growth of laptop market in india
TRANSCRIPT
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Growth of Laptop market in India.
• Indian Laptop market is now in sync with global market.
• In 2005 that sales of laptops surpassed the sales of desktop computers for 1st time.
• Laptop market has registered 79% Year-on-Year (YoY) growth during 2006.
• Market share of laptops would be 35-40% in the next two years.
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Present Market scenario
The major players in the laptop category are: • Hewlett Packard (HP)• HCL• Toshiba• Compaq• Dell Computers• Sony• Lenovo.
• HP has the largest market share of 21 per cent in the Indian laptop market, followed by HCL and Lenovo.
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Legend to Lenovo
• 1984: Chinese Academy of Science founded the New Technology Developer, Inc (NTD).
• 1987: Legend character card which translated English language operating systems into Chinese.
• 1989:NTD renamed Legend Computer Company.• 1990: Legend launched its own computer.• 1996: Legend introduced itd first laptop model.• 2004: Legend renamed Lenovo (Le + novo) the same year a
deal with IBM PC.
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4 Ps of Marketing
• Desktops• Laptops (scratch
resistant, protective & titanium cover).
• Servers• Client base is small
business and customers.
• Workstations• Projectors
Product Place• Lenovo has the
highest market share in China, of over 35%
• Currently it has the third place in Global PC market
• Its market share is constantly increasing in Asia
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•Product Map
Putting more innovation in the hands of more people so they can do more amazing things.
Everyone
• Few
• Commodity •Innovation
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Price Promotion
• Reasonable rates of laptops• Follows competitive pricing
strategy• Prices for all range of
customer base• Follows a different price
range for products in India and China
• Accessories and After-sales services is very cheap compared to its competitors.
•Promotion in India – ‘’Who wants to be a millionaire.
• Turin Olympics sponsorship
•Product oriented messages in advertising.
•Public relation campaigns.
•Advertisements focused on quality and innovation
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Branding decisions
•Customers concern:
i. Innovation
ii. Quality
iii. Service and support
•Branding alternatives:
i.Master brand
ii.House of brands
iii.Synergy approach
iv.Lenux/toyota strategy
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Building the Masterbrand
• “one-two punch” ; build up Lenovo as a strong Master brand
and continue to strengthen the ThinkPad product brand
• Three phase advertising plan
• Worldwide advertising campaign
• “ThinkPad Unleashed” during Turin Olympics opening
ceremony
• Lenovo as a Masterbrand for innovation
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Innovations
•Think Pad 60 –needed something appealing .
•Titanium cover
•Protection
•Scratch resistant
•Built-in EVDO wireless broadband card and antenna.
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BCG Matrix
BCG Matrix
Market share
Market growth
The BCG matrix method is based on the product life cycle theory that can be used to determine what priorities should be given in the product portfolio of a business unit.
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Categories of BCG Matrix
Use large amount of cash and are market leaders.
Low in vestment required, it keeps profit high
Absorbs huge cash and growth decrease
High Demands but Low Returns
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Lenovo in BCG Matrix
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GE Matrix
GE Matrix
Competitive Strength
Market Attractiveness
The GE Matrix works in 3x3 Matrix
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Market Attractiveness Market size Market growth rate Market profitability Pricing trends Competitive intensity / rivalry Overall risk of returns in the industryEntry barriers Opportunity to differentiate products and servicesDemand variability Segmentation Distribution structureTechnology development
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Competitive Strength Strength of assets and competencies Relative brand strength (marketing) Market share Market share growth Customer loyalty Relative cost position (cost structure compared with competitors) Relative profit margins (compared to competitors) Distribution strength and production capacity Record of technological or other innovation Quality Access to financial and other investment resources Management strength
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Lenovo in GE Matrix
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Michael Porter’s
FIVE COMPETITIVE FORCES
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The purpose of Five-Forces Analysis
• The five forces are environmental forces that impact on a company’s ability to compete in a given market.
• The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.
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Threat of Substitute Products
Threat of Substitute Products
Threat of New EntrantsThreat of New
EntrantsThreat of New
Entrants
Rivalry Among Competing Firms in
Industry
Rivalry Among Competing Firms in
Industry
Bargaining Power of Buyers
Bargaining Power of Buyers
Bargaining Power of Suppliers
Bargaining Power of Suppliers
Porter’s Five Forces Model of CompetitionPorter’s Five Forces
Model of Competition
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Threat of New EntrantsThreat of New Entrants
Government Policy
Economies of Scale
Product Differentiation
Capital Requirements
Switching Costs
Access to Distribution Channels
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Bargaining Power of SuppliersBargaining Power of SuppliersSuppliers are likely to be powerful if:
Supplier industry is dominated by a few firms
Suppliers’ products have few substitutes
Buyer is not an important customer to supplier
Suppliers’ product is an important input to buyers’ product
Suppliers’ products are differentiated
Suppliers’ products have high switching costs
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Bargaining Power of BuyersBargaining Power of BuyersBuyer groups are likely to be powerful if:
Purchase accounts for a significant fraction of supplier’s sales
Products are undifferentiated
Buyers face few switching costsBuyer presents a credible threat of backward integration
Product unimportant to quality
Buyer has full information
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Threat of Substitute ProductsThreat of Substitute Products
Products with similar function limit the prices firms can charge
Products with similar function limit the prices firms can charge
Keys to evaluate substitute products:
Products with improving price/performance tradeoffs relative to present industry products
Example:
Electronic security systems in place of security guards
Fax machines in place of overnight mail delivery
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Cutthroat competition is more likely to occur when:
Rivalry Among Existing CompetitorsRivalry Among Existing Competitors
Numerous or equally balanced competitorsSlow growth industryHigh fixed costs
Lack of differentiation or switching costs
High storage costs
Capacity added in large increments
High strategic stakesHigh exit barriers
Diverse competitors
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Porter’s
Five forces
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New World, New Thinking.
