How Micromax Rose to Prominence

8/19/2019 How Micromax Rose to Prominence

1/24

Competition & Strategy ProjectMicromax Mobiles

By

Group 9

1501068 – Aniket Phadnis

1501076 – Dhvanil Zaveri

150108 – !aushik "ath1501090 – Pradeep #eena

150110$ – %aura&h Bose

1501107 – !aran %in'h


2/24

DECLARATIO

!e "ereby certi#y t"at all o# $s "a%e e$ally contrib$te' o$r e(orts to t"is

project) To t"e best o# o$r *no+le'ge, t"e project report 'oes not contain any

$ncre'ite' so$rces ot"er t"an t"e explicit re#erence ma'e in t"e bibliograp"y

Signe'-.

/01/123 4 Ani*et P"a'nis/01/152 4 D"%anil 6a%eri/01/137 4 8a$s"i* at"/01/191 4 Pra'eep Meena/01//1: 4 Sa$rab" ;ose/01//15 4 8aran Sing"

Intro'$ctionMicromax is c$rrently t"e largest In'ian Mobile p"one company) It starte' o( as a

so#t+are company calle' Micromax In#ormatics limite' in t"e year 7111 by a

gro$p o# #o$r #rien's) It initially operate' as an IT So#t+are Company operating in

t"e embe''e' 'e%ices 'omain) In 7113, Micromax entere' t"e mobile p"one

mar*et) T"e company is c$rrently "ea'$artere' in mar*et s"are '$ring t"e ?rst "al# o# its existence) ;y 71/1, it +as one o#

t"e largest 'omestic companies ma*ing "an'sets) Micromax #oc$se' on lo+

pricing to compete +it" establis"e' international bran's s$c" as Apple an'

Sams$ng) T"e initial inspiration #or t"e #o$n'ers to enter t"e lo+ cost #eat$re

p"one segment in In'ia +as t"e #re$ent po+er c$ts in r$ral areas) Apparently

one o# Micromax@s #o$n'ers sa+ a p$blic call oce being po+ere' by a tr$c*

battery beca$se o# t"e po+er c$ts) T"$s an i'ea to intro'$ce a lo+ cost p"one

+it" an exten'e' battery li#e trans#orme' into t"eir ?rst p"one B/i, +"ic" "a' a

mont" long battery bac*$p)

Micromax aspires to become t"e contin$ation o# t"e In'ian yo$t"@s li#estyle an'

personality) T"e company "as a lot o# ?rsts to its cre'it an' "as a "istory o#

$ir*y pro'$cts s$c" as t"e a#orementione' :1 'ay battery bac*$p p"ones, D$alSIM '$al stan'by p"ones, !ERT *eypa' p"ones, $ni%ersal remote control

p"ones an' t"e ?rst $a' core b$'get smart p"one) T"e pro'$ct port#olio o#

Micromax to'ay boasts o# more t"an 21 mo'els ranging #rom #eat$re p"ones to

tablets to LED tele%isions an' 'ata car's)

Micromax is no+ t"e /1t" largest smartp"one %en'or in t"e +orl') T"e pro'$ction

Micromax mobile p"ones is carrie' o$t by oxconn in C"ina) T"$s, Micromax is

able to ta*e a'%antage o# lo+ labor cost in C"ina an' t"e economies o# scale

ac"ie%e' by oxconn) Micromax sells t"ese pro'$cts at lo+ costs in t"eir target

mar*ets) T"is is one o# t"e main reasons #or t"e s$ccess o# Micromax in s$c" as"ort perio')


3/24

Since t"e pro?t margins are lo+, Micromax@s strategy to ac"ie%e pro?t is t"ro$g"

increase' %ol$me o# sales) T"ey targete' t"e r$ral c$stomers as t"eir target

mar*et) T"is segment "a' a lot o# potential an' +as consi'erably $npenetrate')

Micromax also p$t a'e$ate e(orts into t"eir a'%ertising an' mar*et strategy)

Micromax a'opte' t"e slogan, Fot"ing li*e anyt"ing@) T"ey sponsore' a %ariety

o# sports an' b$siness e%ents to gain %isibility) Domestic as +ell as international

celebrities +ere bro$g"t on boar' as bran' ambassa'ors #or t"eir p$blicity

campaign)

PEST ANALYSIS

Political

T"ere "as been a "$ge p$s" by t"e go%ernment to increase t"e mobile

penetration in In'ia) All major ser%ices s$c" as irrigation an' ban*ing ser%ices

"a%e been s"i#te' to mobile plat#orm) T"is "as bro$g"t an $rge in r$ral an'

$rban pop$lation to $se p"ones #or major reasons an' t"ereby increasing t"e

sales o# mobile p"ones in In'ia)

Apart #rom t"is, se%eral go%ernment initiati%es "a%e incenti%iGe' In'ian

man$#act$rers to pro'$ce in In'ia, amongst +"ic" is FMa*e In In'ia@ campaign)


4/24

O%er t"e past H years t"e a%erage gro+t" in 'isposable income an' cons$mer

expen'it$re is increasing by more t"an 2)H>)T"e economic 'e%elopment o# t"e

co$ntry bot" in t"e r$ral an' $rban mar*et ma*es it a 'esirable 'estination #or

mobile p"one companies)

Social

A#ter examining t"e 'emograp"ic 'istrib$tion in t"e co$ntry, +e obser%e rapi'

gro+t" o# yo$t" pop$lation in Tier I an' Tier II cities) T"is becomes #a%orable #or

t"e Smartp"one in'$stry as 2:> o# smartp"one $sers are $n'er t"e age o# 70)

T"is is one o# t"e contrib$ting #actors to t"e increase in 'eman' #or #eat$re

p"ones experience' in t"e recent past)Micromax "as in%este' "ea%ily in t"e

eat$re p"ones segment an' are c$rrently t"emar*et lea'er in t"is segment)

Social attit$'e to+ar's smartp"one $sage "as c"ange' 'rastically o%er t"e

years) o+ c"il'ren as yo$ng as /1./7 years are getting access to smartp"ones)

Technological

T"e mobile p"one in'$stry is a %ery inno%ati%e segment +it"in t"e ICT sector

an' t"e smartp"one "as no+ become t"e stan'ar' con?g$ration among t"e

'i(erent types o# mobile 'e%ices) Tec"nical c"ange an' ne+ pro'$ct proli#eration

"a%e ma'e t"is in'$stry extremely 'ynamic) T"ere is eit"er a pro'$ct

'i(erentiation in terms o# 'ynamic 'esign or %ertical inno%ation +it" selecte'

