Documente Academic
Documente Profesional
Documente Cultură
Roll no. 05
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38 39 54
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Jalpesh Bavishi
Pradipsinh Jadeja Monali Jani Bharat Lalwani
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Manisha Sharma
Flow of Presentation
Industry Company
Overview
o Introduction o Market shares of major
Overview
o Introduction o Business Life Cycle o Products and PLC o Structure o Vision o SWOT o Porters Diamond Model o GE Matrix o Strategies o Value Chain Model o Financial Analysis o IPO and Objectives o Summery
players o Key features for growth of the market o ETOP o Porters Five forces model
Introduction to Industry
market share of Nokia in India stood at 52.2%.11.8% fall from 64% in the last financial year. Samsung with its wide range of Corby and Star branded mobiles has caught the attention of young Indians that played its part in raising its Market share from 10% to 17.4%. LG stands third at 5.9% share.
whose combined market share was just lurking between 3 to 4% in the previous financial year has grown up to 14%. Micromax mobiles topped the chart (of Indian makers) with 4.1% share followed by Spice (3.9%) and Karbonn mobiles (3%). Recent entrants such as Lava mobile, Lemon mobiles and Max mobile too are hovering around that 1% market share. Its not rocket science that why these Indian handset makers saw that instant success. Its all thanks to the falling telecom calling prices and hence the need for Dual sim mobiles. These handset makers made huge money in very little time and were sponsoring events like crazy, including the BCCI cricketing events, which isnt a
Others 16%
Nokia 53%
Samsung 17%
Source: http://www.sriraj.org/
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class. Spending priorities have changed from basic necessities to luxuries. From 12th to 5th consumer market position.
telecomm market in the world in terms of wireless connections (as per TRAI). The industry can be divided into three basic, mobile and internet services. With the implementation of the GoI's Broadband Policy in 2004, the number of broadband connections has increased to 8.77 million subscribers as of March 31, 2010, and according to TRAI, the President of India has 11 set a target of 100 million connections by
increased by 104% from 286 million subscribers in 2008 to 584 million in 2010.
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from116 million handsets in 2008 to 151 million handsets in 2009. Major growth was driven by ASP(Average selling Price) devices (Rs.2000 to Rs.5000). Contribution of ASP about 45%.
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USB modem market stood at 2.02 million units in volume terms and 5,179.72 million in value terms for the twelve month period ended March 31, 2010. (Source: IDC India, 2010)
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household incomes investment into entertainment. Indias changing demography. Growing need of mobility and connectivity. Infrastructure sharing reduce costs - affordable prices. Low mobile penetration
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new users. More innovative and sophisticated products needed(music, e-mail, 3G).
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ETOP
Environmen Nature of tal sector impact Impact on handset market
Favorable demographic conditions, youngsters spends more on entertainment. India is the fastest growing telecomm market, 2nd in the world. Underpenetrated rural market. Big competition and big players available. in underdeveloped Opportunity countries. Corrupt politicians.
Economical
Market
International
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Social
Supplier Technology
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Rivalry
Highly concentrated industry.
Diversity of competitors.
Product differentiation.
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mobile itself is the substitute of the camera, i-pod and many other things.
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Unwanted differentiation in products(eg. Nokia have to go for dual sim phones) Second hand handset market.
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Company Overview
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Private Limited in March 2000. Entered the mobile handset market only in 2008. Micromax is the largest Indian domestic mobile handsets company in terms of units shipped during the quarter ended March 31, 2010 and the third largest mobile handset seller in India as on March 31, 2010.
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Key Events
YEAR EVENTS
2000
2001
Incorporation
Software and e-commerce development business
2003
YEAR
EVENTS
2008
- Started assembling of fixed phones and terminals wireless - Started the mobile handset business - Tie up with BSNL for 3G data cards Tie up with Airtel for launching data cards -Tie up with MTNL and ONGC for supplying of data cards - Co-sponsored Apsara Awards (first such sponsorship) - Private equity investment by Wagner -Title Sponsor for IIFA Awards
2009 2010
2011
Purchase of 3,01,260 shares by Sequoia, Sandstone and Madison from the promoters
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Products
Universal remote control phone
3G mobile phones
Smart phones Gaming mobile phone Qwerty keypad mobile phones Long life battery mobile phones Dual reception mode handsets Gravity phones
Introduction
Universal remote control phone 3G mobile phones Dual reception mode handsets Gravity phones
Growth
Smart phones Gaming mobile phone Qwerty keypad mobile phones Long life battery mobile phones Multimedia mobile phones
Decline CDMA
Key Personals
Name Mr. Rajesh Agarwal Mr. Rahul Sharma Mr. Sumit Kumar Mr. Vikas Jain
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Position Managing Director Executive Director Director & Chief technical officer Executive Director
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employees. Lesser hierarchy. Speedily communication, speedily decision making, reflected in speedily launch of the product.
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Vision
The company's vision is to develop path-breaking technologies and efficient 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 'Innovation' and delivering "nothing short of the best".
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Comments..
No vision mission available on
official website Mission, vision necessary to motivate employees, build corporate culture and communication to external people.
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SWOT Analysis
Strength
Specialist expertise market New innovative products Cost advantage through priority know how
Weakness
High dependence on OEMs and distributors and after sales service providers Less experience first generation entrepreneurs Lack of manufacturing expertise
Opportunities
Growing telecommunication industry Increase in disposable income due to increasing income Dominance of young generation in Indian population Consumer preference for high quality at lower price
Threats
Logo not patented Pending legal suits Changing consumer preferences New entrants Counter strategies by established players
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cost leadership with differentiation. High demand for quality and innovation products at lower price. Growing numbers of service providers. Favorable condition of factors of productions.
