COMPETITIVE STRATEGY

MICROMAX THE INDIAN INNOVATOR

Can Micromax make the leap from Indian to global brand?

Faculty Guide: Naveen Coomar

SUBMITTED BY: ANKUR MAKHIJA

ROLL NO .55

IIFT PT 12-15

What is Competitive Strategy?

Competitive Strategy is defined as the long term plan of a particular company in order togain competitive advantage over its competitors in the industry. It is aimed at creatingdefensive position in an industry and generating a superior ROI (Return on Investment).Such type of strategies plays a very important role when industry is very competitiveand consumers are provided with almost similar products.

Before devising a competitive strategy, one needs to evaluate all strengths,weaknesses, opportunities, threats in the industry and then go ahead which would giveone a competitive advantage.

According to Michael Porter, competitive strategy is devised into 4 types:

1. Cost Leadership

Here, the objective of the firm is to become the lowest cost producer in the industry andis achieved by producing in large scale which enables the firm to attain economies ofscale. High capacity utilization, good bargaining power, high technology implementationare some of factors necessary to achieve cost leadership. E.g. Micromax mobile phones

2. Differentiation leadership

Under this strategy, firm maintains unique features of its products in the market thuscreating a differentiating factor. With this differentiation leadership, firms target toachieve market leadership. And firms charge a premium price for the products (dueto high value added features) Superior brand and quality, major distribution channels,consistent promotional support etc. are the attributes of such products. E.g. BMW,Apple

3. Cost focus

Under this strategy, firm concentrates on specific market segments and keeps itsproducts low priced in those segments. Such strategy helps firm to satisfy sufficientconsumers and gain popularity. E.g. Sonata watches concentrates on lower segmentcustomers.

4. Differentiation focus

Under this strategy, firm aims to differentiate itself from one or two competitors, again inspecific segments only. This type of differentiation is made to meet demands of bordercustomers who refrain from purchasing competitors products only due to missing ofsmall features. It is a clear niche marketing strategy. E.g. Titan watches concentrates onpremium segment which includes jewels in its watches.

Hence without following anyone of above mentioned competitive strategies, itbecomes very difficult for firms to sustain in competitive industry.

MICROMAX AN INTRODUCTION

Micromax Mobiles is one of the leading mobile companies in the World today. Accordingto Strategy Analytics Global Handset vendor market share report, it is the 12th largestmobile brand in the World with a global market share of 1% and close to 8% marketshare in India. With an in depth understanding of rapidly changing consumerpreferences coupled with the use of advanced technologies, Micromax has been able todifferentiate itself from the competitors through innovation and design.

The brand took on the leaders in the category with specific products that addresseddifferent customer needs. The company has focused their efforts towards creating life-enhancing mobile phone solutions and wireless technologies that cater to theincreasingly evolving needs of mobile users in India.

Micromaxs realization that the rural market is a large part of the Indian market made itevolve a strategy for reaching the villages. It also offered products at very low prices,which would suit the rural pocket, thus providing value for money (VFM) products for theprice sensitive rural customers. It also focused on features that addressed the specificchallenges facing those living in the rural areas. Micromax calls its strategy sell deepand sell more.

Today, Micromax has presence across India and global presence in Bangladesh, Nepal,Sri-Lanka, Maldives, UAE, Kingdom of Saudi Arabia, Kuwait, Qatar, Oman, Afghanistanand Brazil. Micromax sells around 1.3 million mobiles handsets every month, with apresence in more than 500 districts through 100,000 retail outlets in India. This helpsthe company achieve economy of scale and keep operational costs low; thus achievingits objective of providing essentially value for money (VFM) products.

HOW MICROMAX FOLLOWS COMPETITIVE STRATEGIES?

Micromax targets the mass market with its products, but combines this broad scopewith a differentiation strategy based on design, branding and user experience thatenables it to reach the Indian common man.

