Strategy is thinking about a choice and choosing to stick with your

thinking.
You cannot be everything to everyone. If you decide to go north, you
cannot go south at the same time.
Jeroen De Flander

Scope of the Project

The study aims at analyzing the competitive strategy of Micromax in India. When Micromax launched its mobile handset business in India,
there was no dearth of handset manufacturers in India or in the world alike. But Micromax used excellent distribution, marketing and pricing
strategy to get into the already saturated handset market in India.
We will focus our study on these strategies of Micromax which gives it a competitive edge over other existing mobile handset companies. Since
Micromax has many firsts to its name, we will analyze how Micromax is able to offer its customers the innovative features in its smartphones at
such affordable cost.

Finally we will try to find out the various factors that could be improved in the future so that Micromax could generate more revenue and
profits.

Objective
The objective of this project is to analyze the competitive strategy adopted by Micromax in distribution, pricing and marketing to position itself

in already saturated market of mobile handset in India. The major focus of study would be to examine closely the unique resource leverage
strategy adopted by Micromax in order to provide high-end feature phone at affordable price. We will identify and conceptualize the strategies
of Micromax in tapping especially the Geographic and Category opportunities.
We would also provide recommendations and future prospects for Micromax to sustain its leadership position.

External Environment Analysis

Porters Five Forces Analysis
Barriers to
Entry

HIGH

Supplier
Power

MODERATE

Rivalry
between
Competitors

HIGH

Threat of
Substitutes

LOW

Buyer
Power

HIGH

Strategic Evaluation of Key Success Factors

Value Innovation

Pricing Strategy

Blue Ocean Strategy

Low Pricing

Distribution Strategy

Marketing Strategy

Extensive and Efficient

Cricket and Youth Segment

Value Innovation: Blue Ocean Strategy

Value Innovation

Pricing Strategy

Blue Ocean Strategy

Low Pricing

Distribution Strategy

Marketing Strategy

Extensive and Efficient

Cricket and Youth Segment

Blue Ocean Strategy within Red Ocean Market Space

Able to challenge & defeat the existing competition in India via creation
of Blue Ocean within known Red Ocean market space of handsets

4-Actions Framework of Blue Ocean Strategy

Reduce

Low cost model

Camera Quality
Screen Resolution
Quality of Handsets body
Lifespan of the device

Introduction of high technology and

android application handsets at
very low prices

Create
Value
Innovation

Increasing the battery size

Extremely suitable for areas in India
suffering from erratic power supply
Launch of dual SIM (GSM and CDMA)
handset
Mobile phones with Qwerty keyboards in
India at very low prices

Eliminate
R & D Expenses
Credit-line policy

A New
Value
Curve

Raise
Battery size for more
backup
Marketing Budget
Advanced gesture
controlled features

First dual SIM dual mode

active phone
First womens line of
devices
First Universal Remote
Control Phone

Strategic Analysis of Micromax

Strengths

Weaknesses

Innovative Culture

Online Presence

Procing Power

Tarnished Reputation

Brand Name

Customer Service

Cost Advantages

Less global presence

Segmentation

Targeting

Positioning

SWOT
Opportunities

Threats

New Products and Services

Bad Economy

Competitive Low-end Phones Market

International Competition

New and Emerging Markets

Substitute Products

International Expansion

Political Risks

ANSOFFs Matrix

Low to Medium
range basic
handsets

Low income
consumers

Youth
Low to Medium
range
Smartphones

Professionals

Replacing bigger
players like
Samsung, Nokia
from the low-end
phone market

Pricing Strategy: Low Pricing

Value Innovation

Pricing Strategy

Blue Ocean Strategy

Low Pricing

Distribution Strategy

Marketing Strategy

Extensive and Efficient

Cricket and Youth Segment

VS

Micromax accounted for

22% of India's
smartphone shipments
in 3 months to Dec14
Samsung has only 20
percent market share
with a huge drop in
recent times.

Micromax flagship line

of products like the
Canvas Nitro and Canvas
Hue has very effectively
targeted at the
INR9,000 to INR12,000
segment

Micromax utilized
Price-sensitivity of the
market in its pricing
strategy to provide
Better features at very
low cost and the local
customizations as well

Samsung could not

match the competition
in this segment as its
phones had very limited
features unlike
Micromax

Samsung failed to
customize the
products as it was
already facing
competition in higher
segment from others.

