Laptop industry analysis porter pestel By Saurabh Maloo
New Product Launch
By- Saurabh Maloo
Lal Bahadur Shastri Institute of Management,
ALACRITY – PROJECT REPORT
ABOUT THE PRODUCT
Alacrity is the new range of Laptops that will be launched soon in the Indian Market.
Alacrity will be launched by SPMDS Technologies Ltd., a pioneer in the cellular device
industry in India. SPMDS Technologies Ltd. is planning to diversify its product base
and enter in Laptop Segment. Alacrity model meets the requirements of households
as well as Industry.
Alacrity – A Complete Package
Designed to give more Intuitive Touchpad Experience.
Exclusive Technology Used – Intel Core i7 Processor.
Highly sensitive surface for almost instantaneous response and incredible accuracy
with 8 GB DDR3 RAM.
More than Adequate Storage of 2 TB.
15 Inch - Larger Display
Packed with technologies designed to enhance your computing experience
Why SPMDS Technologies Limited chosen to diversify in Laptop Segment?
Political stability ensures several things apart from continued supply and good sales.
Government stability ensures the laptop industry to do business without any fear of losing profits
Indian Government in pursuit to transform India into a global design and manufacturing hub had launched
“Make in India” initiative which is a great boon for the growth of laptop industry.
Social factors such as education, preferences, income levels, and other cultural factors influence demand
patterns of laptops.
India has a population of more than 1.2 billion people with about 70% of citizens between the ages of 15
and 65 which is a huge customer base for the laptop industry.
With the rise of social media, people’s taste has shifted towards products that provide better mobility.
Availability of Cheap labour in India which is a great factor to move up profitability.
Laptops are a basic necessity of IT Industry, which constitutes nearly 10% share of Indian GDP.
Better Economic Condition with GDP growth rate of 7%, implies higher consumption and thus more
demand for IT Assets.
The Digital India programme launched by the Government of India with a vision to transform
India into a digitally empowered society and knowledge economy.
India possesses one of the strongest IT sectors in the world, promoting constant IT
development, software upgrades and other technological advancements.
Increase in Income Consumption pattern by the citizens creates a huge potential market for the
The main environmental concern for the laptop industry is the disposal.
E-Waste Management Rules, 2016 has been notified that made transportation of E-Waste more
Focus should be on establishing cleaner and more sustainable supply chains that are securer
for the environment and their workers too.
Red Tape can become a major hindrance to business in India.
Legal Compliance can create pressure and lead to higher cost for the laptop Industry.
GST rate has been fixed at 18% on laptops as against past levy of 14% thereby increasing the
overall cost of laptops.
Porter’s Five Forces Model
Rivalry Among Existing Competitors
There are two major players in the Indian Laptop
market, ie Dell and HP which take up around 52 % of the
market share. As seen in the pie chart, Acer Group and
Lenovo are strong competitors with combined market
share of 32%.
There are relatively few differences among these top
players in terms of product features and product quality.
Threat of New Entrants - LOW
Porter's Five Forces Model and Porter's
• Barriers to Entry – Relatively High
Customers prefer to buy top four brands, unless exceptional package delivered.
• Constant Innovation by existing players
Existing companies attract new engineering talent for constant R&D and invention.
Threat of Substitute Products - MODERATE
• A Particular Niche
Even the I-Phone or other handheld devices have a difficult time competing with laptop features.
Day to Day Necessity for many Businesses and Individuals.
• Constant Developments in Technology
Substitutes to have as many features and capabilities as Laptops.
Bargaining Power of Buyers - Strong
• Large volume buying from businesses
Industries Constitutes 70% of total laptops purchased in 2016 in India.
Industry has bargaining power in terms of dictating demand, buying
preferences, price, features, and service plans
• Minimal switching costs to other Brands
Manufacturer struggle to differentiate their products.
Buyers do not exhibit strong brand loyalty in their purchases.
Bargaining Power of Suppliers - Moderate
• Highly Standardised Components
Number of suppliers for various products. Eg. Intel and AMD, the two major microprocessor
suppliers; Samsung, Western Digital, Seagate for hard drives.
Manufacturers use different suppliers for the same component, by sourcing their requirements
from whoever is cheaper at that time.
Outcome of the Analysis
1. Industry Size:
Around 4.3 million units of laptops were sold in India in Previous Year 2016.
Assuming average price per laptop to be INR 35000, the total market size of Laptop Industry in India
comes to 150 billion INR.
Laptops are becoming a necessity now more than ever. Customers are getting more and more
educated about computers. As their knowledge grows, so do their need to experiment or use some
additional computer features.
The internet also provides our brand “Alacrity” with greater opportunities since all they have to do now
is to visit official website to place their order or to get information.
“Alacrity” is targeting on delivering a reliable PC’s and laptops at a competitive price.
The Indian market is huge and would consume “Alacrity” laptops if marketed well.
Competitive rivalry that exists in the PC market.
The threat to become outmoded is a pulsating reality in a computer business.
Price difference among brands is getting smaller.
With almost identical prices, price difference is no longer an issue for a customer. They might choose
the established brands instead of trying the new brand altogether.