 Strategy and Implementation: .................................................................................................... 15 COMPETITIVE ADVANTAGE: ............................................................................................... 15 Marketing Strategy: .................................................................................................................. 16 Strategic Alliances:................................................................................................................... 16 MILESTONES ........................................................................................................................... 16 Management: ................................................................................................................................ 19 Organizational Structure: ............................................................................................................ 19 Management strategy: ................................................................................................................. 20 Human Resource startegy: ......................................................................................................... 21 SWOT Analysis: ........................................................................................................................... 21

Bibliography .............................................................................................................................................. 24

1.0.

EXECUTIVE SUMMARY:

Our report focuses on giving an insider view of the organization, its systems its strategies for staying market leader, its workings and also of the customers. It also high lights the differences and the Similarities between the real world and the academic world. How they make analyze their dynamic environment and make strategies appropriate for organization. It also highlights Atlas Honda Limited leads the list of fifty competitors in motorcycle manufacturing industry in Pakistan due to distinctive quality policy. Their corporate vision and values are the driving forces and at present Atlas Group spreads over 11 companies both private and public limited. Atlas Group is a responsible entity which is highly committed to comply with corporate, environmental laws and to conduct their business with socially responsible way. AHL has a manufacturing capacity of 910 units per shift under strict quality standards and their sale network is well spread to sell all of them. They have a 5s dealer network to satisfy the customer to the optimum level. .

Introduction about organization Business sector (Automobile Industry):

Irrespective of rising prices and flood devastation last year the sale of motorcycles continued to show positive trend on the back of huge demand from the rural areas during the first nine months of this fiscal year. Motorcycle assemblers however said that higher incomes due to good crops of wheat, cotton, rice, etc., had encouraged growers to buy new bikes. Figures of Pakistan Automotive Manufacturers Association showed that Japanese bikes maintained good sales. For example, Honda twowheeler posted a rise of 17 per cent to 407,133 units in July-March 2011-12 as compared to 345,955 units in the same period of last fiscal year. (mr, aamir shafaat, 2012) evidence suggests that rural demand for automobiles was higher than anticipated. This was due to continued liquidity in rural areas for reasons as mentioned above. However, the relentless cost increases arising from higher commodity prices, weaker Pak Rupee against other foreign currencies, higher inflationary conditions and frequent interruptions to business caused by power and security concerns, continuously put pressure on the margins and pushed up the manufacturing cost. Considered to be one of the main contributors towards technology development and employment generation, the auto industry necessitates an encouraging environment for maintaining the confidence of the investors Changing models, improving fuel efficiency, cutting costs and enhancing user comfort without compromising quality are the most important challenges of the auto industry in a fast globalizing world. Hence there is a need for exploring the industrial complementarities in the region for better quality, favorable costs, fuel efficiency and attractive designs. (Auto Market , 2012)

2.0.

Overview of the Organization:

2.1.

Company:

Atlas Honda Limited (AHL) is a joint venture between the Atlas Group and Honda Motor Co. Ltd., Japan. The company was created by the merger of Panjdarya Limited and

Atlas Autos Ltd. in 1988. Both these motorcycle manufacturing concerns were established by the Atlas Group. In addition, a third concern, Atlas Epak Ltd. was taken over by the Government of Bangladesh in 1971 after the fall of Dhaka. AHL manufactures and markets Honda motorcycles in collaboration with Honda Motor Company. The Company also manufactures various hi-tech components in-house in collaboration with leading parts manufacturers like Nippon Denso and Toyo Denso. Honda motorcycles are by far the largest selling motorcycles in the country with an unmatched reputation for high quality, reliability and after-sales-service. AHL has undertaken to develop local manufacturing capabilities to the highest, economically feasible level. While a major role in localization has been assigned to vendor industries, Atlas has the countrys largest in-house manufacturing capability at its Karachi and Sheikhupura plants. To support the production facilities, the company has established an R&D wing and tool making facilities through CAD/CAM which are growing rapidly in size and function as the company expands. Atlas has managed to execute 12 Joint Venture/Technical Assistance Agreements between local vendors and foreign manufacturers for transfer of technology. Besides, Atlas has directly executed 9 Joint Venture/Technical Assistance Agreements other than Honda. AHL management is striving to modernize company operations by adapting applicable aspects of research and theory and more specifically, Hondas unique philosophy of hard/soft technologies to the realities of Pakistani conditions. Company management structure, systems and processes are changed according to the demands of the customer, growth and new technology. Efforts are being made to develop participation at all levels of personnel in decision-making and a substantial and effective delegation has been established at levels where applicable. Various participation programs such as Ala Mayar Quality Circles movement, launched in 1985, are strongly encouraged to allow constructive selfexpression and teamwork. The Company training and development programs encourage all members to develop themselves and contribute to their full potential.. A vast and growing network of over 1600 sales service and spare parts dealers has been established. In order to back up this system. Mobile training facilities take the latest know-how, technology and maintenance of motorcycles to major rural and urban centers around the country.