Micromax has been

quicker than its
competitors to
improve the appeal of
devices
e.g., by including a
wide variety of local
languages on its
phones to cater to
local markets

The company
published dozens of
handsets and
prompted millions of
Indians to Upgrade to
smartphones every
month.
Samsung was unable
to create such an
impact and its
majority sales
remained limited to
upper segment

Micromax deployed
aggressive marketingassault by making very
popular Hollywood star
Hugh Jackman and
Bollywoods Akshay
Kumar as the brand
ambassador.
They also plowed cash
into cricket sponsorship
which has certainly
helped it grab market
share.

Distribution Strategy: Extensive and Efficient

Value Innovation

Pricing Strategy

Blue Ocean Strategy

Low Pricing

Distribution Strategy

Marketing Strategy

Extensive and Efficient

Cricket and Youth Segment

Efficient Distribution Networks: Localization of Operations

Distribution
Management

Dealer
Management

Service
Centers

Fast Cycle
Stock

Efficient Distribution Networks: Localization of Operations (Cont.)

Distribution Management Strategy

Dealer Management Strategy

Different distribution channels for each category of products

Vendor Selection and Volume Play with quality benchmark

34 super-stockists, 450 distributors, and 55,000 retailers (3-tier)

Felicitation of local dealers for their strong and consistent performance

No interaction with 500+ sub-distributors unlike Nokia and Samsung

Time to market new products from concept to launch is about three

15% margin for super-distributors against an industry average of 6-10%

months compared to around 18 months for larger competitors that build a

150 exclusive stores called Experience Zones for the urban market

strong portfolio for the sellers to offer

Products available in all leading mobile stores like Croma, Ezone, Reliance

1-2% offered by other players

Webworld, Next, Planet M, Reliance Digital, The Mobile Stores

Created awareness to garner a large market share in a short span of 3-4

years

Service Centers

A much higher commission of 5% to channel partners of Micromax against

Faster Cycle Stock

More than 400 strategically located service centers in 250 Indian cities and

Triple-A supply chain of Agility, Adaptability and Alignment

one in Nepal and Sri Lanka

Aligned organizations purpose, strategy & structure for faster cycle time

Tie-up with five third party owned, modular (component) service centers

Cash-only model (online bank transfer) instead of credit offered by rivals

exclusive to Micromax

Minimum working capital, boosting return on capital employed

Toll-free telephone numbers for complaint registration

Supplied to distributors regularly (every 3 days) to keep inventories low

Onsite service in most of Indian cities

No dead inventory, no need for periodic schemes or price protection

200 Micromax touch points, which are product support engineers covering

Shorter shelf life gave sellers peace of mind that bought items are saleable

150 Indian cities

More effort from the sellers to ensure that each item is sold

Marketing Strategy: Cricket and Youth Segment

Value Innovation

Pricing Strategy

Blue Ocean Strategy

Low Pricing

Distribution Strategy

Marketing Strategy

Extensive and Efficient

Cricket and Youth Segment

Marketing Strategy: 4-Pronged

A tighter product portfolio

Getting rid of the Low-Cost, Low-Quality tag

Concentrating on just a few key products

Focusing its marketing initiatives only on 4 strategically
chosen model out of the 30 odd models
Helped to create better connect with the customer
For e.g. Canvas model

Perception of a low quality Chinese brand because of a manufacturing

unit in China
Though Micromax was aimed at being affordable, it never
compromised on quality
A bit of skepticism towards an Indian brand by consumer used to
global brands was understandable
Brought on board Hollywood star Hugh Jackman as their brand
ambassador late in 2013
To talk to a new set of mature audience we needed something
different

Marketing Strategy
Targeting big ticket events

Consistency of messaging

Mostly into dance music and rock because of the huge

buzz here
These tie-ups are expensive but it gives Micromax
visibility and legitimacy
Target audience of all these events is usually the youth,
which fits with Micromaxs main user base

Create a connection with the customer

The marketing team knows the major product launches
months down the line and a marketing strategy is created
taking this into account
Slogan: Canvas HD Colors can come alive
Canvas 3D Entertainment can come alive,

Cricket series like the 2007 India-Pakistan series, the Asia Cup
Music sponsorships included big profile events like Sunburn Goa
2012
Award shows like Brit awards, MTV awards, etc.

Innovative Marketing Initiatives

Occasion based launch

Micromax launched Bling2 on
the occasion of Mothers Day
It twinkles, blended well with
the brand ambassador

MAd A94 serving the

business ecosystem
Launched MAd A94, which comes preloaded with Micromax Mad app which
will pay people money for watching
advertisements
Customer: People who love watching
ads
Other Brands: High engagement
communication channel for the brands
to break away from the clutter
Telecom Companies: Increasing the
ARPU (Average revenue per user), and
contributing to the overall profitability

New Punch Logo

Punch logo is a true reflection of
the Micromax brand which is
young, innovative, dynamic, bold,
extrovert and fun
To highlight that customer
feedbacks are valued by Micromax
Targeted around 150 colleges and
design schools over a span of 2
months and got around 2500
entries by more than 1500
participants from across the globe

From Local to Global Markets

Africa has a market for mobile handsets similar to India. Consumers of Africa
have similar purchasing power

Africa emerged as one of the fastest growing markets in mobile handset.

