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Assignment - Session 1 - Manish

Praxim should take several steps to improve profits without losing sales as the upmarket has stagnated. These include segmenting consumers and offering bundled packages to satisfy more customers and gain economies of scale. Investing in specialty stores allowing premium pricing could also increase margins. Seasonal offers and customization could reduce costs and increase the customer base. The document analyzes the situation using Porter's 5 forces model, noting medium to high industry rivalry, threat of new entrants, and bargaining power of customers, with lower threats from substitutes and suppliers. The PC industry has changed significantly since 1998 with many competitors, lower margins, demand for new technologies, downward price pressure, more commoditization, frequent new products, and

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Manish Sinha
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205 views

Assignment - Session 1 - Manish

Praxim should take several steps to improve profits without losing sales as the upmarket has stagnated. These include segmenting consumers and offering bundled packages to satisfy more customers and gain economies of scale. Investing in specialty stores allowing premium pricing could also increase margins. Seasonal offers and customization could reduce costs and increase the customer base. The document analyzes the situation using Porter's 5 forces model, noting medium to high industry rivalry, threat of new entrants, and bargaining power of customers, with lower threats from substitutes and suppliers. The PC industry has changed significantly since 1998 with many competitors, lower margins, demand for new technologies, downward price pressure, more commoditization, frequent new products, and

Uploaded by

Manish Sinha
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Submitted by:

Submitted to:
Manish
Prakash Bagri

Prof.

EPGP 2014-15, Term VI

MWHTI

Brief Case Analysis of THE CASE OF PROFITLESS PC


April 28, 2015
1. What as per your analysis should Praxim do ? Why ?
Answer : Praxim should take the following steps

Task of improving bottom line without loosing on sales as up market had now being
stagnated and the scope for growth is little

Segmentation based on consumers needs can result in market penetration and


increase in consumer base will give economies of scale reducing marginal costs.

Bundled boxes with ( software and other services) will satisfy more customers and
will increase revenue also.

Investing in specialty stores, where a premium can be charged thus increase in


margin can be gained and thus profits will increase.

Season offers can be introduced, by charging premium differently for different set of
consumers. This kind of focused approach will increase retail customer base within
short time.

Introducing PC customization for consumers, It will reduce inventory cost as well as


procurement cost as it will be JIT inventory.

2. Which strategic models did you use to analyse the situation ?


Answer : I used Porters 5 forces model to analyse the situation.
Forces
Industry Rivalry

Threat of New Entrants

Threat of Substitutes

Bargaining Power of Supplier

Bargaining Power of Customer /


Buyer

Factors
No of competitors
Size of Competitors
Brand Value of Competitors

Degree
Medium to High

Capital Required
Brand Acceptance

Medium to High

Switching Cost
Price of Substitute
Performance of Substitute

Low to Medium

Market Share
Size of Supplier

Low to Medium

Switching Cost
Performance & Cost of product
Volume

Medium to High

Analysis :

3. How has the PC industry evolved since 1998 ?


Answer : The PC industry has changed a lot since 1998 as there is no domination of 1 or 2
players in this industry. There are no. of competitors competing through various resources
and giving different types of value addition to different segments of customers. Some other
key changes in PC industry since 1998 are

Margins on products have shrink due to fierce competition.


The demand for new products & technologies have increased, which encouraged
new entrants.
Prices heads southward direction as the profits also.
From a niche product it has become more commoditized product.
Many new companies have joined the industry with new offerings and customer
segmentation.
The product life cycle has become short and new products keep coming more
frequently.

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