Customer Analysis of India for Sun Microsystems - Case Study Example

1. Introduction The fast changing socio economic dynamics have created a fiercely competitive business environment where organizations tend to adapt to the constantly evolving business environment. “Organizations must change because their environments change” (Bateman, 1990). The macro economic factors significantly impact the business operations and necessitate organizational changes. The various external factors would be analyzed through PESTLE strategy for Sun Microsystems for India. Broadly they are the socio-political environment within which the firm has to operate. The socio-religious culture of the community has strong impact on the attitude and consumer behaviour of the public, which has direct affect on economic transactions of the company. It is therefore vital that needs and concerns of the community, within which the firm intends to operate, be studied in detail so that sensitive public issues are not violated. 2. Brief introduction to Sun Micro System Sun Microsystems, since its inception in 1982, has maintained its market leadership in the network computing infrastructure solution encompassing computer system, software, storage etc. Their products and services like Java Technology Platform, Solaris operating system, MySQL, Ultra Sparc processors and StorageTek have created an unviable market positioning in the global market (Sun Microsystems). Sun Microsystems has primarily been able to maintain a competitive edge because of its dynamic market strategies that have continuously adapted the changing business compulsions within its business strategies. It caters to a wide range of personal and professional arenas like technical/ scientific industries, financial services, manufacturing, retails, telecommunication etc. 3.PESTLE Analysis for India Charles Hill’s assertion that ‘Countries have different political, economic, and legal systems… All these differences can and do have major implications for the practice of international business’ (Hill, 2004) is absolutely correct. In the rapidly changing environment of globalization, the businesses have become more competitive thereby making it obligatory for them to become more flexible and swiftly adapt to the changing technologies and work environments. PESTLE stands for the macro environmental factors vis-à-vis political, economic, social, technical, legal and environmental paradigms within which the firms have to operate in offshore and domestic region. 3.1 Political environment India is one of the largest democratic states of the world. Though its relations with its neighbors, apart from Pakistan, are cordial, its political stability greatly favors foreign investment. The recent liberalization and favorable trade conditions have brought in huge foreign capital in terms of business alliances and foreign business. Like all new economies, there is rampant corruption but the favorable industrial environment has provided the global business with more scope. 3.2 Economic It is a very important factor because the market is driven by the demand and supply that is mainly dependent on the buying capacity of the consumers. With nearly 9% GDP growth and 1.1 billion population it is one of the fastest emerging economies of the world with huge market potential. Despite the current environment of recession, the networking solutions have become the critical part of industrial success and therefore, an intrinsic part of business strategy. Sun Microsystems has huge market potential in India’s emerging economic conditions. 3.3 Socio-cultural paradigm There is huge socio-cultural diversity amongst the masses. With multi-cultural society, the demographic factors are vital ingredients of Indian market and have huge cascading effect on the market. The demographic changes vis-à-vis population size, age distribution, gender ratio, income group etc. have massive influence on the changing consumer preferences and thereby on the economy. Kotler et al(2007) emphasize that in the fast changing global business, demographic compulsions have significant impact on market position and therefore, they need to become intrinsic part of the market strategy of the industry. 3.4 Technology The advancing technology has been a boon as well as a bane for current generation. The advent of internet has fast transformed the business dynamics. The diversity of products and services offered by Sun Microsystems has increasing become intrinsic part of business operation at almost all level of interaction. 3.4 Legal The government regulations, employment laws, competition, health and safety and other imperatives which have direct consequences for people, are important factors for the organizations which need to be conformed as per the specific country. Hence, the industry needs to be aware of the legal framework as well as the laws that directly impact its operation in the country. The Indian laws regarding corporate laws and foreign investment are important aspects of the country. 3.6 New Environmental compulsions While technology has greatly facilitated communication and increased business opportunities across the world, it has also created a wide spectrum of factors that are detrimental to the environment. The by products of technology like Carbon emission, radiation etc have become a big threat to the environment and consequently to the survival of human race. Hence, judicious use of technology and using it to the advancement of environment has become strong motivation for the people. The firms must incorporate environmental imperatives within their business strategies to promote sustainable development. 4. Customer Analysis Consumer psychology and analysis of database of customers are important part of market strategy which helps one to know the changing preferences of the customers in the rapidly changing times. Identification of the changing trends of the customer requirements helps firms to gain leverage against their rivals. The market strategy should be totally focused on the needs and requirements of the people and make continuous efforts to update its products line with that of the changing public demands. Understanding of consumer psychology, therefore, plays a vital role in the development of marketing strategy and planning. With vast database of customers in India, the effective market strategy has huge opportunity to penetrate and create niche market. India IT Software and Services Industry US$ billion Source: NASSCOM (business week) India’s expertise in the software arena needs to be complemented by the networking infrastructure solutions thus providing Sun Microsystems with huge opportunities to monopolize Indian market with its state of the art technology and infrastructural solutions. Sector wise breakup of Indian software and services industry performance USD billion 2005-06 2006-07 2007-08 IT Software and Services Exports[1] 17.3 22.9 28-29 ITES-BPO Exports 6.3 8.4 10.5-11 Domestic Market 6.7 8.2 ~10 TOTAL (IT Services + ITES-BPO + ES, Product Exports + Domestic Market) 30.3 39.6 49-50 Source: nasscom The stupendous growth in the IT sector across the globe is ample indication of the vast opportunities in the Indian market for Sun Microsystems Inc. 5. SWOT Analysis (global) Sun Microsystems Inc. has greatly expanded its operations and business interests across the globe primarily because of its unique and innovative products and services in the field of contemporary information