The Impact of International Joint Venture on Local Economy: A Case Study of Hero Honda

The Impact of International Joint Venture on Local Economy: A Case Study of Hero Honda

  • Case

The Indian two-wheeler industry has undergone a long journey since its humble beginning in the late 1940s. During these eventful years, it has experienced great advancements in technology, tremendous increments in production volume and opening up of the market for global trade. India has now emerged as a global leader in two-wheeler production and trade. A key factor behind the creditable progress of this industry has been the operation of several international joint ventures (IJVs) such as Kawasaki Bajaj, TVS Suzuki, Kinetic Honda and Hero Honda. Of all IJVs, the partnership between Hero and Honda has been the longest and perhaps the most remarkable too. This article gives a brief overview of the Indian two-wheeler industry and presents a glimpse of the IJVs therein. It analyzes the impact of Hero Honda case, in detail, to showcase how a local manufacturer can team up with a global player and still achieve a synergy between their core competencies for enhancing efficiency, productivity and quality. The article narrates the transition from interfirm competition to cooperation and aims at finding out how management innovations by both the partners can help reduce conflicts of interest, avoid cannibalization of the products of individual firms and derive mutual benefits by aligning their individual targets to a common goal of market success.

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