YEAR/SEMESTER: 2022-23/III BATCH: 2021-23

A
Comprehensive Project on
A STRATEGIC ANALYSIS OF ELECTRONIC INDUSTRY IN INDIA

Submitted To

MBA Department,
LDRP - Institute of Technology & Research, Gandhinagar.

(Affiliated to Kadi Sarva Vishwavidyalaya, Gandhinagar)

[As a Part of the Fulfillment of the MBA Degree, Year-II/Semester-III
For the practical subject Comprehensive Project-I, Code-CC 304]
Under the Guidance of
Prof. Dr. Hemali G. Broker

Faculty-MBA Department;
LDRP - Institute of Technology & Research,
Gandhinagar.
Submitted by
NAME ENROLLMENT NO. EXAM NO.
Kachariya Shrushti Harshadray 21MBA30011 553011
Makwana Rohan Arunkumar 21MBA30013 553013
Joshi Devank Bhaskarbhai 21MBA30051 553047

Sign of External Examiner Sign of Internal Examiner

 PREFACE

In a developing country like India, Electronic Industry is one of the very crucial topics. In India,
there are many Electronic Industry which are developing day by day and setting new trends
every single day.

We made this project on Electronic Industry in order to know about how development of new
technology takes place and manufacture of various products are made.

Comprehensive Project – 1 would also be a great learning experience since it enables students to
apply theory to practice and observe and learn the current trends in the market.

MBA is not only the bookish knowledge of business and economics but also provides many
opportunity of getting actual practical experience and CP – 1 is one of them.

The main aim of the study was to make a project on secondary data by selecting a particular
products from various electronic products. Further to see which major players are ruling over this
product, how much is their market share and what’s their growth chart. Electronics sector has
shifted from primarily public sector to private sector and has immense growth opportunities

During preparation of CP – 1 has been rotated different segments such as, background of the
industry, trends in production and consumption , major players in segment, demand determinant
of the electronic industry segment, key issue and current trend, data analysis and interpretation,
future trend projection etc.

We the student of second year M.B.A, LDRP institute of TECHNOLOGY and RESEARCH,
GANDHINAGAR is a constituent institute of KADI SARVA VISHWAVIDYALAYA, did our
project on “Electronic Industry” with reference to “Air Conditioner”.

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 ACKNOWLEDGEMENT

We have made a lot of efforts for this project. However, it won’t be possible without the
assistants and encouragement of my college, faculties and others who helped me for this project.

On the very outset of the report, We would like to present my heartfelt gratitude towards all the
people who helped me in this endeavour. Without their guidance and support, I would not able to
complete this project

WE would like to present gratitude to my University, Kadi Sarva Vishwavidyalaya & my college
LDRP – Institute of Technology & Research for giving me this opportunity.

We are highly indebted to our Head of Department Prof. (Dr.) Surya Krishna Mantrala for his
guidance. We are extremely thankful and pay my gratitude to my Project Guide & SIP
Coordinator Dr. Hemali Broker for her valuable guidance and support on completion of this
project in her presence.

We are thankful to Dr. Vinit Mistri, Dr. Mallika Babu, Dr. Sejal Archrya and Dr. Harshita
Vijaywargi; faculties of LDRP-ITR MBA Department for their constant supervision as well as
for their support in completing the project.

We would like to acknowledge my parents and all my friends to directly or indirectly helped me
to complete my project. My thanks and appreciations also go to our colleague in developing the
project.

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 DECLARATION

We hereby declare that the project report – “Electronic Industry” and the information and details
has been carried out by our own efforts and facts arrived at our observation, under the guidance
and supervision of Dr. Hemali G. Broker.

We declare the statements made and result drawn as an outcome of our research work. The work
contained in the project is original and done under supervision of our supervisor. We have also
followed the guidelines provided by our supervisor.

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 EXECUTIVE SUMMARY

In today’s competitive world limited theoretical knowledge can’t work anymore effectively and
cannot be relied on and thus a deep study is needed to get full knowledge of a particular topic.

Comprehensive project 1, would also be a great learning experience since it enables students to
apply theory to practice and observe and learn the current trends in the market.

the main aim of the study was to take collect information from secondary data on “Electronic
Industry” and prepare the project. By this study we have come to know regarding the Indian and
global scenario of electronic industry, its growth, various segments of electronics industry and
under its major players in various segments of Electronic Industry.

Further, we have selected one particular product from various products of Electronic industry -
Air Conditioner. Research work done for collecting information regarding its Price, how to target
people on Basis of their Income level, Availability of Finance, Replacement Demand, various
promotion scheme etc.

Later on identified its key issue & current trend in market by checking its product quality,
Applying company specific marketing strategies for solving issues and to get into current trend
segmentation and positioning is way for important and then check whether growth rate increases
or not.

Data analysis and interpretation of data is done by using various methods – Pestel Analysis,
Porter’s Five Force Model of Industry Analysis, SWOT Analysis, Value Chain Analysis.

While completing this project we have come to know:

• Electronics sector has shifted from primarily public sector to private sector and has
immense growth opportunities.
• Its total contribution to economy and sales is ever increasing.
• Contribution in creating employment opportunities.
• Rivalry among firms are moderate.
• Changing lifestyle and increasing income is a stimuli for its growth.
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 TABLE OF CONTENT
Sr. No. Sub. Particulars Page No.
Sr. No.
Title Page
I Preface I
II Acknowledgement II
III Declaration III
IV Executive Summary IV
V Table of Content V

CH 1 Introduction to Electronic Industry 1

1.1 Global Scenario 2
1.2 Indian Scenario 4
1.3 History of Electronic Industry Evolution 7
1.4 Growth and Development of Electronic Industry 13
1.5 Key Characteristics of Electronic Industry 17
1.6 Various Segments of Electronic Industry 17
1.7 Major Players in Various Segments of Electronic 19
1.8 Market Share and Growth Rate Details 20
1.9 Demand- Supply Scenario 22
1.10 Trend in Production, consumption 22

CH 2 Background of the study 27

2.1 Need of the study 27
2.2 Significance of the study 27
2.3 Objectives of Study 27
2.4 Limitations of the study 28

CH 3 Major Players in Segment 29

V
 3.1 Product Profile of the Segment 29

CH 4 Demand Determinant of the Electronic Industry 32

4.1 Price 32
4.2 Income of Target Segment 32
4.3 Penetration Level 33
4.4 Availability of Finance 33
4.5 Replacement Demand 33
4.6 Promotion scheme 34
4.7 Distribution Structure in the Industry 34

CH 5 Key issues and current trend 35

5.1 Product Quality/Technology 35
5.2 Promotion 35
5.3 Company specific marketing strategies 35
5.4 Segmentation and Positioning 36
5.5 Total Market 37
5.6 Seasonality Pattern 37
5.7 Growth Rate Statistics 38

CH 6 Data Analysis and Interpretation 39

6.1 PESTLE Analysis 39
6.2 Porter’s Five Forces Model 42
6.3 SWOT Analysis 44
6.4 Value Chain Analysis 45
6.5 Key Success factors 45
6.6 Key Driving Forces 47
6.7 Gaining and Sustaining Competitive Advantage 48

CH 7 Future Trend Projections 50

VI
CH 8 Conclusion 53

CH 9 Bibliography 53

CH 10 Annexure 54

VII
 CHAPTER 1: INTRODUCTION TO ELECTRONIC INDUSTRY

The Electronics Industry is made up of companies that manufacture, design, manufacture,

assemble, and service electronic products. These products consist of materials, parts,
components, subassemblies, and equipment that use the principles of electronics to perform their
major functions.

Products can range from discrete components like integrated circuits; consumer electronics like
TVs, smartphones, and personal computers; medical equipment like heart-rate monitors and
dialysis machines; industrial equipment like robots; to communication and networking
equipment like routers and switchboards. Industries that are supported by the electronics industry
include automotive, aviation, defense, telecommunications, entertainment, and healthcare.

The Electronics Industry is driven by innovation and a lot of money and effort goes into research
and development to design and make improved parts and products, as well as improve
manufacturing processes.

Companies in the electronics industry are always in tough competition to implement innovative
ideas and introduce the newest technology in the market first. This puts a lot of pressure on
design and engineering teams to develop and create innovative products and services faster and
cheaper. Sales and marketing teams are also under pressure to drive sales and ensure that profit
margins remain way above production and operational costs. Many electronic companies are also
experimenting with and utilizing advanced analytics to provide insights that can help improve
processes and bring in more profits.