Cost leadership Strategy

This strategy involves the firm winning market share by appealing to cost-conscious orprice-sensitive customers. This is achieved by having the lowest prices in the targetmarket segment, or at least the lowest price to value ratio (price compared to whatcustomers receive). To succeed at offering the lowest price while still achievingprofitability and a high return on investment, the firm must be able to operate at a lowercost than its rivals. There are three main ways to achieve this.

The first approach is achieving a high asset turnover. These approaches meanfixed costs are spread over a larger number of units of the product or service,resulting in a lower unit cost. Higher levels of output both require and result inhigh market share, and create an entry barrier to potential competitors, who maybe unable to achieve the scale necessary to match the firms low costs andprices.

The second dimension is achieving low direct and indirect operating costs. Thisis achieved by offering high volumes of standardized products, offering basic no-frills products and limiting customization and personalization of service.Maintaining this strategy requires a continuous search for cost reductions in allaspects of the business.

The third dimension is control over the supply/procurement chain to ensure lowcosts. This could be achieved by bulk buying to enjoy quantity discounts,squeezing suppliers on price, instituting competitive bidding for contracts,working with vendors to keep inventories low using methods such as Just-in-Time purchasing or Vendor-Managed Inventory.

Differentiation strategy:

Differentiate the products in some way in order to compete successfully. Adifferentiation strategy is appropriate where the target customer segment is not price-sensitive, the market is competitive or saturated, customers have very specific needswhich are possibly under-served, and the firm has unique resources and capabilitieswhich enable it to satisfy these needs in ways that are difficult to copy. These couldinclude

patents or other Intellectual Property (IP) unique technical expertise (e.g. Apple's design skills) talented personnel (e.g. a sports team's star players or a brokerage firm's star

traders)

Successful brand management also results in perceived uniqueness even when thephysical product is the same as competitors. This way Starbucks could brand coffee,and Nike could brand sneakers.

Focus or Strategic scope

This strategy describes the scope over which the company should compete based oncost leadership or differentiation. The firm can choose to compete in the mass marketwith a broad scope, or in a defined, focused market segment with a narrow scope. Ineither case, the basis of competition will still be either cost leadership or differentiation.

In adopting a broad focus scope, the principle is the same: the firm must ascertain theneeds and wants of the mass market, and compete either on price (low cost) ordifferentiation (quality, brand and customization) depending on its resources andcapabilities.

Hence MICROMAX has successfully implemented Michael Porterthree competitive strategies.

MICROMAX OBJECTIVES

Focus on urban market specially youth 18-25 years Micromax is Focusing onsmart phones and tablets. As smart phone is going to be the future of mobilemarket.

To start new plant and reach market share of 20% and to increase market share,it is essential to increase production capacity.

Focus on international markets. On making strong focus on rural market andurban market in India, Micromax needs to expand to international markets andenter into neighboring Indian countries, south African countries etc.

PRODUCT INNOVATIONS

Micromax product portfolio embraces more than 60 models today, ranging fromfeature rich, dual-SIM phones to QWERTY, touch-enabled smart-feature phonesand 3G Android smart phones designed for younger consumers in suburban andurban markets.

It also introduced the dual SIM and though the dual SIM feature is present in 20-30%of all mobile handsets sold in India, the company offers this feature on 22out of 26 phone models it sells in India. All its products were designed to suit thedomestic palette and majorly all designs focused on utilitarian concept.

PRODUCT DIFFERENTIATION

Micromax reaches Indian mass by launching new and innovative products sinceinception. It has many first to its credit like

First Long Battery Life Phone with 30 days battery backup( X1i Marathon Batteryphone with 30 days standby time & 17 days Talk time )

First Dual SIM Dual mode active Phone (GSM+CDMA) (Micromax GC700 is thefirst GSM + CDMA Mobile phone)

First Gaming Device ( G4 Gamolution phone with motion sensor gaming like Wi-Fi )

First Womens Line of Devices (Q55 Bling phone- First womens phone with aswivel form and Swarovski navigation keys)

First Universal Remote Control Phone ( X235 With Universal Remote Control forTV, DVD, AC in your phone)

