Report on

Apple IPAD In India: Was There A Way Out?

Submitted by:
Karan pratap-1226114116
Mohammed Naseer khan-1226114117
Lalit Akhil pillala-1226114119
Sai surya raghava-1226114120
Malavika issar-1226114121

EXECUTIVE SUMMARY
India offers a wealth of opportunities for business expansion. Though the country maintains a
large gap between the wealthy and the impoverished, Indias middle class represents a growing
consumer population expected to increase from about 5% of the population to 41% by 2025, an
increase in middle class consumers from 50 million people to 583 million people.
While India represents a vastly different culture from the U.S., Apple has significant experience
dealing with such cultural dimensions as organizational collectivism, high power distance, and a
moderate level of uncertainty avoidance through its foray into both China and Japan
Apple has wrongly determined that India is an inconsequential market in the short-term.
It is unrealistic, however, for Apple to believe that conquering the Indian market is a matter of
waiting for several years until the countrys infrastructure is established and the demand for
Tablet PCs is more clearly outlined. Apple must consider India in its long-term perspective by
investing there in the short-term or else it will not retain the option to enter the market more fully
at some indeterminate point down the line when it sees a more clear, complete picture of what
the Indian market means in terms of financial potential and strategic opportunities. From a
financial standpoint, India suits Apples long-term profitability goals because India does not
require Apple to reach everyone; rather, if Apple can penetrate even a small portion of the Indian
market and create consumer value there, it will be targeting millions of new consumers with an
increasing amount of disposable income.
From a strategic standpoint, Apples goal is to be among the industry leaders in the Tablet PC
market in India. This requires expansion through organic, internal growth and a combination of
offensive and defensive strategies. Moving into India more directly and completely not only
enables Apple to take an offensive approach to gaining greater market share as it competes with
Samsung and RIM in India, but also allows Apple to defend its market position in India by being
present in the minds of competitors and consumers. As long as its competitors continue to expan,
Apple will not be able to defend itself from losing a foothold without a similarly comprehensive
strategic investment in India. Apples plan in India needs to focus on three parts: bringing the
Apple experience to India through its Apple Stores and high-quality retail environment,
integrating iTunes use by Indian consumers with its overall brand image and market penetration,
and establishing an Indian distribution network through warehousing with the potential for
eventual expansion into product manufacturing.

Market for tablets - Indian scenario:The costs of doing business in India remain high as inefficiencies in infrastructure
and government bureaucracy creates greater operations expense. Another large barrier
to greater entry into India remains its poor infrastructure, primarily roads and electrical grids.
The cost to overcome these is significant, but few companies maintain the financial resources to
fund solutions to these issues Moreover, India offers businesses a significant amount of quality
human resources and a financial system that is responsive to international business transactions.
Both of these off-set some of the infrastructural costs of doing business in India. Looking at
the overall risk situation in India, the fundamental issues are bureaucracy and
political corruption Bureaucracy creates inefficiencies for businesses because the process of
setting up and running a business can take long amounts of time. In this case, political corruption
emerges as businesses aim to circumvent the regular way of doing business legally. For
American companies, the Foreign Corrupt Practices Act, a federal statute, embodies
Congressional intent to exercise jurisdiction where these companies engage in acts of bribery
abroad.
Apples key competitor within the Indian Tablet PC market is Samsung because they both sell
within the same price and quality range. Each of these companies has established distribution
channels that run through web-based and brick-and-mortar authorized resellers, but Samsung
also provides Tablet sales on its own e-store website.
Further, Apple and Samsung are both vertically integrated to the same degree.
As of late 2011, both competitors offered two tablets for Indian consumers to choose from which
offer similar product features: high-definition touch screens, fast web browsing capabilities,
interactive and customizable user-friendly home screens, accessory compatibility, remote
connectivity, and media functions. Looking more broadly, all competitors within the Indian
Tablet PC industryincluding Acer, Dell, HP, Motorola, RIM, Toshiba, and HTCcenter their
rival positioning around three key success factors: performance, portability, and price In terms of
performance (Disk Size, Resolution, Battery Life), Apples iPad does exceptionally well
compared to its competitors and outpaces each of them when looking at an aggregated
performance score comprising these three elements.
Apple is, however, in the middle of the pack in terms of portability: Samsungs Galaxy Tab 7,
Dells Streak, and Amazons Kindle Fire are all lighter than either of Apples iPads and offer a
smaller display size.
RIMs Blackberry Playbook leads the industry in terms of portability with a display size of 7
inches and a weight of just 400 ounces, only about 2/3 the weight of Apples iPads.10 to
establish awareness about the Apple brand and understanding about its products in a historically
under-branded market.

