GROUP 6 | SECTION C

B2B PROJECT
MID REVIEW SUBMISSION

Industries Chosen:
1. Electrical Products
2. IT

Group Members
16PGP011 B SAMHITHA
16PGP113 SHILPA RAMNANI
16PGP119 SRISHTI KUMAR
16PGP124 SWETA KUMARI SINGH
16PGP133 ANKIT BELE
16PGP214 DEVI PRATYUSHA G
 INDUSTRY- ELECTRICAL PRODUCTS

A. Size and number of players

The worldwide electrical and electronics industry is experiencing phenomenal and remarkable changes these days. The
worldwide electronics industry is distinguished by fast technological advances and has grown rapidly than most other
industries over the past 30 years. By 2025, India would rise from the 12th to the 5th largest position in the consumer
durables market in the world; the market is estimated to reach USD12.5 billion in 2016. Companies are expanding their
product portfolio to include products like High-Definition Televisions (HDTVs), tablets & smart phones, etc, demand
for which are rising with consumers income, easy availability of credit and wide use of online sales

The major players in this industry are Bluestar, Daikin, Godrej, Hitachi, LG, Onida, Philips, Samsung, Sony, Videocon,
Whirlpool, Havells, Bajaj, Siemens, ABB.
Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej, Allwyn, and Voltas
were the major players in the consumer durables market, accounting for no less than 90% of the market. Then, after the
liberalization, foreign players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa came into the picture. Today,
these players control the major share of the consumer durables market.

B. Impact of technology and other environmental factors that drive the industry
Higher real disposable incomes
Easy consumer credit
Growing working population
Setting up of EHTPs
Increasing liberalization, favorable FDI climate
Policies like national electronics mission and digitalization of television
Reforms like simplified labor laws and technology upgradation fund scheme
Expanding production and distribution facilities in India
Increased R&D activity Government to spend Rs.60000cr more on rural jobs
Providing support to global projects from India

C. Present and projected demand

.
In 2015, demand in the consumer durables sector in India
stood at USD9.7 billion, which further increased to
USD12.5 billion in FY16.
Consumer durable market expected to grow at CAGR of
13 per cent from FY05 to FY20.
Around two third of the total revenue is generated from
urban population & rest is generated from rural
population.
Godrej group, Onida Electronics, Blue Star & Videocon
Industries are few of the major domestic players
operating in India consuer durable market

D. Nature of demand
Urban markets accounted for the major share (67 per cent) of total revenues in the consumer durables sector in India in
FY15. Demand in urban markets is likely to increase for non-essential products such as LED TVs, laptops, split ACs,
beauty & wellness products In rural markets, durables like refrigerators as well as consumer electronic goods are likely
to witness growing demand in the coming years as the government plans to invest significantly. Because of rural
electrification Rural & semi-urban markets are likely to contribute majorly to consumer sales.The rural consumer
durables market is growing at a CAGR of 25 per cent. (source: Ibef)

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 E. Buyer behavior issues

B2B buying behaviors differ substantially from consumer buying behaviors, in several ways in Electrical Products
Industry. First, B2B buying entails satisfying derived demand. Organizations purchase products to meet the needs
of their buyers. Impulse-buying is rare; clearly stated, objective criteria, such as meeting production needs and
schedules at a minimum cost, usually drive the choice process. Second, because more than one person is involved
in the purchase decision process, purchasing managers rarely make a buying decision independent of the influence
of other stakeholders, whether within the buying organization or external to it (e.g., consultants, supplier firms,
other firms in the industry)

F. Competitive scenario:

Competitive Rivalry: Continuous innovation leading to intense rivalry, homogeneity in product and low switching
cost
Bargaining Power of Suppliers: Product differentiation is low and by changing the input, firms cannot drastically
differentiate on price
Bargaining Power of Buyers: Use of Internet to get all the information enables customers to be powerful which
further lessens the buyers switching cost
Threat of Substitutes: Because of technology advancements in the industry buyers have huge propensity to
substitute
Threat of New Entrants: The industry is highly capital intensive. Major players have developed brand equity but
brand loyalty is moderate

INDUSTRY- INFORMATION TECHNOLOGY (IT)

A. Size and number of players

The IT sector ranks fourth in Indias total FDI share and accounts for approximately 37 per cent of total Private Equity and
Venture investments in the country. As of 2016, India has been a prominent sourcing destination across the world,
accounting for approximately 56 per cent market share in the global services sourcing business. The contribution of the IT
sector to Indias GDP stood at 7.7 per cent in 2016.
TCS is the market leader, accounting for about 10.4 per cent of Indias total IT & ITeS sector revenue in FY16. Other
major players include Wipro, Cognizant, Infosys, Tech Mahindra, HCL Technologies, Microsoft, Mindtree and
Capegemini

B. Impact of technology and other environmental factors that drive the industry
Tax holidays for STPI and SEZs
More liberal system for raising capital, seed money and ease of doing business
India remained the worlds top sourcing destination in 2016-17 with a share of 55 per cent
Robust IT infrastructure across various cities in India
Technology mission for services in villages and schools, training in IT skills and E-kranti for government service
delivery and government scheme
Disruptive technologies, such as cloud computing, social media and data analytics, are offering new avenues of
growth across verticals for IT companies.

C. Present and projected demand

Indias technology and BPM sector (including hardware)

generated revenues of USD160 billion during FY16
compared to USD146.5 billion in FY15, implying a
growth rate of 9.2 per cent
The Dm
domestic revenue of the IT industry is estimated at
US$ 38 billion and export revenue is estimated at US$
117 n/.nlnmm
billion in FY17
In FY16 the estimated revenue from exports of IT and
BPM sector was USD108 billion and Global IT-BPM
spending (excluding hardware) has grown 0.4 per cent
over 2015 to nearly USD1.2 trillion 3
D. Nature of demand
Strong consumer demand for IT service and products is likely to be there in coming years because of many
factors:
Advent of smartphones, tablets and iPads
Industry leaders are stressing the need for promoting support start-ups
Rising computer literate population Enhanced internet and mobile penetration
Growing disposable income strengthening consumer purchasing power
Emerging verticals (retail, healthcare, utilities) are driving growth above 14 per cent

E. Buyer behavior issues

Business buyers are influenced by their behavior as consumers
Executives have become much more risk averse.
Organizations continue to involve many people in the buying process.
Procurement departments have become much more involved and sophisticated

F. Competitive scenario
Competitive Rivalry: High Intense competitive rivalry exists due to low switching costs and most of the
bigger Indian firms offer same services and there is little product differentiation
Bargaining Power of Suppliers: Bargaining power of suppliers is less as most of their businesses come
from the same geographies. They are price taker rather than price maker
Bargaining Power of Buyers: Bargaining power is high as many IT firms fight for a similar project. Firms
are mostly dependent on same geography, which increases customer power
Threat of Substitutes: Threat is medium as new centres, such as Philippines and China, are fast gaining
ground among investors due to their low cost advantages
Threat of New Entrants: This threat is high i.e the industry permits easy entry as the capital required is
low. Large players, however, tougher prospects of small and medium players to win large deals

References Used:
IBEF Research papers
Official websites of major firms of both industries