First phone with built-in blue tooth ( Micromax X450 Van Gogh A stylish phonethat integrates a detachable Bluetooth headset in its sleek design)

First Superfone with Gesture Control (Created a new category called Superfonewith Gesture Control, powered with 1GHz dual core NVIDIA Tegra 2 Processor)

TARGET MARKETS

Currently Micromax is dominating the rural market. Initially the marketing strategy ofMicromax was to target rural market. They are basically catering to the need of thecustomers of the rural area. For example the first mobile Micromax introduced in ruralarea was having the battery backup of 30 days which was catering to the need of therural market of inconsistent power availability. Other markets which they focus are asfollows

TARGETING WOMENOn the occasion of Mothers Day, Micromax announced the launch of its latest Androidphone targeted at women.

TARGET YOUTHAs smart phones are future of telecommunication industry, Micromax has startedfocusing on it strongly.

TARGET PROFESSIONALSProfessionals keep two phones in todays life: One for Professional use One forPersonal use Micromax came up with Dual SIM mobile phones. Micromax focuses onthis target to cater need A single phone with Business and Private use with separatenumbers and bills.

MICROMAX DISTRUBUTION NETWORK

Apart from the Product, Price and Promotion Micromax has shown strength in anothersignificant aspect that is distribution network.

Achieving supply chain superiority or excellence is within the reach of any company.However, it requires a vision, as well as the organizational imperative and willingness toinvest in the right direction.

For the B2C model, higher margins up to 15 per cent were offered to the dealers, whichwas higher than the industry average of 6 per cent to 10 per cent. And distributors wereoffered higher margins than what Nokia offered. This helped them penetrate the marketdeeper into the urban markets. In B2B model, where corporate selling was involved, tieups with major corporate houses saved the margins of the distributors and Micromaxcould provide the corporate houses a lesser price than the market. Thus, the targetmarket of professionals was reached.

Micromax has a 3 tier distribution network in India, which extends across 65 superdistributers, 1500 micro distributors and over 100,000 retailers. To enhance brandcognizance and retail strength, Micromax has a chain of exclusive retail outlets, ownedby third party.

MICROMAX MANAGEMENT

Micromax focuses on the pulse of the consumer and hence constantly investsinto strengthening the product portfolio though R&D and innovative marketingstrategies.

The product portfolio embraces more than 60 models today, ranging from featurerich, dual-SIM phones to QWERTY, touch-enabled smart-feature phones and 3GAndroid Smartphone's.

Also lay special focus on the products to enhance the customer's overallexperience with the device. Most of the products come with innovative packagingand bundled accessories.

Globally, Micromax caters to a varied target audience having their focus majorlyon the youth.

The Strategy focuses on innovating, designing and using the latest technologiesto develop products at affordable prices.

Products are tailor-made to suit the needs and aspirations of the growingconsumer base in the international markets.

The other aspect of it success is that Micromax is one company that has managed tounderstand the Indian consumer psyche much better than the multinationals as well asthe home-grown companies.

For its Entry level tablet Micromax strategy revolved around education andentertainment (edutainment). It tied up with Pearson, Everonn, Vriti (foreducation) and for entertainment it had tied with Bigflix, Hungama, Indiagamesand Zenga. With it Micromax saw an impressive sale of 65,000-70,000 permonth.

In the smartphone segment, the company incorporated applications that made itsproducts stand out despite the low price stamp; it had Aisha with the samefeatures as Apples Siri, a voice-controlled personal assistant. Micromax alsolaunched a mobile messaging application HookUp.

COMPETITORS

Micromax knows that there are many established brands in Mobile Phones industry likeNokia, Samsung, LG and several other local as well as Chinese manufacturers .Some

major competitors and their strategy and strengths are identified as below: Nokia,Samsung, Apple, Htc

VARIOUS STRATEGIES FOLLOWED BY MICROMAX

MICROMAX MARKETING STRATEGY

Marketing strategy is a process that can allow an organization to concentrate its limitedresources on the greatest opportunities to increase sales and achieve a suitablecompetitive advantage.