#eat$res li*e +eig"t, !i?, M$ltito$c", secon'ary camera etc) Inno%ation an'

pro'$ct 'i(erentiation are important in t"is pro'$ct segment to ac"ie%e long

term s$stainability an' "ence cannot be o%erloo*e')Micromax nee's to stay

a"ea' o# t"e tec"nological an' inno%ation c$r%e) It "as set $p a Researc" an'

De%elopement center in ;eijing,


5/24

Conclusion-

rom t"e PEST Analysis, mobile in'$stry seems to be a %ery promising in'$stry

+it" "ig" gro+t" opport$nities) All t"e #actors in t"e external en%ironmental

#actors s$pport t"e pro'$ction an' sale o# mobile p"ones) !it" go%ernment

ta*ing se%eral initiati%es in t"is aspect along +it" t"e gro+ing income an' b$ying

be"a%ior o# In'ia, PEST analysis gi%es a goo' #o$n'ational reasons #or Micromax

to o$ris")

Porter’s fve orces

Barriers to Entr !L"#$% T"e JS an' C"inese mar*ets "a%e reac"e' sat$ration

point) T"is "as le' to many Smartp"one man$#act$rers to loo* to+ar's In'ia)In'ia is one o# t"e #astest gro+ing mar*ets in Asia an' !orl' all aro$n') T"ere

are t"ree ne+ companies entering t"e mar*et e%ery mont") T"e possible reasons

#or s$c" lo+ barriers to entry are

/)


6/24

companies c"ose to c$t 'o+n t"e prices o# t"eir ags"ip Smartp"one p"one in

t"is #eat$re p"one segment) T"e a'%antage is passe' on t"e b$yer)

/) ;ac*+ar' Integration T"ere is a lo+ t"reat o# bac*+ar' integration #rom

t"e b$yers) One o# t"e cases is t"at o# t"e mobile operators li*e i'eocon

t"at starte' man$#act$ring p"ones $n'er t"eir o+n bran') T"ese p"ones"o+e%er "a%e not been so pop$lar among c$stomers

Po&er o Su))liers !*"+E,ATE$% T"e s$pplier po+er is mo'erate in case o#

components li*e t"e microprocessors $alcomm an' IntelK, p"ysical memory,

C tec"nology an' special screens CorningK 'i(erentiate t"e ?nal pro'$cts an'

a(ect t"eir selling price an' margins) T"ese nic"e s$ppliers are mostly

concentrate') In a''ition, t"ere is large n$mber o# players in t"e mar*et, +"ic"

gi%es t"em m$ltiple opport$nities an' c$stomers)

/) S+itc"ing costs =o+e%er in case o# so#t+are stac*, operating system an'

'esign re$irements mobile man$#act$rers "a%e a mo'erate s+itc"ing

cost) Example . P"ones r$nning +in'o+s mobile operating system can

s+itc" to an'roi' easily)

7) ;ac*+ar' Integration T"is possibility is lo+ #or lo+.cost #eat$re p"ones as

t"e cost inc$rre' #or %ertical integration is %ery "ig") In a''ition, t"ere

+o$l' "a%e to be a lot o# in%estment in t"e R&D as +ell as patent

ac$isitions #or nic"e tec"nologies) T"is +o$l' ta*e time an' co$l' a(ect

t"e selling prices as t"e inp$t costs go $p)

Threat o sustitution !Lo&$% T"e t"reat o# s$bstit$tes is lo+ as alternate

pro'$cts li*e tablet, laptops an' Personal Digital assistants 'o not $ite o(er t"e

same #$nctionality as t"e p"one) T"e b$l*iness o# a tablet in a''ition to t"eir

non.calling #$nctionality ma*es it 'ic$lt to replace a p"one e%en t"o$g" it "as

been gro+ing in pop$larity)

T"e p"one o(ers a better price.per#ormance ratio as compare' to its s$bstit$tes)

Mobile p"ones are portable comm$nication 'e%ices, +"ic" are in'ispensible) Its

$bi$ito$s nat$re ma*es it %ery 'ic$lt to s$bstit$te

,ivalr among com)etitors !'I('$%

/) In'$stry ann$ally in H o# 71/0) D$ring 71/0, t"e total

s"ipments amo$nte' to /11 million $nits) T"is gi%es a pict$re o# t"e pace

o# t"e in'$stry gro+t") More t"an /11 players #rom In'ia, C"ina, Jnite'

States & So$t" 8orea compete in t"e In'ian mar*et)


7/24

7) Intense Competition T"e retail %ol$me brea*'o+n c"art belo+ s"o+s t"e

n$mber o# companies +it" t"eir mar*et s"are) T"is s"o+s t"at t"ere is

%ery "ig" competition amongst t"e competitors to gain maxim$m mar*et

s"are by %ol$meK in t"e In'ian mar*et)

Phone ./0/ ./00 ./0. ./01 ./02 ./03Samsu

ng

/5)5 /9 /:)3 7:)3 77)/ 7/)0

*icrom

a4

H)7 5)/ 2)2 //)3 /0)3 /2)/

5aron

n

7)9 0)0

5)5

9 9): 9

Inte4 . 1)7 /)0 7)2 0 3)7

No6ia . . . . //)5 3)/

Lava 1)3 H 0)7 2 2)0 5

iBall 1)7 1)2 7): 7)2 :)H :)3(ionee . 1)0 /)0 /)3 7)/ 7

L( 2 0)9 2 0 :)7 7

S)ice :)3 : 7)9 7): 7): /)3

Cel6on . 1)/ / /)5 /)5 /)2

*a44 1)/ 1)H /)3 7)3 7 /)2

7iaomi . . . . 1)0 /)2

7olo . . 1)/ 1)2 1)9 /)0

8i9eoc

on

. 1)/ /)H 7): /)3 /)H

Son . . :)5 /)7 /)7 /)/

iPhone 1 1)/ 1)7 1)2 1)2 /

:TE /)9 /)H /): 1)9 1)9 1)9

'TC 1)/ 1)7 1)/ 1)/ 1)/ 1)7

*otorol

a

. . . . 1)0 1)/

'ua&ei /)0 / 1)5 1)7 1)/ 1)/

Blac6

err

. . . 1)/ 1)/ 1)/

5ocer

a

1)5 1)7 1)/ 1)/ 1)/ 1)/

No6ia 01): H1)9 7/)3 /2)5 . .

*otorol

a

. . 1)3 /)/ . .

