MyDearPC Business Plan

MyDearPC.com

Changing the way you buy desktop PCs

• Start-up Cost required for the venture.• The projections for the first 3 years.

Finances & ProjectionsGlobal Vs Indian PC MARKETHow is the Computer Market Segmentation different in India compared to other Global economies?

• The Indian Market Scenario.• The Assembled PC.• Branded Vs Assembled – The

Dilemma!

The Dilemma Case Study & SWOT Analysis• Case Analysis for a suburb in

Mumbai.• SWOT.

• The Branded Assembled.• Let’s go ONLINE!• Execution Strategy.

The Solution

Topics Discussed

Global Vs Indian - PC MARKET

How is the Computer Market Segmentation different in India compared to other Global economies?

The Statistics

Dell Lenovo HP Acer HCL Others

15%13% 12% 12%

5%

44%

Global Vs Indian - PC MARKET

Country-wise Market Segmentation

IndiaUnited States Europe

HP Dell AppleToshiba Acer Others

24% 23%

12% 11% 10%

22%23%

14% 12% 10% 9%

33%

The Indian PC Market

• The Indian Market Scenario.• The Assembled PC.• Branded Vs Assembled – The

Dilemma!

The Indian Market

The Indian Market Scenario

HCL

Acer

HP

Lenovo

Dell

Others

5%

12%

12%

13%

15%

44%


Almost 44% of the Market is still mainly represented by the unorganized market, i.e. the Assembled PCs market.

Despite having had a presence of over a decade in the Indian market, globally established players such as Dell, HP have been unable to capture any market leadership in India.

WHY??

An average Indian consumer is price sensitive. A Branded PC costs substantially higher than a similarly configured Assembled PC in Indian Market.

Price Sensitivity

The local Assembled PC vendors have cordial relations with the consumers. Consumers trust the vendor’s opinions and are more comfortable dealing with them.

The Personal Touch

Global players offer only pre-configured PCs in India. They do not offer customizations that the local vendors can offer with Assembled PCs.

Lack of Options


When you buy a typical ‘branded’ PC, you don’t know what is ‘inside-the-box’. For example, you don’t know the actual manufacturer and quality of RAM used. You are compelled to buy the entire package ‘as is’ even if you don’t like the quality of speakers, the design of cabinet or the layout of the keyboard.

The Assembled PC – Best of All Worlds

iBall (Keyboard & Mouse) Creative (Speakers)

Intex (Cabinet)

Sony (Disk Drive/Burner)Samsung (Monitor)

When you buy an Assembled PC, you EXACTLY know what you are buying. Assembled PCs allows you to select the best of all worlds. So you can go with your favorite pair of speakers from Bose or you can choose that awesome Logitech gaming keyboard and mouse you just love. With Assembled PCs, you are not restricted, you have plenty of choices. You can buy what YOU WANT, not what the companies want to sell.

Branded Vs Assembled – The Dilemma!!


The Dilemma!!

The Urban India is growing brand conscious. Brand is slowly becoming synonymous with quality and service. However, high pricing and lack of options have hindered the growth of Brand in the PC industry. There is always a trade off between quality, service, price and customization for the consumer before buying a PC.

The Changing Scenario

Branded PC

Quality

Service

Assembled PC

Price

CustomizationThe Trade-off

The Solution

• The Branded Assembled.• Let’s go ONLINE!• Execution Strategy.

The Solution

The Branded Assembled

• Its about taking advantage of the changing scenario in India. Corporates and Individuals likewise have started relying on the Brand value of the products, associating Brand with Quality and service.

Bridging the Gap

• However, Brands may not be providing to the exact need and specification of the consumer (They sell pre-configured PCs). This is where we come in. We bridge the gap between what is available and what they want.• So we provide them a good trade-off without any

compromise on quality, service or requirements at a price comfortable to them.

• The Urban Indian Consumer, on the whole are opting to shop online.

The Internet

• Basically, we aim to turn the unorganized sector of the PC Industry to an organized market using innovative and a never tried before way – Going ONLINE.

• Studies by Google India show that a 3-digit growth rate is expected in 2013 in the online shopping market.• Only second to Travel, Electronic Goods contribute

hugely to the online shopping market, because the consumers get a better deal and trust the online vendors to provide good quality in electronics.

There is a logical, and a very simple solution to this Dilemma faced by the Indian Consumer, Branded Vs Assembled

A Brand selling Assembled PCs.

Assembled PCBranded PC

Brand Selling Assembled PCs

The Solution

Let’s Go ONLINE!