About 90% of all phones in Africa are mobile phones

Market for low cost handset with average expected handset cost lying
between $15-20

Mobile networks are cheaper and faster to establish

Wide use of mobile phone technology for banking transactions like depositing
and transferring money

Insights from Yu Televentures A Subsidiary of Micromax

Transform the company from being a devices company to services company with the advent of the Internet

Aim is at offering devices that can be customised by the buyer and that offer a bunch of Internet-based services to customers

Check threat from rapidly expanding Chinese handset makers such as Lenovo, Gionee and Xiaomi

Existing smartphone is based on stock Android system

Transform through the push and the pull as Spectrum is so expensive

Possible downside

Advantages of selling online-only

Potential to grow sales rapidly and low cost of distribution resulting in saving of

Possibility of cannibalization of parent brand

15 to 20 per cent of distribution cost

Introducing new brand shows weak parent

Growth of e-commerce

Flash sales also get a lot of attention on social media

brand

Recommendations
Transformation into a Services Company

Explore alternate revenue streams by transforming into a services

Feb 15: Bought a "significant minority stake" in a local analytics company

plans on offer

We propose that Micromax should invest in and incubate startups that will

But Samsung also entered the cut throat ultra low cost smartphone
segment dominated by Micromax by using MediaTek chipsets

These tech-based startups will offer granular analytical capability of

consumer data usage and consumer behavior

2014: Micromax, Aircel and MediaTek partnered over a deal with

Micromax launching devices with MediaTek processors and Aircel data

help it in leveraging and assimilating their capabilities

company rather than just a mobile phone vendor

and is close to investing in a Silicon Valley-based startup

Partnerships, Alliances and Acquisitions

To sustain its competitive edge, Micromax needs to enter into alliances

with hardware, software and design firms

It needs to improve on its design in order to foray into the international

It will provide Micromax a competitive edge to differentiate itself in the

market where it has to face the heat from low-cost models from Gionee

crowded and fastest growing smartphone market of the world

and ZTE

Make in India Opportunity

This initiative launched to encourage manufacturing in India has led to

After Sales Service

Samsung and Sony setting up their manufacturing units in India

Micromax is also setting up a Rs.500 crore manufacturing plant in

lags that of global brands

Rajashtans Alwar district

It should exploit this opportunity that will provide it a host of benefits for
setting up manufacturing and a Made in India label to all its devices

Even Micromax acknowledges, to some extent, that its after-sales service

Many promises from the company about changes in this system have not
translated into action

The lackadaisical attitude will not work in international markets where

regulations and consumer vigilance is much more active

References

http://www.integraluniversity.ac.in/12052010/irjm_paper6_dec2012.pdf

http://articles.economictimes.indiatimes.com/2015-02-26/news/59541902_1_micromax-co-founder-rahul-sharma-yu-televenturescyanogen

http://www.thehindubusinessline.com/features/investment-world/macro-view/strategy-behind-the-screen/article4203766.ece

http://cellphonelover.com/5-reasons-micromax-india-dominating-market/

http://www.integraluniversity.ac.in/12052010/irjm_paper6_dec2012.pdf

http://www.business-standard.com/article/management/how-micromax-cracked-the-code-112101000711_1.html

http://guruprasad.net/posts/part-3-micromax-phenomenon-mediatek-chipset-revolution/

http://tech.firstpost.com/news-analysis/micromax-plant-worth-rs-500-crore-to-come-up-in-rajasthan-255604.html

http://trak.in/tags/business/2015/03/07/samsung-sony-manufacturing-india/

http://www.business-standard.com/article/companies/micromax-eyes-new-revenue-streams-services-on-radar-114090800962_1.html

http://www.tolmol.com/z/spotlight/micromax-india-mobile-brand-threatening-global-giants/

http://www.euromonitor.com/micromax-informatics-ltd-in-consumer-electronics/report

http://www3.ntu.edu.sg/eee/fyp/SuggestedFormatInterimReport.pdf

http://www.exchange4media.com/56974_how-micromax-is-dethroning-samsung-as-indias-no-1-mobile-brand.html

http://www.mbaskool.com/brandguide/mobile-handsets/449-micromax-mobiles.html

Thank You