Blac6

err

1)0 1)2 1)H . . .

Son

Ericsso

n

H)3 H)/ . . . .

*otorol

a

. 1): . . . .

Pantec 1)2 . . . . .


8/24

h

*otorol

a

1)/ . . . . .

Ex"ibit 4 Company s"ares "istoric retail %ol$me brea*'o+n

E$romonitor passportK

:) Lo+ Margins T"e income is $s$ally 0.2> o# t"e sales re%en$e) T"is is %ery

lo+ in t"e %al$e c"ain) Micromax - 2)//>, La%a - 0)21>) Only "ig" en'

Smartp"one li*e Apple "as a "ig"er pro?t margin 7/)H7>K

Conclusion

T"e o%erall Smartp"one in'$stry is not attracti%e #or any existing company gi%en

-.

• ;arriers to entry are lo+)

• Po+er o# b$yers is "ig"

• Po+er o# s$pplier t"o$g" mo'erate ,t"ere are concentrate' s$ppliers #or

some "ig" per#orming an' 'i(erentiating "ar'+are systems li*e screens

an' microprocessors

• T"reat o# s$bstit$tion is lo+ #or no+)

• T"e ri%alry among competitors is "ig" as t"e margins are lo+) A lot o#

companies are ?g"ting #or a s"are by %ol$me in a similar b$t booming

mar*et) T"is "as ca$se' intense competition in lo+ cost #eat$re p"onesegment)

al$e C"ain Analysis-

T"e %al$e c"ain analysis o# a company is an important tool to

$n'erstan' "o+ t"e 'i(erent acti%ities $n'erta*en by t"e ?rm res$lts in

creating %al$e #or t"e en' c$stomer) T"e eciency o# a ?rm in creating

%al$e #or its en' c$stomers reects eit"er in t"e increase in !TP by t"econs$mers, or in re'$ction in costs) Eit"er +ay, t"e 'i(erent %al$e c"ain

acti%ities 'etermine t"e pro?tability o# t"e ?rm) I# t"e ?rm creates

signi?cant %al$e #or its c$stomers, it +ill lea' to increase in t"e +illingness

to pay !TPK 4 +"ic" in t$rn enables t"e ?rm to sell its pro'$cts at a

premi$m) On t"e ot"er "an', cost re'$ction in %ario$s %al$e c"ain

acti%ities by t"e ?rm enables it to *eep t"e total pro'$ction cost lo+, an'

in t$rn "elp it sell its pro'$ct at a lo+ price) A #rim may create a cost

a'%antage eit"er by re'$cing t"e cost o# t"e in'i%i'$al %al$e c"ain

acti%ities, or by recon?g$ring t"e entire %al$e c"ain) Once t"e %al$e c"ain

is i'enti?e', a cost analysis can be per#orme' by assigning cost to t"e


9/24

R&DInbo$n'Logistics

O$tbo$n'

Logistics

Mar*eting

A#tersalesser%ice

%al$e c"ain acti%ities) T"e major cost 'ri%ers relate' to t"e %al$e c"ain

acti%ities are- Economies o# scale, learning, capacity $tiliGation, lin*ages

among acti%ities, interrelations"ips among b$siness acti%ities, 'egree o#

%ertical integration, timing o# mar*et entry, ?rm@s policy o# cost lea'ers"ip

or 'i(erentiation, geograp"ical location an' instit$tional #actorsreg$lation, $nion acti%ity, tax etcK) A ?rm creates cost a'%antage by

better controlling t"ese cost 'ri%ers t"an 'o t"e competitors) !"ile t"e

external in'$stry an' en%ironment analysis "elps $s $n'erstan' t"e

in'$stry, o# +"ic" t"e ?rm $n'er consi'eration is a part o#, t"e %al$e c"ain

analysis "elps $s $n'erstan' t"e so$rce o# pro?tability o# t"e ?rm +it"in

t"e in'$stry relati%e to its competitors) It is to be note' t"at t"e total

pro?tability enjoye' by any ?rm in a gi%en in'$stry is a #$nction o# bot"

t"e in'$stry it is part o#, an' t"e 'istincti%e acti%ities $n'erta*en by t"e

?rm +"ic" gi%es it an a'%antage . or 'isa'%antage 4 o%er its ri%als an'

competitors in t"e in'$stry)

T"is is especially tr$e #or t"e smartp"one in'$stry in In'ia +"ic" is

gro+ing at a staggering /7> CA


10/24

an' Apple spen' se%eral billions o# 'ollars in R&D ann$ally) T"ey pass on

t"ese R&D costs to t"e c$stomers by selling "an'sets at a premi$m +"ile

*eeping ot"er inp$t costs lo+) !"ile it is possible #or companies li*e Apple

an' Sams$ng to in%est so "ea%ily in R&D on t"e acco$nt o# t"eir 'eep

poc*ets, t"e same may not be possible #or ne+ players entering into t"ein'$stry) Micromax initially entere' into t"e smartp"one in'$stry in 7113

+it"o$t a 'e'icate' R&D center) T"e company a'opte' a non.tra'itional

b$siness mo'el, +"ereby t"ey so$rce' ?nis"e' goo's #rom t"eir C"inese

man$#act$rer oxconn) Design speci?cations +ere pro%i'e' to oxconn

an' e%en t"e pilot testing o# t"e pro'$cts +as 'one at s$pplier@s #acility in

C"ina) Jn'er t"is strategy t"ey 'i' not re$ire R&D, neit"er co$l' t"ey

start man$#act$ring in In'ia $ntil t"ey ac"ie%e' economies o# scale

a'%antage in man$#act$ring)=o+e%er, t"is strategy +o$l' not be able to

generate consistent pro?tability in t"e long r$n beca$se any competitor

co$l' imitate s$c" a strategy) To ens$re long term pro?tability Micromax

nee'e' to 'e%elop in."o$se R&D an' man$#act$ring capabilities in In'ia)

!it" t"at %ie+ in min', Micromax opene' its ?rst R&D center in


11/24

All t"ese R&D acti%ity +ill $ltimately lea' to increase in !TP #or Micromax

pro'$cts, +"ic" +ill enable it to enjoy "ig"er margins on its pro'$cts in

t"e coming years)

Inoun9 Logistics%

!"en Micromax starte' its jo$rney in 7113, t"e mobile p"one

mar*et in In'ia +as pretty m$c" a seller@s mar*et) =o+e%er, +it"

