A Study on “Micromax”

By Group 6:
1. Harbinder Singh Deepak (MP12023)
2. Ishwari Prasad Gupta (MP12025)
3. idhi !u"ari (MP120#2)
#. $a%esh !u"ar (MP12053)
5. Sant&sh !r.Singh (MP120'3)
 
 

Contents

1.Introduction

2.SWOT Analysis

3.Porter !e "orces analysis

#.$C% Matrix analysis

&.$enc'mar(in) exercise *it' com+etitors

,.-inancials

.Strate)y / An outsiders +ers+ecti!e

 

1.Introduction
 0e)istered as “Micromax In"ormatics Pri!ate td.” in
Marc' 2 2444 *it' its re)istered o5ce in 6e* 7el'i.
 Its 14t'  lar)est mo8ile 'andset manu"acturer in t'e
*orld 9 second lar)est smart+'one com+any in India.
 :i(as ;ain in a recent inter!ie* *it' <T admitted to t'e
"act o" considerin) )oin) +u8lic in 241# de+endin) on
country=s +olitical situations +ost elections.
Mission>
“Micromax is on a mission to successfully overcome the
technological barriers and constantly engender “life
enhancing solutions””. 
:ision statement
“The company’s vision is to develop path-breaking
technologies and ecient processes that incubate newer
markets, enliven customer aspirations and continue to
make Micromax a trusted market leader amongst people
The Micromax ideology stems from its rooted belief in
!"nnovation’ and delivering “nothing short of the best##
 

1.Introduction

Micromax "ounders 0a?es' A)ar*al Sumeet

Arora 0a'ul S'arma and :i(as ;ain @
@ 6ot'in) i(e Anyt'in)
 

1.Introduction
-ormation o"
Micromax
Fiscal Year Key Events
2000 Company was incorporated as Micromax Informatics Ltd.
2001 Started software-commerce & embedded technoloy
 b!siness.
200" #lso de$eloped diitally a!tomated traffic information
sec!rity system for airport a!thority of India.
200% Started M2M distrib!tion for o'ia fixed mod!les
200( La!nch of self-branded prod!cts !nder the !mbrella of )
Micromax*
200+ Started b!siness as mobile handset man!fact!rer  
  ,ied !p with SL for " data cards
La!nched data cards with tie /!ps with #irtel
2010 ,ied !p with C & M,L for s!pply of data cards
Sponsored & co-sponsored many e$ents
 

Product cate)ories
  T'e +roduct ran)e !aries "rom dual SIM +'ones 3%
Android smart+'ones ta8lets to <7 tele!isions and
data cards .
  T'e mo8ile +'one ran)e "rom lo* +riced 'andsets to
medium ran)ed 8olt smart+'ones to 'i)' end Can!as
smart+'ones
 -irm 'as 8een success"ul till date in com+etin) *it' 'i)'
end mo8ile 'andset manu"acturers *it' its lo* +riced
inno!ati!e solutions.
 Ma?or Indian com+etitors include SPIC< A:A and
Sales o" t'e +roduct
A0$O66 /G0s.
B<6 I6 and ot'er 8i) 'i)' end +layers li(e
Cr.HSAMSD6% 6OIA and SO6E
 
 

2.SWOT Analysis
Stren)t's

1.Mar(et leader in "ast

)ro*in) mar(et
• Mar(et s'are o" 1.J in Indian mar(et

2.Tec'nical ex+ertise
• Many +roducts +atented
• Introduced mo8ile *it' t'irty day 8attery dual SIMK*erty
(ey +ad 'andset

3.Stron) distri8ution 9
net*or( reac'
• Presence in &,4 districts t'rou)' 12&444 retail outlets in
India
 

2.SWOT Analysis
Wea(ness

1.6e* +layer amon) t'e

lar)e 8i) ones
• A ma?or c'un( o" industry is ruled 8y international +layers
GSamsun) 9 6o(iaH 3J 8ecause o" a +rior 8i) customer
8ase

2.7e+endence on O<Ms
9 su++liers
• <n)a)ed *it' # O<MS *it' contractual a)reements and
'as relations'i+s *it' additional six O<Ms "or manu"acture
o" t'eir +roducts
•  T'ese O<Ms in turn are de+endent on t'ird +arty su++liers
to su++ly +roduct com+onents
• $ut 'o*e!er none o" t'e contracts are lon) term or
exclusi!e in nature
•  T'is internally 'as +osed +ro8lems in a8ility to recei!e
Kuality +roducts at lo* cost and meet customer
reKuirements
•  
 