Annual Production Capacity: 600,000 units 1 Billion (rupees) Paid Up Capital: - 625.52 Million (staff, 2013)

Authorized Capital: 1 Billion (rupees)

2.2.

Company location:

Karachi Plant: Company mother plant is based in the city of lights and provincial capital of Sindh, The Karachi city. It is located at F-36, Estate Avenue, S.I.T.E. Karachi. Atlas Group signed technical agreement with Honda in 1963 and plant started commercial production subsequently. Plant spread over an area of 5 acres. In 1964, production began with 7 motorcycles per day. Now plant production has reached to 300 units in a day. Plant manufactures CD 70 only.

(Source: Atlas Honda, Karachi plant)

Sheikhupura Plant: Another plant is situated in Sheikhupura city, Punjab. It is located at 26-27 KM LahoreSheikhupura Road Sheikhupura. The plant was built in 1981 and spread over an area of 27 acres with the establishment of modern and synchronized 500K plant in 2006. The plant manufactures all four models i.e. CD 70, CD 100, CG 125 and CG 125 Deluxe.

(source: Atlas honda.Sheikhupura plant)

Export:

Bangladesh Afghanistan Maldives

2.3.

Regional Offices:

Lahore: 1 Mecloed Road Lahore-54000 [ (042) 111-111-245, 37225015-17,

37233515-17 ] Rawalpindi: 60-Bank Road, Saddar [ (051) 5120494-6, 5120497 ] Multan: Azmat Wasti Road Multan-60000 [ (061) 4540054, 4540028, 4571989 ] Rahim Yar Khan: Atlas Honda Limited, 4-B Zamindara Colony [(068) 5888809 ]

2.4.

Vision:

Market leader in the motorcycle industry, emerging as a globally competitive centre of production and exports.

2.5.

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.

Our slogan: For Honda to remain Honda, and for everyone to realize their aspirations, we must believe in "The Power of Dreams"

3.0.

Products and services:

3.1.

Products and services description:

Currently we have following products to fulfill the needs of market. Honda CD 70 Honda CD 100 Honda CG 125 Honda CG 125 delux

(source:

www.AtlasHonda.com)

Honda CD 70:

Honda CD 70 is the first choice in motorcycles. The New CD 70 gives a perfect blend of Japanese technology along with charismatic design, in addition to its established superiority in terms of durability and fuel economy. Further, 2 years engine warranty not only provides peace of mind to its valuable customers but also the best value for their money.

Honda CD 100 (Pridor)

Honda Motorcycles are defined by Quality, Performance, Speed, Economy Petrol and Re-sale Value. All these have managed to successfully bag your trust on the New Honda CD100. It is a stunning result of advanced Japanese technology and right up there as an outstanding performer representing all the qualities that make Honda motorcycles so special.

Honda CD 125:

Honda Motorcycles are defined by Quality, Performance, Speed, Economy Petrol and Re-sale Value. All these have managed to successfully bag your trust on the New Honda CG125. It is a stunning result of advanced Japanese technology and right up there as an outstanding performer representing all the qualities that make Honda motorcycles so special.

Honda CD 125 delux:

The CG 125 Deluxe is the unique combination of power & style, a new addition in the company as 125 cc. The new power up 4 stroke engine gives same fuel economy as CG 125. An ideal model for youth and high income segment.

product services:

Availability of Spare Parts where they are needed Providing repairing services throughout the country To server our first customers (dealers) Asking the dealer to PDI (Pre Delivery Inspection) Two free checkups are offered to customers Dealing with warranty claims

3.2.

Competitive Comparison:

Honda Motorcycles positioning with respect to its Competitors: Honda Motorcycle has brand competition with Suzuki and Yamaha and also with Chinese Motorcycles.

Competitors:

Major competitors of the organization: Market always creates competition because there is no restriction for any one, everyone try to compete other. AHL competitors are:

Dawood Yamaha Motor Company. Sehgal & company.

Suzuki Motorcycle. Sohrab Motorcycle.