Driven by growing aspirations of the Indian mobile users, Micromax has geared up tobring about a paradigm shift in the way cell phones are used by introducinggroundbreaking mobile solutions technology.

Micromax marketing strategy is to improve the visibility in the urban markets byimproving awareness of customers for our products and also building brand image.

When Micromax entered the segment, it followed a simple strategy of bringing innovativeproducts for the consumers and coupled it with smart marketing. The companys successcould be attributed to the Out of the Box thinking and thus providing Innovative &insightful products to the masses.

At Micromax, the target audience is youth who want innovative, stylish phones that areaffordable. Today the mobile phone category is driven by youth, with about 60% of theusers under the age group of 20-40 yrs and Micromax utilizes every opportunity toconnect with the youth.

Micromax understands that building connect is all about being involved with thecustomers and also giving them the value for money.

Through their products and innovative campaigns, they aim to provide value additionsto the Micromax users and have him or her involved by creating unique brandproposition.

THE MARKET ENTRY STRATEGY

Micromax had a clear positioning strategy when it started its operations; it had a hugedomestic market to tap. Samsung and Nokia were battling out for supremacy in theIndian market; however Micromax was quick to see some of the gaps, especially inaffordable feature and smartphone segment to tap rural Indian markets and middleclass who were looking to upgrade to smartphones, but with lesser spending power.

Their first line of phones was around the features of dual SIM and longer battery life,which made their phones hugely popular among the Indian masses.

When Samsung launched Galaxy Note, Micromax was already selling its tuned downversion with almost all the features at quarter of its price. Micromax believed in fasterturnaround, launching new models quickly at lower price. This really helped them togrow faster and penetrate the price sensitive Indian market.

BUY VS BUILD STRATEGY

It was sure that Micromax cannot compete with giants like Apple and Samsung onspending huge money on R&D, however they concentrated on supply chain and buyingthe technology which will work for them to bring out comparable good quality models atlesser price.

They had handsets sourced from China earlier, but now they are planning to build someof it in their Indian plant where their tablets and LED TVs are already beingmanufacturer.

AGGRESSIVE THINKING

The other advantage that has worked in their favour has been their aggressiveapproach when it comes to product design and launch. We can see this in couple ofinstances, when they brought out 5 inch screen phones and also when they brought inAndroid in entry level phones. Their Canvas phone which had a 5 inch screencompared to 5.5 inch of Galaxy Note of Samsung did well to capture initial salesvolume. This strategy helped them to tee off Nokias Asha phones and Samsungs lowerend models.

DIRECT COMPETITION

Many research agencies indicate that Micromax is now standing second to Samsung inIndian market. Though Micromax threaten to reduce Samsungs share initially, now itseems to be fading. Their market share has dipped from over 20% to now 15%.Samsung unlike Nokia and Apple have been quite successful in bringing out localizationstrategies with multiple models to different local segments and a strong distribution andservicing network too.

CONSUMER CONNECT THROUGH CONSUMER BRANDING

Micromax realized in its early years itself that though it made a name in inventingsurprises it is not a sustainable strategy in an industry which is a crowded market. Theyhad to provide something more sustainable to retain the customer to itself. This could

be attained through connecting with customers and establishing a long lastingrelationship with them. The answer was consumer branding.

According to American Marketing Association, brand is a name, term, sign, symbol ordesign, or a combination of the intended to identify the goods and services of one selleror group of sellers and to differentiate them from those of other sellers.

MICROMAX AND HUGH JACKMAN

Successful entrepreneurs globally have hadto take a decision like this at some point orthe other to ensure their company keepsgrowing. Micromax proved no exception.Micromax seems to be ready for heavymarketing investments. Appointing theHollywood star answers the need forMicromax to build an international image.

With this, Micromax becomes the firstIndian mobile operator to have roped in aHollywood star as its brand ambassador.Micromax is largest handset seller in Indiaafter Samsung and first Indian based mobilehandset brand that came up with this much

PRODUCT STRATEGY

On the product side, Micromax has a wide range of phones with different features andthus offering variety to the customers.