'eman's increasing consistently since t"en, t"e mobile p"one mar*et

$n'er+ent a ra'ical c"ange) O%er t"e last #e+ years se%eral ne+ players,bot" local an' global, "a%e entere' t"e in'$stry) T"e competition is

intense, especially in t"e lo+ an' me'i$m range smartp"one segments)

T"e pro'$cts o(ere' in t"is segment are mostly $n'i(erentiate', an' t"e

competitors engage in ?ercely conteste' price +ars) T"e *ey to enjoying

"ealt"y pro?tability in t"is in'$stry is to *eep t"e costs lo+) T"is is +"y

inbo$n' logistics becomes s$c" an important %al$e c"ain acti%ity #or a

company li*e Micromax)

Micromax imports most o# its pro'$cts #rom its OEM s$pplier in

C"ina) Cost o# p$rc"asing ?nis"e' goo's constit$te 59> o# t"e total

expense o# Micromax) T"e real clinc"er #or Micromax +as to tie $p

l$crati%e 'eals +it" Tier I r$ng man$#act$rers locate' in C"ina +"o are

associate' +it" global bran's li*e Apple, Sams$ng, o*ia etc) oxconn,

+orl'@s largest contract man$#act$rer, #or instance, "as been associate'

+it" Apple) Similarly, ;D, +"ic" +or*s on some Micromax "an'sets, "as

been associate' +it" o*ia) Typically Micromax or'ers 011,111 mobile

"an'sets at t"e entry le%el #rom t"eir man$#act$rers in C"ina) T"e %ol$me

gro+t" ens$res better cost eciencies, an' t"$s "elp Micromax get

%ol$me 'isco$nts #rom its s$ppliers) S$c" excl$si%e contracts +it"s$ppliers enable' Micromax to *eep t"e o%erall proc$rement cost lo+) T"is


12/24

cost a'%antage o# Micromax ga%e it a competiti%e e'ge o%er its ri%als in

t"e ?ercely conteste' lo+ margin smartp"one segment)

!"en Micromax starte' o$t in 7113 t"e mobile "an'set in'$stry

+as still gro+ing in In'ia) It +as not possible #or a ne+comer li*e

Micromax to start its pro'$ction in In'ia beca$se it +o$l' not get t"e

%ol$me sales re$ire' to ac"ie%e economies o# scale) So, t"ro$g"

excl$si%e contracts +it" s$ppliers Micromax +o$l' import ?nis"e' goo's

#rom C"ina, +"ile *eeping t"e cost o# proc$rement lo+) Se%eral ot"er

external #actors also "elpe' t"e ca$se o# Micromax an' similar ot"er local

players li*e Intex) T"e lo+ +age rate in C"ina "elpe' man$#act$rers li*e

oxconn inc$r lo+ man$#act$ring cost) As a res$lt, Micromax co$l' also

'eman' lesser prices #rom s$pplier) =o+e%er t"e scenario c"ange' in t"e

last co$ple o# years) T"e minim$m +age rate in C"ina +as "i*e' by

/:):>) T"is +as major s"oc* to all t"e man$#act$rers in C"ina as itres$lte' in increase in man$#act$ring costs, +"ic" t"ey passe' on to t"eir

b$yers li*e Micromax) T"$s proc$rement o# ?nis"e' goo's #rom C"ina

became a lot costlier) On top o# it Micromax "a' to inc$r signi?cant

expense in import an' excise '$ty +"ic" amo$nte' to abo$t /:>)

=o+e%er, a recent c"ange in t"e import tari( "as ma'e it c"eaper #or

In'ian companies to man$#act$re in In'ia) As part o# t"e Ma*e in In'ia

campaign, t"e import '$ty o# component importsC8D.Completely

8noc*e' Do+nK "as been re'$ce' to j$st />, +"ile t"at on import o#

?nis"e' goo's "as remaine' $nc"ange' at /7>) T"is means t"at it +ill belot c"eaper #or In'ian companies to import ra+ materials #rom abroa' an'

man$#act$re in In'ia) Ta*ing a'%antage o# t"is #a%orable tax policies,

Micromax opene' its ?rst assembly plant in R$'rap$r in 71/H) Since t"en

it "as anno$nce' plans to b$il' t"ree more man$#act$ring #acilities in

In'ia by 71/3) Micromax plans to s"ip its entire pro'$ction line to In'ia by

71/3) =a%ing no+ ac"ie%e' t"e %ol$me sales re$ire' to ac"ie%e

economies o# scale a'%antage, by man$#act$ring in In'ia Micromax +ill be

able to 'ri%e 'o+n t"e cost #$rt"er +"ic" +o$l' enable it to enjoy "ig"er

pro?tability in t"e #$t$re)


13/24

"utoun9 logistics%

T"e +are"o$sing an' 'istrib$tion o# ?nis"e' goo's constit$te

o$tbo$n' logistics) It incl$'es %ario$s acti%ities li*e transportation,

material "an'ling, an' pac*aging, comm$nication, an' in#ormation

systems) !"en Micromax starte' o$t it pic*e' "an'sets #rom C"ina,reba'ge' t"em an' sol' t"em in In'ia) D$ring t"at perio' smartp"one

in'$stry in In'ia +as still in its in#ancy) !"ile t"e rest o# t"e +orl' +as

?nally catc"ing $p +it" t"e smartp"one craGe, 'eman' in In'ia +as still

'ri%en by #eat$re p"ones) =a%ing starte' o$t +it"o$t any man$#act$ring

#acility in In'ia o# its o+n, Micromax co$l' t"ere#ore #oc$s all its e(orts on

setting $p an extensi%e 'istrib$tion net+or* t"ro$g"o$t t"e co$ntry) A

signi?cant aspect o# Micromax@s s$ccess is its 'istrib$tion net+or*) T"is is

somet"ing t"e company in"erite' rig"t at t"e time o# inception) Micromax

+as #o$n'e' in /99/ by Rajes" Aggar+al +"o +as a 'istrib$tor o# global

"ar'+are bran's li*e =P, Dell, Compa) T"e company le%erages itsalrea'y establis"e' 'istrib$tion net+or* to spee' $p t"e la$nc" o# ne+

pro'$cts in t"e In'ian mar*et) So, +"ere Micromax ta*es barely a mont"

or t+o to la$nc" pro'$cts, anot"er big international bran' re$ires

ro$g"ly /3 mont"s #or a similar pro'$ct to go t"ro$g" t"e retail pipeline)

