Professional Documents
Culture Documents
Group 5
Aishwarya S Aravind Ganesan Bhavesh Vijay Dharmendar S K Divya Rajesh Kumar Rohit Arya
1
New domestic handset manufacturers have grown Exceptionally in the last 5 years
Maxx Mobiles
8% 20%
Current Domestic handset manufacturers have grown at 15 Times the rate at which the market has grown Period 2008-2011 Domestic players 160.3% International players 10.79%
2
growth in disposal income for products and services of glocal market provides immense potential for products targeting this segment of customers
Disposable income for products and services using four tiered structure of markets
Bottom (<90K) Local (90K-2Lacs) Glocal (2-10 Lacs) Global (>10lacs)
2005
2015
2025
Source: Group5, Section:E Intellectual property and Mckinsey report on growth in Indian middle class
With increase in glocal market, domestic manufacturers should start producing more products which are near world class but at lower price than international brands
Global
World class quality and features % of domestic players models2.82%
Global
Glocal
Near world class quality and features Price 7-15k % of domestic players models13.2%
Local
Glocal
Bottom
People who can afford only the least expensive products Price <2k % of domestic players models68.13%
Source: Group5, Section:E Intellectual property and www.compareindia.in.com
Local
Bottom
2011
2025
Institutional Voids
Political Environment
Differential VAT structure Delay in 2G rollout due to scam Budget implications
Economic Environment
Deep pocket of foreign players Increase in disposable income Fluctuation of exchange rates
Social Environment
Perception of low quality Increased demand for Internet on the go Mobiles gradually becoming style statement
Technological Environment
Inclination towards Smartphone Category Gradual shift towards 3G High product and Features variety
Source:Group5, Section:E Intellectual property
Domestic Players can further leverage their local market Knowledge and skills to increase penetration
Economic
Foreign Investments Sourcing from China at $16
Social
Village First Strategy Innovative marketing strategy Provided cheap platform for social networking Collaboration with youth centric brands
Political
1% Excise duty retained Tax exemption on R&D expenditure increased by 33% Easy Credit policy due to the status of infrastructure industry
Technological
Low cost product innovation Flexibility towards technology Phone with built in projector by Spice
Cost leadership is the strategy that will work under current market conditions
18000 16000 14000 12000 10000 8000 6000 4000 2000 0 -2000 0
Price
present
Opportunity region
8 10
4 Features
Rivalry is moderate, need to stock latest handset to meet end user Demand, high penetration in rural India increases Competition and network operators diversifying put pressure on manufactures But still supplier power is low because of large size of manufacturers
Intensity of competition
Weak Strong
Degree of rivalry
Buyer power 4 3 2 1 0
Supplier power
Substitutes
New Entrants
Source :Group5, Section:E Intellectual property and Global top 10 mobile phone companies
Conclusion
Market has grown at an excess of 10% in the last 8 years and expected to continue
Major growth drivers are rural markets and replacement handset sales Products which have features comparable to high end mobiles at lower cost will be the strategy that domestic handset manufacturers have to implement Market dynamics provide opportunity for domestic players to leverage institutional voids Market is still attractive for new entrants Product and factor market provide evidence of opportunity in local and glocal segments
Domestic handset manufacturers need to develop high end mobiles at lower cost to capture majority market share from current market leaders
14
15
Thank you
16