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Challenges of the 2-Speed Economy

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Jay_Bond
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re:
Jay_Bond   1/28/2011 7:16:37 PM
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These are some very valid points. On the positive side, economies are still growing, of course not as much as the previous year. Growth is still growth and that’s a good thing. On the other side of things there is still a lot of uncertainty out there. The European Union is going to have a challenge figuring out the best way to handle the collapse of multiple economies without hurting the rest of Europe.

Electronics suppliers would definitely want to consider alternative plans to protect themselves in case of a downturn. Focusing on the strongest economies, while still not forgetting the established economies, should help to provide a good year of growth.

 

Himanshugupta
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ramp up sale to developing countries
Himanshugupta   1/30/2011 12:42:25 PM
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Bolaji, you started the article with problems that both developed and developing nations are facing during these times. I do agree with most of them as developed nations are facing slow growth while developing nations are facing problem of high growth related problems such as inflation. In conclusion, you point out that the electronics companies should ramp up sale to developing economies but did not say how? Should they change their product strategy and marketing to suit the needs of developing economies? Also isn't it too much defensive strategy and waste of resources to be prepared for all possible scenarios?

TaimoorZ
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Re: ramp up sale to developing countries
TaimoorZ   1/30/2011 2:16:44 PM
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I think if electronic companies need to target the developing countries, they will have to change the product designs and marketing strategy. It would be a completely new experience for them and a lot of revamping would be required. However, the critical question for them would be to decide if incurring all the additional costs in bringing about the change would be justified with the additional revenue.

prabhakar_deosthali
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Re: ramp up sale to developing countries
prabhakar_deosthali   1/31/2011 12:59:26 AM
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One of the key sale strategies that has become very successful in the developing economy like India is a buy back of the customers old gadgets. Most of the  white goods companies in India have successfully adopted thiis stratgey to push their products in the market. In india , you normally don't throw away your old appliance ( it may be your TV, washing machine or refrigerator) to buy a new one. You will continue using it even if it is outdated, partly malfunctioning , as long as it can be repaired and is doing the basic functionality.  To lure these cutomers, the companies show their readyness to buy the customers old appliance. The buy back price is attractive enough ( much more than what the customer would get if the applinace is sold to the scrap dealer). These old appliance are sold by the company in the rural markets after minor repairs. So this becomes a win-win situation for the customer as well as the company

Himanshugupta
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Re: ramp up sale to developing countries
Himanshugupta   1/31/2011 2:58:13 PM
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I know what you are talking about Prabhakar, buying back old appliance attract more attention than otherwise. But i did not know what these companies used to do with them. Now i know that they repaire them and resell them. Even if they do not sell them, i think the profit margin should be more than enough to take care of any risky scenario. Having a Diwali sale when the prices can be upto 20% lower is as good as buying back option for companies.

Anna young
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Challenges of the 2-speed economy
Anna young   1/30/2011 5:12:25 PM
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I agree with the conclusion of the article and comments made so far.

However, if the electronics industry is to advance their business transactions in the developing economies, there might be a need to rebrand the product in order to suit the needs of the developing economy. Of course, this might involve additional costs to the industry. Now is the electronics industry prepared to take such risk particularly in the present global economic crisis?

Himanshugupta
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Re: Challenges of the 2-speed economy
Himanshugupta   1/31/2011 2:52:26 PM
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I think Anna has a valid point. The electronics industry will need to shell out some money to modify and market their products in the developing countries. Does it make sense in this risky ecomonic scenario is what Bolaji tried to analyze in his article. If i read into the statement that companies should prepare themselves for all risk scenarios then it does make sense to spend some more money and try to neutralize the risk.

prabhakar_deosthali
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Re: Challenges of the 2-speed economy
prabhakar_deosthali   2/1/2011 12:49:47 AM
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The Automotive industry has well understood what is required to push their products in the developing economy. Most of the Europian car companies have suitably come out with compact car models which sale the most in developing economy while they also have their luxury models to cater to the select class in these developing countries. Even Mercedez which is known for its most luxurious and costly cars has decided to introduce a compact car for the middle class in India , to push numbers.

t.alex
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Re: Challenges of the 2-speed economy
t.alex   2/6/2011 7:12:17 AM
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Anna, quite agree with you. When expanding the products to developing countries, companies may need to go through the whole cycle again to identify, package, price the product specifically for the developing markets. This is a real challenge.

Toms
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Re: Started a Long Time Ago
Toms   2/1/2011 5:22:59 AM
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    Rich, you are very much true. From early 2000 onwards we all are hearing about future growth of Chine’s and India economy. Some of the famous economist also predicted about this economic growth during early 90’s and these countries marketed it in a big way. That was one of the reason many of the big brands and MNC’s shifted their base either to China or India.

     I think the latest IMF prediction report also motivate companies to start their own development centers in these countries. Since everybody wants to grab the advantage of this economic growth, this will end up in winding up or cut down some of their other centers.




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