T"is gi%es t"em a signi?cant a'%antage o%er its ri%als li*e Intex) T"is is

beca$se s$ccess in t"e lo+ price' lo+ margin smartp"one segment

'epen's majorly on t"e n$mber o# ne+ pro'$cts la$nc"e' by t"e players

an' also t"e spee' at +"ic" t"ese pro'$cts are bro$g"t to t"e c$stomers

t"ro$g" t"e retail c"ain) Its alrea'y existing 'istrib$tion net+or* "elpe'

Micromax to expan' its presence t"ro$g"o$t t"e co$ntry)Anot"er reason #or Micromax@s s$ccess in 'istrib$tion is t"at t"e

company speci?cally so$g"t to target segments o# t"e In'ian smartp"one

mar*et +"ic" +as still $npenetrate' by t"e global players) E%er since its

inception, Micromax@s strategy "as been to target t"e still $ntargete'

r$ral segment) =$ge gro+t" potential in t"is mar*et segment meant t"at,

being t"e ?rst mo%er, it co$l' generate signi?cant %ol$me sales by

bringing o$t a(or'able smartp"ones +it" longer battery li#e) Electricity is

a major problem in r$ral In'ia t"ere#ore, Micromax@s o(ering o# %al$e #or

money smartp"ones +it" longer battery li#e +as a big "it among In'ianr$ral cons$mers);y increasing t"e siGe o# t"e battery to /311 mA",

Micromax +as able to to$t a stan'by time o# :1 'ays #or t"e B/i) An' at

t"e rat"er a(or'able price o# Rs) 7,/01, t"e p"one +as a big s$ccess in

r$ral In'ia) T"e extensi%e presence o# Micromax in Tier II an' Tier III cities

"a%e "elpe' Micromax consistently increase its mar*et s"are year.on.year

by selling "$ge %ol$mes o# lo+ price' lo+ margin smartp"ones)

In Tier I cities Micromax speci?cally targete' yo$t" pop$lation by

bringing o$t ne+ an' inno%ati%e #eat$re p"ones li*e sel?e p"one, camera

p"one etc) T"ro$g"o$t t"e co$ntry it "as set $p extensi%e 'istrib$tionnet+or* an' retail c"annel) Micromax "as :H s$per.stoc*ists, H01


14/24

'istrib$tors an' 00111 retailers sprea' across t"e co$ntry) S$c" an

extensi%e 'istrib$tion c"annel "as "elpe' Micromax generate sales in

excess o# one million $nits a mont") It "as also recently opene' /01

excl$si%e stores, calle' QExperience Gones, #or t"e $rban pop$lation)

Micromax also sells its p"ones t"ro$g" lea'ing mobile stores li*e EGone,Croma, Reliance !eb !orl', Reliance Digital, Planet M, T"e mobile stores

etc) Players li*e Micromax also enter into l$crati%e contracts +it" t"ese

retailers +"ic" enable t"em to re'$ce t"eir in%entory t$rnaro$n' time,

+"ile *eeping t"e 'istrib$tion costs lo+er t"an t"e competitors)or t"e

;7C mo'el, "ig"er margins $p to /0 per cent +ere o(ere' to t"e 'ealers,

+"ic" +as "ig"er t"an t"e in'$stry a%erage o# 2 per cent to /1 per cent)

An' 'istrib$tors +ere o(ere' "ig"er margins t"an +"at o*ia o(ere') T"is

"elpe' t"em penetrate t"e mar*et 'eeper into t"e $rban mar*ets) In ;7;

mo'el, +"ere corporate selling +as in%ol%e', tie $ps +it" major corporate

"o$ses sa%e' t"e margins o# t"e 'istrib$tors an' Micromax co$l' pro%i'e

t"e corporate "o$ses a lesser price t"an t"e mar*et) T"$s, t"e target

mar*et o# pro#essionals +as reac"e') To #$rt"er expan' its reac" in t"e

In'ian mar*et an' penetrate t"e r$ral mar*et, Micromax is also b$n'ling

its pro'$cts +it" telecom ser%ice pro%i'ers li*e Aircel #ollo+ing in t"e

#ootsteps o# ot"er players in t"e in'$stry)

Online c"annel is gra'$ally becoming t"e most #a%ore' 'istrib$tion

c"annel among global tec"nology giants li*e Motorola, Sams$ng, Apple,

Biaomi etc) In'ian "an'set ma*ers are increasingly selling t"eir ne+smartp"ones t"ro$g" online c"annels, "oping to mimic t"e rob$st sales

t"at Biaomi an' Motorola "a%e reporte' in In'ia by tapping t"e cost

a'%antage an' 'irect cons$mer connect t"at t"e me'i$m o(ersSelling

online only "elps "an'set companies *eep greater control on c"annel,

'istrib$tion an' s$pply c"ain, +"ile *eeping mar*eting an' pricing policies

separate) It also "elps bran's stay lean an' at t"e same time target

millions in $rban an' s$b$rban In'ian mar*ets) =a%ing a'opte' t"e

online.only selling mo'els, C"inas Biaomi an' JS.base' Motorola "a%e

alrea'y manage' to grab abo$t /> an' 0> mar*et s"ares, respecti%ely,+it"in mont"s o# entering a complex geograp"y li*e In'ia +"ere b$il'ing a

soli' oine 'istrib$tion net+or* ta*es time an' is costly) ollo+ing t"is

online only 'istrib$tion mo'el, Micromax la$nc"e' its $re*a bran' o#

smartp"ones t"ro$g" a s$bsi'iary) 70111 'e%ices +ere sol' in secon's

o%er t+o as" sales in AmaGon) T"$s Micromax, t"ro$g" its *no+le'ge o#

t"e In'ian mar*et an' its cons$mers, +as able to le%erage bot" t"e oine

an' online c"annel o# 'istrib$tion to increase its sales an' mar*et s"are

o%er t"e years)

http://economictimes.indiatimes.com/topic/Xiaomihttp://economictimes.indiatimes.com/topic/Motorolahttp://economictimes.indiatimes.com/topic/Motorolahttp://economictimes.indiatimes.com/topic/Xiaomi


15/24

*ar6eting% T"e biggest c"allenge #or Micromax imme'iately a#ter entering t"e

In'ian mar*et +as to c"ange t"e bran' i'entity perception among

cons$mers) Percei%e' as a C"inese bran' intitially, Micromax +as a

pre#erre' bran' in t"e r$ral areas an' #or t"e same reasons +as notconsi'ere' 'esirable in t"e $rban areas) To penetrate t"e $rban mar*ets,

an image correction +as re$ire' an' a bran' strategy nee'e' to #a'e t"e

memories o# o*ia #rom t"e min's o# t"e cons$mers) !it" t"at %ie+ in

min' Micromax increase' its a'%ertising an' mar*eting expen'it$res

mani#ol') A%erage mar*eting an' a'%ertising expenses o# Micromax is

abo$t //> o# t"e total expenses, compare' to t"e in'$stry a%erage o# 5>)