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Companies are also specializing in specific niches to guarantee sustainability and maintain
profitability. Many electronics manufacturing companies are outsourcing manufacturing and
production of parts or products.

The rise of Electronics Manufacturing Services (EMS) and Contract Electronics Manufacturing
(CEM) companies is a testament to that. These are companies that are contracted to manufacture
parts or products for other companies, and also provide a variety of value-added services. This
allows the contracting companies to concentrate their efforts on other strategies that will help
drive sales and help them remain competitive on the global market.

1.1 Global Scenario

The global electronics hardware sector is estimated to be worth around US$2 trillion, with India's
production amounting to around US$47 billion in 2016-17. In the fiscal year 2016-17, India's
domestic consumption was over $ 86.4 billion, while exports were over $6 billion.

In India, current value addition in the sector ranges from 5 to 30%, depending on the value
chain's constituents. It is approximately 25-30% in components, whereas it is approximately 5-
15% at the SKD assembly level.

In terms of its main parts, the electronics industry is divided into numerous verticals. Currently,
there is a scarcity of production data in this sector.

➢ Consumer Electronics Overview

As a result of the digitalization of the broadcast business and increasing affordability due to price
reductions, the flat panel TV market has seen significant development in the last 5 years. The
production of LCD/LED TVs has climbed to 16.0 million units valued at around Rs. 26,400
crore in 2017-18, up from 14.5 million units valued at around Rs. 23,925 crore in 2016-17,
indicating a 10% rise.

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Home Theater output is expected to increase by 0.76 million units, valued at FRs.924 crore in
2017-18, compared to 0.7 million units, valued at Fts. 840 crore in 2016-17.

➢ Exports Scenario

The government has taken several steps to boost the Electronics Hardware sector's exports.
EHTP units and Special Economic Zones (SEZs) are the key contributors to exports. SEZs were
established to promote hassle-free manufacturing and trading for export reasons.

➢ Start a Business in Middle East

SEZ Units are eligible for a 100% income tax exemption on export profits for the first five years,
50% for the next five years, and 50% on ploughed back profits for the next five years. The
Electronics Hardware Technology Park (EHTP) Scheme is an export-oriented program for
electronic goods manufacturing.

➢ Start a Business in Asia

According to data from the Directorate General of Commercial Intelligence and Statistics
(DGCI&S), electronic goods exports in 2016-17 totaled US $ 5962.9 million (Rs.39,979.6 crore),
up from the US $ 5959.5 million (Rs.39,063.5 crore) in 2015-16.

➢ Start a Business in Africa

The field of Electronics System Design & Manufacturing (ESDM) is critical to the government's
goal of generating $1 trillion in economic value from the digital economy by 2025.

India has already begun to see beginning activity with increasing production and assembly
operations across products such as mobile phones and other consumer electronics, thanks to
several government efforts aimed at boosting domestic manufacturing.

➢ Start a Business in India

The ESDM sector in India is expected to reach US$ 220 billion by 2025, growing at a 16.1
percent CAGR between 2019 and 2025, thanks to strong legislative backing, massive
investments by public and private stakeholders, and a surge in demand for electronic products.

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1.2 Indian Scenario

Global shifts in trade policies, like the US-China face-off, as well as the pandemic that has
shown that dependence on one country for electronics raw materials can be a dangerous strategy,
have given India a chance to step up. It is the opportunity of a lifetime for the Indian electronics
manufacturing sector to avail enabling policies and grab global market share.

By Manik Abbott:

The electronics industry has seen sweeping changes over the last two decades. These have
primarily been in the product domain (across technologies, formats and design), the evolution of
the retail environment (from traditional to large-format specialised stores and e-commerce), and
an evolving regulatory landscape. The requirements of both the consumers and businesses have
evolved, leading to a demand for more innovative products.

The industry’s ecosystem has undergone drastic changes to keep pace with the changing demand
patterns. The supply chains are now far more complex, diverse, and optimised to meet the new
industry structure. Currently, a significant share of Indian demand is met by imports. But the
Indian electronics industry is being ushered into an era wherein the manufacture of several
components will be indigenised through regulatory support and incentivised production from the
government of India.

The long-term growth potential for the industry is optimistic, primarily because the market
penetration is still low, currently standing at single digits for some categories like LED products
and industrial electronics. Besides, the positive outlook of higher GDP growth rate, rising
disposable incomes, improving physical and social infrastructure (availability of electricity and
water), better logistics (facilitated by improved road connectivity), the Digital India programme,
and the expansion of retail will provide additional impetus. It is this promise of sustainable long-
term growth that has attracted several international brands to India, many of whom have set up
manufacturing facilities here.

Specific to the electronics sector, several policies such as Make in India, National Policy of
Electronics, Net Zero Imports in Electronics, and Zero Defect Zero Effect, augur well for the
industry, as they signal a commitment to growth in domestic manufacturing, lowering import

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dependence, energising exports, and environmentally-conscious manufacturing. Incentives to
attract capital and measures to develop the component supply base (applying the Phased
Manufacturing Plan for mobiles to other categories) will have to be sustained at the supply side,
while also correcting aberrations in GST on the demand side. Furthermore, despite the lockdown,
the government of India has been consistently expanding incentives through the three major
schemes it launched in April 2020 with an outlay of ₹ 500 billion.

The electronics industry is one of the fastest growing across the world, set to reach US$ 7.3
trillion by 2025. The Indian market is expected to be second only to China’s, followed by
Vietnam, South Korea and Taiwan.

The government of India is focusing on manufacturing electronics hardware within India, which
seems to be the conceptual origin for both the Make in India and the Digital India programmes.
These initiatives encourage domestic manufacturing and exports across the electronics system
design and manufacturing (ESDM) value chain, aiming to achieve a market size of US$ 251
billion by 2023. The Indian electronics industry consists of seven main segments, including
consumer electronics, industrial electronics, communications and broadcasting electronics,
strategic electronics, computer hardware, electronic components, and LED products.

Apart from policies like the Make in India initiative, the National Policy on Electronics (NPE)
2019 and Digital India, the Indian government has also backed the sector with the Electronics
Development Fund (EDF), the Modified Special Incentive Package Scheme (MSIPS), the Phased
Manufacturing Programme (PMP), Preferential Market Access (PMA), and by rationalising the
duty structure.

With the rising manufacturing costs in other economies and the increasing labour costs in China,
coupled with the trade war between the USA and China, global organisations are expected to
shift their units from China to India to serve domestic and global demand. Thus, it is expected
that the Indian electronics industry is likely to increase its share in the global market.

➢ An Overview of the Indian market

With the exponential rise in demand and supportive demand conditions, the Indian market is
poised to grow considerably in the next five years, primarily on account of growing per capita

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incomes, the consumption of electronics goods (such as smartphones, consumer electronics, etc),
and growing industrial demand.

➢ Electronics trade

Of the total electronics demand in India, around 50 per cent is fulfilled by imports, whereas of
the total local electronics production, 16 per cent is exported. The government of India is very
keen to reduce electronics imports by creating a local ecosystem for electronics manufacturing.

Here are some key insights into electronics trade in the Indian market:

Gradually, the growth rate in domestic production is outpacing growth in imports, which
underscores the government’s focus on endorsing new initiatives for the Indian electronics
manufacturing industry. Currently, semiconductors and integrated circuits (ICs) are the major
products being imported, as India lacks the required ecosystem and technical know-how to
produce them. Given the existing supply chain of electronics manufacturing in India, domestic
production of semiconductors and ICs is yet to gain traction.

In FY 19, for the first time, electronics imports declined as compared to the previous year. In
contrast, both electronics production and electronics exports increased compared with the
previous year.

In FY 18, 75 per cent of the total electronics imports constituted components, industrial
electronics, strategic electronics and computer hardware. However, in FY 2019, for the first time,
domestic production overtook imports largely due to the Make in India initiative and the
reduction in mobile data costs.

In the industrial electronics segment, the focus is shifting, particularly to solar and cleaner
energy. In this segment, imports fulfil 50 per cent of the local demand.

With India importing considerable volumes of medical electronic equipment from the US, it is
estimated that imports in this category reached US$ 5 billion in FY 18. This segment is expected
to see high growth for local manufacturing.

Computer hardware and software imports are significant due to the large scale commercial
applications of PCs, laptops and enterprise solutions.

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With older lights such as CFLs and ILs becoming technologically obsolete, the trend is to move
towards more energy-efficient and environmentally conscious products like LEDs.

India’s major exports are to the US, which constituted 14 per cent of total electronics exports
from the country in FY 19. India’s import dependence on China has reduced significantly as
imports from that country in FY 19 were 39 per cent of the total electronics imports, as compared
to 59 per cent in FY 18.

