HCL Beanstalk Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Bargaining Power of a Supplier

As the leading marketer imports products from ODM, therefore, these companies have significant dependency on its suppliers as these companies market these products on their own brand names which lead to low bargaining power. However, while considering the ODM market, these have strong bargaining power.

Bargaining Power of a Buyer

The bargaining power of a consumer is high as consumers have different varieties of products to choose from, and are often confused in making the right decision. There are a total of 25 stock keeping units (SKU) offered by different companies in the market.

BCG Matrix

While constructing the BCG matrix for HCL AIO product Beanstalk, two case scenarios have been evaluated for the particular product. In the first case scenario, Beanstalk has been evaluated when it was first launched in the year 2007. The product falls under the quadrant of ‘dogs’ in the BCG matrix because the product failed to create impression due to premium pricing. The expected unit sales for the product in the first quarter were estimated to 200 units, but the product managed to sell 300 units which represents that the company had performed below expectations which managed to create low sales and low market share. Moreover, the company invested INR10 Million in the advertisement of the product which did not saved the product from failure.

However, considering the BCG matrix for HCL AIO product Beanstalk in a re-launching phase, the particular product has been placed in the question mark quadrant due to low market share assumed in the initial phase. However, the market growth for the particular product is high as it has been mentioned in the case that the AIO industry market growth was increased in the first quarter of 2010. By viewing these market characteristics, HCL estimated to capture the AIO desktop market share of 10%. These characteristics lead to the placement of the product in the question mark quadrant.

Segmentation

In the case, it has been mentioned that the company has been focusing on introducing the Beanstalk desktop product to launch it to its consumer base. However, the company needs to identify its target customers either by geographical segmentation or through psychographic segmentations. Therefore, the targeting process, methodology, and the calculations have been provided for the two approaches in order to identify the feasible target segment for launching Beanstalk.

Psychographic

SOHO

These segments are also referred to as Small Office/Home office customers who include families, schoolchildren below the age of 15, professionals who tend to work from home, and small enterprises. These are the customers living as a family with an average monthly income of INR40,000 to INR60,000. The children of these families go to English-medium schools and travel through motorbike or a small purchased car. Education is top priority for these children, whereas, the parents would show their improved lifestyle to their neighbors or their relatives through the purchase of stylish things. However, these customers are regular buyers from a particular retailer which make the influence power of retailers much stronger. According to the survey conducted by the company, consumer buying patterns for IT devices revealed that the children below the age of 15 have little interest, where the people that age from 25-35 years of age had the highest AIO awareness which falls under the SOHO segmentation. 70% of consumers from home segment and 30% of the consumers from the small enterprise companies generate sales from the retailers.

Large and Very Large Enterprises

These are the customers which include government bodies, medium enterprises, and large customers such as insurance companies, banks, and many other groups and business that purchases the product in bulk. These customers contribute highly towards the profitability of HCL. However, the business customers also allow many problems for the company in the long run. The long term businesses require an old fashioned technological product which allows the company to develop those desktop PCs for their customers which makes the company outdated in terms of new technology. Therefore, this makes it difficult for the company to target the individual consumers. Furthermore, targeting the business customers eliminates the chances for the company to gain the competitive edge for economies of scale.

Brand Pyramid

The particular tool is used to determine the brand loyalty of the company’s customers and to increase the product’s revenues; this is done at the bottom of the features and attributes of a product offered by the company. HCL offered an AIO desktop which combined the different features of a desktop PC while removing the unnecessary cords so that the product could be carried inside the house. The second level includes the functional benefits of the product which include the four basic processes of input processing, storage, and output................................

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