Micromax "a' a 'eep $n'erstan'ing o# t"e In'ian mar*et +"ic" ga%e

t"em a signi?cant a'%antage o%er any o# t"eir tra'itional competitors) It

targete' t"e r$ral mar*et an' came $p +it" pro'$cts t"at +o$l' be a big

"it among r$ral c$stomers) Micromax@s JSP o# selling a(or'able, %al$e #or

money pro'$cts +it" longer battery li#e +as an instant s$ccess as it

appeale' to t"e r$ral c$stomers)

=o+e%er, similar %al$e proposition +o$l' not able to 'ri%e $p t"e

'eman' #or Micromax smartp"ones in t"e $rban an' semi.$rban mar*et)

So, t"ey spent big on celebrity en'orsements an' cric*et sponsors"ips to

increase %isibility o# t"e bran') At ?rst t"ey targete' t"e yo$ng $rban

#emale pop$lation by bring o$t t"e bling series o# "an'sets) Micromax

rope' in a #ace t"at +as consi'ere' elegant an' nic"e, T+in*le 8"anna)Micromax grabbe' t"e insig"t t"at


16/24

aggressi%e mar*eting an' a'%ertising st$nts 'i' not gi%e Micromax any

signi?cant e'ge o%er its ri%als, it 'i' "elp t"e bran' increase its %isibility

in t"e In'ian mar*et)

Ater Sales Service%A#ter sales ser%ice constit$te one o# t"e most important %al$e

creating acti%ity #or tec"nology companies li*e Micromax beca$se o# "ig"

in%ol%ement pro'$cts sol' in t"e mar*ets) Typically in In'ia, t"e sale o#

"ig" in%ol%ement tec"nology.'ri%en pro'$cts li*e smartp"ones is 'ri%en

to some extent by t"e a%ailability o# ser%ice centers in t"e c$stomer@s

%icinity) T"at is +"y, all t"e major players in t"e smartp"one in'$stry are

starting to in%est "ea%ily to re%amp an' impro%e t"e existing t"e a#ter

sales ser%ice in#rastr$ct$re in t"e co$ntry)

Micromax, li*e its competitors, "a%e ma'e "$ge in%estments ina#ter.sales ser%ice an' "a%e opene' more t"an :51 ser%ice centers in

'i(erent parts o# t"e co$ntry) Micromax "a%e recently establis"e' a

ser%ice #actory in e+ Del"i +"ic" pro%i'e a compre"ensi%e range o#

ser%ices, incl$'ing c"ipset an' PC; replacement ser%ice) T"e ser%ice

#actory s$pports t"eir mo'$lar componentK ser%ice centers an' ASCs by

s$pplying necessary in%entory an' s$pporting t"eir tec"nical teams in

or'er to re'$ce t$rnaro$n' time) Tec"nical an' process orientation

training is gi%en to all t"e mo'$lar an' ASC ser%ice centers, t"$s "elping

to impro%e t"e le%el o# ser%ice $ality) T"is $ic* t$rnaro$n' time "as

been a *ey 'i(erentiating #actor Micromax +it" respect to its competitors

li*e Intex, La%a, 8arbonn etc) !"ile percentage o# calls to ser%ice centers

#rom o%erall installe' base "as come 'o+n by a #actor o# t+o, o%erall

complaints pen'ing #or more t"an 7/ 'ays "as come 'o+n by a #actor o#

?%e) T"ese "a%e res$lte' in consi'erable ser%icing cost re'$ction #or

Micromax) A#ter sales ser%ice increase t"e !TP to pay #or Micromax

pro'$cts an' strengt"en relations"ip +it" existing c$stomers, t"$s lea'ing

to an increase in t"e bran' e$ity)

Conclusion%!"en Micromax starte' its jo$rney in 7113, smartp"one mar*et in

In'ia +as still in its in#ancy) Cons$mers +ere a'apting to +"at +as being

o(ere') So it +as pretty m$c" a seller@s mar*et) Early entrants into t"e

in'$stry li*e Sams$ng, o*ia an' Apple sol' smartp"ones at a premi$m

beca$se o# t"e associate' bran' i'entity) =o+e%er, since t"en bot" t"e

mar*et an' t"e in'$stry "as $n'ergone a ra'ical c"ange) T"e smartp"one

in'$stry is gro+ing at a staggering /7> CA


17/24

#$rt"er "elpe' t"eir ca$se) T"e mar*et gra'$ally trans#orme' into a

b$yer@s mar*et +it" t"e gra'$al increase in 'eman') Especially t"e lo+

an' me'i$m price' segment o# t"e smartp"one in'$stry is ?ercely

compete' by 'i(erent players) irms engage in price +ars, an' companies

are re$ire' to implement cost.competiti%e b$siness mo'el to ens$reconsistent pro?tability)

rom t"e %ery beginning Micromax@s strategy "as been t"at o#

a(or'able inno%ation) It targete' t"e r$ral an' semi.$rban segment o# t"e

mar*et, +"ic" +as still $npenetrate' at t"at time, an' too* a'%antage o#

t"e rapi'ly gro+ing smartp"one mar*et to increase its mar*et s"are by

generating consi'erable %ol$me sales in t"e r$ral mar*et) It tailore' its

pro'$cts to t"e re$irement o# t"e r$ral people) Electricity being t"e

major iss$e in r$ral areas, Micromax came o$t +it" p"ones "a%ing %ery

long battery li#e) In t"e $rban mar*et it targete' t"e gro+ing yo$t" an'#emale pop$lation by la$nc"ing #eat$re p"ones) eat$re p"ones is t"e

#astest gro+ing segment in t"e smartp"one in'$stry, an' Micromax

la$nc"e' p"ones li*e sel?e p"one, camera p"one etc, to appeal to t"e

yo$ng cons$mers in Tier I an' Tier II cities) Recently Micromax "as opene'

$p a R&D #acility in


18/24

71/3) C$rrently it "as one man$#act$ring #acility in R$'rap$r, an' is in t"e

process o# setting $p t"ree more) In."o$se man$#act$ring capability +ill

'ri%e 'o+n t"e costs #$rt"er an' impro%e pro?tability in t"e coming years)