Micromax has a lot of interesting and thoughtful products. Micromax has been able tosuccessfully identify the needs of customers and design products appropriately.

Micromax believes that consumers in India have unique preferences with respect tomobile handsets such as long battery life, dual GSM capability, low-cost QWERTYphones, universal remote control and gaming phones. Also, the company has investedheavily in the product development as of now to capture market share in urban

PRICING STRATEGY

Its at the core of Micromax to serve the customers by proving them with lower cost, valuefor money products. Thus Micromax will adopt penetration pricing in the urban marketbecause placing our product at a lower cost will serve our purpose and make the customer

rethink before buying other competitors product such as Nokia, Samsung, etc which are ata high price segment.

So with a lower price they provide with almost same functionality which in turn help themin gaining a better share in the urban market as they also want lower prices phones withhigher functionalities which has been proved by their marketing survey.

PROMOTION STRATEGY

To increase visibility further, Micromax bombarded the market by advertising through outdoor,online, radio, exchange schemes and promotions via social causes. The motive of thisstrategy is to increase our visibility in the urban markets. So making people aware aboutMicromax incur high promotional expenses in terms of

I. Hoardings and banners

II.Advertising online

III.Sponsoring in the social cause events

PLACE STRATEGY

By placing the product in popular stores like Croma, The mobile store, Reliance Digital etc.,high visibility was assured along with the competitive brands. Tie ups with local distributors foreasy availability helped to tap the customers who did not visit the popular stores.

MICROMAX VARIOUS OTHER BIG COLLABORATIONS

MICROMAX AND VODAFONE

Micromax announced a strategic partnership with Vodafone India. The partnership aimsto drive data growth in India with an exciting deal for the internet savvygeneration. Under this new partnership, Micromax and Vodafone India are comingtogether to provide a more fulfilling device connectivity and experience.

MICROMAX AND AIRCEL

Mobile handsets maker Micromax has tiedup with telecom services provider Aircel tooffer cheaper voice and Internet services tocustomers. Under the deal, buyers ofMicromax smartphone and tablet

computers will be able to get Aircel voice and Internet services at competitive rates.

Aircel opted for Micromax because of the latters affordable range of large-screensmartphones, or phablets.

MICROMAX AND PANTECH

Micromax, which recently announced international expansion plans, looks to becomethe first Indian handset maker to enter the Russian market. According to a Reutersnews report, Micromax has expressed interest in buying into Pantech, South Korea'sthird largest Smartphone.

Micromax, which already sells its handsets in Saarc and Russia, would also get accessto markets like the US and Japan, that Pantech serves. It has plans to increaseinternational presence and climb up from the position of world's 10th largest mobilephone maker.

success.

MICROMAX AND MICROSOFT WINDOWS

The Domestic handset maker Micromaxbecomes a new partner of the Microsoft andwill offer Windows Phone 8.1-poweredSmartphones. Micromax will be one of thefirst companies to launch Googles low-costAndroid One handset in India.

Micromaxs growth has been significant thatglobal companies have started to partnerwith the handset maker in their entry into thecompetitive Indian smartphone market.Microsoft chose the New Delhi-based firm tolaunch a Windows 8.1 low-cost cell phone that is powered by Qualcomms chipset.

SWOT ANALYSIS OF MICROMAX MOBILES

Strengths

Innovative products and features- Marathon battery mobile phones with a 30-daybattery life, phone which is programmable as a universal remote control, gravityphones are some of the features which have increased the popularity of theproduct.

Low cost of production For a company that has been importing all its devicesfrom China, Micromax has now taken a new turn by making a few products athome. Both the R&D and design are carried out in India.

No debt burden- Micromax has no debt on its balance sheet. The companydoesn't believe in taking loans from financial institutions for expansion. It had, inthe past, only raised one round of funds from TA Associates and SequoiaCapital, which together hold about 20 per cent of Micromax. The rest of the stakeis held by the four founders.