The major imports included semiconductors, ICs, products for defence electronics, and mobile
phones, in both FY 18 and FY 19.

1.3 History of Electronic Industry Evolution

History of Electronics Dates back to 1745 with Invention of the Layden Jar followed by
identification of electron in 1897 and then invention of the vacuum tube.

➢ 1745 – Discovery of the Layden Jar:

Ewald Georg von Kleist and Pieter van Musschenbroek discovered the Layden Jar in 1745. It
was the first electrical capacitor– a storage mechanism for an electrical charge. The first ones
were a glass jar filled with water-two wires suspended in the water. Muschenbrock got such a
shock out of the first jar he experimented with that he nearly died.

Later, the water was replaced with metal foils wrapped so that there was insulation between the
layers of foil-the two wires are attached to the ends of the sheets of foil.

➢ Ben Franklin (1706-1790):

Benjamin Flew kites to demonstrate that lightning is a form of Static Electricity (ESD). He
would run a wire to the kite and produce sparks at the ground, or charge a Leyden jar. This led
Franklin to invent the lightning rod.

Franklin also made several electrostatic generators with rotating glass balls to experiment with.

These experiments led him to formulate the single fluid (imponderable fluid) theory of
electricity. Previous theories had held there were two electrical fluids and two magnetic fluids.
7
Franklin theorized just one imponderable electrical fluid (a fluid under conservation) in the
universe.

The difference in electrical charges was explained by an excess (+) or defect (–) of the single
electrical fluid. This is where the positive and negative symbols come from in Electric Circuit.

➢ Charles Augustus Coulomb (1736-1806):

Invented the torsion balance in 1785. The torsion balance is a simple device – a horizontal cross-
bar is mounted on a stretched wire. A ball is then mounted on each end of the cross bar. Given a
positive or negative charge, those balls will then attract or repel other objects that carry charges.
The balls responding to these charges will try to twist the wire holding the cross bar.

The wire resists twisting, and how much twisting occurs tells you how much force the attraction
or repulsion exerted. Coulomb showed electrical attraction and repulsion follow an inverse
square law. The unit of charge (Coulomb) is named after him.

➢ Alessandro Volta (1745-1827):

Announced the results of his experiments investigating Galvani’s claims about the source of
electricity in the frog leg experiment. He undertook to prove that he could produce electricity
without the frog. He took the same bimetallic arcs (many of them) and dipped them in glasses of
brine.

This was Volta’s Couronne des Tasses- his first battery.

The voltaic pile was an improved configuration for a battery. With it he showed that the
bimetallic arcs were the source of electricity. The unit of voltage is named after him.

➢ André Marie Ampère (1775-1836):

Gave a formalized understanding of the relationships between electricity and magnetism using
algebra. The unit for current (ampere) is named after him.

➢ Hans Christian Oersted (1777-1851):

In the year 1820 in Denmark demonstrated a relationship between electricity and magnetism by
showing that an electrical wire carrying current will deflect a magnetic needle.

8
The CGS unit for magnetic field strength (Oersted) is named after him.

➢ George Simon Ohm (1789-1854):

He wanted to measure the motive force of electrical currents. He found that some conductors
worked better than others and quantified the differences.

He waited quite some time to announce “Ohm’s Law” because his theory was not accepted by
his peers. The unit for resistance (Ohms) is named after him.

➢ Michael Faraday (1791-1867):

Great Contribution to History of Electronics,

In 1820s Faraday postulated that an electrical current moving through a wire creates “fields of
force” surrounding the wire. He believed that as these “fields of force” when established and
collapsed could move a magnet. This led to a number of experiments with electricity as a motive
(moving) force.

In 1821, Faraday built the first electric motor – a device for transforming an electrical current
into rotary motion.

In 1831, Faraday made the first transformer – a device for inducing an electrical current in a wire
not connected to an electrical source, also known as Faraday’s Ring. It was powered by a voltaic
pile and used a manually operated key to interrupt the current.

The unit of capacitance (farad) is named after him.

➢ Karl Friedrich Gauss (1777-1855) Wilhelm Eduard Weber (1804-1891):

Gauss is known as one of the greatest mathematicians of all time. At very early age he
overturned the theories and methods of 18th-century mathematics. Beginning in 1830, Gauss
worked closely with Weber. They organized a worldwide system of stations for systematic
observations of terrestrial magnetism.

The most important result of their work in electromagnetism was the development, by others, of
telegraphy. Weber, a German physicist, also established a system of absolute electrical units.

9
His work on the ratio between the electrodynamics and electrostatic units was crucial to
Maxwell’s electromagnetic theory of light.

The CGS unit of magnetic field density in named after Gauss.

➢ Joseph Henry (1797-1878):

He was a professor in a small school in Albany, New York. He worked to improve

electromagnets and was the first to superimpose coils of wire wrapped on an iron core. It is said
that he insulated the wire for one of his magnets using a silk dress belonging to his wife.

In 1830 he observed electromagnetic induction, a year before Faraday. He was roundly criticized
for not publishing his discovery, losing the distinction for American science. Henry did obtain
priority for the discovery of self induction, however.

He received an appointment at New Jersey College (later Princeton University) and in 1846
became the first director of the Smithsonian Institution.

The unit of induction [henry (H)] is named after him.

H: Heinrich F.E. Lenz (1804-1865)

Born in the old university city of Tartu, Estonia (then in Russia), He was a professor at the
University of St. Petersburg. He carried out many experiments following the lead of Faraday.

He is memorialized by the law which bears his name – the electrodynamics action of an induced
current equally opposes the mechanical inducing action- which was later recognized to be an
expression of the conservation of energy.

➢ Samuel Finley Breese Morse (1791-1872):

He brought a practical system of telegraphy to the fore front using electromagnets, and invented
the code named after him in 1844.

Although in 1837 the development of an electric telegraph system making use of a deflecting
magnetic needle had already been developed by Sir W. F. Cooke and Sir Charles Wheatstone,
who installed the first railway telegraph system in England, Morse James Clerk Maxwell (1831-

10
1879) overcame both electrical design flaws and information flow restrictions to enable the
telegraph to become a viable system of communication.

➢ Gustav Robert Kirchhoff (1824-1887):

He was a German physicist. He announced the laws which allow calculation of the current,
voltage, and resistance of electrical networks in 1845 when he was only 21. In further studies he
demonstrated that current flows through a conductor at the speed of light.

➢ James Clerk Maxwell (1831-1879):

He wrote a mathematical treatise formalizing the theory of fields in 1856: On Faraday’s Lines of
Force. Most researchers at the time did not believe in Faraday’s lines of force, but James Clerk
Maxwell did.

Between 1864 and 1873 Maxwell showed that 20 simple mathematical equations could express
the behavior of electric and magnetic fields and their interrelated nature.

In the year 1873 Maxwell published Electricity and Magnetism, demonstrating four partial
differential equations that completely described electrical phenomena. Maxwell also calculated
that the speed of propagation of an electromagnetic field is approximately that of the speed of
light.

➢ Hermann Lud-wig Ferdinand von Helmholtz (1821-1894):

He was an all round universal scientist and researcher. He was one of the 19th centuries greatest
scientists.

In 1870, after analyzing all the prevalent theories of electrodynamics, he lent his support to
Maxwell’s theory which was little known on the European continent.

➢ Sir Joseph John Thomson (1856-1940):

He is universally recognized as the British scientist who discovered and identified the electron in
the year 1897. Thomson demonstrated that cathode rays were actually units of electrical current
made up of negatively charged particles of subatomic size.

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He believed them to be an integral part of all matter and theorized the “plum pudding” model of
atomic structure in which a quantity of negatively charged electrons was embedded in a sphere
of positive electricity, the two charges neutralizing each other.

➢ Albert Einstein (1879-1955):

Great Name in History of Electronics

In the year 1905, Einstein elaborated on the experimental results of Max Planck who noticed that
electromagnetic energy seemed to be emitted from radiating objects in quantities that were
discrete.

The energy of these emitted quantities – the so called “light-quanta” was directly proportional to
the frequency of the radiation which was completely contrary to classical electromagnetic theory,
based on Maxwell’s equations and the laws of thermodynamics.

Einstein used Planck’s quantum hypothesis to describe visible electromagnetic radiation, or light.
According to Einstein’s viewpoint, light could be imagined to consist of discrete bundles of
radiation.

➢ History of Electronics Timeline – 2000-2021

2006 – The First WII and PS3 Gaming Console were Launched.