Chinese Brands: Ravi, Sthalco, Super Power, Metro, Super Star, Habib, Pak Hero, Super Asia, New Asia etc.

3.3.

Production and operation staretegy:

Six key principles of ATLAS HONDA operations Back to basics: The analysis of customer, competition, company, and cost is put in focus at the start of each endeavor. 3Rs (Respect, Recognition, and Reward): To b a great company, we need to put respect, recognition, and reward-and in that order-at the core of our management practices. Cash is king: The company is cash rich, we will have the resources to beat the competition. we must re-assess and re-vitalize the focus on generating and preserving cash. Analysis, analysis and analysis: The decision making procedure be supported by a combination of data analysis backed by genba on the spot analysis. Customer first: The endeavor of our company need to be that we understand the company more deeply and create market or financial solutions for him to buy his dreams product-our product 650 k is must in 2012: It is our goal to to sell a minimum of 650k in 2011. For this we must use revolutionary path instead of evolutionary in everything we do.

4.0.

Market Analysis:

4.1.

Market Segmentation:

Middle Middle Class Middle Lower Class 4.2. Usage Rate Purchasing Procedure Customer Type: First time & Straight Re-buy High Medium On cash/Credit

Buying Situation

4.3.

The analysis of five forces for motorcycle industry of Pakistan

Background of industry

The motorcycle industry faces the tremendous growth in past year. Pakistan stands at number 7 in top manufacturers of motorcycles by producing 751,000 units about 2% of worlds total production. In Pakistan motorcycle assembly started 1964 by Atlas group and Honda motor company. Currently with Honda there are other Japanese brands (Suzuki, Yamaha) as well as Chinese brands (pak hero, ravi, eagle). Chinese brand enter in industry in late 1990 after the tremendous success of 70cc of atlas Honda. PAMA Pakistan automotive manufacture association which includes majors players of industry atlas Honda, Suzuki, and Yamaha and others. The entry of the Non-PAMA OEMs with a competitive price difference of approximately 25% (Rs.52,000 Vs. Rs.68,000 for the Honda 70CC in 1999) and continuous price reductions (2006 price for average Non-PAMA OEM 70CC clone is Rs.40,000 Vs. Rs.54,000 for a Honda 70CC). This has seen the total motorcycle market increase from 120,627 in 2001 02 to 751,667 in 2005 06. (competitive support fund, 2006) And this goes continue till 2011 with leading seller Honda 70cc price 65500.

Potential of new entrants: High growth in tough economic conditions in Pakistan encourages the new investors in this industry as well as existing players are investing more for expansion. Significant increase in production volume and transfer or increase in technology remains low. Yamaha to invest $15 million in motorcycle industry. Yamaha Japan has proposed to invest $15 million for the manufacture and sale of motorcycles of advanced functions, high quality and sophisticated designs in the 125cc and 150cc categories in Pakistan. (the dawn newspaper, Saturday, March 27, 2012).

This industry is going toward maturity so creating a barrier. So to compete new entrant should have economies of scale and low cost production which is another barrier. The new entrants should be aware of buying power of customers, energy crisis, raw material resources and competition from existing strong players like atlas group. Buying power reduces due to inflation and other reason but demand of motorcycles increases because of high prices of fuels .so people switching from cars to motorbikes.

Suppliers power

Suppliers in this industry posses low power. Large number of suppliers are there for small number of bike manufactures. many suppliers depend on a particular manufacturer for a large part of their revenue like ATLAS Honda develops their own suppliers who are dependent on ATLAS Honda for their business. thus, the manufacturers' bargaining power is high and suppliers usually try to accommodate the manufacturer's wishes. Labors their bargaining power varies according to the position they hold within the company assembly line worker vs. high-tech engineer (knowledge and innovativeness key resources)

Threat of Substitutes

Its low in Pakistan. At present, train, planes, public transport, walking, cycling, roller skating, etc. can be considered substitutes. Willingness to substitute largely depends on two factors: convenience distance (different substitutes for different distances, e.g.

Roller skates vs. Planes). time other factors: passengers, luggage, cost the higher the cost of buying and also operating (!) an automobile, the higher the likelihood that people will look for substitutes thus, the cost of complementary products, in particular petrol has a considerable influence on people's willingness to substitute.