Effective promotion campaigns- Micromax has been promoting its productsthrough famous celebrities and has also had tie ups with MTV.

However, of late it has set up a plant in Baddi in district Solan in HimachalPradesh to offer Indian products to Indian consumers. The major attractions forsetting up plant in Baddi were the slew of tax incentives that the Governmentprovided. These were a 100 per cent outright excise duty exemption for a periodof ten years from the date of commencement of commercial production, 100 percent income tax exemption for an initial period of five years and thereafter 30 percent for companies for a further period of five years, and capital investmentsubsidy of 15 per cent on plant and machinery subject to a ceiling of Rs 30 lakhs.There were many tax incentives provided by the State

Weaknesses

Perception of low-quality Chinese brand- Micromax has a manufacturing unit setup in china which has strengthened this perception among people.

Low customer acquisition and retention services which can be increased byproviding better after sales services.

Opportunities

Increase penetration in urban market. Entry into international markets-Micromaxhas the potential to make its presence felt on global scale eventually as itestablishes itself in the domestic market.

Exchange offers will also be a major tool for customer retention as the customerwill be getting additional discount on the new Micromax phone he buys byexchanging the older one. Thus this will help create a chain of transactions withcustomers.

. The company is also working on launching smartphones based on 4G once thelong-term evolution infrastructure is in place, which would be also priced right.

Threats

Increasing competition from local and international players- With well establishedplayers like Apple, Nokia, Samsung, etc Micromax faces a tough competitionfrom these players.

But in todays fast paced world, where change takes place in nano seconds, itbecomes increasingly difficult to compete only on product functionality andinnovative product features. The first mover advantage is transient (very shortlived). Therefore, only focusing on the product and attaining manufacturingefficiency would not do. Organizations need to look for more sustainablestrategies. The players need to look beyond core product and focus oncomplementary assets like supply chain efficiency, brand equity, and relationshipmanagement with customers as well as dealers to emerge a winner.

Replication of business model by competitors- Micromaxs business model hasbeen replicated by many new players which again pose a threat to Micromax

Micromax: The king of Competitive Advertising

Micromaxs rebellious sojourn began early with its Micromax A70 campaign thatmocked the popular iPhone Ad simply replacing the iPhone with the sound of throatscratching. While Apple and iPhone were a little too big to be worried by such gimmicks,Micromaxs Ads definitely rang home the message to typical consumers.

Micromax isnt the first company to think along the lines of hitting straight at the heart ofcompetitor with Ad campaigns. Since time immemorial both Coke and Pepsi have beenat loggerheads with each other both on their marquee products as well as onMoutainDew and Sprite commercials.

DRAWBACKS IN MICROMAX APPROACH

Lack of Innovation and originality

Micromax may be busy taking on its international competitors by simply makingtheir technology cheaper and more affordable but its approach may endanger the brandin future. While Micromax is a fairly innovative company with some interesting additionsto its Smartphones, from Gesture control to Voice assistants, it is often the standardspecs that are innovated upon.

Micromax has yet to file any significant patent. The company continues to use existingand often out dated processors to produce its affordable Smartphones and insists onusing design elements that have been used by its international competitors.

For them to be taken seriously, Micromax may have to slowly break away from theircompetitive approach to build on newer technologies and bring in more firsts to theIndian market.

Micromax has done this significantly in the feature phone segment, but has not yetmanaged to do so in the Smartphone segment.

Micromax made some cheeky advertisements making fun of Apple for being costly andthen they took on Samsung with advertisements targeting their lower end series. Butyou cant deny that fact that being in a mobile phone market for more than half a decadealso helped them in gaining the faith and trust of buyers. Value for money factorexceeds quality expectations

LARGER LAUNCHES

The year 2012 has been very active forthe company. Micromax made its debutin the smartphone landscape launched22 smartphones in the Indianmarket, the maximum so far by anymanufacturer. If we compare othermanufacturers, then Samsunglaunched only 4 new models.

MICROMAX PRESENT SCENARIO

In its home market, Micromax is struggling to win over the top position in theSmartphone segment from current leader Samsung.