technology area. The increasing use of internet technology and hi-tech dataware in business operations has greatly facilitated the aims and objectives of Sun Microsystems. The recent trends have shown that people and businesses across the world are heavily relying on information sharing made easy through the advancing technology. The company has exploited this revolution in the communication technology and has come up with various state of the art network computing infrastructure solutions. The platform free Java solution has reduced the disparities amongst the various operating system and help opened the people at large to exploit the opportunities and expand their businesses across the globe. The SWOT analysis has helped company to maintain its competitive edge. The company’s strength lies in its core competencies in the network infrastructure and database software which have facilitated easy information sharing and storing. The leadership initiative under Scott McNealy has helped the company to diversify from its core competencies in harware and software into architecture design, solutions, services and documentation. The huge diversity provides the customers with one point solution thus providing the company with literal monopoly in the network infrastructure solution. The major weakness of the company lies in its retailing and supply chain management that has not yet been able to meet the standards of the company. The timely delivery is the essence of the business and needs to be religiously followed. The huge opportunities for the various products and services of the company makes it’s the ideal choice for other businesses. The company exploits those opportunities with creative inputs and expertise. The company now provides single window solutions to business’ network solution and as such, has very few competitors. While companies like IBM, Microsoft etc may offer some threat to its business prospects but the company’s dynamic market strategy helps to give it leverage against its rivals. 6. Impact on Company’s marketing Strategy (7Ps) The 7P’s of marketing strategy have become highly relevant in the contemporary environment of competitive business. Shultz, an eminent academician says that McCarthy’s principles of 4Ps of marketing have outgrown their effectiveness in the present age of information technology. In the past, the 4Ps (product, price, place and promotion) of marketing strategy were highly relevant mainly because of the three main reasons. They were lack of variety within the products, people were exposed to limited means of publicity and lastly promotional activities were more localised. The strategy therefore, was viable in the given restrained parameters and yielded results that satisfied both the customers and the retailers of the time (Shultz, 2001). But the recent trends in the consumer behavior and the need to incorporate the changing requirements of the people has made it essential for the business to take into consideration the 3Ps (people, process and physical evidence). It is true that increased awareness among the customers has put more pressure on the marketers. Even though the customer base is increasing, it is becoming difficult not only to attract more customers but also to retain them. So, one need to add something ‘more’ on the existing products to make it more attractive without compromising much on the price. In fact, the more innovative the product and fancier the promotional techniques, the higher are its chances of capturing market space. Thereby, asserting that brands, advertising, and promotional techniques are very important tools of marketing. Sun Microsystems has successfully included the 7Ps in its market strategy. People have become the focal point and therefore effective customer relationship management has become very important. Through regular HR training and upgrading the skills of the human capital, the company strives to cater to the changing demands of the people. The efficient delivery of the services and products are crucial ingredients of the firm. Thus the process of ensuring the same gives the market position to the company. In the contemporary times, physical evidence of state of the art technology and efficient delivery of the same promotes goodwill and provides credibility to the company. The company provides quality diversified goods and services at competitive prices and ensures credibility through effective after sales service. The company also customizes the product and services as per the changing demands of the people. Marketers excel in influencing the self concept and personality traits and behavior by developing market strategies of the products, keeping in mind the prevailing lifestyles of the people. Hence, different market strategy is adopted for different group of people. Advertisements are the most prolific example of segmented marketing where the contents of advertisements are decided by the target group. The company follows market mix strategy and uses demographic segmentation to exploit the emerging market. The brand creation and use of effective advertising has helped the company to keep its leadership in the network solution. 7. Recommendation for marketing strategy The compulsions of the emerging new dynamics in the global businesses have necessitated for people-centric policies and plans that would meet the challenges of the changing social patterns and its changing demands. The following recommendations would help the company to maintain its leadership position. The company needs to keep abreast with the changes and maintain a competitive edge over their by testing new approaches in its business strategy. It should incorporate the socio-environmental paradigms within the framework of its strategic goals and visions, the company has been able to contribute towards environmental conservations and social issues which have considerable impact on the sustainable development. The company should utilize local resources for its strategic market plans and manufacturing processes. The changing paradigms in the global business environment have brought forth a new set of uncertainties and risks that need to be addressed urgently. Hence the risk management would become a crucial strategy that should be incorporated in the wider aims and objectives of the company. ‘In order to manage risk, an organization needs to know what risks it faces and to evaluate them’ (Orange Book, 2004). The company must initiate global partnership and franchising for its goods and services in the field of quality customized packaged software. Reference Bateman, Thomas S., and Carl P. Zeithaml. Management: Function and Strategy. Homewood, IL: Irwin, 1990. Hill, Charles. (2004). International Business: Competing in the Global Marketplace. 7th ed. Irwin/McGraw-Hill. Nasscom (Business Week). Available from: [Accessed 17 October, 2009]. Kotler, P., Brown, L., Adam, S. and Armstrong, G. (2007). Marketing. 7th Edition, Pearson Education Australia, ISBN 9781741034950, (Marketing BB Pack 7/e). The Orange Book. (2004). ‘Management of Risk: Principle and Concepts’. HM Treasury. Norwich. Available from: [Accessed 17 October, 2009]. Sun Microsystems. Available from: [Accessed 17 October, 2009]. Nasscom. Sector wise breakup of Indian software and services industry performance. Available from: [Accessed 17 October, 2009]. Shultz, Don E.( Feb 12, 2001). Bid Farewell Strategy based on old 4Ps. Marketing news;35,4; ABI/INFORM Global. p 7. Read More