Downfall of micromax

This will enrich your knowledge about the key facts of downfall of micromax - indian mobile giant. This don't cover the detailed report but will give you an overview.

1. DOWNFALL OF A presentation by Kshitij Gupta

2. Contents About the company Growth years Market share Downfall Conclusion of case

3. About the Company Micromax was incorporated as Micromax Informatics Ltd. on 29 March 2000 .  It started selling mobile telephones in 2008, focusing on low pricing to compete with international brands .  Micromax's co-founder Rahul Sharma once saw a public call office being powered by a truck battery because of frequent power cuts in its locale. It prompted him to launch a feature telephone with an extended battery life.  Micromax launched X1i, its first telephone with a month-long battery back-up.

4. Unique Selling Proportion Largest Indian manufacturer of telecom goods and services. Best price in the market if compared to its competitors Long lasting battery High sales volume Tough and long lasting

5. Growth of Micromax A large part of  Micromax ’s growth is attributable to its significant share of the Smartphone market, including so-called phablets (voice and data devices that have a screen size of 5 inch and above). It has been able to deliver Smartphone with specifications akin to those offered by global handset makers like Samsung, but at half the price.

6. As a result, the company has been able to attract a number of first-time Smartphone buyers, who were upgrading from a regular features phone and did not want to spend a bomb while doing so. India’s growth story is believed to be outside the metropolitan cities, in semi-urban and rural areas, and a large chunk of upwardly mobile population in such areas will give a Micromax product due consideration while looking to upgrade to a Smartphone.

7. Sustained advertising campaigns through television, print and outdoor have also helped the company’s cause, especially since some of its television commercials feature an international look-and-feel, giving an impression to the buyer that he is buying a world-class product. The problem that Indian IT hardware and electronics brands faced earlier was that they were thought to be cheap. Micromax appears to have somewhat dispelled this notion with its products and that has happened mostly by word-of-mouth marketing from existing users.

8. Market Share The forerunner among them is Micromax Informatics Ltd, which according to latest International Data Corp. (IDC) data had a 22% share of the Indian mobile handset market, second only to Samsung, which had a 26% share, and much ahead of other foreign competitors like  Nokia, Sony and BlackBerry.

9. 2014

10. 2015

11. Downfall “Nearly lost 50% market share in just one year” Chinese market dominance Rapid growth has helped nurture a crop of local brands, led by Micromax, that outsourced production to Chinese manufacturers. Now, as Samsung rolls out more affordable phones, the same Chinese factories are entering the Indian market with their own brands, depressing prices and forcing Indian mobile makers to rethink their strategies.

12. Management Issues In 2014, the founders brought in outside managers to lead the company at a time when Micromax was challenging Samsung to become the largest mobile phone maker in India . Former executives said the lack of fresh funding undermined a proposal by the new executives to move Micromax's research and design operations, which had previously been outsourced, in-house. The move was intended to help Micromax differentiate itself from generic Android clones. Top level management started resigning.

13. Conflict with Alibaba Micromax decided to raise funds from Chinese giant Alibaba This deal was regarding the research and development Alibaba walked away from a mooted $1.2 billion purchase of a 20% stake, citing a lack of clarity on growth plans, according to one executive involved in the discussion.

14. Whole Market is Suffering In 2015, Chinese brands doubled their market share to 18%, according to Counterpoint Research, taking away business from Indian budget phone makers such as Micromax, Intex, Lava and Karbonn. Indian brands' market share fell from 48 to 43% last year . Chinese phone makers including LeEco, Xiaomi and Lenovo have also partnered with e-commerce companies including Amazon India and Flipkart to sell phones directly to consumers, saving on distribution and sales and reaching new online shoppers directly.

15. Conclusion As seen in the case, from the Indian giant to a beggar, Micromax has seen every phase during the course of operation. The Chinese interference and poor strategic management led to these kind of crisis for the company. Lack of funds also played an important role in downfall of the company’s stake.

16. References www.livemint.com www.dnaindia.com www.wikipedia.com

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