Intensity of Rivalry among Competitors

Ita very high in this industry. Its quite Mature Industry which includes Increasing one's market share only possible by taking away someone else's. Economic crisis increase the pressure for consolidation of industry. It can be results in decrease in profitability even further consolidation to be expected. Its has competition both on price and nonprice dimensions. So having low costs is not enough by itself and brand image is not enough by itself either to compete successfully. There should be combination of both. So to win over customers, manufacturers started offering value-added services e.g. Easy low-interest finance options, extended warranties etc. but these decreases profit margins further rising oil price effect on competitors. Players started finding new markets like ATLAS Honda exporting bike to Afghanistan, Bangladesh, and srilanka.

Power of Buyers

Power of buyers is relatively low because of High in numbers. But their collective power is high, therefore big consumer trends e.g desire for more energy efficiency have considerable influence over manufacturers. A special power in this industry in these days is Low switching costs because of entry of Chinese bikes. Buyers of a larger volume can have a considerable influence on product development and design e,g Police, fire brigades, military. (staff, 2012)

5.0.

Strategy and Implementation:

5.1.

COMPETITIVE ADVANTAGE:

Atlas Hondas in-house technology with collaboration of Honda motor co, Japan, excellent network of vendors, QUALITY, dealership network with 5s facilitation, and culture are their competitive edge in terms of administration, operational, human resource. Marketing perspectives

5.2.

Marketing Strategy:

Quality product with resale value Multiple Segment Strategy Push strategy (as they force there dealers to keep specific models)

5.3.

Strategic Alliances:

Engineering development board: Its facilitates imports and less import duty by fulfilling the SRO (statutory regulatory ordinance.) and took facility of less duty.

PSQCA: It controls quality. And standardize it. If any product meets its standards it gives a certificate for production. And this certificate is required to be renewing after a specific time period.

PAMA (Pakistan automotive manufacture association): All the government affairs are handled through PAMA. E.g. cost, taxes etc.

Valuation: Helps to stop misuse of law. E.g. other motor cycle manufacturers imports parts from china and say them to paste less price tag and take original price from us to save themselves from taxes. So it was suggested that tax should be on value or import item not on price. Valuation of parts are done and duty will be according to their assigned value.

5.4.

MILESTONES

2012: launched new CD 100 pridor

2011: manufacturing expansion 2010: II 2010: SAFA Award for Best Corporate governance Launched New Model of CG 125 Deluxe - Euro

disclosures in annual report 2008 2010: Best Corporate report award by Joint Committee of ICAP & ICMAP 2009: HRM Excellence Award 2009 2009: National CSR Award 2009 2009: Launched New Model of CD 100 - Euro II 2009: ISO 14001-2004 Environment Certificate acquisition 2008: Established DCC (Delivery Control Center) at Karachi Plant 2007: Successfully implemented SAP ERP to its business process, all over Pakistan 2006: Top 25 company award by KSE 2006 Established DCC at Sheikhupura Plant 2006: Annual Production reached to 360,000 2004: Top 25 company award by KSE 2003: Best Corporate Report award by joint committee of ICAP & ICMAP 2002: Deletion level reached to 87% and 80% for CD70 & CG125 respectively 2002: Establishment of Research and Development Wing 2002 Introduction of Gratuity 2002: Best Corporate Report award by joint committee of ICAP & ICMAP 2001: Concept of 5S dealership - Sales, Service, Spare Parts, Second hand exchange and . 2000: Investment in Crankshaft Project 1999: ISO 9002 certification for both factories 1995: Export Agreement signed with Honda Motor Company Limited Japan 1995: Limited, 1992: 1991: 1989: 1988: Exports to Bangladesh 1994 Mr. Kawamoto President, Honda Motor Company . visited AHL . Special (Credit) sales launched

Change of name to Atlas Honda Limited (AHL Inauguration of CG125 Engine Project at Sheikhupura Factory Export of built up motorcycles to Nepal Merger of Panjdarya Limited into Atlas Autos Limited

1988: 1988: 1987: 1981: 1981:

Production capacity expansion III Joint Venture agreement signed with Honda Motor Company Limited Inauguration of CD70 Engine Project at Karachi Factory Commercial Production started at Panjdarya Limited Production capacity expansion II

1979: Incorporation of Panjdarya Limited as Joint Venture with Honda Motor Company . 1976: 1965: 1964: 1962: . 1962: Limited Production capacity expansion I Public offering of Shares Commercial Production started Technical Assistance Agreement signed with Honda Motor Company Limited . Japan Incorporation of Atlas Autos Limited

6.0.

