HCL LAPTOP MARKET CHALLENGES
MANAGEMENT
CASE
describes a real-life situation faced, a decision or action taken by an individual manager or by an organization at the strategic, functional or operational level
HCL: Facing the Challenge of the Laptop Market
Jaydeep Mukherjee and Mahalingam Sundararajan
M
r. Ajai Chowdhry, Chairman and CEO at HCL Infosystems Limited, a major technology hardware player in India, was pondering upon the company’s marketing strategies to build its laptop sales in 2010-111.
Driven by powerful and sustained marketing campaigns by the multinational companies (MNC), namely Dell and Acer, during 2009-10, the laptop market had witnessed tremendous growth. Dell’s 1,500 million Indian Rupee (INR) marketing initiative had catapulted it from the fifth position (in terms of sales revenues) in
2008-09 to a second position in 2009-10 in the Indian laptop market2. Similarly, Acer had gone on a marketing and distribution blitz that catapulted it from No. 6 to No. 3 in the market, thereby more than doubling its market share.
The reason for this sustained effort by the players could be attributed to the major structural changes that were taking place in the rapidly growing Indian computer marketplace. Traditionally, consumers preferred desktops due to lower costs. However, in 2008-09, consumer preference started shifting to laptops because of the mobility advantage and the falling prices of laptops leading to an exponential growth of the laptop market. Households accounted for 56 per cent and business customers accounted for 44 per cent of the market, growing at 83 per cent and 47 per cent respectively on an annual basis. The laptop market was projected to overtake the desktop market in 2013 (Refer to Exhibits 1, 2, and 3 for sales and projected sales of the industry). Due to this, all hardware companies were forced to consolidate their position in the laptop space. The predominant belief in the industry was that if this window of opportunity was
CASE
describes a real-life situation faced, a decision or action taken by an individual manager or by an organization at the strategic, functional or operational level
HCL: Facing the Challenge of the Laptop Market
Jaydeep Mukherjee and Mahalingam Sundararajan
M
r. Ajai Chowdhry, Chairman and CEO at HCL Infosystems Limited, a major technology hardware player in India, was pondering upon the company’s marketing strategies to build its laptop sales in 2010-111.
Driven by powerful and sustained marketing campaigns by the multinational companies (MNC), namely Dell and Acer, during 2009-10, the laptop market had witnessed tremendous growth. Dell’s 1,500 million Indian Rupee (INR) marketing initiative had catapulted it from the fifth position (in terms of sales revenues) in
2008-09 to a second position in 2009-10 in the Indian laptop market2. Similarly, Acer had gone on a marketing and distribution blitz that catapulted it from No. 6 to No. 3 in the market, thereby more than doubling its market share.
The reason for this sustained effort by the players could be attributed to the major structural changes that were taking place in the rapidly growing Indian computer marketplace. Traditionally, consumers preferred desktops due to lower costs. However, in 2008-09, consumer preference started shifting to laptops because of the mobility advantage and the falling prices of laptops leading to an exponential growth of the laptop market. Households accounted for 56 per cent and business customers accounted for 44 per cent of the market, growing at 83 per cent and 47 per cent respectively on an annual basis. The laptop market was projected to overtake the desktop market in 2013 (Refer to Exhibits 1, 2, and 3 for sales and projected sales of the industry). Due to this, all hardware companies were forced to consolidate their position in the laptop space. The predominant belief in the industry was that if this window of opportunity was