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Laptop industry analysis porter pestel By Saurabh Maloo


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Porter Five Forces and PESTEL Analysis of New Product (Laptop) Launch

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Laptop industry analysis porter pestel By Saurabh Maloo

  1. 1. MARKETING MANAGEMENT Market Analysis Of Laptop Industry For New Product Launch By- Saurabh Maloo Lal Bahadur Shastri Institute of Management, Delhi
  2. 2. 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.  Lightweight Laptop  15 Inch - Larger Display  Packed with technologies designed to enhance your computing experience
  3. 3. Why SPMDS Technologies Limited chosen to diversify in Laptop Segment? Environment Analysis PESTEL Analysis Political Factors  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  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. Economic Factors  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.
  4. 4. Technological Factors  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 laptop industry. Ecological Factors  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 stringent.  Focus should be on establishing cleaner and more sustainable supply chains that are securer for the environment and their workers too. Legal Factors  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.
  5. 5. 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.
  6. 6. Threat of New Entrants - LOW Porter's Five Forces Model and Porter's Value Chain • 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.
  7. 7. Bargaining Power of Buyers - Strong Households 30% Industry 70% 2016 • 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.
  8. 8. 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. 2. Opportunities  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. 3. Threats  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.