According to International Data Corporations (IDC) report for Q2 2013 for India,Micromax crossed the 2 million units mark in sales. Though the positions of globalvendors like Samsung, Nokia, Blackberry and Apple are strong in India, their marketshares have been steadily dropping due to intense competition from the local vendorsincluding brands like Micromax and its competitors like Karbonn, Lava, Intex andCelkon.

The IDC report says While Samsung still controls 20% of the market share in overallvendor share, Micromax hasbeen pushed to 12% of marketshare. Nokia is witnessing agrowth and is at 13% whileKarbon is in neck-to-neckcompetition with Micromax at13% of the market share.

MICROMAX TREMENDOUS GROWTH

The Micromax is the second largest Smartphone player in India, held about 16percent market share in Q4 2013, according to IDC data.

In 2006/07, when Micromax, today India's largest domestic handset maker, reportedrevenues of Rs 16 crore, Rahul Sharma and his three co-founders thought theycould make it a Rs 1,000-crore company in a few years. They had no time frame inmind. But just seven years later, Micromax has grown about 500 times, to Rs 7,500crore in 2013/14. The formula was simple: offer consumers the handsets that theywanted - the qwerty "Q" series in 2009, the Swarovski-encrusted Bling series for womenin 2010, and more recently, Android touch phones - at some of the lowest rates in themarket.

Micromax's leading rivals have changed over the last seven years. In the featurephones era, it fought Nokia. When qwerty was a rage, it was pitted against BlackBerry.Now it is taking on Samsung's andApple's smartphones. While Nokia andBlackBerry are struggling, Micromax hasgrown stronger. And Sharma, who drives aBentley Continental GT, is dreamingbigger: he wants Micromax to be amongthe top five globally in five years.

SUCCESS OF MICROMAX

A consumer Electronics Company based in India primarily known for its smart phonemanufacturing. Micromax started as a software company in 2000 but started gettingrecognition only after they started their mobile phone manufacturing operation in 2007,and became the largest local producers in 2010.During their rudimentary stage in India;Micromax was fighting the big names: Nokia (The erstwhile largest player. Microsoftacquired the giant when they failed due to the lack of pace in their innovation),Samsung, LG, Sony Ericson and others.

Micromax tasted success because they adopted strategies that are key to a companyadopting the Blue Ocean strategy. Interestingly, as with the case of Blue Oceans,Micromax created a mobile market demand for them by catering to the local Indiantastes, needs, preferences and issues. They did not look far beyond the Red Ocean.They just restructured the boundaries of the existing Red Ocean. Micromax created anew space, challenged the competition, expanded and catered to the demand andbroke the barrier of value-cost trade-off.

India has a mammoth demography spread across the rural and urban areas. Now cellphone being a key element of business. However, the truth remains that the phone

needs to be charged repeatedly. India has imminent power issues, and especially inrural areas. Micromax wanted to create demand by revolving their selling point thataddresses the issue. They launched their first model named X1i, which claimed to havebattery charging that lasted 30days.This triggered their network effect.

In India, there is hardly any concept of locked phones. Again, Mircomax differentiatedwith smart innovation that fit the local needs. They launched the first dual-SIM phone,which could support two active SIMs at the same time. Other global brands found itdifficult to launch their dual-SIM versions very soon. Post that success, where theymade themselves visible amongst the bigger players, came the era of smart phones.

Although only around 20% mobile phone users in India use smart phones, Indianmarket is 3rd largest Smartphone market after China and the US. Owing to the style,features and capabilities, with the changing trends everyone aspires to haveSmartphones. However, not all could afford the price for a high-end Samsung model oran iPhone, which is nothing short of a status symbol in India.

Micromax appealed the Indian emotion, and targeted the youth by launching a series oflow-priced versions of Smartphones. And yes, all Smartphone are powered by AndroidOS. Android was easily the biggest factor for Micromaxs success. Market leaders areusing android too. Hence, it brought about standardization of mobile OS, and in-turnproduct differentiation became difficult.