71/1 71// 71/7 71/: 71/H

.01

1

01

/11

/01

711

")erating Perormance In9icators ; *icroma4

DSO DIO DPO Cas" Cycle Operating cycle

71/1 71// 71/7 71/: 71/H

.71

./1

1

/171

:1

H1

01

21

51

Cash Ccle

Micromax Intex

Excl$si%e contracts +it" s$ppliers an' 'istrib$tors "as "elpe'

Micromax spee' $p its cas" con%ersion cycle o%er t"e years) !"ile ?%e

years ago Micromax@s cas" con%ersion cycle o# H1.01 'ays +as #ar greatert"an t"e in'$stry a%erage, to'ay Micromax "as been able to re'$ce its

cas" con%ersion cycle to a meagre 3 'ays) T"is is lo+er t"an t"at o# Intex,

Micromax@s biggest competitor in t"e lo+ range smartp"one segment)

T"e cost re'$ction ac"ie%e' in 'i(erent %al$e c"ain acti%ities,

mainly inbo$n'.o$tbo$n' logistics an' a#ter sales s$pport, "as "elpe'

Micromax enjoy "ig"er pro?tability margins +"en compare' to its

competitors li*e Intex) T"e grap" belo+ s"o+s t"e %ario$s pro?t margins

o# Intex an' Micromax o%er t"e years)


19/24

71 / / 7 1 /7 7 1/ : 71 / H1

0

/1

/0

71

70

PB+ITA as < o total income

Micromax Intex

71 / / 71/ 7 71 / : 71 / H1

7

H

2

3

/1

/7

/H

PAT at < o total income

Micromax Intex

Micromax capitaliGe' on a rapi'ly gro+ing smartp"one mar*et an'

targete' t"e r$ral segment o# t"e mar*et, +"ic" +as still $npenetrate' at

t"e time, to 'ri%e $p %ol$me sales o# its pro'$ct an' increase t"e mar*et

s"are) =a%ing a 'eep $n'erstan'ing o# t"e In'ian cons$mers an' t"eenjoying t"e a'%antage o# being t"e ?rst mo%er enable' Micromax to

expan' its presence in t"e In'ian as +ell as global mar*et) D$ring t"e last

$arter o# 71/H, Micromax became t"e largest smartp"one man$#act$rer

in In'ia by %ol$me) Alt"o$g" Sams$ng regaine' t"e top position in mar*et

s"are in 71/0, Micromax is still gro+ing strong an' is c$rrently on 7n'

position) =o+e%er, a c"ange o# strategy is re$ire' i# Micromax is to

s$r%i%e in t"e in'$stry an' enjoy consistent long term pro?tability) Almost

all t"e %al$e c"ain acti%ities t"at eit"er le' to re'$ction in cost, or

increase in !TP #or Micromax cannot gi%e t"e company a s$staine' longterm a'%antage o%er its ri%als) T"is is beca$se most o# t"e core %al$e


20/24

c"ain acti%ities o# Micromax can be imitate' by its competitors in t"e long

r$n) ;esi'es, t"e cost o# p$rc"asing ?nis"e' goo's #rom C"ina "as also

gone $p '$e to increase in labor +age rates an' $n#a%orable 'ollar

$ct$ation) To enjoy long term s$stainable pro?tability in a 'ynamic

in'$stry li*e cons$mer electronics, inno%ation is o# $tmost importance)Increasing its R&D expenses in t"e #$t$re +ill enable Micromax to

compete e%en in t"e premi$m p"one segment +"ere it can enjoy "ig"er

margins) It "as also 'e%elope' in."o$se man$#act$ring capability in In'ia,

+"ic" +ill #$rt"er bring t"e cost 'o+n an' increase t"e pro?tability

margin)

Micromaxs gro+t" strategy "as #ollo+e' t"ree clear stages) !"en it

starte' o$t, t"e company pic*e' "an'sets #rom C"ina, reba'ge' t"em an'

sol' t"em in t"e In'ia mar*et)In t"e secon' stage, it realise' t"e nee' to

'o extensi%e researc" in terms o# In'ian cons$mers 'eman's an' pro'$ct'e%elopment)o+ it "as crosse' o%er into a ne+ p"ase, +"ere t"e

company "as starte' #ollo+ing a mix.an'.matc" strategy . getting some

pro'$cts man$#act$re' in C"ina an' ot"er co$ntries, so$rcing

components #rom abroa' an' man$#act$ring some o# t"e ne+er lines in

In'ia) Only time +ill tell +"et"er Micromax is able to le%erage t"is

ne+#o$n' strategy to enjoy long term pro?tability)

RI analysis

,esource

s

8alua

le

,ar

e

Inimita

le

Non-sustituta

le

,=+

E4clusive

contracts

&ith

su))liers

s"ort

r$nK

Asset

Light

Business

*o9el

E4clusive

stores

!e4)erien

ce >ones$


21/24

Service

un9ling

s"ort

r$nK

E4clusive

"nline

Selling!Ama>on$

Ater

Sales

Service

,esearch = +evelo)ment% !"at ga%e Micromax a competiti%e a'%antage o%er

its ri%als li*e Intex is t"e spee' at +"ic" it +as able to intro'$ce ne+ pro'$cts to

t"e mar*et) Moreo%er, $ Tele%ent$res, a s$bsi'iary o# Micromax, "as recently

?le' #or #o$r patents on "ar'+are inno%ation 'esign) =ence t"is reso$rce is

valuale to t"e company as it +o$l' 'ictate t"e mar*et s"are in t"e coming

years as tec"nology impro%es an' t"e company nee's to stay a"ea' in t"e

tec"nological c$r%e) It is not rare beca$se almost all companies "a%e an R&D

'epartment)

E4clusive contract &ith su))lier% ) Excl$si%e contracts +it" s$ppliers li*e

oxconn allo+s Micromax to enjoy %ol$me 'isco$nt on its import o# ?nis"e'

goo's +"ic" res$lts in consi'erable cost re'$ction) T"e contract also enablesMicromax to t"e get t"e a'%antage #a%o$rable cre'it policies +it" t"e s$pplier)

T"is reso$rce "as "elpe' micromax to re'$ce t"e selling price an' pass on t"e

a'%antage to t"e b$yer) It is valuale to t"e company as it 'ri%es en' sales)

=o+e%er, it is not in imitable as company can r$n o$t o# contracts anytime or

competitors can get into contracts +it" s$ppliers t"emsel%es) T"e reso$rce is

non.s$bstit$table

Asset Light Business *o9el% T"e online retail penetration "as "elpe'

