Micromax, once a leader in the Indian mobile handset market with a 22% share, experienced a significant downfall, losing nearly 50% market share in one year due to increased competition from Chinese brands and management issues. The company's attempt to innovate through in-house research was hampered by lack of funding and poor strategic decisions, including a failed partnership with Alibaba. The shift in market dynamics and emerging local competitors forced Micromax to reassess its strategies in a rapidly changing landscape.

1. DOWNFALL OF
A presentation by
Kshitij Gupta

2. Contents
 About the company
 Growth years
 Market share
 Downfall
 Conclusion of case

3. About the Company
 Micromax was incorporated as Micromax
Informatics Ltd. on 29 March 2000. It started
selling mobile telephones in 2008, focusing
on low pricing to compete with international
brands. Micromax's co-founder Rahul
Sharma once saw a public call office being
powered by a truck battery because of
frequent power cuts in its locale. It prompted
him to launch a feature telephone with an
extended battery life. Micromax launched
X1i, its first telephone with a month-long
battery back-up.

4. Unique Selling Proportion
 Largest Indian manufacturer of telecom
goods and services.
 Best price in the market if compared to its
competitors
 Long lasting battery
 High sales volume
 Tough and long lasting

5. Growth of Micromax
 A large part of Micromax’s growth is
attributable to its significant share of the
Smartphone market, including so-called
phablets (voice and data devices that have
a screen size of 5 inch and above). It has
been able to deliver Smartphone with
specifications akin to those offered by
global handset makers like Samsung, but
at half the price.

6.  As a result, the company has been able to
attract a number of first-time Smartphone
buyers, who were upgrading from a
regular features phone and did not want to
spend a bomb while doing so. India’s
growth story is believed to be outside the
metropolitan cities, in semi-urban and
rural areas, and a large chunk of upwardly
mobile population in such areas will give
a Micromax product due consideration
while looking to upgrade to a Smartphone.

7.  Sustained advertising campaigns through
television, print and outdoor have also
helped the company’s cause, especially
since some of its television commercials
feature an international look-and-feel,
giving an impression to the buyer that he
is buying a world-class product. The
problem that Indian IT hardware and
electronics brands faced earlier was that
they were thought to be cheap. Micromax
appears to have somewhat dispelled this
notion with its products and that has
happened mostly by word-of-mouth
marketing from existing users.

8. Market Share
 The forerunner among them is Micromax
Informatics Ltd, which according to latest
International Data Corp. (IDC) data had a
22% share of the Indian mobile handset
market, second only to Samsung, which
had a 26% share, and much ahead of other
foreign competitors
like Nokia, Sony and BlackBerry.

9. 2014

10. 2015

11. Downfall
“Nearly lost 50% market share in just one year”
 Chinese market dominance
Rapid growth has helped nurture a crop of local
brands, led by Micromax, that outsourced
production to Chinese manufacturers. Now, as
Samsung rolls out more affordable phones, the
same Chinese factories are entering the Indian
market with their own brands, depressing prices
and forcing Indian mobile makers to rethink
their strategies.

12. Management Issues
 In 2014, the founders brought in outside managers to
lead the company at a time when Micromax was
challenging Samsung to become the largest mobile
phone maker in India.
 Former executives said the lack of fresh funding
undermined a proposal by the new executives to move
Micromax's research and design operations, which had
previously been outsourced, in-house. The move was
intended to help Micromax differentiate itself from
generic Android clones.
 Top level management started resigning.

13. Conflict with Alibaba
 Micromax decided to raise funds from Chinese
giant Alibaba
 This deal was regarding the research and
development
 Alibaba walked away from a mooted $1.2
billion purchase of a 20% stake, citing a lack of
clarity on growth plans, according to one
executive involved in the discussion.

14. Whole Market is Suffering
 In 2015, Chinese brands doubled their market share to
18%, according to Counterpoint Research, taking away
business from Indian budget phone makers such as
Micromax, Intex, Lava and Karbonn. Indian brands'
market share fell from 48 to 43% last year.
 Chinese phone makers including LeEco, Xiaomi and
Lenovo have also partnered with e-commerce companies
including Amazon India and Flipkart to sell phones
directly to consumers, saving on distribution and sales
and reaching new online shoppers directly.

15. Conclusion
As seen in the case, from the Indian giant
to a beggar, Micromax has seen every
phase during the course of operation. The
Chinese interference and poor strategic
management led to these kind of crisis for
the company. Lack of funds also played
an important role in downfall of the
company’s stake.

16. References
 www.livemint.com
 www.dnaindia.com
 www.wikipedia.com

17. THANK YOU