Intensity of Rivalry

Large number of players increases Rivalry.

Major Players are- Samsung, Phillips, Sony, LG,
Videocon, Bluestar, Voltas, Bajaj Electricals.
Market Leader A/to Products-
Flat panel TV-Sony 22%
Samsung 21%
LG 21%
Refrigerators- LG 23%
Samsung 20%
Whirlpool 20%
Air Conditioners- LG 28%
Samsung 21%
Voltas 19%
Microwaves- LG 29%
Samsung 27%
Whirlpool 16%
Washing Machine- LG 31%
Samsung 19%
Whirlpool 13%

Induction cooker- Prestige 26%
Bajaj Electricals 19%

Industry Is expected to grow at 15% CAGR from
2012-15, up to 12.5 USD billion, Good for healthy
competition, new entrants may rise up.
High Fixed costs Increases rivalry so as to attain
economies of scale.
Brand Identity associated with the product
Increases competition.
Unstable environment-
Technological Innovation.
Changing Needs of customers.
Favorable FDI adds burden to established players.

Threat of New Entrants
Capital requirement is high for new entrant.
There is a need to spend huge amount of money to built
high tech manufacturing plant.
Large fixed cost is associated with setting up manufacturing
plant so they require economies of scale.
High investment = High risk.
Existing global players which are investing huge capital , so
to compete with them you need to do high investment.
Sony invested 163 million US$ in 2013.
Reliance & Videocon are in talks to set up 5.2 billion US$
chip manufacturing plant.
India is big market & to reach the customer
you need very effective distribution channel
but for such a widespread network u need too
many intermediaries , which eats away your
profit.
Online and Offline channel conflict because
internet penetration is still very low in India.
Only 243 million population is using internet
out of 1.7 billion.

Threat of New Entrants
Indian consumer is price sensitive & they keep
hunting for new deals.
New entrant should have technically advanced
products to be in competition.
Indian consumers are not brand loyal when it
comes to consumer durables.

Threat of New Entrants
Brand loyalty scorecard
CATEGORY BRAND NAME BRAND LOYALTY (%)
LCD SONY 54.7
SAMSUNG 32.3
LG 31.2
AC LG 38.7
SAMSUNG 38.3
VOLTAS 22.3
REFRIGERATORS LG 51.9
GODREJ 38
SAMSUNG 32.9
WASHING MACHINE LG 47.8
SAMSUNG 39.8
MICROWAVE SAMSUNG 37.5
LG 35.4
Electronics industry can be set up anywhere in the country, subject
to clearance from the authorities responsible for control of
environmental pollution and local zoning and land use regulations.
100 per cent FDI is permitted in electronics hardware-manufacturing
under the automatic route.
Electronics sector the first in India to be allowed complete customs
exemption on certain items used for manufacturing electronic goods.
The peak rate of basic customs duty is 10 per cent and 217 tariff lines
(under the ITA-1) are exempted from duty.
In India we follow multiple tax structure which has 12% VAT, 8%
excise, 4% Goods & service tax, 2% central sales tax & local taxes.
EPCG allows import of capital goods on paying 3.0 per cent customs
duty
EHTP provides benefits, such as duty waivers and tax incentives, to
companies which replace certain imports with local manufacturing.
Red tapes & bribery in Indian government system is also stumbling
block for new manufacturers.





Threat of New Entrants
Buyer Power
Large consumer base but they have low bargaining
power.
The Indian retail market is currently worth USD500
billion, the penetration of modern retail is 12.0 per
cent in consumer durables segment
The sector is witnessing the emergence of modern durable
retail chains and e-retailers like Tata Croma, Reliance
Digital, E zone, etc which bring more brands under one
roof and thus increase options.
Several brands are providing replacement and cash
back schemes to reduce switching cost & thus shorten
consumption cycles
Buyer power
Pre-purchase Research Needs - Among
digitally influenced consumers, the Internet
rivals TV as a source of information for big-
ticket items such as automobiles, computers,
and appliances. Indian consumers view the
transparent data found online as more
unbiased and trustworthy than what they
might hear from in-store salespeople on
commission.