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Mark Hollands Principal ITR. Whitebox buying beliefs of Australian SMBs. The Price is. White. Strategies to Differentiate. Mark Hollands, Principal. The Whitebox Market. What do we mean by ‘whitebox’ 1 Custom-built computer with name-brand internal components

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Presentation Transcript
slide1
Mark Hollands

Principal

ITR

slide2
Whitebox buying beliefs of Australian SMBs

The Price

is . . .

White

Strategies to

Differentiate

Mark Hollands, Principal

the whitebox market
The Whitebox Market
  • What do we mean by ‘whitebox’
    • 1Custom-built computer with name-brand internal components
    • 2Generic computer systems that don't carry any mainstream brand names
    • 3Sometimes called clones, not major brands such as IBM, Dell etc.
  • Research on whitebox in Australia is thin
  • Estimates of Market size
    • IDC 46%
    • Gartner 44%
    • AMD internal figures - 50+%
  • We interviewed Small Businesses and Government agencies
  • To find 100 companies that use whitebox computers, we had to ring 251 organisations
opportunities challenges in the whitebox market
Opportunities & Challenges in the Whitebox Market
  • Competitive Challenge:
  • Price, Price Price
    • Making brand name computers more affordable
    • Move from PCs to Notebooks
    • Organisations embracing wireless and mobile computing
  • Differentiation & Advantage
  • Service, Service Service
    • Customers looking to differentiate beyond price
  • Flexibility
    • Major attraction to generic brands
whitebox incidence among 251 organisations
‘Whitebox’ incidence among 251 organisations

This chart shoes the penetration of whitebox computers among 251 Australian organisations. From this sample, 40% of organisations are currently running some whitebox systems.

PCs or workstations

37

Servers

22

Notebooks or laptops

7

None

60

0

20

40

60

80

100

% of Respondents; All Contacts (n=251)

how common are whitebox computers
How common are whitebox computers?

Q.5. Within your organisation, are all of your computers whitebox, most of them, some of them or very few of them?

Business Size: Number of Employees

Don’t know

All are

1%

>20

20-99

100-250

whitebox

17%

All are Whitebox

21%

18%

12%

Very few are

whitebox

44%

Most are Whitebox

18%

12%

24%

Most are

Some are Whitebox

18%

24%

18%

whitebox

18%

Very few are Whitebox

42%

42%

47%

Some are

whitebox

Don’t know

-

3%

-

20%

Base: Total Respondents (n=100)

Base: Organisations with ‘whitebox’ computers

recency of purchasing a whitebox computer
Recency of purchasing a whitebox computer

50

Purchase within the last year = 53%

Purchase within the last 3 years = 77%

40

36

30

% of Respondents (n=100)

22

20

17

17

10

7

1

0

Within the last 6

Up to 1 year ago

Up to 2 years ago

Up to 3 years ago

More than 3 years ago

Don’t know

months

Base: Organisations with ‘whitebox’ computers

where organisations buy whitebox computers
Where organisations buy whitebox computers?

Base: Organisations with ‘whitebox’ computers

overall satisfaction with whitebox purchase
100%

3

3

4

3

9

5

9

3

13

15

80%

21

42

60%

45

% of Respondents

39

53

40%

52

20%

33

33

15

0%

Total

< 20 Employees

20-99

100-250

(n=100)

(n=33)

(n=33)

(n=34)

Very Satisfied

Satisfied

Very

Disatisfied

Ambivelant

Overall satisfaction with whitebox purchase
perceptions of whitebox computer reliability
Very Reliable

Reliable

Unreliable

Don't know

Perceptions of whitebox computer reliability

100%

1

3

3

3

8

18

80%

48

67

56

60%

% of Respondents

53

40%

48

20%

35

30

26

0%

Total

< 20 Employees

20-99 Employees

100-250 Employees

(n=100)

(n=33)

(n=33)

(n=34)

Base: Organisations with ‘whitebox’ computers

are businesses loyal to whitebox vendors
Are businesses loyal to whitebox vendors?

Base: Organisations with ‘whitebox’ computers

do they specify build or rely on advice
Do they specify build or rely on advice?

Base: Organisations with ‘whitebox’ computers

price is driving organisations to purchase whitebox
56

8

8

6

5

4

4

3

1

5

0

20

40

60

80

100

Price is driving organisations to purchase ‘whitebox’…

Price

Specification

Performance

Reliability/Quality/Guarantee

Support/Maintenance

Not my choice

Customer Service

Local purchase

Base: Organisations with ‘whitebox’ computers

Speed of delivery

Other

% of Respondents (n=100)

influences on the pc purchasing decision
Influences on the PC purchasing decision

100

% Highly Important

[Extremely / Very Important]

80

68

64

60

59

60

52

52

% of Respondents (n=100)

