PEST Analysis:Political Factors:The laptop and PC industry is expected to grow at a faster rate in developing countries comparedto the developed countries. Therefore, changes in government policies in developing countrieslike India and China can affect the potential growth rates in their markets. For instance, theremoval of import duties on laptops in India in 2005 was one of the factors that resulted in agrowth of 94% in laptop sales in 2005 . Increasing focus on the environmental impact of high-tech trash has lead to more stringent environmental regulations on the electronics industry such asthe RoHS (Restriction of Hazardous Substances) and WEEE (Waste Electrical and ElectronicEquipment) Directive. The additional testing and certification involved directly affect the supplychains for laptop and PC manufacturers, resulting in increased costs. For instance, in Canada, theenforcement of the WEEE Directive will increase the cost of computers by $15 . The increaseeither affects the consumer or reduces profitability for manufacturers.Economic Factors:The global economy influences various different factors that affect the growth of the PC industry.Business capital spending for small and large corporations, resulting in reduced demand for PCs.Gartner, Inc. forecasts a decline of 3.8% in global IT spending, of which computing hardwarespending is expected to decrease by 14.9% in 2009. Though this decline in IT spending is likely torecover slowly during 2010 , the global PC market is expected to face declining growth rates interms of market value, from an expected 5.4% growth in 2009 to 4.1% in 2012  Most laptop (andPC) manufacturers such as Dell, HP, Acer, Lenovo, and Apple generate sales throughout the worldand therefore currency exchange rates are an important factor as well. The strength (or weakness)of the US dollar versus other currencies can directly affect a company’s bottom line *9+,*10+. Theeconomies in developing countries such as China, India, Brazil, and Latin America are growing at amuch faster rate than developed countries and therefore provide better growth opportunities forcomputer manufacturers, since developed countries like the US and Japan have become saturated.This trend is reflected in the slower single digit growth in the last few years as opposed to theconsistent double digit growth in the developing markets
Social:Social factors such as education, preferences, income levels, and other cultural factors influencedemand patterns in the different regions and therefore affect how a company operates in eachregion. The education and income level of users affects the brand perception of the computermanufacturers. As shown in Figure 5, households with higher income have higher percentages ofApple computers. Such households are also more likely able to afford (and want) Applecomputers . This has allowed Apple to continue its strategy of premium pricing andperformance compared to Windows PCs, while at the same time increasing its market share of thetotal laptop and PC market . At the other end of the education spectrum, new devices such asthe rugged and ultraportable OLPC (One Laptop Per Child) have been developed forunderprivileged users in developing countries like Africa. Thus, education levels affect bothproduct demand as well as preference. Cultural aspects of different regions affect the occurrenceof seasonal sales, which significantly affect the performance of the computer industry as a whole. For instance, in the U.S., the periods from November-December (Thanksgiving / Christmas)and August (back-to-school) are significant earnings period.Technological:Technological advances over the past decade, such as increased processing power with reducedpower consumption and reduced cost, or the standardization of Windows and Intel in laptops,are one of the main reasons for the increase in market share of the laptop segment comparedto the overall PC industry. For instance, the netbook category’s average selling price (ASP) of$300 was made possible by the low cost Intel Atom microprocessor, released in 2008. Newtechnologies, such as hosted virtual desktops (HVD), threaten to completely change the industrydynamic, due to the possibility of cheaper computers along with lower software costs .HVDs involve centralized computing in which the processing is done on servers instead ofindividual clients. Gartner, Inc. estimates that the HVD market will grow in revenue from $1.3billion in 2008 to $65.7 billion in 2013.
PEST ANALYSISA PEST analysis most commonly measures a market. Generally speaking aSWOT analysis measures a business unit or proposition or idea, whereas aPEST analysis measures the market potential and situation, particularlyindicating growth or decline, and thereby market attractiveness, businesspotential, and suitability of access market potential and fit in other words. PEST helps to identify SWOT factors. PEST assesses a market, including competitors, from the standpoint of aparticular proposition or a business, whereas SWOT is an assessment of abusiness or a proposition, whether of your own or a competitors. All businesses benefit from a SWOT analysis, and all businesses benefit fromcompleting a SWOT analysis of their main competitors, which interestingly canthen provide some feed back into the economic aspects of the PEST analysis. The four quadrants in PEST vary in significance depending on the type ofbusiness, e.g. social factors are more obviously relevant to consumer businessesor a B2B business close to the consumer-end of the supply chain, whereas thisis not the case with SWOT.a. Political Factors Influencing Indian PC Industry:-i. Government StabilityAs we know that government instability leads to economical & political hazardslike inflation, dumping share markets, etc. hence government stability is a boonfor the growth of any industry.ii. Environmental Protection LawsIn contemporary world of personal computing, modern PCs are needed to bedisposed according to the local-state and federal laws, to protect theenvironment. 12
iii. Special IncentivesSuch types of perks are provided to the employees in order to motivate themtowards their contribution and commitment. These special incentives fillexuberance among the employees and thus increase the CAGR/SAGR of theorganization.iv. Attitude Towards Foreign CompaniesIndian government has already opened its doors for the foreign players in thisindustry.b. Economical Factorsi. GDP TrendsA country is known by the services it offers. Indian PC Industry contributes 7%of the overall GDP growth of India.ii. Inflation RateWhile entire industry‟ s growth rate declined during the global meltdown,Indian PC industry also experienced the Inflation rate of 11.89%.iii. Employment GenerationApproximately 10 million people are working in this industry and it is expectedto grow at the rate of 22% in the next decade.iv. Pricing StrategyWith the intervention of open market, a revolution emerged, as a result of whichmajor global player grabbed Indian PC market, which ultimately led to the rapiddownfall of PC prices thus enabling almost all the middle class people to affordcomputers. 13
c. Socio-cultural Factorsi. Changing LifestylesAs we know that „human wants are unlimited‟ so, in this changing scenario,computers have become the essential part of the lifestyle of the contemporaryworld and in these too, anywhere and anytime computing has brought a seachange in the trends of carrying a notebook instead of antiquated desktops.ii. Career ExpectationsWith the introduction of PC industry, a revolutionary change is beingexperienced in every field of our life, be it education, transportation, business,or even small shopkeepers like groceries, stationeries, chemists, etc.iii. Consumer ActivismSeveral laws like RTI (Right To Information Act 05), Consumer Protection Act,etc. and majorly the internet accessibility to every door has made the consumersaware of the ifs & buts in all kinds of transactions.iv. Growth Rate of PopulationHigher the population more is the demand for PCs and since we (INDIANS)stand at the second position in the world in terms of population, so there is awide scope for the growth of this industry in our country as compared toothers‟ , except China.d. Technological Factorsi. Industry Spending on R & DCurrently the Indian PC industry is spending approximately 7% of their overallrevenue i.e. 945 cr in its Research and Development.ii. Cutting-edge TechnologiesIndian PC industry has introduced various innovative features like GreenComputing, Noise control Technology, Aesthetic features, Face recognitiontechnology for convenient login, and many more which has positioned it in theglobal market.
Transfer Rate of TechnologyEarlier, it used to take more than one year for any new technology to come inthe market after getting developed inside the laboratory. But now, with theintervention of the ready to use technologies and increased adaptability, thistransfer rate (from lab to field) got reduced to only 3 to 4 months.iv. Patent ProtectionAfter the Copyright Act 1957 was implemented, Intellectual Property Rightregime has covered the innovative world with patent protection.