2.SWOT Analysis
O++ortunities

1.Dnderstandin) o" Indian

mar(et
• Micromax "ocused on t'e 8i) c'un( o" unta++ed mar(et o"
t'e rural area *'ic' *as an i)nored mar(et "or t'e 8i)
+layers
•  T0AI estimates t'at ur8an mo8ile teledensity *ill reac'
12&J 8y Marc' 241# *it' ur8an mo8ile su8scri8ers
reac'in) &2 million and t'at t'e rural mo8ile teledensity
*ill reac' ,4J 8y Marc' 241# *it' rural mo8ile
su8scri8ers reac'in) #, million
• Wit' t'e s'i"t in income +yramid a))re)ate consum+tion
in India *ill )ro* "rom 1 trillion in 244 to 4 trillion 8y
242&
• Also *it' mo8ile ser!ice +ro!iders reducin) t'e tariLs
GA0PD> A!era)e re!enue +er userH to access t'e mar(et o"
lo*er Indian incomes 'as also +us'ed t'e mar(et o"
'andset manu"acturers in t'e se)ment.o*e!er t'ou)'
t'e A0PD is declinin) )radually o!erall re!enue remains
*ell su++orted 8y t'e increase in su8scri8er 8ase.
 

A))re)ate consum+tion in India

 

S'i"t in Income Pyramid

 

7eclinin) A0PD Trend

 

2.SWOT Analysis
 T'reat

1.T'reat o" losin) IP ri)'ts

•  T'e trademar(s are not currently re)istered under t'e
 Trade Mar(s Act 1 in India or in ot'er countries in
*'ic' t'e rm o+erates and 'ence may lose its IP.
•  T'e rm also runs at t'e ris( o" not o8tainin) or rene*in)
any o" t'e many a++ro!als licenses re)istrations or
+ermits reKuired "or its o+erations

2.7e+endence de8t ser!iced

model
• Its ina8ility to dra* money "rom +u8lic domain 'as +us'ed
t'e rm to*ards addin) de8t on its accounts *'ic' 'a!e
deteriorated its ratin)s and 'a!e im+lications o" ne)ati!e
co!enants on t'e rm.
 

7e8t on t'e 8oo(s

 

3.Porter !e "orce model

(a) Threat of substitute products- A lot o" acti!e researc' and
de!elo+ment into mo8ile +'one tec'nolo)y 'as 8een under*ay.

• O+erators are u+)radin) t'eir net*or(s to ad!anced

6et*or(s *ireless and ot'er "ourt'@)eneration G#%H ser!ices
many ne* entertainment and communications ser!ices
in"rastructure are 8ecomin) a!aila8le.

• 7e!elo+ment in miniaturiNed 'ard dis(s and as'

dri!es to sol!e t'e stora)e s+ace issue 'as already
Stora)e ta(en +lace t'ere"ore t'is 'as +a!ed t'e *ay "or
+'ones to 8ecome +orta8le music li8raries and +layers
similar to an iPod.

• Cell +'ones 'a!in) %PS +ositionin) may 8e cou+led

*it' accelerometer +ositionin) to co!er under)round
or indoor +ositionin). T'is leads to ma+s and 'el+
ndin) )rou+ mem8ers near8y or identi"yin)
%PS stran)ers. W'en cou+led *it' camera +'one t'e %PS
tec'nolo)y also allo*s users to ta(e a +icture or sna+
t'e exact location and an)le at *'ic' t'e +icture *as
ta(en.
 

3.Porter !e "orce model

(b) Threat of new entrants

Since t'e ca+ital reKuirement to start t'e 8usinesses o"

mo8ile manu"acturin) is 'i)' and "urt'er t'e mo8ile
manu"acturin) tec'nolo)y is also 'ard to acKuire t'e
t'reat o" ne* entrants is lo*. A )reat sum o" money must
8e in!ested to attain t'e economies o" scale and it is
di5cult to enter t'e mar(et *it' existin) rms already
o+eratin) on cost and diLerentiation strate)ies
 

3.Porter !e "orce model

(c) Industry Rivalry

Cell +'one cost> Customers *ant

8etter ser!ices and +roducts at a lo*er
cost.

$undle "unctions into ?ust one cell

+'one> -or exam+le <@mail text
messa)in) internet !arious mo8ile
a++lications etc.

