Wednesday, February 6, 2013

MICROMAX: COMPETITION

It was a rather quick climb up the ladder for Micromax. So far, so good. But even after becoming the third-largest handset vendor in India, it has a steep climb ahead, with threats in the names of both new entrants and seasoned players... Will it win the ‘Silver’ soon?

So what was the secret behind Micromax’s unexpectedly quick growth? According to Vikas Jain, Business Head, Micromax, “One of the prime reason was that we identified the right need gap in the right market, and offered products relevant to those needs.” Unlike most handset makers who tested waters in the metropolitan areas, Micromax deliberately made an attempt to tap the interior parts of the country first. Realising that the limited supply of electricity was proving the biggest roadblock to the growth of wireless telephony in those areas, the company started by offering a handset that guaranteed a 30-day stand-by battery. Furthermore, the company deliberately focussed on the entry to mid-level segment that was growing at a much faster rate, both in terms of first time buyers, as well as in terms of replacements.

But Micromax’s easy-on-the-pocket proposition doesn’t come sans value evolution. To cater to the wants of the customers to carry two handsets (to make most of the existing on-going tariff wars amongst service operators), Micromax started offering Dual SIM phones. As a matter of fact, its existing product line consists of 27 phones, out of which 23 are Dual SIM. The handset maker isn’t alien to cosmopolitanism either. Catering to the touch-screen loving lot, it plans to launch two such devices in the coming quarter, one based on the platform Windows and another on Android. What’s best, the products will be offered in the price range of Rs.6000 – Rs.7000. Another strategy that has helped this company to grow from a mole-hill to a mountain has been efficient supply chain management. When Micromax realised that established handset vendors were giving as low as 1-2% margin to their channel partners, it offered a 5% commission to those willing to stock up its products. It proved a win-win situation.

It really has been a dream run for the young founders of Micromax, but the question remains – will it become the #2 soon? Honestly, for now, that question matters little in an industry where, over the years, the top leaders have been incessantly losing ground to newbies. So, while on one hand, Micromax has to hold fort against competitors, on the other, it has to continue running hard to become the first Indian to win the Silver in this new age telecom marathon!


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Posted by at
Labels: , , , , , , , , ,