2007 – First Apple iPhone and iPod were Launched.

2008 – First Android OS for Smartphones was Launched.

2008 – The Large Hadron Collider.

2010 – The First Apple iPad and Xbox 360 Gaming Console were Launched.

2011 – Solar Panel Revolution as Alternate and Renewable Source of Energy.

2011 – Curiosity, the space vehicle launched by NASA landed on Mars.

2014 – Microscale 3-D Printing Available.

2018 – Parker Solar Probe Launched by Nasa.

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2019 – India Launched Chandrayan-2 to the Moon.

1946 – 2021 (Still Going On) – Ray Prasad contribution to SMT.

The MKS unit of flux is named after Weber.

1.4 Growth and Development of Electronic Industry

India, considered a popular manufacturing hub, has grown its domestic electronics production
from US$ 29 billion in 2014-15 to US$ 67 billion in 2020-21. The electronics sector of India
contributes around 3.4% of the country's Gross Domestic Product (GDP). The government has
committed nearly US$ 17 billion over the next six years across four PLI Schemes:
Semiconductor and Design, Smartphones, IT Hardware and Components.

Recently, the Ministry of Electronics & Information Technology released the second volume of
the Vision document on Electronics Manufacturing in India, which stated that the electronics
manufacturing industry will grow from the current US$ 75 billion in 2020-21 to US$ 300 billion
by 2025-26. The major products that are expected to drive growth in India's electronics
manufacturing are mobile phones, IT hardware (laptops, tablets), consumer electronics (TV and
audio), industrial electronics, auto electronics, electronic components, LED lighting, strategic
electronics, printed circuit board assembly (PCBA), wearables and hearables, and telecom
equipment. Mobile manufacturing is expected to cross US$ 100 billion in annual production
growth from the current US$ 30 billion by accounting for nearly 40% of the industry growth.

The IT sector in India is one of the largest contributors with a 9% contribution to GDP. The
industry is around US$ 194 billion and is expected to surpass US$ 300-350 billion by 2025.
India's IT industries and companies are majorly located in the southern regions such as
Bangalore, Hyderabad, Chennai, Visakhapatnam, Trivandrum, Mysore, Mangalore, Kochi, etc.
The country's major information technology hubs are Mumbai, Pune, Delhi, etc.

13
➢ EXPORT TREND:

14
India is among the largest IT and BPM services exporting countries and accounts for about 56%
of the global outsourcing market. India’s exports of software services (excluding exports through
commercial presence) are estimated to have increased by 17.2% to US$ 156.7 billion during FY
2021-22. BPO services accounted for nearly 84% of exports of information technology (IT)
enabled services. Business process management (BPM) exports are valued at US$ 34 billion,
growing 2.3% over the previous year. This growth in BPM is mainly driven by automation-led
services in finance & accounts and human resources, increased adoption of robotic process
automation (RPA) and analytics. BPM is also witnessing an accelerated shift to platform
solutions.

Over the last few years, engineering research and development (ER&D) services have recorded
one of the fastest export growth driven by increasing adoption of software-led products and
cloudification of equipment and devices. Exports for ER&D sector are valued at US$ 31.1 billion
in 2020-21. Software products witnessed 2% growth to reach US$ 3 billion, mainly driven by the
rise in demand for collaborative applications, application platforms, security software, system &
service management software, and content workflow & management applications.

India's export of electronic goods stood at US$ 2,009.07 million in September 2022, an increase
of 71.99% YoY. Mobile phones, IT hardware (laptops, tablets), consumer electronics (TV and
audio), industrial electronics and auto electronics are key export products in this sector. As per
the Ministry of Electronics & IT vision, India's electronics industry exports are expected to
increase to US$ 120 billion by 2026.

➢ MAJOR EXPORT DESTINATIONS:

The top 5 destinations for Indian electronic goods exports are: USA, UAE, China, Netherlands
and Germany. USA is the largest importer of India's electronic exports followed by UAE,
accounting for 18% and 17% of the overall exports, respectively. For mobile phones exports
from India, South Asia, Africa and Middle East are key importing markets.

15
For the IT-ITeS services of India, the top 3 export destinations of India are USA, UK and EU.
The country also exports these services to Asia Pacific regions, Latin Americas and Middle East
Asia and sees new opportunities emerging to expand services to continental Europe, Japan,
China and Africa.

As per Reserve Bank of India (RBI) statistics, software services exports to USA and Canada
combined grew by 15.7% from US$ 75.1 billion in 2020-21 to US$ 86.9 billion in 2021-22,
accounting the largest share at 55.5% of the overall exports. This is followed by Europe, with
exports valued at US$ 48.6 billion in 2021-22. UK is the largest importer of Indian software
services within EU region, accounting for 48% of exports to EU. Asia region exports of Indian
software services were valued at US$ 10.2 billion, with a major share of East Asia exports
valued at US$ 9 billion.

16
1.5 Key Characteristics of Electronic Industry

➢ The electronic industries have developed products, commodities, services, digital

machine software and hardware to make the human society comfortable.
➢ These industries daily plan to develop new technologies.
➢ These are trying to make technology as well as devices accessible for all groups of
people.
➢ These are trying to reduce the manual labor.

1.6 Various Segments of Electronic Industry

➢ Semiconductor supply and manufacturing services:

This segment does design and manufacture work, and supplies everything related to
semiconductors including electrical components and integrated circuits that are common in many

17
electrical and electronic devices. It supports almost every industry you can think of including
medical, aviation, automotive, telecoms, etc.

➢ Industrial Equipment:

This segment manufactures equipment that assists in industrial processes. Equipment can range
from industrial robots, automation and control systems, wafer-processing equipment,
semiconductor assembly and packaging equipment, electronic testing and measurement
equipment, etc.

➢ Networking and communication equipment

This segment comprises manufacturers of consumer and industrial networking hardware and
other communication equipment. this could be routers, lans, wans, switchboards, bridges, hubs,
and gateways. examples of companies specializing in this segment include cisco systems,
extreme networks, telco systems, etc.

➢ Computer and Office Products:

These are producers of a wide range of business-related electronic equipment like copiers and
fax machines, and computing equipment including personal computers, servers, mainframes, and
workstations.

➢ Medical Devices:

This segment deals with the manufacture of electro-medical equipment used in diagnosis,
surgical procedures, medical imaging, forensics, and medical research and training. Such
machines include ultrasound devices, X-ray machines, dialysis machines, heart-rate monitors,
and so on.

18
 ➢ Consumer electronics and home appliances:

This is a major segment in the electronic industry and produces consumer products such as
Televisions, radios, DVD players, video gaming systems, mobile phones, cameras, electronic
ovens, etc. They also produce home intercommunication and alarm systems.

1.7 Major Players in Various Segment of Electronic Industry

(Reference to Air conditioner)

• Havells India LTD

• Voltas
• LG
• Blue star
• Whirlpool
• Samsung
• Philips
• Godrej
• Apple
• Panasonic

19
1.8 Market Share and Growth rate Details

COMPANY MARKET SHARE GROWTH RATE

LG 16% LG India records one million
inverter AC sales in H1, clocks
50 per cent growth
LG garnered revenues of Rs
₹4,000 crore revenues from the
AC segment in January-June
period.
Deepak Bansal, VP, Home
Appliances & Air-Conditioner,
LG Electronics India told
BusinessLine, that the
company garnered revenues of
about ₹4,000 crore from the
air-conditioner segment this
year. “ We saw unprecedented
growth and saw good traction
for air-conditioners this year.
We have seen a significant
first-mover advantage due to
our strategy back in 2016 to
completely switch to inverter
ACs. We have sold one million
inverter air-conditioners in the
first half of 2022 clocking a
growth of 50 per cent over last
year,” Bansal explained. Last
year, the company sold about
7.5 lakh units of air-

20
 conditioners.
HAVELLS INDIA LTD 12% Havells India Ltd saw growth
across all its businesses in the
March quarter (Q4FY22)
leading to a nearly 33% year-
on-year (y-o-y) growth in
standalone revenues to ₹4,417
crore. The Lloyd consumer
segment did particularly well
with revenues rising by 62% to
₹959 crore, helped by the onset
of the summer season and the
pent-up demand. In the post-
earnings call, Havells said air
conditioners (AC) constituted
about 80-85% of Lloyd’s
revenue in Q4
VOLTAS 24.4 Growth in the AC segment was
led by sales of inverter air
conditioners, which bodes well
for the company’s margins.
Voltas has held on to the top
spot in the room air conditioner
business with a market share of
25.9%

21
 BLUE STAR 10% We have ambitious plans to
grow our commercial air
conditioning exports. In
commercial refrigeration, the
deep freezer market is growing
and we are expanding that
manufacturing by around 2.5
lakh units. The factory is
getting commissioned in the
first week of April,” says B
Thiagarajan, MD, Blue Star.