45

43

40

21

20

0

Support/

Customer

Specification

Price

Replacement

Purchase

Purchase

Speed of

Brand name

Maintenance

Service

policy

from regular

from local

delivery

distributor

supplier

Base: Organisations with ‘whitebox’ computers

influences on the pc purchasing decision1
Highly Important {1-2}

Moderately Important {3-4}

Not Important {1-2}

Don't know

Influences on the PC purchasing decision

Support/ Maintenance

68

22

9

1

Customer Service

64

29

6

1

Specification

60

31

8

1

Price

59

36

5

Purchase from reg dist

52

38

10

Replacement Policy

52

35

12

1

Purchase from local supplier

45

31

23

1

Speed of Delivery

43

48

9

Brand name

21

42

37

0

20

40

60

80

100

% of Respondents (n=100)

Base: Organisations with ‘whitebox’ computers

perceptions of whitebox computer prices
Perceptions of whitebox computer prices

More expensive

1%

Don’t Know

7%

No difference in

price

24%

Less expensive

68%

Base: Total Respondents (n=100)

Base: Organisations with ‘whitebox’ computers

are brand name systems preferred over whitebox
Are brand-name systems preferred over whitebox?

Don’t Know

5%

No

39%

Yes

56%

Base: Total Respondents (n=100)

reasons for brand name system preference
Reasons for brand-name system preference
  • 38% Better Customer Service
  • 27% Better Warranty/Guarantee
  • 27% Trusted Brand Names
  • 21% Reliability
  • 9% Maintenance and Support
  • 9% Quality/Better Product/Performance
  • 20% Other
processor preference
Processor Preference

AMD

Other

2%

5%

No preference

34%

Intel/ Pentium/ P4

59%

Base: Total Respondents (n=100)

claimed annual pc spend
50

40

30

20

20

17

14

10

10

9

9

10

8

3

0

Less than

$5,001-

$10,001-

$20,001 -

$5,000

$10,000

$20,000

$40,000

Claimed annual PC spend

Average Spend = $36,000

Median Spend = $18,375

% of Respondents (n=100)

$40,001 -

$50,001 -

$70,001 -

$90,000 +

Don’t know

$50,000

$70,000

$90,000

Base: Organisations with ‘whitebox’ computers

expected trends in pc spend over the next 12 months
Expected trends in PC spend over the next 12 months

Base: Organisations with ‘whitebox’ computers

percentage increase expected over the next 12 months
100

80

74

60

40

20

10

5

3

3

2

1

1

1

0

No increase

1-10%

11-20%

21%-30%

31-40%

41%-50%

51%-60%

More than

100%

Percentage increase expected over the next 12 months

Average Increase in PC Spend = 5.86%

% of Respondents (n=100)

Don’t know

Base: Organisations with ‘whitebox’ computers

large company and govt agency desktop buying intentions
Don't Know

Decrease

1%

15%

Increase

29%

Remain The Same

54%

Large Company and Govt. agencyDesktop Buying intentions

See rating colours

% Respondents (n=300)

average desktop spend increase
Average desktop spend increase

‘Average % spend increase’

notebook buying intentions
Notebook Buying Intentions

See rating colours

% Respondents (n=300)

average notebook spend increase
Average notebook spend increase

‘Average % spend increase’

likelihood of vendor loyalty through price guarantee
Likelihood of vendor loyalty through price guarantee

100%

36

38

80%

42

51

60%

9

18

% of Respondents

14

15

40%

55

44

44

20%

33

0%

Total

< 20 Employees

20-99 Employees

100-250 Employees

(n=100)

(n=33)

(n=33)

(n=34)

Total likely

Total Unlikely

Don't know/Makes no difference to me

usage of the internet to purchase
Usage of the Internet to purchase

Q.14 Have you or someone in your organisation used the Internet to purchase a “whitebox” computer for the organisation?

Q.14a. Would you consider using the Internet to purchase “whitebox” computer in the future?

Yes

13%

No

87%

Base: Total Respondents (n=100)

Base: Organisations with ‘whitebox’ computers

interest in on site pc evaluation
Interest in on-site PC evaluation

Base: Organisations with ‘whitebox’ computers

importance of pc disposal policy
Importance of PC disposal policy

Base: Organisations with ‘whitebox’ computers

meeting new challenges
Meeting new challenges
  • Exploit flexibility and expertise
    • 57% spec their own systems
    • 17% want help
    • Specs are 2nd highest criteria for buyer
  • Price
    • Key competitive advantage in this market - don’t lose sight of that!
    • 39% would go to brand name if budget permitted
    • 44% want price guarantee - only 7% say ‘no’
  • Emphasise support
    • Brands do badly here, especially cheaper end
    • Lay-out strong replacement policy & on-site evaluation (48% want this service)
meeting new challenges1
Meeting new challenges
  • Market still spending
    • PC growth projected at 10+%
    • 1:4 say they will increase spend
    • 65% to maintain spend
    • Only 7% to decrease
  • Loyalty weak - no ‘80-20 Rule’
    • 52% buy from regular distributor
    • 45% from local supplier
    • Increase marketing in niche / SMB areas to exploit lack of loyalty
    • Strategise offers aimed at loyalty - eg price guarantee etc.
    • Exploit lack of brand value equity of competitors
  • Drive Internet purchase
    • Take cost out of your own business to keep prices low
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