Micromax to set $p an asset lig"t b$siness mo'el in its %al$e c"ain) T"is "as

"elpe' t"e company to re'$ce spen'ing excessi%ely on capital expen'it$re li*e

pro'$ction #acilities an' store o$tlets) T"is sa%ing in in%estment co$l' be $se' in

ot"er acti%ities li*e R&D an' bran'ing) T"e pro?ts realiGe' co$l' be rig"t a+ay

$tiliGe' in mar*eting t"e pro'$cts, t"$s expe'iting t"e %al$e c"ain process)T"is

ma*es it a %al$able reso$rce to t"e ?rm) ;$t it is neit"er rare or in.imitable

E4clusive stores !e4)erience >ones$% Micromax "as /01 experience Gones

sprea' across t"e co$ntry) =ere c$stomer can get t"e loo* & #eel o# t"e 'e%ices)

T"ese centers +ill pro%i'e c$stomers +it" $ni$e pro'$ct experience, somet"ing

t"ey miss +"en b$ying #rom online retail c"annels) T"is en"ances bran' i'entity

an' cre'ibility o# t"e company) It establis"es long term c$stomer relations"ips &

sa%es cost o# ac$iring ne+ c$stomers +"ic" is more t"an retaining t"em)=o+e%er t"is is not t"e only mar*eting c"annel, "ence it is s$bstit$table


22/24

Service un9ling% Micromax is also b$n'ling its pro'$cts +it" telecom ser%ice

pro%i'ers li*e Aircel #ollo+ing in t"e #ootsteps o# ot"er players in t"e in'$stry)

T"is gi%es t"em "ig"er penetration in t"e In'ian mar*et) It also "elps t"e

company to loc* in c$stomers #or /.7 years) T"is is in imitable in t"e s"ort r$n as

it ta*es co$ple o# years to get into contract +it" telecom companies)

E4clusive "nline Selling% Online only 'istrib$tion mo'el, Micromax la$nc"e'

its $re*a bran' o# smartp"ones t"ro$g" a s$bsi'iary) 70111 'e%ices +ere sol' in

secon's o%er t+o as" sales in AmaGon) T"$s Micromax, t"ro$g" its *no+le'ge

o# t"e In'ian mar*et an' its cons$mers, +as able to le%erage bot" t"e oine an'

online c"annel o# 'istrib$tion to increase its sales an' mar*et s"are o%er t"e

years)

Ater Sales Service% Micromax, li*e its competitors, "a%e ma'e "$ge

in%estments in a#ter.sales ser%ice an' "a%e opene' more t"an :51 ser%ice

centers in 'i(erent parts o# t"e co$ntry) Micromax "a%e recently establis"e' a

ser%ice #actory in e+ Del"i +"ic" pro%i'e a compre"ensi%e range o# ser%ices,

incl$'ing c"ipset an' PC; replacement ser%ice) $ic* t$rnaro$n' time in

ser%icing "as been a *ey 'i(erentiating #actor Micromax +it" respect to its

competitors li*e Intex, La%a, 8arbonn etc) T"is reso$rce is %al$able as it pre%ents

c$stomers to s+itc" bran's) Also a#ter sales ser%ice cannot be replace') It is a

part o# c$stomer retention strategy)

Competitor 'ynamics

Com)etitor Analsis

All major companies in t"e in'$stry "a%e t"e same common reso$rces an' t"e

same set o# s$ppliers) T"e "ar'+are an' t"e c"ipsets $se' in t"e p"ones are

almost similar) T"e primary reso$rces $se' in t"e smartp"ones are CPJ, C"ipset,


23/24

*otivation-

rom a strategic point o# %ie+, t"ere is no better mar*et #or mobile p"ones t"an

In'ia) T"e "$ge potential mar*et +it" 3/7 million potential $sers by 71/9 is

"ar'ly #o$g"t by all competitors) Mobile p"one companies are li*ely to in%est Rs

201 crore by Marc" an' pro'$ction o# "an'sets in %al$e terms is expecte' tocross Rs H1,111 crore by t"e en' o# c$rrent ?scal) T"is j$st 'escribes t"e sta*es

p$t by t"e in'$stry on In'ia.

Ca)ailit

C$rrently all t"e major competitors "a%e t"e reso$rce an' talent capability to

compete in t"e mar*et) ot a great le%el o# expertise in nee'e' by t"e

companies beca$se t"e majority o# pro'$ction is o$tso$rce' to C"inese an'

Tai+anese man$#act$rer) ;$t t"e economic bac*ing by t"e in%estors an' parent

companies is s$bstantially large) Micromax got N /)7 'ollars in%estment #rom

Alibaba, Biaomi a C"inese competitorK is %al$e' at N 01 billion an' it is in%esting"ea%ily on In'ia) Intex mobiles also in%este' /111 crore r$pees in b$il'ing plants

in Rajast"an)

Current Business *o9el

Inbo$n'O$tbo$n'

Logistics Excl$si%eContracts

Lo+ Costs

Man$#act$ring in

C"inaLo+ Price

Lo+

T$rno%er

time Mar*et

S"areloo' mar*et

+it" p"ones

;ran' propagation $sing

;ran' Ambassa'or an' Asia

C$pAggressi%e mar*eting an'

A'%ertising Strategy

Targeting nic"e

segments s$c" as r$ral

an' #emale


24/24

?uture Business *o9el

"TC"*E

T"e o$tcome o# s$c" intense ri%alry "as been intense price +ars) T"is "as le' to

+a#er t"in margins in t"e in'$stry) Almost all t"e companies are s$(ering '$e to

t"is *in' o# lo+ margin operation) Micromax net pro?t +as j$st 2)/ > in t"e year

71/:./H, +"ile La%a an' 8arbonn "a' a pro?t margin o# 0)2 > an' 9)/ >

respecti%ely) So any 'ip in prices or increase in costs can "$rt t"ese companies

?nancially) T"e mobile companies are le%eraging t"e 'eep poc*ets o# t"e

in%estors to gain maxim$m possible mar*et s"are, "o+e%er se%erely losing o$t

on pro?ts)

Inbo$n'

O$tbo$n'

LogisticsLo+ Price

Lo+ Cost

In =o$se

Man$#act$ring

R & DMar*eting an'

;ran'ing

Mar*et S"are

Pro?t

!TP

Price

How Micromax Rose to Prominence

Documents

Transcript of How Micromax Rose to Prominence