Dissertation Writing Help-Project Report on Consumer Electronics Industry in India
Market analysis
The Indian consumer electronics market experienced strong growth during 2011 and 2012 at 9.8% and 8.1% respectively. The market is predicted to continue growing at a strong accelerating rate over the forecast period through to 2017.
The Indian consumer electronics market is expected to generate total revenues of $6,328.1 million in 2012, representing a compound annual growth rate (CAGR) of 9.9% between 2008 and 2012.In comparison, the Chinese and Japanese markets will grow with CAGRs of 6.4% and 1.1% respectively, over the same period, to reach respective values of $36,100.5 million and $27,500.6 million in 2012.
The audio visual equipment segment is expected to be the market's most lucrative in 2012, with total revenues of $6,258.8 million, equivalent to 98.9% of the market's overall value. The games consoles segment will contribute revenues of $69.3 million in 2012, equating to 1.1% of the market's aggregate value.
The performance of the market is forecast to accelerate, with an anticipated CAGR of 12.6% for the five-year period 2012 - 2017, which is expected to drive the market to a value of $11,441.8 million by the end of 2017. Comparatively, the Chinese and Japanese markets will grow with CAGRs of 6.2% and 1.5% respectively, over the same period, to reach respective values of $48,877.8 million and $29,663.2 million in 2017. (Source-Consumer Electronics Industry Profile:India, MarketLine, Datamonitor 2013)
Five Forces Analysis of Consumer Electronics Industry
The consumer electronics market will be analyzed taking non-diversified retailers specializing in consumer electronics as players. The key buyers will be taken as consumers, and consumer electronics manufacturers as the key suppliers.
The Indian consumer electronics retail market includes large chains of retailers, as well as independent stores, in a relatively competitive environment. Buyer switching costs are low, and it is generally quite difficult for the players to differentiate themselves because, as a rule, the products players stock are purchased from the same manufacturers. Players therefore compete on service, and only very rarely on product. Furthermore, traditional retailers face competition both from their own suppliers selling directly to end-users, such as Apple, and huge generalist online retailers, such as Amazon and eBay. Next Retail India is a huge, expanding retail chain looking set to further dominate the consumer electronics landscape; any firm considering entering the market must beware of the competitive pressures the large firm will perpetuate. (Source-Consumer Electronics Industry Profile:India, MarketLine, Datamonitor 2013)
Buyer power
The Indian consumer electronics retail market is characterized by huge volumes of small buyers, end-users or consumers. As the impact on a retailer of losing any particular customer is nominal, buyer power is correspondingly deemed to be weak. It is difficult for retailers in this market to differentiate themselves. Except perhaps for high-end 'boutique' hi-fi specialists, or the retail outlets operated by manufacturers like Sony and Apple, most retailers sell quite often exactly the same products made by the major electronics manufacturers. However, complement this with the price sensitivity of consumers, especially for 'big ticket' items like televisions, and the lack of significant switching costs, and buyer power starts to look stronger. However, one way a retailer can defend itself against this is by focusing on customer service. For example, in 2009 the bankruptcy of Circuit City in the US was attributed in part to a decision to fire the higher-paid store workers, who were usually older and more experienced; conversely, the strong performance of the UK's John Lewis Partnership may be linked to its low employee turnover rates. More experienced employees are likely to have greater knowledge of the products on sale and therefore can advise customers better. Overall, buyer power is moderate.(Source-Consumer Electronics Industry Profile:India, MarketLine, Datamonitor 2013)
Supplier Power
Major retailers often buy stock direct from manufacturers such as Toshiba and Samsung. These are large multinationals, with considerable bargaining strength. Consumer electronics manufacturing benefits from scale economies, and so it is likely that there will always be a preponderance of large manufacturers upstream of the retailers. Retailers rarely integrate backwards into manufacturing, but some manufacturers run high street retail chains to sell their own products exclusively. However, it is unlikely that manufacturers would ever extend themselves so far into direct-to-consumer business that the pure retailers became unimportant for their sales. Consumer electronics is a fairly commoditized market. Even an innovative product such as the original Apple iPod soon stimulates manufacturers into producing similar items. Also, where a manufacturer has valuable intellectual property, it can choose to generate revenue through licensing agreements rather than defending exclusivity in order to charge high prices. For example, DVD player manufacturers must pay a royalty to the DVD format patent holders for each player they make. From the perspective of retailers, this will tend to weaken buyer power, as it means that no one supplier monopolizes a particular product category. Overall, supplier power is moderate. (Source-Consumer Electronics Industry Profile:India, MarketLine, Datamonitor 2013)
Degree of Rivalry
The Indian consumer electronics retail market has several large chain players, although these coexist with small independents. It is relatively easy for a company to step up its sales volume in response to market conditions, for example it is usually not difficult to take on additional staff where necessary. It is difficult for a retailer to differentiate itself from the competition, and switching costs are minimal; as a result it is easy for customers to move from one retailer to another, and this boosts the intensity of rivalry. The Indian market is growing rapidly and so rivalry will be eased. Also, this market is fairly easy to exit, which also eases competitive pressures. Overall, the degree of rivalry is moderate. (Source-Consumer Electronics Industry Profile:India, MarketLine, Datamonitor 2013)
Disclaimer- This report should be used for academic and reference purpose only.
