A1. Analysing the external environment for Microtek.

Inverters and UPS systems are in high demand in India's varied industries. The IT sector is the
primary engine, followed by IT-enabled services and industries such as telecommunications, banking
and manufacturing. Low electrification in semi-urban and rural areas has resulted in an increase in
demand for power inverters, which are utilised as a backup power source during power outages or
emergencies. Furthermore, the widespread usage of electronic devices and appliances such as
cellphones, laptops, smart TVs, and air conditioners has necessitated the addition of more backup
power.

PESTEL ANALYSIS
Political Environment – The Government has given a great push for the energy sector, providing
various incentives and subsidies on manufacturing and purchasing of UPS, Batteries, e-vehicle
chargers, solar products etc.

Economic Environment – Due to the recent Covid-19 pandemic induced lockdown in 2020 and the
second wave in 2021, the general economic condition is weak, with lower demand and lower
economic growth rate. But this expected to pick up pace with increased government capital
expenditure. Increased foreign investment in the

Social Environment – The demographics of India is one of the younger aged population group who
have easy access to tech gadgets like mobile phones, laptops, PCs, Smart TVs thereby increasing the
demand for Inverters and UPSs

Technological Environment - Many new technology trends and developments have also been
introduced to the market to address changing customer preferences and lifestyles. Example -
Portable power banks that can charge mobile phones and tablets on the go are a major market
driver for inverters and UPS systems.

Environmental Factors – UPS & Invertors do leave a carbon foot print but when utilised in the most
efficient manner alongwith solar energy which can be stored and use as the battery back up, it can
significantly reduce this carbon foot print thereby contributing to lower greenhouse gases. Increased
awareness of global warming has made e-vehicles a great future prospect, therefore increasing the
need for e-vehicle chargers.

Legal Environment – Increased government push for e-vehicles, solar energy and better battery
storage has lead to reduced compliances and administrative work for ease of doing business
purposes thereby attracting players in the industry.

PORTER’S FIVE Competitive Forces

1) Competitive Rivalry amongst Firms – Luminous Inverter, Exide Industries are major rivals for
Microtek. Microtek has currently 40% of market share and is aiming for 50%. There is
increase in buyer demand for the products, Firms fixed cost in the industry is high,
Competitors are growing at a good pace all factors indicating an increased rivalry amongst
firms in the coming future.
 2) New Entrant – With liberalised government policies and subsidies for the battery and e-
vehicle, solar sectors has the entry barriers for new firms has reduced. Increased demand for
the products, increase in resources and capabilities all have added to threat of new entrants.

3) Possibility of Substitutes – Battery storage, e-vehicle chargers are very readily available in
the growing light of the semiconductor supply issue, therefore the switching costs for buyers
have considerably increased. Buyers for these products are mostly institutional and value-
perceiving buyers who want good quality of the products.

4) Buyer Bargaining Power – Supply has lowered due to the semi-conductor supply issue, but
demand has increased for battery inverters, e-vehicles, solar products. This increased buyer
switching cost and reduced buyer bargaining power. Buyers are not as big as the suppliers,
they cannot profitably integrate backwards and theredore have weakened bargaining
power.

5) Supplier Bargaining Power – Supply bargaining power has increased due to increased
demand, more than supply and therefore suppliers can charge higher prices and have better
bargaining power.

A2)

Threats of new entrants-

The Threat of New Entrants, one of the forces in Porter’s Five Forces industry analysis framework,
refers to the threat that new competitors pose to current players within an industry. It is one of the
forces that shape the competitive landscape of an industry, and it helps determine the attractiveness
of the industry. The framework was developed by Michael Porter at Harvard University.

Threat of new entrants is very high in this online retail industry because of the following reasons:
The Indian government has permitted 51 percent foreign direct investment in multi-brand online
retail and 100 percent foreign direct investment in single-brand online retail. As a result,
international enterprises can come to the country and launch their own online retail businesses.

There are fewer obstacles to entry, such as the quantity of capital needed to start a firm and the
amount of infrastructure needed to get started. All you need is a partnership with a product
supplier, a website to showcase products so clients can order them, and a partnership with an online
payment gateway provider like Bill Desk.

Industry will also expand at a quick pace. By 2021, it will have surpassed 76 billion dollars. The
industry is expected to grow at an exponential rate. As a result, no one wants to miss this big
opportunity. With the new entrants like Jabong, Snapdeal etc. rapidly racing towards the top
position, Flipkart needs to devise new strategies to avoid this threat from new entrants.

Flipkart com will be facing high new entrants threat if

Existing regulations encourage new companies to enter the market.

Due to low/no brand loyalty, consumers can readily swap brands.

The initial capital outlay is substantial.

For new players, establishing a distribution network is simple.

The threat of retaliation from existing market actors is not a deterrent.

Here are some factors that reduce the threat of new entrants for Flipkart com:

Entry into the sector necessitates a significant financial and resource investment. If product
differentiation is high and customers place a high value on the unique experience, this force loses its
strength.

If the existing regulatory framework imposes certain hurdles to new enterprises interested in
entering the industry, Flipkart com will face a low threat of new entrants. New participants will be
forced to meet stringent, time-consuming regulatory procedures in this situation, which may deter
some from entering the market.

If consumers have a high psychological switching cost and existing brands have created a devoted
client base, the danger will be low.

If access to distribution channels is restricted, new entrants will be discouraged.

What the flipkart should do-

By focusing on customer relationship management, Flipkart.com may increase brand loyalty. It will
increase the psychological costs of switching.

To gain access to the target market, it can form long-term contractual ties with distributors.

Flipkart.com can also invest in R&D, collect important customer data, and provide innovative
products/services to establish a strong difference foundation.

A3)

As per the prices, perceived quality and image parameters, the top players can be classified into
high, medium and low stages.

Necco, Idaho, Mondelez and Nestle provide average quality at low prices and their brand image is
quite less than the other players. Their price range starts around 10 rs in India.

Necco, Idaho, Mondelez and Nestle provide average quality at low prices and their brand image is
quite less than the other players. Their price range starts around 10 rs in India.

The medium stage includes players like Cadbury, Russel Stover, Mars and hersheys. They have a
better brand image and they provide better quality products than the before discussed players.The
starting prices is around 50-100 Rs.

The high stage of prices, quality and brand image include players like Lindt and Godiva which provide
premium quality chocolates at premium prices. The price range starts around 300 bucks.

Price, Perceived Quality and High

Brand Image Lindt,Godiva

Medium Russel
Stover

Low Necco, Mars, Hersheys, Nestle,

Idaho Mondelez

Narrow Medium Broad

Geographic Market Scope

Geographic Reach
Nestle operates in 189 countries
Mondelez International empowers people to snack right in over 150 countries.

Mars is present in 55 countries

Lindt is present in 120 Countries

This is high geographic reach of Nestle, Lindt and Mondelez therefore both are International Brands

Mars is an international brand but with a lower reach than Nestle, Mondelez and Lindt therefore more
targeted.