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GE MATRIX
INDUSTRY (category) ATTRACTIVNESS
HIGH
HIGH
LOW Selectively build Marathon battery phone Limited expansion for divest Gravity phones
MEDIUM
Selectively Selectively build manage Qwerty phones Touch screen Re-focus Multimedia
LOW
Manage for Harvest / Divest earning CDMA Gaming phones Utility phones
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Market penetration
Market development Product development
Integration
Vertical
Expansion
Diversification
Related
Internationalization
MICROMA X
Digitalization
With differentiation
Combination
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Simultaneous
COMPETITIVE STRENGTHS
Combination
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of technical expertise and understanding of Indian consumer behaviour. Strong product development capabilities. Efficient and speedy execution capability. Extensive nationwide distribution network. Nationwide after sales support. Diversified across products, geographies
STRATEGIES OF MICROMAX Continue to build Micromax as an innovation focused brand. Continue to expand the product portfolio and invest in product development. Expand distribution network and after sales services networks. Target high growth avenues for the mobile handset business. Developing subscription based applications for providing value added services . Pursue strategic acquisitions and investments in India and abroad. Establish own manufacturing facility in India.
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Primary Activities
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Inbound Logistics
Free delivery from Original Equipment
Suppliers (OES) of China In house logistic team take care of the Original Equipment Suppliers (OES)
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Operations
Using
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Surface Mount Technology (SMT) and testing line equipments, which will allow to mount components directly onto the surface of PCBs(printed circuit board), solder the components, annealing, assemble the various other components of the handset to the surface mounted PCB and finally test/ run quality control diagnostics on the product at various stages in the
The
manufacturing facility will have the capability of producing basic handset models as well as models with smart phone features. The proposed manufacturing facility will enable to manufacture up to 2.0 million handsets per month based on two, 10 hour shifts per day on an aggregate of nine SMT lines and a box-build assembly.
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Outbound Logistics
On the arrival of consignment at its distribution
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hub, an appointed customs house agent processes the consignment and arranges for the consignment to be transported to warehouse situated in the distribution hub. On arrival the consignment is checked, unpacked and packaged for onward distribution. Products from warehouses in Delhi and Dubai are transported to state and regional distributors and international distributors respectively through appointed third party transporters, who use a combination of air transport and road transport to deliver the products.
delivery of the products on a real-time basis to ensure our products are delivered on a timely basis.
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Marketing
Brand Ambassador to increase brand Image RadioContent integration with RJ Build Brand imageQuality and Reliability
In Films & PR
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Sales
National sales Head
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third party including Srilanka, Dubai and Nepal. They are providing technical bulletins and process documentation online through a secured internet platform. Further, they also update their ASCs and modular (component) service centers at regular intervals on the technical specifications and other relevant information for new products to ensure that they are adequately equipped in time to be able to service all queries pertaining to new products.
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Supportive Activities
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service people for customer satisfaction and retention. Good incentive margins to distributors to motivate. Dedicated to the development of the expertise and know-how of the employees. Training need identification through survey. Buy in talent and recruitment of employees through empanelled consultants, online employment portals, campus recruitment and through referrals in line with cost leadership
Prototype batch and testing Packaging brand strategy Final prototype approved Pilot testing order launched Product feedback
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activities. High dependence on third party may cause a risk but planning for backward integration. Value addition can be there by creating corporate culture.
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Financial Analysis
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Foreign Venture capitalists (Sandstone, Sequoia and Madison ) Individuals/HUF (promotersRahul Sharma, Rajesh Agarwal, Sumeet Kumar and Vikas Jain)
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05.77
79.33
GP Ratio
YEAR Mar 2010 Mar 2009 GP Ratio 20.94 14.17
Mar 2008
Mar 2007 Mar 2006
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15.37
7.96 4.89
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GP ratio
15
10
GP ratio
Mar2006
Mar2009
NP Ratio
YEAR Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006
14 12 10 8
NP ratio
6 4 2 0
Mar2006
Mar2009
Mar 2009
Mar 2008 Mar 2007 Mar 2006
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1.41
0.89 0.29 0.05
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10 8 6 EPS 4 2 0
Mar2006
Mar2009
capital
YEAR ROC
74.46 37.62
31.48 39.57 36.25
Return on capital
60 50 40 ROC
30 20 10 0
Mar2006
Mar2007
Mar2008
Mar2009
Mar2010
Worth
YEAR RONW
100.71 52.54
67.01 79.06 71.53
100
80
60
RONW
40
20
Mar2006
Mar2007
Mar2008
Mar2009
Mar2010
Current ratio
YEAR Current ratio
1.5 1.31
3.31 1.24 1.14
Current ratio
Mar2006
Mar2009
Quick Ratio
YEAR Mar 2010 Quick Ratio 1.22
1.06 2.66
0.97 1.09
Quick ratio
1.5 1 0.5 0
Mar2006
Mar2009
Debt-Equity Ratio
YEAR Mar 2010 D/E 0.24
Mar 2009
Mar 2008 Mar 2007 Mar 2006
1.8 1.6
0.66
1.34 0.721 1.60
Debt-equity ratio
Mar2006
Mar2009
capability of manufacturing 2mn sets a month. 2) Enhancement of the brand through advertisement and marketing. 3) Acquisitions and other strategic issues. 4) Funding expenditure for general business purposes.
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Summary
Strong competition among established
as well as small newer players. Micromax is growing very fast with technical expertise and insight in consumer behaviour. Micro player with Micro technology doing Max effect and impacting Max players
Bibliography
www.micromaxinfo.com www.ibef.org www.google.com www.valuebasemanagement.net www.wikipedia.com
www.spicemobile.com
www.nokia.com RED HERRING PROSPECTUS of Micromax
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