How? - Let’s Go ONLINE

• A very user friendly and easy to use website.

• Users can COMPLETELY customize their PCs as per their requirements.

• From motherboard to mouse and from cabinet to camera, the user can select every single

component exactly the way they do it when they buy an Assembled PC from a local vendor.

GO

Rs. 25,000/-

“Urban Indian consumers are now confident enough to make online

purchases of up to Rs. 25000, from Rs. 2000-5000 in the recent past “

- First Data Corporation & ICICI Merchant Services.

That’s exactly what an average Assembled PC costs in India.

The Solution

Execution Strategy

• PC components are easily available in the wholesale market.

• We have already tied up with one of the biggest suppliers of Hard Disks and RAMs in Mumbai.

• To match the quality of service provided by big brands, we plan to set up a technical team providing on-call

technical support and if required, on-site support.

The Solution

• Business model based on zero (or very low) inventory.

We receive orders online and on phoneWe source the components from our

suppliers

We assemble the PCs in-houseWe deliver the PCs to our happy customers. They refer us to their

friends & relatives..

Case Study & SWOT Analysis

• Case Analysis for a suburb in Mumbai.• SWOT.

A Closer Look

Case Analysis – A suburb in Mumbai

Analysis

Limited Reach

An Average PC vendor in Mumbai has a reach of around 2-3 suburbs or say 2-3 miles within the city. This greatly limits the scalability of the vendors.

A vendor sells 35-40 (average) assembled PCs/month.

Over 10 shops selling assembled PCs.

Mumbai – Population – 20 million.

Mulund (suburb) – Population – 400,000.


Enough Margins

Despite the lack of reach to the entire city, the vendors sell around 35-40 PCs/month. The profit earned is enough to sustain in the market.

Scalable OpportunityThe market reach is restricted due to high capital investment required to set-up shops throughout the city. Internet can help overcome this hurdle.

TH

REA

TS

WEA

KN

ESS

• E-commerce space in India is booming.

• India PC shipment is expected to reach 12.5 million units in 2013.

• Multiple revenue streams (banner space, featured products, etc.)

• Opportunity to scale swiftly in other cities.

STR

EN

GH

TS

SWOT Analysis

SWOT

• No fixed cost of owning/renting property at preferred locations.

• Better bargaining power with the suppliers. (Better Reach & Quantity)

• Access to the ENTIRE market (Mumbai) unlike other assembled PC sellers.

• FIRST brand to sell assembled computers.


OP

PO

RTU

NIT

IES

• Highly volatile market (Prices of components are very volatile)

• Initial access to internet required to buy a PC. (Can provide bookings over phone)

• Indian customers are risk averse and might desist online payment for high value transaction

• Local Assembled pc vendor’s might cut margins and offer competitive prices(A big threat for MyDearPC’s existence in the Indian price-sensitive market)

• New innovations like tablets and Smartphones are a big threat to overall PC industry.(Counter-view: PC-penetration in India is much lower compared to most developed countries and the market is still growing)

• Start-up Cost required for the venture.• The projections for the first 3 years.

Financials & Projections

Finances & Projections

Application of Funds Amount (INR)

Salary (Founder) 3,90,000

Website 60,000

Working Capital 4,50,000

Computers 80,000

Legal Charges 20,000

First year Operating Expenses 10,00,000

Marketing Costs 1,00,000

Other Expenses, Unforeseen Costs & Cash Buffer 4,00,000

Total 25,00,000

Sources

Owned Equity 5,00,000

Funding Required 20,00,000

Total 25,00,000

Start-up Costs


Particulars Year 1 Year 2 Year 3

Sales - B2B 200 nos. 400 nos. 1000 nos.

Sales - B2C 500 nos. 1200 nos. 2500 nos.

Sales – Total number of PCs 700 nos. 1600 nos. 3500 nos.

Average Selling Price 25,000.00 25,000.00 25,000.00

Total Sales (in lakhs) 175.00 400.00 875.00

Projections – 3 years


• Above projections are sales estimates for the city of Mumbai.

• We would ideally extend our reach to neighboring districts like Thane and Navi Mumbai during the second year

and to other cities like Pune in the third year.

• Industry Gross Profit margin is 18-20%. MyDearPC will operate at a Gross Profit margin of 15-18%.

Thank You For Your Time

People don't know what they want until you show it to them.“

“”- Steve Jobs

Niraj PatadiyaMSc. in Global Management,Rouen Business School, France.

[email protected]+91 (0) 9870 106 537+33 (0) 6 49 57 32 42