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Business marketing project: Computer Hardware Industry

Submitted to: Dr. Gopal V V

Group 4

Ajay B.S

Anil Kumar

Gunasekar Y

Tanvi raj

The year 2012-13 has been another year with uncertainties and downtrends globally. Indian economy has also slowed down in spite of being one of the most promising and developing economies. Beyond all these economic forces certain industries exhibited growth above industry average. For example, As NASSCOM state, IT-ITeS industry grew at 16% and for the first time touched the mark of 100 billion USD in revenue. Though the main chunk of this 100 billion USD is contributed by the software and BPO, the remaining is amount contributed by hardware supplies. This low contribution by Indian computer hardware industry is because of the dominance of China, Malaysia, Taiwan, South Korea and etc.

Placing the computer hardware industry under the spotlight, the Data by IDC says that the Indian PC market has grown against the negative trend across the globe.

The article read, "Overall PC shipments for calendar year 2012 stood at 11 million units resulting in a year-on-year growth of 3.5 percent over 2011, according to IDC. Despite a drag on overall IT spending, the growth in the India PC market was driven by special projects like ELCOT and a spurt in consumer demand for notebooks. "

From the standpoint of "Business marketing" we might have to focus more on the industry's business/commercial market (Leaving out the consumer market). This focus on business market is also interesting because of the huge amount of the revenue it gives to the industry. Just to quote a sample, Out of the 2.23 Million notebooks sold in 2012, One entity called Elcot in Tamilnadu made order for 9,05,000 notebooks.

But the sad part is, A study on the commercial PC business market by Ramdas S, CRN says, "The market saw a negative dip of 1.5 percent compared to 2011 when the total commercial PC market was estimated at 5.9 million and is expected to slide further"

Restraining forces of the business market:

Though there are big player like IBM's Lenovo, Hewlett-Packard, Acer, Dell and others in the business with all the resources required. The sluggishness prevails due to various factors like,

• Slashing of IT budgets by small businesses and corporates: The global economic conditions are making them work on cost advantage with low margins. Thus the big corporates are not ready to spend much on anything due to the low budgets they are forced to work on.

• The lack of need to update the technology: Technology and products offered by the industry has not changed drastically in recent times so the need for change is not felt by the customers.

• Increase in the other forms of devices like tables and smartphones: The technology convergence has happened. More than computers the tablets are efficient for mails, presentations, power consumptions, space and more. Thus the trend is shifting towards the tablets

• Concept of BYOD (Bring your own devices): Organization have employed a new technique to cut down on their cost by asking the employees to bring their own computers and notebooks to the workplace.

Drivers of the business market:

The import bill for electronic goods is predicted to the bigger than the oil import bill by 2020 if a domestic ecosystem for promoting manufacturing is not developed.

• Electronics Manufacturing Clusters Scheme (EMCs): The union cabinet has recently approved the proposal for the Electronics Manufacturing Clusters Scheme (EMCs), which will provide financial assistance and guidance for manufacturers.

• Software Technology Parks of India (STPI): The effective functioning of these parks as association are huge potential customers of computer hardware.

• People employed: There are about 25 lakhs people working in the IT industry alone. Where most of the individuals will do their days to day work on a piece of hardware.

• Computerization of industries: Most the industries in India are computerizing their firms. Even the government of India is implementing e-governance effectively.

Thus by making a brief study on the computer hardware industry (Personal computer and Notebooks) we were able to find the above-mentioned points along with the restraining and driving forces. These mentioned points along with the dropping growth rates shows the signals of a matured market. This fascinating fact that the computer hardware industry has stagnated, makes the group more interested to learn more about the industry under the business marketing context and study the industry’s reaction to various marketing concepts and monitor the future.

References:

1. http://www.crn.in/news/hardware/2013/04/26/commercial-pc-market-to-shrink

2. http://www.crn.in/news/hardware/2013/03/01/indian-pc-market-has-grown-idc

3. http://www.ficci.com/sector.asp?secid=87 4. http://appleinsider.com/articles/13/04/11/consolidation-in-struggling-pc-

market-considered-inevitable-as-sales-plummet 5. http://www.computerweekly.com/news/2240181282/PC-market-crashes