1.10 Trend in Production, Consumption(Past, Present, Future)

(Present)

➢ Increased efficiency and productivity

Although machines are not error-proof, they make fewer mistakes than humans. For example,
machines do not get distracted by environmental changes or work area distractions, and above
all, they do not get tired. Hence, they can complete more work precisely and within the shortest
time possible. However, machines cannot match human skill and creativity. As a result,
industrial automation is mainly utilized in areas that require top-notch accuracy, where the duties
are physically draining or must be carried out in dangerous environments with a tendency for
monotony.

➢ Improved work quality

If basic electronic manufacturing steps can be completed quickly, more time can be devoted to
tackling complexities. Hence, engineers and electronic manufacturers are able to concentrate on
higher value activities like finishing touches resulting in high-quality products. Though future
workshops will be highly automated, the human touch will be required to boost innovation and
skills.

22
 ➢ More customization opportunities

The demand for customized and personalized products that cater for special tastes, preferences
and market needs is on the rise. Manufacturers must have the capacity to meet such demands
while still retaining high quality and safety standards without incurring losses. Smart factories
allow manufacturers to increase production flexibility. Additionally, the use of configurable
robots and sensors on assembly lines to increase automation allows manufacturers to mass-
produce products designed to meet specific customer requirements. For instance, the automotive
industry allows customers to design their cars online by adding features defined their taste and
style. This is yet to happen in the electronics industry where products are mass-produced to
similar specifications. However, smart factories can change this paradigm.

➢ New electronic products

Industrial automation will trigger the development and manufacture of a wide range of new
electronic products and systems. A good example is the unveiling of 3D printing prototypes by
Siemens in April 2016; the prototypes work collaboratively to print surfaces and structures. Such
technological advancements not only boost revenue and OEMs recognition but also play a major
role in enhancing automation.

➢ Smart Factory Graphic

While industrial automation originally focused on cutting manufacturing costs and boosting
productivity, the emphasis is shifting towards enhancing the quality and flexibility of products.
As detailed by the benefits above, industrial automation offers manufacturers the opportunity to
explore endless possibilities.

(Future)

➢ Internet of things

Not surprisingly the industry has been embracing the Internet of Things (IoT) for years and this
big trend is set to grow in importance. By interconnecting equipment and appliances
manufacturers have collected data to increase device efficiency, improve safety and cut costs.

23
The development of 5G networks, smaller sensors and cloud computing makes it easier than ever
to connect devices quickly and easily. This allows businesses to make informed decisions based
on real time data to drive better decisions both in the short term and for the longer term.

➢ VR and AR

Many product designers are turning to virtual reality (VR) and augmented reality (AR) to help
design products, particularly as you can integrate VR with computer aided design.

The technology allows designers to make changes to a product before it is even prototyped
allowing them to make modifications to products quickly and save development time and cost.

➢ Rapid prototyping and production

While VR and AR are helping develop product designs it is still necessary to have physical
models to check the concept and test for form, fit and function. In response to the need to launch
more quickly than the opposition, rapid prototyping has evolved to become even faster, with
delivery times possible in as short as a day after you upload your CAD.

One key technology that is driving rapid prototyping is 3D printing, which can now produce
parts across a wide range of plastics, metals and other materials. There is no tooling or set up so
you can get the part back quickly and cost effectively. This also allows you to produce products
on demand so that you can experiment with more designs before committing any significant
investment.

For small volumes 3D printing can also print geometries and shapes that are simply not possible
using other manufacturing technology to meet a growing demand by customers for
customisation.

While 3D printing is evolving rapidly, don’t overlook other rapid manufacturing technologies.
CNC machining can also produce parts in as little as a day after uploading your CAD and rapid
injection moulding can turn round multiple parts in as little as 10 to 12 days.

The latter is ideal for medium production runs of a few hundred up to several thousand. By
using aluminium tooling instead of steel, the speed of delivery is far faster and it is more cost

24
effective per part for smaller volumes. We find that many businesses use it for test marketing or
to meet a need for mass customisation by producing more options in smaller volumes.

➢ ERP Systems

Enterprise resource planning keeps a company competitive and lean. It allows you to automate
and optimise your processes using real time information to help reduce operational costs and
prevent choke points. While recent advances of IOT across all operations provides real time
information, ERP systems allow companies to optimize and automate the use of this data faster.

➢ Leveraging the supply chain

Recent events have underlined the importance of securing your supply chain for future
operations.

But beyond this by working more closely with suppliers you can take advantage of their
expertise and skills. A big benefit of digitisation is that you have far more visibility of your
supply chain than ever before.

At Protolabs for example, you can control the entire prototyping and production of parts from
one online platform. You can choose how many parts you need and when you need them
delivered, you can even explore how the cost of those parts will vary by changing the material
specification and or the delivery date.

While digitisation brings more visibility, it is also worthwhile tapping into the expertise that your
supply chain can offer. With a shortage of engineers and talent available it’s well worth
leveraging the expertise that they have. At Protolabs, for example, we can help bridge the gap
between design, prototyping and final production, it’s something that our application engineers
do on a daily basis.

➢ Moving from B2B to B2C

As we all move towards a more connected future, consumer electronics manufacturers are also
examining how they can get closer to their customers. Accessing better and more consumer data
allows you to develop better products even faster.

25
It also allows you to cut out retailers. People are far more used to e-commerce and dealing direct
now, especially after the pandemic. It does means that businesses will have to leverage their
existing e-commerce platforms and logistics capabilities.

To illustrate this interconnectivity, imagine a sensor on a mobile phone detecting a fault and
relaying this direct to the manufacturer which will then contact the customer directly with a
suggested fix. This already happens with software and it’s not that far off for hardware as well.

➢ Sustainability

While the past has been dominated by incremental increases in performance the nature of
consumer demand is shifting.

In addition to performance, customers are now demanding more sustainable solutions. Those
who step up and deliver such solutions, will benefit while many of those who don’t could be left
behind. For an industry where a lot of product development has been based on obsolescence and
replacement this is a major change in thinking.

Solutions will cover material selection but will go beyond this by exploring a product’s life
cycle, opting for replacing and upgrading parts rather than supplying an entire new product. It
could change the way that many consumer electronics businesses operate – watch this space.

While many of these changes relate to consumer electronics manufacturing and efficiency gains,
as an industry we can’t ignore society’s wider trends such as sustainability that will affect our
future. The good news is that access to more information from your customers, within your own
organisation and from your supply chain, will give you the tools to find the right answers.

26
 CHAPTER 2: BACKGROUND OF THE STUDY

2.1 Need of the Study

• To know the role in improving the efficiency and productivity of industries like energy,
semi – conductor, chemical, transportation.
• To gain knowledge regarding the updating new technologies every day.
• To get driven by new innovation.
• To know Demand and supply scenario of electronics.
• To take Follow – up of trends in production & consumption.

2.2 Significance of the study

• Advancements in Technology
• Globalization
• Information
• Increased efficiency and productivity
• Improved work quality
• More customization opportunities
• New electronic products

2.3 Objectives of the Study

• To gain an overview of current electronic industry

• To became familiar with the technological basics and terminology of electronic industry
• To examine how to sport industry can use electronic media to market and promote
products.
• To gain an understanding of how sporting events are produced and distributed through
the electronic media.

27
 • To understand marketing strategies adopted by the company.
• To understand marketing mix of the company
• To understand the market position
• To know about awareness of the products in the market.

2.4 Limitations of the Study

• The data may not be primary.

• The data collected through internet is that it is not always secure
• Many difficulties are not solved as it is secondary data
• Accuracy level is dependent on by which accuracy level secondary data have given and
which cannot be predicted.

