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Tariq Kareem Adnan Shabbir

Qasim Mushtaq

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Case Study

Building Home Browsing PC Segment

Genensis
The use of internet and PCs is increasing day by day everywhere ,for household use for corporate sector and in industries, computer hardware and software now become life line of every citizen. An immense increase in the demand of WiFi and WiMAX enabled devices enhancing the connectivity of peoples place high opportunity for IT corporations.

Contd..
These are the cutting edge technologies which are essential for corporations to sustain thier competitive advantage on global scale .But the point is high inflation rates leading to the little spending on the computer purchase by home user.

Trends in Indian PC Market

The unbranded PCs are dominating in the indian market, indiviuals are the biggest buyers of the unbranded PCs .In commercial sector buyers are using major local and multinational brands.

Current Market Share

60% 60%

50%
40%

40%

non-branded
branded

30%
20%

10%
0% PCs

Contnd
Indian market is growing for notebook PCs as compared to the desktop PCs . Users are shifting to the TFT and LCD screen from CRT. The young and first time user prefer notebook over desktop PCs.

Increase in sales
Chart Title
7 6.5 5.4

$in million

6
5 4 3 2 1 0 0.98

desktop PC
notebook PC 1.8

2006

2008

Aqua Marina Technologies

It is a mid-sized PC manufacturer based in india . Ramesh GM marketing , CFO Manoj Bayan , Marketing Manager ashutosh are worried about the dipping demand of PCs in indian market and try to find out the reasons of dipping demand .

Decline in Demand
PC sales in india during the first quater of 2008-09 decline by 4% In next fiscal quater it is estimated that demand would be decline by the 12.5% Whiteboxes has 40% market share so its the time for company to make new plans

Factors contributing to decline demand

The branded PC manufacturers lacking the value to the customer. Distributon channels needs to be tunned according to the needs of the customer. Lacking of the after sales service by PC manufacturers

 Home PC browser segment is clearly neglected about 1.8 million PC are sold in 2007-8 and one thid of the PC are found thier way to the internet parlours. One of the main reason is that thier is no channel which will cater the needs of the home PC browsing segment.

Needs and complaints of the home PC segment

Most of the owners of home PCs complain that service engineers do not respond promptly and some dealers do no give them free service. Home PC browser need a reliable after sale service from the vendors. These are the main reason that people opt fotr local manufacturers and whiteboxes.

 Another main characteristic of the home user is the fear of obselence that people want those chips which will remain last for minimum next 5 years and support the upgraded softwares.

Sub dividing the home PC segment

Ashutosh marketing manager of the company sub divided the segment into three groups according to their diffrentiated need, which is currently served as same needs by distribtuion channels.

Segment 1 Not knowlegable about computers

Segment 2 Somewhat knowlegable about computers

Segment 3 Very knowledgeable about computers

Needs reliable, prompt, after sale service

Needs prompt, reliable after sale service and on ways to upgrade

Does not need after-sales service

Needs training Are willing to pay little

Does not need training Are willing to pay a premium for these services

Does not need training Very price senitive

Segment 1
These people are not knowlegable about computers ,affordability and price is most sensitive .The thing they require the most is realiable after sale service . Usually they purchase computers for their childrens learning in schools .The feel comfortable buying PCs from nearby shop

Segment 2
In this segment customers wants availability, broad assorments, multiple brands and reliable after-sales service and are willing to sacrifice some price benefits to get them .Computer specialist are ideal for servicing these people.

Segment 3
This consist of people who are very well-versed about computers and are self-reliant, but who are price sensitive and therefore buy from gray market . These peoples enough know about computers to sevice small faults in their own.

What aqua marina do next..

Prepare macroeconomic forecast projecting inflation, interest rates, consumer spending and other variables. A survey of buyers. Take demand estimates from sale representatives, dealers and trade associations. Identify Which segment is easy to serve.

conclusion
Company had to grow in order to survive in the recession and here was the home PC browsing segment that had been neglected and that ought to explode in the years to come, with increasing awareness about PCs increasing the buyer power and the advent of the internet.

Question 1
How did Ramesh , GM marketing of aqua marina technologies decide on which home browsing segment to enter, taking into account the potential and capabilities available or to be made available to the firm?

 Ramesh should keep in mind things like purchasing power of each segment, number of rivals exist in each segment, potential interest of users and aligning them with company existing capabilities. Because aqua marina is mid-sized company, segment 2 might be correct option for aqua marina because they are willing to pay premium for services.

Question 2
Explain the various dimensions of PC industry analysis like actual and potential industry size , growth opportunities available for small technologybased firms, strategic options available to them by analyzing industry market potentials and usage gaps among home browsing segments.

Answer
PC sales in india is growing from last few years by 20% and laptops are become the first choice of first time users. Immense potential available for small or mid-sized companies because people are more cautious about price and want to have more sale service , small firms can interact with users more effectively and can cater their needs.

contd
As we see there is a gap between the needs of three home PC browser segments, a mid sized company cannot invest heavily but could provide training and after sale service to the customers. By this way they can get market share which lead to revival from recession due to economic forces.

Question 3
Comment on the relevance and significance of five forces model for Aqua Marina Technologies for understanding the PC industry.

Answer
Again the 5 forces model is highly important for the Aqua Marina to analyse the industry enviornment. Substitute product offering is immensily high in the industry many choices are available to the Aqua Marina, supply of finished and semi finished goods is high many suppliers available due to market saturation its an opprtunity for the firm.

Contd
Buyer bargaining power is also high in this industry because buyer have many options readily available and they can switch to one brand to other brand which is an opportunity and threat to the firm that one can attract others customer by offering differentiated product in market.

Contd
Potential for new entrants is low because industry is currently saturated and new investor might not invest in this industry due to financial losses.

Thank You.
Any Questions