6e* tec'nolo)y im+ro!ement> -or

exam+le day 8y day im+ro!in) t'e
mo8ile so"t*are +ro!idin) ne* and
uniKue a++lications "or users
 

3.Porter !e "orce model

(d)
Bargaini Cell+'one manu"acturers loo( to
ng su++liers "or cell+'one +arts@c'i+s
power of 8atteries Glit'ium 8atteries in most
supplier casesH sim cards etc.
s As t'ereQs a lar)e num8er o"
su++liers t'ey donQt 'a!e
muc' +o*er in inuencin) t'e
decisions o" cell+'one
manu"acturers.
Manu"acturers can easily s*itc' to
anot'er su++lier i" one raises t'e
+rice o!er t'e desired amount or
t'e Kuality o" t'e su++lies 'a!e
8ecome undesira8le.
 

3.Porter !e "orce model

(e)
Bargaini Customers 'a!e a 'u)e inuence
ng in t'e ty+es o" +'ones t'eir
power of "eatures loo(s and "unctionality
Buyers
t'at manu"acturers +roduce
Customer loyalty is almost
non@existent.

s*itc'in) cost is almost non@

existent.
 

#.$C% Matrix
 T'is met'od is *ell (no*n as Port"olio
•

Mana)ement Tool *'ic' is 8ased on Product

li"e cycle t'eory.
 

#.$C% Matrix
0elati!e Mar(et S'areGCas'
%enerationH
i)'
o*
   H
  e Stars Question
  )
  a
  s
ar! 
   D
   ' • Can!as
  s
  a android • $olt Smart
   C Smart
   G P'ones
  e P'ones
   t
  a
   0
   '
   t
  * "ash "ow #og
  o
  r
   %
   t
  e    '
   (     ) •  Touc' Screen • *erty
  r   *
   i
  a  o    GR3, R#&H
   M   1
ey+ad
• 7ual Sim P' P'ones
GR142 R,,4H • $ar P'ones
 

&. Bench$ar!ing %-Strategic $apping with respect to co$petitors

(a) &ricing

 T'e +ricin) +olicy o" Micromax is !ery a))ressi!e

!is a !is its com+etitors. One o" its directors *as
once Kuoted sayin) t'at “Our t'in(in) starts "rom
t'e consumer and so we decide the $ar!et
price 'rst and the device later”. I" *e com+are
some o" t'e +o+ular +roducts o" Micromax *it' t'e
+roducts o" its com+etitors *e can see 'o*
Micromax is so a))ressi!e in its +ricin) +olicy.
 

&. Bench$ar!ing %-Strategic $apping with respect to co$petitors

(b) &roduct Innovation%- Micromax 'as a lot o" inno!ati!e and creati!e +roducts to its credit *'ic' )i!es its +roduct +ort"olio a !ersatile loo(. Micromax *as rst to introduce>

obile handsets obile handsets

with  days with #ual SI
battery bac!up card

*andsets
Switching spirational
+etwor!s (,S Qwerty .eypad
- "#) using *andsets/
gravity sensors
 

• Micromax 'as 8een s'i"tin) its

+ositionin) !ery "ast as
(c) ar!et com+ared to its com+etitors.
 To start *it' Micromax
&ositionin entered t'e mar(et in entry
le!el and mid@se)ment mo8ile
g%- +'ones.. Ta(in) t'is ?ourney
"or*ard t'e com+any no*
oLers t'e +'ones *it' latest
tec'nolo)y in com+etition
*it' t'e *orld leaders.

• Micromax also redened t'e

(d)Supply distri8ution c'annel in t'e
mo8ile 'andset industry. As
"hain a)ainst t'e com+etitors
)i!in) its distri8utors a ,4@
anage$e day credit Micromax denied
any credit to its distri8utors
nt 8ut oLered to su++ly 'andset
on re)ular 8asis to (ee+
in!entories at a 8are
 

  ey Ta(ea*ay "rom t'e nancial data

Ratios Interpretations
1. 7e8t Com+any does not 'a!e any lon) tern de8t. Primarily
<Kuity run 8y t'e s'are'older=s "und
  0atio
2. Current Alt'ou)' t'e current ratio is sli)'tly 8etter t'an t'e
ratio industry 8ut is not 8etter enou)' to su8stantiate t'e
claim o" t'e com+any t'at it=s *or(in) ca+ital
mana)ement is 8etter t'an com+etitors.
3.-ixed ere lies t'e (ey diLerence. Actually Micromax is
Assets 'i)'ly "ocused to*ards +roduct inno!ation and
 Turno!er distri8ution c'annel. T'e manu"acturin) o" t'e
ratio +roduct 'as 8een lar)ely outsourced and 'ence t'e
rm is en?oyin) suc' a 'i)' asset turno!er ratio.
 

Strategy 0 1ro$ the outside

 

 T'an( you