28
 CHAPTER 3: Major Player in Segment

Major Players in Air Conditioner:

• Carrier corporation
• Daikin Industry
• Lennox International
• Hitachi-Johnson Controls Air Conditioning Inc.
• Haier group Corporation
• LG Electronics Inc.
• Lloyd AC

3.1 Product Profile of the Segment

Air conditioning, often abbreviated as A/C or AC, is the process of removing heat from an
enclosed space to achieve a more comfortable interior environment (sometimes referred to as
'comfort cooling') and in some cases also strictly controlling the humidity of internal air. Air
conditioning can be achieved using a mechanical 'air conditioner' or alternatively a variety of
other methods, including passive cooling or ventilative cooling. Air conditioning is a member of
a family of systems and techniques that provide heating, ventilation, and air conditioning
(HVAC). Heat pumps are similar in many ways to air conditioners, but use a reversing valve to
allow them to both heat and also cool an enclosed space.

https://en.wikipedia.org/wiki/Air_conditioning

Different Types of Air Conditioners:

1. Central Air Conditioners

2. Ductless mini-spit
3. Window Air Conditioners

29
1. Central Air Conditioner

If you have a large home & wish to cool multiple rooms at once then this type of air
conditioning is best suited for you. A central air conditioning unit uses a split system that
regulates air through ducts installed in your home. It is also known as a ducted system.

The split aspect implies that the system is a combination of two main units. The outdoor
unit packs in the condenser and compressor. While the indoor unit comprises the
evaporator coils & air handler. Like any typical air conditioner, central air conditioning
also uses refrigerant in removing heat from the indoor air. This heat is pulled outdoors &
cool air is pushed in through the ducts.

2. Ductless Mini-Split

30
If you want better efficiency, or you want to do away with a lot of ducting, or you simply
just want a portion of your home to be cooled, then opting for ductless mini -split air
conditioners is a great choice. Ductless systems are a great choice for contemporary
homes.

3. Window Air Conditioner

Since Window air conditioners come in different sizes, they would be suitable if you’re
looking to cool a single room or a small area. If you go for a large window air conditioner
you can even cool a small home considering it is a single story or one open space.
Window air conditioners, since the beginning, have been labeled as champions of cooling
smaller spaces & regarded as the most common type of air conditioner.

A window air conditioner is a single unit with all of its components enclosed inside. It
ejects heat out of its outdoor side and blows cool air into the room on the indoor side. As
the name suggests, it is installed in a window or by making a hole in the wall. Such air
conditioners have a filter that slides out so that it can be cleaned regularly for full AC
efficiency. These air conditioners have controls on the unit & may also come with a
remote.

31
 CHAPTER 4: DEMAND DETERMINANT OF THE ELECTRONIC
INDUSTRY SEGMENT

4.1 Price

Company Star Rating Capacity Price

Blue Star 4 Star 1.5Ton Around 35,000
Carrier 4 Star 1.5 Ton Around 32,000
Hitachi-Johnson 5 Star 1.5 Ton Around 40,000
LG Electronics Inc 3 Star 2 Ton Around 50,000
Lloyd Ac 3 Star 2 Ton Around 45,000

4.2 Income of Target Segment

❖ Demographic segmentation is one of the most common forms. It refers to splitting up

audiences based on observable, people-based differences. These qualities include things
like age, sex, marital status, family size, occupation, education level, income, race,
nationality and religion.

❖ Income targeting lets you measure the buying power of your audience. When you
know the income range of consumers, you can usually find data to support h ow
people spend money on both the higher and lower end of the spectrum. Many
companies use this data to sell different tiers of the same product, based on income
level.

Types of Targeting Consumers

• Income in family
• No. of Family Members

32
4.3 Penetration Level

Air conditioner is one of the lowest penetrated product categories in India with
only 5% penetration.

This statistic represents the penetration rate of the air conditioner market in India from 2005 to
2016 with an estimate for 2026. The penetration rate of the air conditioner market across the
country was estimated to increase to 12.4 percent in 2026, up from about five percent in 2016.

Year Penetration Rate

2026 12.4%
2016 5%
2011 3.8%
2005 2.5%

4.4 Availability of Finance

4.4.1 Private loan

• Bajaj finance
• Mahindra Finance
• Axis bank loan
• PNB Personal loan

4.5 Replacement Demand

• Ductless mini-spits
• Air Coolers
• Window AC
• Slimline Tower AC

33
4.6 Promotion Scheme

• Cash Back Offers

• 5 Year Warranty
• Festival Offers
• 2 services Free

34
 CHAPTER 5: KEY ISSUES AND CURRENT TREND

5.1 Product Quality/Technology

5.1.1. Control the AC With Your Smartphone

Flagship AC models from LG comes with Smart ThinQ equipped with WiFi control that
allows you to control the AC from anywhere at the swipe of the fingers (or your voice if
you use Alexa or Google assistant). LG has designed ThinQ app to control any LG
appliances (provided they have ThinQ functionality) using a smartphone and this is valid
even for new generation of ACs.

5.1.2. 2-in-1 AC: Cooling and Heating

Modern premium split ACs come with a built-in heater functionality in the form of heat
mode option, which when enabled would reverse the air conditioning process. This
results in circulation of hot air inside the room. The best part is that it does not use a
heating element like conventional heaters. This means they are not much more energy
efficient than the dedicated heaters but also eliminates the risk of low oxygen—a typical
problem with the ordinary heaters.

5.2 LG Promotion Strategy

The company has advertised on several channels such as TV commercials, magazines,

newspapers, hoarding and the Internet. They offer great deals in this way leading to high sales in
the market. In 2020, the company said it would intensify its marketing campaigns and launch a
series of products.

5.3 Company specific marketing strategies

Marketing Strategy Adopted by LG

35
The promotional and advertising strategy of LG is as follows:

The promotional strategy helps you create huge brand awareness about the company by
promoting through various channels of communication.

The company believes in selling products directly to the customers, hence advertisement here
plays a major role. The company has advertised on several channels like TV advertisements,
magazines, newspapers, and the internet.

They also offer great deals through this medium which leads to high sales in the market. In the
year 2010, the company said it would go aggressive with its marketing campaigns and launch a
series of products. The company had taken an initiative to call various famous personalities to
advertise their products.

5.4 Segmentation and Positioning

5.4.1. Segmentation

The brand has been segmented based on the product usage like smartphones are mostly
used by the tech-savvy millennial/generation. While the home appliances are used by the
married couples mostly, AC is used in urban or semi-urban regions.

LG has segmented its market based on following:

• Demographic: Age, Income, Gender, Occupation, Education, Family size

• Geographic: Tier 1 cities, Tier 2 cities, region, climate
• Psychographic: Lifestyle, personality, opinions
• Behavioral: Loyalty, product knowledge, involvement
• Benefit Sought: Convenience, safety, status

5.4.2. Positioning

Positioned as “Innovative, Luxurious, Stylish and Healthy.”

36
 With the tagline, Life’s Good, LG positioning is to differentiate their products based on
technology, which appealed to the consumer because of health benefits. With the tag line
Life’s good its corporate philosophy to make people lives batter, convenient and
healthier. There positioning strategies are technologically intelligent and futuristic. As
they are in upper and premium segment, so they are featuring that their brand is young,
vibrant and premium. LG has differentiated its product using technology and health
benefits. The CTV range has ‘Golden Eye Technology’ to reduce eye strain, Air
conditioners have the ‘Health Air System’ As antibacterial filter. Microwave ovens have
the ‘Health Wave System’, Sponsorship Of Indian Cricket Team in ICC World Cup 2003
and discounts during Diwali Festivals,Etc. They are talking about ther value and
changing life styles in their Positioning Strategy.

5.5 Total market

❖ LG sold one million inverter air-conditioners in the first half of 2022 clocking a growth
of 50 per cent over last year,” Last year, the company sold about 7.5 lakh units of air-
conditioners.
❖ The domestic air conditioner market is expected to reach 8.5 million units this year (as
per industry body Consumer Electronics and Appliances Manufacturers Association), and
LG Electronics India is aiming for 1.4 million units out of that pie. Last year, the
company sold about 750,000 air conditioner.

5.6 Seasonality Pattern

➢ Festival Season

In festival Season They are giving Discounts. In India people preferred to buy any important
things on festivals. Since buying important items is considered auspicious during festivals, the
demand for electronics items increases during the festival season, which starts from Ganesh
Chaturthi and extends till the end of Diwali in India.While all of us would like to buy electronic
items during the festival season to get maximum advantage of the attractive offers.

37
 ➢ Winter Season

Companies give discount in winter season on AC, so people may get attracted to Buy Air
Conditioners.

5.7 Growth Rate Statistics

❖ Consumer Durables major LG India sold as many as one million inverter air-conditioners
in the January-June period this year clocking a growth of nearly 50 per cent compared to
last year.
❖ The Global Residential Air Conditioner Market is valued at USD55.12 billion in 2021
and is anticipated to grow at a CAGR of 4.15% in the forecast period, to reach USD70.81
billion by 2027.