N,
ppda
Threats of new entrant
Threats of substitute
Rivalry among
existing firmsEasy entrant
Profitable sector
New technology
Ultra light laptop’smobile pc’sThink padsPDSDesktop, Smartphone
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Cont..
Supplier’s power
Buyer’s power
it has excellent supply chain.Intel corp.Seagate's technology etc
Customers who are enterprises have less power as compared to individual buyers.
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The Five Forces of Competition Model
LOW
HighMODERATE
INTENSE
HIGH
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SWOT Strength Weakness Lean cost structure Effective business modelInnovation leadership Event sponsoring Good marketing and distribution strategies Quick responsiveness Strong R&D National image.
Unable to maintain sustained growth rate in all market segment Ignoring potential market Retaining of largest shares by competitors Poor global perception Globally not well known.
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Opportunity Threat
Increasing global demand for PC Specialty shops proving one stop platform for distribution Government organizations increasing their spending on IT Internet boom Increase product lines Converting manual orders to automotive orders.
Competition threat from both local and international market Industry reaching maturity Software piracy and clone market Price warEmerging small firms International competitors forming alliance with local competitors.
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•Product Map
Putting more innovation in the hands of more people so they can do more amazing things.
Everyone
• Few
• Commodity •Innovation
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Lenovo’s growth Strategy• Changed its name Lenovo from Legend in 2003.• In 2004 LENOVO acquired IBM’s PC division.• Adopted direct distribution technique leaving traditional technique.• Lenovo established new Innovation center in 2005.• Lenovo introduced the first Dual-core ThinkPad notebook PCs in
2006.• Sponsored 2006 Olympic Winter Games in Torino, Italy, supplying
5000 desktops.• Increasing the range of product categories
(diversification) in order to maximize the number of customers and to face fierce competition
• Efficient international management.
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PROFIT IMPACT OF MARKETING STRATEGY(PIMS MODEL)
The PIMS (Profit Impact of Market Strategy) of the Strategic Planning Institute is a large scale study designed to measure the relationship between business actions and business results.
The project was initiated and developed at the General Electric Co. from the mid-1960s and expanded upon at the Management Science Institute at Harvard in the early 1970s.
Since 1975 The Strategic Planning Institute has continued the development and application of the PIMS research
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continued
The comprehensive profiles of over 3,000 strategic experiences constitute this unique data pool.. The data covers the important characteristics of the MARKET ENVIRONMENT, THE STATE OF COMPETITION, THE STRATEGY PURSUED BY EACH BUSINESS AND THE RESULTS OBTAINED.
PIMS is:• a database of business strategies, used to generate benchmarks and
identify winning strategies.• a set of data-derived business strategy principles to guide strategic
thinking and strategic measurement. • a methodology for diagnosing business problems and opportunities,
and for measuring the profit potential of a business.
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PIMS• The data constitute a key resource for such critical
management tasks as evaluating business performance, analyzing new business opportunities, evaluating and reality testing new strategies, and screening business portfolios.
• The primary role of the PIMS Program of the Strategic Planning
Institute is to help managers understand and react to their business environment. PIMS does this by assisting managers as they develop and test strategies that will achieve an acceptable level of winning as defined by various strategies and financial measures.
• The PIMS database allows for the identification of those critical
strategic factors that enable a business to achieve an improved sustainable position.
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KEY STRATEGIC FACTORS INFLUENCING BUSINESS PERFORMANCE
• Competitive Position • Market Environment • Stage of Lifecycle • Market Share • Marketing/Sales • New Products/Sales • Relative Market Share • Customer Concentration • R & D/Sales • Relative Quality • Customer Purchase Amount• Real Market Growth
• Relative Price • Industry Concentration • Capital and Operating
Structure • Investment / Sales • Receivables / Investment • Investment / Value Added • Capacity Utilization • Gross Book Value of
P&E/Total Investment • Value Added / Sales • Operating Effectiveness
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THE STATISTICS
• Lenovo market share 0.01% (November 2009) Devices Market Share • Lenovo i966 0.01% • Lenovo V800 <0.01% • Lenovo P780 <0.01% • Total market share 0.01% (0.01%) • Other than Lenovo devices, unknown devices and PC browsers 99.99% • Total market share 100% (99.99%)
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Consumer satisfaction index
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CRITERIA OF PIMS-QUESTIONS TO BE ASKED
• Return on Investment Report - What level of profitability is "expected" for comparable businesses? (106.42%)
• Market Share Change Report - What level of share gain/loss is
"expected" for comparable businesses? (.01%) • Marketing Budget Report - What level of marketing expenses is
"expected" for comparable businesses? • Market Attractiveness/Competitive Strength Report - How
attractive is the market/competitive position of comparable businesses?
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CONTINUED
• Important Strategic Principles Derived From PIMS • In the long run, product quality is the single most important
factor affecting performance • Market share and profitability closely correlated • High-investment intensity reduces profitability • Cash implications of growth rate and relative market share are
affected by many factors • Vertical integration is profitable for some businesses only
• Most factors that boost ROI also contribute to value
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LIMITATION OF PIMS
• Key market-share variable is sensitive to product-market definition
• Other variables depend on subjective judgments • Inherent limitations of cross-section analysis • Sample biased toward larger firms that are industry leaders
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• THANK YOU
PRESENTED BY:HARSHA ABHISHEKMUKESHMANALIPANKAJPRIYANKA