Intel’s foray into rural india

Amlan Patnaik(03) Richa Jain(43) Varun Garg(59)

About Intel
• Established in 1968 as a silicon based chip maker. • In 1971 introduced the world’s first single chip microprocessor named intel 4004. • In 1990’s became the world’s most recognizable computer brand. • In 2006 started world ahead program with a view to capture emerging markets in the world.

• • • • • Developed “community PC” to penetrate Indian rural market. Started “jaagruti (Awakening)” to bridge between rural and urban digital divide. Partnered with OEM’s like HCL & Wipro for manufacturing. Collaborated with Tata to provide Wi-max technology for better internet services. Key areas like: education, health care, agriculture and trading.

Decision Problems
• To capture untapped rural market of developing countries. • To deliver accessibility to the rural region of developing countries. • Provide education to people so that they can use the computer properly. • Making a common man PC which can be accessible in adverse circumstances. • Creating awareness among the people living in rural area regarding the importance of computer & it’s utility. • Pricing of PC & profit generation where market is price sensitive. • Stretching of brand: From Chip maker to PC platform provider.

Major Issues
• Tackling the problem of low computer literacy. • Adverse natural environment & distribution of electricity in rural area of developing countries. • Diversity of Language. • Emerging competitors in developing countries. • Problems in Providing Internet Service. • Distribution of community PC.

Macro Environment Analysis
Political: • Major focus on the basic needs of rural people. • Lots of loop holes in the system in terms of proper implementation of Policy. • Policy changes frequently by changing of government. Technological: • Supporting the effective use of technology in education. • Use rugged chassis to save computer from dust and insects. • Developed ultra low power processor to reduce power consumption up to 100 watts.

Socio-cultural • People don’t know the utility of PC. • Technological devices used on shared basis. Demographic • low per capital income. • Low literacy and computer literacy ratio. • Lack of computer experts in rural area.

Michael Porter five forces
• Threat of new entrants - entry of HP in theo same segment. - entry of WYSE Technology . • Suppliers power - computer giants like Wipro and HCL may set up terms and conditions in future. • Buyers - Developing countries are price centric and are not very much brand loyal may set terms and conditions • Threats to substitutes - It is not so easy for the substitute to steal the market of Intel because of the reputation of “Dependable Brand” • Competitive Rivalry - Cmpetitive rivalry in genteel one

SWOT Analysis
Strengths: • Technical savvy company. • efficient R&D department. • Strong financial position. • Big brand name. Weakness • Pricing of the PC.

Opportunity: • Untapped market

Threats: • New entrants in the market. • Competitors (HP,AMD,SiS). • Lack of political support.

Marketing Strategies

Enter the market

Generate demand

Increase sales

Recommended course of actions
• Come with a joint venture. • Instead of providing PC on shared basis it is good to open a Internet Kiosks having multiple PC so that many people can work on same time. • It is good to start campaigns in the villages by which people can learn the benifits of the computer according to their utility. • Provide free computers to schools and colleges and provide them assistance. • They should start several agricultural program so that they can influence villagers as most of the population is related to agricultural business.

Time frame analysis
Short Term Vs Long Term • It is good to form joint venture for long term rather than going for short term in terms of achieving the desired goal of company to provide low cost PC.

• Kiosks should be opened for long term looking at the income level of rural people. • Campaign should be for long term because it is not so easy to capture a market with 2% of computer literacy ratio. • Company should go on long term basis to provide agricultural information to village people.

Optimal solution
• Rather than coming individually they should come with central government support.

Cost and benefit analysis
• “In India, the program unifies Intel’s local efforts to enhance the lives of the vast majority of India’s population who would benefit from information technology and education, but have not found it within their reach till that time.” statement of CEO. The PCs will be available in 60 days and will be priced 20 percent less than the lowest priced Intel-based PCs in India with similar feature-rich configurations. The global collaboration between Microsoft and Intel to implement Microsoft FlexGo* technology is another example of the successful joint activities the two companies have taken on in emerging markets. The pay-as-you-go model enabled by FlexGo makes PCs more accessible by reducing the initial cost and enabling customers to pay for computers through subscriptions or as they use them, through the purchase of prepaid activation cards or tokens. Intel will provide support for the FlexGo capability initially on Intel’s Discover the PC platforms tailored for people in developing regions, such as the recently introduced Intel-powered Community PC in India.

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Intel will also collaborate with ICICI Bank* to facilitate loans for PC ownership through the emerging subscription payment model, ensuring long-term viability for computer financing methods. With the World Ahead Program, Intel has committed to invest more than $1 billion globally over the next five years to speed access to uncompromised technology and education for people in the world’s developing communities. India is one of the key countries to be covered by this program. The program integrates Intel’s efforts to enhance lives by driving progress in three areas: Accessibility: Creating opportunities for widespread ownership and shared access of PCs through affordability, access and content, including the development of fully featured, affordable PCs tailored to regional needs. Connectivity: Expanding wireless broadband Internet access by cultivating the required ecosystems and encouraging deployment, including the broad promotion of WiMAX trials and deployments. Education: Preparing students for success in the global economy through education programs and resources, including professional development for teachers worldwide.