PEST & Porter's 5 Forces

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PEST & Porter's 5 Forces

  1. 1. PEST & Porter’s 5 Force Analysis New Entrant to Indian Laptop Market Ramesh Palanisamy
  2. 2. PEST Analysis
  3. 3. Political The Indian laptop industry is rising very rapidly because the consumer work life style is change day by day, consumer needed are increasing they want those type of product which is save their time, money and increasing their work efficiency. Some of factor for increasing laptop sales such as for example where past few decades ago laptop price used to be more than desktop but today laptop price is equal to the desktop price. Technological world today and it cannot be ignored Indian laptop industry has going on path of progress step by step just because due to the expansion of technology in all over the world. • Slow-down in government decisions due to political instability • Adverse changes or unpredictability on foreign investment, import, ownership, pricing or tax issues • Disruption of normal business due to social and political unrest • Corruption and bureaucratic inefficiency • Fluctuation in interest, inflation and currency rates Increasing focus on the environmental impact of high-tech trash has lead to more stringent environmental regulations on the electronics industry would require additional testing and certification involved directly affect the supply chains for laptop and PC manufacturers, resulting in increased costs
  4. 4. The growth in consumer PC market was driven by growing shift in end-user demand towards portable PCs, which grew at 20.2 per cent in 2012 over 2011, IDC said in a statement. According to the latest data released by market intelligence and research firm, IDC, Hewlett- Packard repositioned itself as the number one PC brand in India in October-December period of CY2012 with a market share 16.5%. Lenovo slipped to number-two position during that period with a market share of 13.2% followed by Acer at 12.1%. Tamil Nadu & UP government’s free laptop programme for students, such special projects could be repeated in few of the larger states with forthcoming elections in 10 states. Economical
  5. 5. Social factors such as education, preferences, income levels, and other cultural factors influence demand patterns in the different regions and therefore affect how a company operates in each region. The education and income level of users affects the brand perception of the computer manufacturers. This research analyzes the market for laptops and tablets and the tensions between these product categories. It presents the latest data on purchase patterns, tests consumer demand for Ultrabook laptops, and gauges how Ultrabooks will impact the laptop and tablet markets. Tablets and laptops are both appealing options for consumers, and some purchase one at the expense of the other. Social
  6. 6. Emerging technologies such as social media, mobility, analytics and cloud (SMAC) are driving the growth in this segment and helping it move to the next level. Technological advances over the past decade, such as increased processing power with reduced power 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 compared to the overall PC industry. Technological
  7. 7. Porter’s 5 Forces
  8. 8. Competition Rivalry with Industry As a matured industry, the laptop industry is seeing a price downtrend in the long term, indicating that aggressive pricing will bring more consolidation in the industry to reduce development costs. India's largest computer seller Lenovo said it expects higher competition from rivals HP and Acer in the coming year, as PC sellers in the country continue to launch aggressively priced devices in an attempt to attract cost conscious consumers. Different brands pursue different strategies. Some compromise on profits to win large deals. India has traditionally been a price sensitive market for PC's, where no single vendor enjoys a clear monopoly. Industry watchers say that it is hard to predict how the Indian market will go forward, given the number of brands and new launches over the past couple of years. PC business is a very low margin segment, therefore the game really is to come up with newer models
  9. 9. Due to aggressive pricing and reducing profit margins, there is a high barrier to entry for new companies. Since large companies are able to invest more in R&D and more easily hire top management talent, there is greater possibility for more innovation in the products. This further increases the barrier to entry for smaller companies. Sony India has recently announced its plans to market 6.5 lakh laptops of the Vaio brand in 2012-13. The electronics company from Japan is supposed to put in INR 90 crore and initiate a fresh marketing program for the brand with Kareena Kapoor, its brand ambassador. At present brands like Apple, Dell, Sony, HP, and Toshiba are being regarded as the most preferable options when it comes to laptops. However, other companies like Samsung are also making their mark. Indian companies such as Wipro & HCL have some takers as well. Threat of New Entrant
  10. 10. Research and Markets (http://www.researchandmarkets.com/research/q68lhs/ultrabooks) has announced the addition of the"Ultrabooks, Laptops and Tablets: Complements or Substitutes" report to their offering. This research analyzes the market for laptops and tablets and the tensions between these product categories. It presents the latest data on purchase patterns, tests consumer demand for Ultrabook laptops, and gauges how Ultrabooks will impact the laptop and tablet markets. Specific attention is also given to the Microsoft Surface product and how the tablet market will receive it. Tablets and laptops are both appealing options for consumers, and some purchase one at the expense of the other. Ultrabooks will impact this dynamic by making laptops a more appealing choice in comparison to tablets. The laptop industry faces a significant threat from new trends such as cloud computing, Which potentially will reduce the need for high computing power & storage in portable laptops. Moreover, advances in computing power and as well as communication technologies (3G,4G etc.) have enabled devices such as smartphones (iPhone, Android Blackberry, etc.) to compete with laptops by providing similar capabilities. For instance, iPad, Galaxy TB, Funbooks, Kindles reduce the need for laptops by providing similar functionality or becoming alternate for specific use. Threat of Substitution
  11. 11. Customers have large bargaining power over manufacturers, since a major part of the total PC sales is made up of large volume buying from businesses. In addition, consumers also have bargaining power in terms of dictating demand and buying preferences. Example: bulk order from the Tamil Nadu government to supply free laptops to schoolchildren. Consumer preference for mobility and wireless connectivity at low cost resulted in the growth of the laptop market compared to desktops. In addition, continued demand for cheaper costs lead to aggressive pricing as well as the creation of new categories such as netbooks/Touch screen. The power of customers is reflected in the change in buying behavior Example: PC sellers in the country continue to launch aggressively priced devices in an attempt to attract cost conscious consumers. Buying Pattern of the consumer influences company to change decisions. Example: customers’ buying behavior in developing markets influenced Dell’s decision to sell through retail stores as well. Buyer Power
  12. 12. The suppliers for all competitors are quite limited in terms of bargaining power due to increased commoditization of hardware components. Intel and AMD, the two major microprocessor suppliers, compete for increased market share. However, their power is limited due to their need for product promotion among consumers. For hardware such as hard drives (Samsung, Western Digital, Seagate, etc.) or motherboards (Intel, MSI, ASUSTek, etc.) there is very limited bargaining power due to their lack of branding on the finished product. Most manufacturers use different suppliers for the same component, by sourcing their requirements from whoever is cheaper at that time. Thus, if the prices are not competitive, the suppliers risk losing out to their rivals. On the software side, Microsoft dominates with its Windows line of Operating Systems (OS) and therefore exerts considerable power over PC manufacturers. Supplier Power

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