23 November 2016 14:58:45 IST

Turning around with flexible bundling and IoT

Micromax will have to leverage expertise in market research and 'jugaad' innovation

In the face of burgeoning competition from Chinese phone makers, Micromax needs to consolidate its position in the Indian mobile phone industry. It has initiated moves towards this by taking certain concrete measures, such as a rebranding exercise, launching new handset models and starting an e-commerce portal.

However, to ace this race, Micromax will have to pre-empt competitors by walking the extra mile in terms of product line diversification and management of top talent. For this we suggest a comprehensive strategy.


Driving product innovation: ‘ Delivering the right value at the right price’ has been Micromax’s core strategy so far, which it has followed by basing its products on off-the-shelf technology rather than a proprietary one. Moving forward, Micromax will have to leverage its expertise in market research and jugaad innovation, and couple this with sophisticated R&D to come up with breakthrough innovations.

The key challenge faced by Micromax and its peers is that while the pace of innovation from their perspective is vibrant, the modifications are less apparent to the consumers.

A highly undifferentiated market deters consumers from upgradation. Hence, Micromax needs to develop new areas of differentiation by bringing in advanced product features that resonate with the mainstream consumer, such as iris scanners for improved security in phone access, Li-Fi technology for faster data transfer, voice assistance to benefit those with limited technological familiarity and contactless charging for a seamless and uninterrupted mobile experience.

However, such innovations on the hardware side can be easily imitated by competitors, resulting in little competitive advantage in the long term.

Combining products and services for sustainable comparative advantage: To build a sustainable competitive advantage, Micromax will have to look at hybrid product and service offerings in an effort to attract new customers and increase demand among existing ones by providing superior value.

When products and services are examined through the lens of complementarity and independence, the following four types of hybrid offerings emerge: flexible bundle, peace of mind bundle, multi-benefit bundle and one-stop bundle (see Figure).


As per this framework, the flexible bundle is a combination of products and services that are highly independent and also highly complementary, which help in addressing thorny customer problems. Micromax would benefit by innovating a hybrid offering in this quadrant. Its competitors, such as Xiaomi, have invested in flexible bundle offerings, such as integrating Hungama’s content services into its platforms.

Last year, Micromax made an investment in Gaana (an online music streaming service) which falls in the category of flexible offerings. Building on this, Micromax can make further strategic investments in start-ups in the areas of artificial intelligence, healthcare and gaming areas.

With increasing 4G penetration in India, consumers would want to consume more digital content through their smartphones and hence, such value-added services will not only help shorten the purchase cycles (for in-app, premium and paid content) but also help increase market share.

Internet of things — the new frontier: Micromax recently entered the air-conditioner market in India. Not only should this move be looked at as a product diversification exercise, but also as the beginning of Micromax’s internet of things initiative. To build on IoT infrastructure, horizontal product line extensions, such as air-purifiers, microwaves, and the like, can help in creating a customised ‘Micromax ecosystem’, which will, in turn, help enhance the customer experience and improve customer-stickiness.

Solving the HR conundrum: For better personnel retention at higher levels, Micromax should try to build a collaborative and supportive culture which allows flexibility in idea implementation, respect for work-life balance, and an openness in communication at all levels.

A structured hiring process that identifies the best fit for a role after seeking relevant third-party opinions and reviewing performance during the training period may help align the expectation gap between promoters and newly-hired top executives. Organising an ice-breaker session before induction that allows interaction with new hires and then seeking feedback on them can help in better selection.

Additionally, checking for entrepreneurial capabilities and the ability to work under pressure is crucial, as most top-level executives quit under pressure. Recognition of people’s achievements and providing a well-aligned and efficient team can help executives remain engaged for long to produce better results.

(The fourth runners-up are pursuing PGP-2 at IIM Indore.)