38
 CHAPTER 6: DATA ANAYSIS AND INTERPRETATION

6.1 PESTLE Analysis

6.1.1 Political factors

• Political stability and importance of diversified electronics sector in the country’s

economy.
• Risk of military invasion
• Level of corruption-especially levels of regulation in technology sector.
• Legal framework for contract enforcement
• Intellectual property protection
• Trade regulations & tariffs related to technology
• Favored trading partners
• Anti-trust laws related to diversified electronics
• Pricing regulations-are there any pricing regulatory mechanism for technology
• Taxation - rates and incentives
• Wage legislation – minimum wage and overtime
• Work week regulations in diversified electronics
• Mandatory employee benefits
• Industrial safety regulations in the technology sector.
• Product labeling and other requirements in diversified electronics

6.1.2 Economic factors

• Type of economic system in countries of operation – what type of economic system

there is and how stable it is.
• Government intervention in the free market and related technology
• Exchange rates & stability of host country currency.
• Efficiency of financial markets –does LG Display Co. Ltd. Needs to raise capital in
local market?

39
 • Infrastructure quality in diversified electronics industry
• Comparative advantages of host country and technology sector in the particular
country.
• Skill level of workforce in diversified electronics industry.
• Education level in the economy
• Labor costs and productivity in the company
• Business cycle stage (e.g. prosperity, recession, recovery)
• Economic growth rate
• Discretionary income
• Unemployment rate
• Inflation rate
• Interest rates

6.1.3 Social factors

• Demographics and skill level of population

• Class structure, hierarchy and power structure in the society.
• Education level as well as education standard in the LG Display Co. Ltd.’s industry
• Culture (gender roles, social conventions etc.)
• Entrepreneurial spirit and broader nature of the society. Some societies encourage
entrepreneurship while some don’t.
• Attitudes (health, environmental consciousness, etc.)
• Leisure interests

6.1.4 Technological factors

• Recent technological developments by LG Display Co. Ltd. Competitors

• Technology’s impact on product offering
• Impact on cost structure in diversified electronics industry
• Impact on value chain structure in technological sector
• Rate of technological diffusion

40
6.1.5 Environmental factors

• Weather
• Climate change
• Laws regulating environment pollution
• Air and water pollution regulations in diversified electronics industry
• Recycling
• Waste management in technological sector
• Attitudes toward “green” or ecological products
• Endangered species
• Attitudes toward and support for renewable energy

6.1.6 Legal factors

• Anti-trust laws in diversified electronics industry and overall in the country.

• Discrimination law
• Copyright, parents/ Intellectual property law
• Consumer protection and e-commerce
• Employment law
• Health and safety law
• Data protection

41
6.2 Porter’s Five Forces Model of Industry Analysis

Porter’s five forces for electronics industry in India

6.2.1 Potential Entrants (Entry Threat):

The potential new entrant in the electronics market is Low due to following reasons.

• Huge capital requirement for a firm to enter in this segment.

• Rapidly evolving technology is another entry barrier as for a new entrant; it is
very difficult to build technology advanced products right from the start as they
will need time to understand the actual evolutions in this field.
• Major firms like LG, Samsung, and Sony etc have efficiently built their supply
chain and hence it will be very difficult for a new entrant to compete with them on
price. E.g. these firms can get displays, panels etc at a very less price due to
efficient supply chain.
• Major players i.e. LG, Samsung, Sony, Videocon etc have already developed their
huge brand equity which will be very tough for a new entrant to establish in this
market.
• Brand loyalty to existing firms. Since brand loyalty is moderate in this sector,
hence this also imposes entry threat on new entrants.

6.2.2 The Bargaining Power of Suppliers:

According to present market conditions, in electronics sector also the bargaining power
of supplier is on Low end because of following reasons.

• Product differentiation is very low. Since most of the companies are developing
similar kinds of products, therefore the power is very less. Like in the TV, each of
LG, Samsung, Sony etc have similar product range in LCD, LED, Plasma and
Smart TV’s; hence they have less power to bargain.
• Since there is no or very negligible switching cost, hence this again makes the
supplier power to be on lower end.
• Impacts on inputs on cost:- Since in this sector by changing the inputs i.e. input
technology or other raw material, the firms cannot drastically differentiate on
42
 prices in order to be competitive, hence this also leads to reduced in supplier
power.

6.2.3 The Bargaining power of customers (buyers):

The bargaining power of buyer is High because of following reasons.

• Use of internet to get all the information: - Buyer has a power to go online and
compare the prices and features of various products online. Hence buyers are
more informative and educated regarding products and this leads to increase in
their power.
• Mid to High price sensitivity of buyer. Since buyer are generally very price
sensitive, so this also leads to increase in buyer power.
• Feedbacks and suggestions available over internet. With era of internet, there is
also increase in buyer power as buyers can now easily read the feedbacks and
suggestions regarding the products. So they are more informed and also influence
buying decisions of other powers.
• Buyer switching cost is very less; hence this also leads to increase in buyer power.

6.2.4 Threat of substitute products or services

Threat of substitutes are again from Mid to High.

• Due to changing technology, there is high threat of substitute products in this

industry. E.g. before 2010 consumer used to use CRT televisions. But after the
innovation of Plasma, LED and LCD TV’s consumers and shifted to the newer
generation products.
• Buyer have huge propensity to substitute if any firm provide more technologically
advanced product.

6.2.5 Intensity of competitive rivalry

The competitive rivalry is again very High in this industry due to following reasons.

• There is continuous innovation in this industry making an intense competitive

rivalry. Hence innovation leads to sustainable competitive advantage.

43
 • Powerful competitive strategy: - If LG is to be evaluated on the competitive
strategy then it will be that Samsung is more focussing on product innovations
and diversification and they are quickly launching new products in market. Sony
is focussing on both quality and technology. Hence every firm has a different
strategy and core competencies which make their rivalry even more intensive.

6.3 SWOT Analysis

STRENGTHS

• Well established and highly regarded in the electronics market.

• A dedicated group of engineers and designers working to give the highest quality
possible.
• Efficient production methods.

WEAKNESSES

• Building new relations with suppliers.

• The target group can choose cheaper models if they want.
• Low debt equity rating. Lower risk.

OPPORTUNITIES

• The internet. Having Easy access to view and read reviews for the product helps
give it publicity.
• Word of mouth. Let other consumers hear how it helps others who they can relate
to.

THREATS

• Other companies with similar or better products.

• Economic downturns shifting consumer’s rationality if they want to spend on
luxury vs needed goods.

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 • Much larger companies cutting corners on quality to overrun the market with
cheaper products.

6.4 Value Chain Analysis

6.4.1 Product and Service Development

This stage encompasses all the steps involved in transforming anidea into a final product
or service. Normally, a product is taken through design, analysis, testing, and
modification before it can go into production. The product will also have to meet specific
consumer requirements and demonstrate that it has a worthy ROI.

6.4.2 Procurement, Supply, and Manufacturing

Sourcing and supply of necessary raw materials and components needed for
manufacturing a product or for delivering a service. This stage makes use of inventory
management, quality analysis and control, and production line optimization to ensure
there is both efficiency and a smooth flow of production operations.

6.4.3 Marketing, Sales, and Service

Marketing is all about helping the business to drive sales for its products and services
through such means as advertisements, promotions, etc. Marketing team also provide
feedback to product development and manufacturing teams, which can be used to make
improvements based on consumer preferences and market needs. At this stage, businesses
receive and process orders, and then deliver products and services to customers. This may
be followed by after sales services like commissioning, maintenance, repair or any other
support services.

6.5 Key Success Factors

The key factors for the success of electronic industries mainly relate to the demand for
technological production. By providing a comfortable and reliable working environment for

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employees, electronic companies manage to maintain steady production and successful talent
management. Technology producers also globalized the assembly process of goods by
establishing production plants in countries with cheaper labor and so have generated more
income from sales.

6.5.1 Responding to demand

Society has demanded technological production for the past several decades. Since the
invention of computers, electronic industries have tried to respond to such demand
efficiently by providing customers with technology products. A good example is the
mobile devices sector -- after the appearance of the first mobile phones, the public has
demanded more innovative devices. This led to the invention of color displays and
integrated cameras as well as business applications in the mobile devices.

6.5.2 Competition

Competition is the moving force of every production because by competing, companies

come up with more and more innovative technological products. This is evident in the
success of the electronic industries. A report by the leading technology experts IBM, for
instance, indicates that through competition between Japanese electronic companies and
western corporations, the industry has developed more attractive products and has
incorporated more advanced technologies. The competition between, for example, Sony
and Microsoft has led to the distribution of two of the most successful game consoles --
PlayStation and Xbox.