In this scenario, the Samsungs and the LGs were at a disadvantage because Mircomaxlaunched a series of smart phones similar to their high-end models at a price a fifth astheirs. They do not build components. They smartly customize it by using cheaperproducts. So far, this formula is working guns for them, at least in India. They have soldlarge volumes ofSmartphones.

Their presenttarget is to unseatSamsung from thetop position, whichholds the highestmarket share.Micromax is alsoincreasing itsmarket to othercountries likeNepal,Bangladesh, Sri

Lanka and Russia. In addition, they are increasing the product line by entering intoTablets, LED TV and 3D Data card market.

All the above have insured that a little known Indian mobile handset manufacturingcompany has been able to beat the existing competition in India via creation of BlueOcean within known Red Ocean market space.

Blue Ocean Strategy suggests that an organization should create new demand in anuncontested market space, or a "Blue Ocean", rather than compete head-to-head withother suppliers in an existing industry.

CONCLUSION

Micromax is arguably one of the biggest success stories when it comes to Desibranded mobile phones. The company has grown quickly over the last 6 to 7 years tobecome one of the largest Indian mobile handset manufacturers with a major presencein South Asian countries and with revenue touching Rs 7500 crores. However, thecompany is yet to establish a global footprint.

Micromax is a darling of the Indian middle class and rightly so. But its approach thus farhas been questionable with respect to Advertising and product pitching. Perhaps itstime for Micromax to build on their own brand value than derive from the brand value ofcompetitors.

Micromax India, which started out as the go-to company for budget mobilephones, hasemerged quite positively in the smartphone market. As markets develop mobile phonemanufacturers will have to adapt their value chain approaches and re-think the basis offuture competitive advantage. Micromax has broken the norm and proved that even asmall player can make a place for itself.

Therefore, one can conclude, that being big and strong with an impressive balancesheet is no longer a guarantee of long term survival or a guarantee for entry into ahighly competitive market space. In the struggle for survival, the fittest win out at theexpense of their rivals and make a place for them because they understand theenvironment and also adapt themselves best to their environment.

Micromax tasted success because it understood that India is predominantly a ruraleconomy; and it used its knowledge of India and business acumen to mine consumerinsights and thereby create impactful product launches. Further it supported its efforts

with an efficient manufacturing system, agile and responsive supply chain, consumerbranding and effective dealer and consumer management strategies.

Micromax needs professional management for various reasons. For one, it is lookingbeyond the handset business. While Sharma maintains the markets in India and otherdeveloping countries are still not fully tapped, especially the Smartphone segment, thecompany has already ventured into LED televisions. They require strategic direction totake the company's billion dollar business to the next level of growth and expansion.

REFERENCES

http://www.dnaindia.com/scitech/report-micromax-vodafone-india-partner-for-customized-offer-on-canvas-knight-2002677

http://daily.bhaskar.com/article-srh/GAD-idc-reveals-reason-behind-nokia-225-says-india-highest-growing-market-in-q1-2014-4636399-NOR.html

http://articles.economictimes.indiatimes.com/2014-04-15/news/49155846_1_micromax-informatics-smartphones-samsung-electronics

http://businesstoday.intoday.in/story/micromax-plans-in-india-success/1/204523.htmlhttp://timesofindia.indiatimes.com/tech/tech-news/Samsung-tops-Indian-smartphone-market-Micromax-second-IDC/articleshow/36058247.cms

http://www.digit.in/mobile-phones/micromax-aims-to-go-global-with-high-end-smartphones-18835.html#sthash.0sO6qdyp.dpuf

http://www.thehindubusinessline.com/industry-and-economy/info-tech/now-micromax-founder-dreams-of-smartphone-at-rs-2000/article4895060.ece?ref=relatedNews

http://forbesindia.com/article/boardroom/can-micromax-become-indias-leading-smartphone-maker/36577/0

http://yourstory.com/2011/08/the-story-of-micromax-mobiles-meteoric-rise-by-co-founder-vikas-jain-techsparks-2011-grand-finale/