Management: 6.1. Organizational Structure:

C.E.O

Marketing

I.T

Engineering

Production

Finance

Logistics

H.R

Sales

V. P Human Resources

S. Parts

Local Purchase Industrial Relation

Services

F. G. D

Paint I. Sales V. I .P

Frame Assembly DD & CC Out Source process Welding

No doubt AHLs organizational structure is working properly; all decisions are made by top management which gives instructions to Middle managerial staff, its middle management responsibility to implements these orders. Company also gets feedback from their employees mean the feedback also transfer from lower to top management. A flat organizational structure exist in Atlas Honda Limited as in contrast to a tall organisation, a flat organisation will have relatively few layers or just 3 to four layers of management. This means that the Chain of Command from top to bottom is short and the span of control is wide. Due to the small number of management layers. It has greater communication between management and workers, with a better team spirit and less bureaucracy and easier decision making,

Management Team 6.2. Management strategy:

To dedicate to supplying product of the `highest quality for customer satisfaction. Honda remains its rich culture of customer satisfaction, it being serving nation. For management we have following our management strategy. Proceed always with ambition and youthfulness. Respect sound theory, develop fresh ideas, and make the most effective use of time. Enjoy your work and encourage open communications. Strive constantly for a harmonious flow of work. Be ever mindful of the value of research and endeavor. Respect for all man has priority over others.

MANGEMENT LIFE CYCLE

PLANNING

CONTROLLING

ORGANIZING

LEADING

7.0.

Human Resource startegy:

HR Department is the most impartment department in any type of organization. It depicts the outer look as well as inner look to the market about the company operations and image. HR Department in Atlas Honda Ltd is increasingly invited to participate in strategic planning and organizational goal setting. It has also becomes involved in personal and career development (to prevent stagnation and to develop talent), in interpersonal relations (to assure teamwork and accurate communication), in attending to associates needs (to demonstrate the organizations concern for them), and in associate participation in work life (to help associates perform at their full capacity).

Objectives: Meeting Organizational Goals Developing Future Managers

Major Functions: Human Resource Planning Forecasting Human Resource Needs by keeping touch the concerned departments Competitive Influences Retaining Employees Attracting Employees Labor Relations Influences

8.0.

SWOT Analysis:

8.1.

Strength:

Organizational culture. Good Corporate Image.

 Qualified and well trained staff High Quality Products Resale value Motivated, loyal and skilled employees. Experienced, developed and loyal service dealers network.

8.2.

Weakness:

Lack of excellent marketing. Electric shortfall High Price of Products

8.3.

Opportunities:

Exploration of new markets.eg. srilanka, Africa. and other countries. Stabilize the improve process of export to Afghanistan, srilanka, and Bangladesh to capture more market share. Create loyal customer by various customer oriented activities/ services. Improvement of relationship with dealers. Newly developed Areas/Markets (e.g. Gawader)

8.4.

Threats: Competitors follow up to AHLs dealers and offering various incentives. Chinese cheaper products challenges Strong competition from competitors in near future Instability of Government Energy crisis High rate of Taxation

Strategy conclusion:

Atlas Honda ltd gains its competitive advantage over time which starts after collaboration with Honda Motor Company Japan. A consistent growth and localization of technology from Japan to Pakistan was a breakthrough for competitive advantage. So technology and quality become immutable competitive advantages. So strategically they are using this advantage in quite a good and responsible way.

Beside of technology they start working on local vendors for the supplies which was imported from Japan or other countries. So they start developing their own vendors locally, this strategy worked very well and now majority of things which was priorly imported can get localy and cheaply.

Chinese bike assemblers import parts by misusing law as discussed in strategic collaboration. Atlas Honda makes authorities to put tax and duties right. So to retaliate competitors.

Next strategic move was when they saw that Pakistan market is going to saturate and they are market leader they got the maximum market share then they start developing new markets. Started exports to afganistan which have great potential if they stabilize politically. And to other countries like Bangladesh and Maldives.

Atlas Honda got an excellent network of dealers to put their products available to every region of Pakistan which is lack by competitors.

Bibliography:

Auto Market . (2012). retrieved from automarket. Retrieved from www.automarket.com) competitive support fund. (2006, december 12). policy Analysis on the competitive advantage of motorcycle industry of pakistan;problrm and prospects. mr, aamir shafaat. (2012). market demand of automobiles. the DAWN . staff. (2012, 9). www.paperscamp.cpm. Retrieved from www.paperscamp.cpm. staff, A. H. (2013). www.atlashonda.com. Retrieved from ATLAS HONDA. (Saturday, March 27, 2012). the dawn newspaper.