6.5.3 Working environment

The electronic industries offer some of the most attractive employment opportunities in
terms of environment and labor. EHS Today Magazine concludes that by providing
comfortable social conditions and especially by increasing the pay rates for technology
specialists in developed countries, electronic industries have become a sought-after
employer for educated individuals. This gives the technology companies the opportunity
to manage talent in their organizations and to enjoy progressive work by specialists.

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 6.5.4 Exported production

Many American and European technology giants have successfully exported their
productions abroad. Such companies have assembly plants in Asia and pay less for
production resources and labor costs. Specialists from the Warwick Institute for
Employment Research concluded that such companies receive the same level of
production quality by their employees and pay less for their labor. Thus industries can
save costs and boost revenue rates and production quality. For example, organizations
such as Intel and Nokia have their assembly plants in countries like Thailand and China
where the labor costs are lower that in the U.S.

6.6 Key Driving Forces

6.6.1 Increased domestic demand and new markets

Rising demand from rural markets especially for washing machines and mobile phones
and the changing household type to nuclear families coupled with the changing lifestyles
of consumers has increased domestic demand of electronics.
6.6.2 Technology adoption
Consumers are becoming technology aware and want to stay abreast with the latest and
newest. They are demanding products with built in artificial intelligence which make
their life easier. Washing machines with load sensor which decide the appropriate cycle is
one such example.
6.6.3 Technology adoption
Consumers are becoming technology aware and want to stay abreast with the latest and
newest. They are demanding products with built in artificial intelligence which make
their life easier. Washing machines with load sensor which decide the appropriate cycle is
one such example.
6.6.4 Support for manufacturing
India is likely to emerge as a potential future manufacturing hub for the region. Specific
factors that are likely to boost manufacturing in India include reduction in borrowing
costs, export incentives, reduction of customs duties on raw materials and components,
and improvement in the ease of doing business.

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 6.6.5 Emerging trends for electronics industry
The Indian electronics industry is in the midst of an exciting phase owing to new
technology, introduction of innovative products and global competition which keeps the
industry on its toes. This means that manufacturers must focus on continuous innovation
and improvement of products.
6.6.6 Technology-conscious consumers
Consumers are abreast with new technology and are now demanding products with built-
in artificial intelligence. This has led to the development of intelligent electronics and
consumer durable products. For instance, washing machines can now sense the load and
decide the appropriate washing cycle. Artificial intelligence will move beyond consumer
products and will be available in several medical electronics and industrial electronic
products.
6.6.7 Big players expanding into newer segments
Big players are expanding their current offering to get a bigger piece of the pie.
Panasonic is looking beyond consumer electronics to business solutions and Xiaomi into
the white goods sector. The Hero group’s Hero Electronics is said to enter the consumer
good industry and launch AI products while LivPure has entered the air-conditioners
space by launching on Flipkart.

6.7 Gaining and Sustaining Competitive Advantage

6.7.1 Advancements in Technology

Electronic equipment manufacturers will have to make use of robotics and automation to
improve both efficiency and productivity.

6.7.2 Globalization

Companies are now competing on matters price and efficiency on a global level. They are
also penetrating larger and larger geographical markets riding on internet capabilities.

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6.7.3 Information

By leveraging acquired knowledge, companies can rethink and perform comprehensive

analysis of their product development, design and sales strategies.

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 CHAPTER 7: FUTURE TREND PROJECTIONS

The past two years have been challenging for many supply chains and OEMs, especially with the
continuing impact of COVID-19, but a new year brings new possibilities. A number of exciting
technologies are making it possible for the electronics manufacturing process to become more
efficient than ever. Here are the electronics manufacturing trends

The past two years have been challenging for many supply chains and OEMs, especially with the
continuing impact of COVID-19, but a new year brings new possibilities. A number of exciting
technologies are making it possible for the electronics manufacturing process to become more
efficient than ever. Here are the electronics manufacturing trends that will shape 2022.

➢ More IoT

The Internet of Things has played an important role in improving efficiency across a number of
industries for a few years now, and more devices than ever are now IoT compatible. In
electronics manufacturing, the use of IoT technology has helped to reduce costs, improve safety,
and increase efficiency.

We can expect this trend to continue into 2022 and beyond as the technology becomes even more
efficient, particularly with the widespread implementation of 5G. This will result in faster
connections between IoT devices and more accurate real-time data that can be used to make
informed decisions in both the short and long term.

➢ More automation

Completely autonomous manufacturing is still a way off, but AI and automation technologies are
already proving their ability to decrease operational costs and improve service levels and speed
in many areas of the supply chain.

Smart factories, autonomous manufacturing robots, and automated supply chain management
systems are being implemented by some manufacturers in conjunction with the huge amounts of
data provided by IoT devices to create a much more efficient operation. If these examples

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continue to prove successful, we can expect a wider adoption of automation technologies to be
an electronics manufacturing trend for the coming years.

➢ Predictive maintenance

When manufacturing equipment breaks, production usually has to be stalled while it is fixed, and
this downtime can be lengthy if the problem is severe. No matter how long the delay is, revenue
is lost, and the business has to play catch up once everything is operational again.

However, the use of IoT and AI technologies’ data collection means that predictive maintenance
is now possible, identifying problems before they happen. This helps manufacturers to plan
ahead and avoid downtime by scheduling any maintenance at the most suitable time for the
operation, rather than reactively when machinery breaks. It also allows businesses to budget for
these maintenance costs and identify the most cost-effective options, rather than having to
prioritise the speed of repair.

➢ ERP systems

Enterprise resource planning, or ERP, is a type of software that integrates the management of
day-to-day business activities such as accounting, project management, risk management,
compliance, procurement, and supply chain operations. We can expect the use of ERP systems to
be one of the main electronics manufacturing trends of 2022.

The use of ERP systems allows a business to automate its processes using real-time information
and make quicker, more accurate decisions. In turn, this can reduce operational costs, prevent
bottlenecks in the operation, and reduce the risk of human error.

➢ Big data

Big data deals with data sets, particularly from new data sources, that are too voluminous or
complex to be dealt with by traditional data-processing software. The information that can be
gained from these data sets can bring a wealth of possibilities for businesses.

Advances in IoT technologies has meant that big data is no longer exclusive to big companies.
Now, small and medium businesses can take advantage of this information and use it to better
understand their business and reduce operational costs, while also predicting future challenges.

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The adoption of big data by more companies means we can expect it to become more of a trend
across the electronics manufacturing industry in 2022.

➢ AR and VR

Augmented reality and virtual reality have seen increased application in recent years, not just in
the consumer space, but across many professional industries as well. VR and AR can be used for
‘hands-on’ training without any of the risks, to aid with the proper operation of machinery, and
to access useful information on the production floor about warehouse management or
productivity.

One other area that AR and VR are especially useful for is design. These technologies can be
used in conjunction with CAD to better visualise product designs and make accurate and reliable
changes before production begins, when such changes become costly.

We are likely to see many changes to the electronics manufacturing industry in the next year as
we (hopefully) come out the other side of the COVID pandemic and businesses continue to look
for creative solutions to global component shortages. These evolving technologies signal a
brighter future for a more efficient industry.

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 CHAPTER 8: CONCLUSION

• After having all the required information for preparing report, it has concluded that
• Electronics sector has shifted from primarily public sector to private sector and has
immense growth opportunities.
• Its total contribution to economy and sales is ever increasing.
• Contribution in creating employment opportunities.
• Rivalry among firms are moderate.
• Changing lifestyle and increasing income is a stimuli for its growth.

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 CHAPTER 10: ANNEXURE

Government of India’s goal is to make India a significant Electronics System Design and
Manufacturing hub as part of its AtmaNirbharBharat economic policies. As a result, both
production and exports of electronic items have grown substantially. The details of the electronic
goods manufactured and exported are placed hereunder:

(Values in INR Crore)

2017-18 2018-19 2019-20 2020-21 2021-22

Production 3,88,306 4,58,006 5,33,550 5,44,461 6,40,810
Exports 41,420 61,908 82,929 81,822 1,09,797

Government of India’s goal is to broaden and deepen the country’s electronic manufacturing
ecosystem. At this juncture, National Policy on Electronics 2019 (NPE 2019) envisions
positioning India as a global hub for Electronics System Design and Manufacturing (ESDM) by
encouraging and driving capabilities in the country for developing core components, including
chipsets, and creating an enabling environment for the industry to compete globally.

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