Case Analysis:The fact that Indian consumers have felt a sense of being product-dumped by Apple as a
second-rate product speaks to Indian consumers desire for continued product development; for
Apple, this means incorporating innovation and product line extensions into its functional
strategy in India. A final facet of Apples functional strategy pertains to its human capital and
how it creates a competitive advantage: the in-store experience provided through Apples
company-owned retail locations is vital for a product that is most effectively engaged through the
relationship that Apple has with its consumers.
STRATEGIC PLAN:
In order to avoid losing market share and to establish itself as a premier brand in India for both
now and the future, Apple needs to expand more fully into India and commit to a physical
presence there for the long-term.
Apple Stores in India
Without a retail presence in India, Apple is missing one of the key components of its value chain:
customer service. Apple should enter India by establishing Apple Store locations throughout
Indias largest cities. Initially, Apple should open three stores: one in Mumbai, one in Delhi, and
one in Bangalore. These are the three largest markets in India by population, and their dispersion
around three of Indias key regions (West Coast, Northern Inland, and the South) will enable
Apple to gain a foothold from which it can begin to establish its own distribution networks.
Within two years of opening its doors in these three markets, Apple should then expand into
Hyderabad, one of the wealthiest cities in India and its de-facto tech-hub, and Kolkatta, a large
port city in the North-Eastern region of India. These two cities rank fifth and seventh,
respectively, with regard to most populous cities in India and are also among the top five most
valuable Indian markets in terms of wealth, level of consumption, and overall awareness.
Distribution strategy:One expensive cost incurred by Apple investing more fully in India is the transportation of its
goods from warehouses in the U.S. to India. This cost could be reduced if Apple instead set-up a
warehouse in India where they could keep products for the Indian market in order to more easily
meets consumer demand as more iPads are sold in India. This would also allow Apple an
opportunity to satisfy the requirement that at least 30% of the value of their sales must be sources
from local firms. If Apple manages to set-up a warehouse and begins to construct its own Indian
distribution network, this is certainly an operational process that would add value and allow
Apple to source locally. Moreover, creating local jobs in India will permit Apple to curry favour
with Indian consumers as Apple becomes a broader employer beyond just its retail stores.
Further, Apple may be able to use this permanent physical occupation to
investigate the possibility of moving some of its Chinese manufacturing operations to
India, a nation where intellectual property rights are concretely protected. India is well-known
for being a tech-savvy nation with a large pool of workers. Also, the average age of an Indian
worker is 23, while Chinese workers average 35 years of age. Oxon already has a facility in a
Special Economic Zone in Chennai one of Indias wealthiest cities. Lastly, several Indian
companies are in the same business as Fox com and possess similar mass production capabilities,
including Bharti, HCL Technologies, and Reliance Communications.

Solutions of the case:1. Apple delayed the launch of iPad in India by nine months from its launch in the
US. What may be the possible reasons for this decision?
More than half a million avid Apple fans have already tested it:In fact excess demand in that market is cited as the main factor behind the delayed launch
elsewhere in the world. However, its not been without its glitches, with well publicized wifi
problems being a source of early frustration for some new purchasers.
More Accessories:Apple branded products were also scheduled for launch alongside the iPad but were unavailable
for the US launch, some of which are still on 2-3 week back-order including the official iPad
case.
More Apps:in addition to many more compatible iPhone apps. New iPad apps continue to hit
the iTunes app store meaning that there will be an even greater choice awaiting the world when
the Apple puts the platform live around the world at the end of May.
Whats more, those apps that were developed on the iPad emulator will have been tried and
tested in the real word on real iPads for several weeks.
More Time To Save
An extra few weeks might just give you the extra earning time you need to save for a better iPad
than the one you thought you could afford. If youve already got the money burning a hole in
your pocket, enjoy the interest or keep saving and get ready to kit your iPad out in the best apps
and accessories when it finally comes home.
More Time to Consider Alternatives
The market is buzzing with news of alternative tablet offerings. This includes the Linuxbased WePad, launched in Germany this week, as well as speculation around Googles entry into
the tablet market.

2. What are the various selection criteria Apple could have considered before selecting
the Indian market?

3. What are the potential threats that Apple could face in a country like India where it
is striving hard to achieve its global image as the market leader?

4. Apples product strategy is a global success, but it failed in India. Why?

First is a technology issue. In India, the market Im most familiar with, the iPhone has
compatibility issues. Thats an amazing thing to ignore. Your product has to be aligned with the
context in which you are marketing it.
Second is a pricing issue. At its introduction, an iPhone cost about the same price in India as it
did in the U.S. (about $700). But the way consumers process price information is interesting.
A third reason is that people in India are used to an unlocked phone. Apple does not want people
to buy unlocked versions of its phone. But the moment there is a gray market where people can
buy another compatible version of the iPhone, Apple will be challenged.
A fourth reasonand this is personal speculationis a misalignment of softer brand
attributes.

Conclusion:

To establish the importance of proper market evaluation and selection tools that enable
the effective selection of markets, with a maximization of probability of achieving company
objectives.

To demonstrate the significance of the commercialization of new product launches in new

markets. Important decisions here include deciding when to launch, where to launch, how to
launch, how to address target markets, and how to introduce the product in each market.

To demonstrate a fundamental fact though a product might be the same, markets are
heterogeneous.