Zenith Computers Ltd Strategic Analysis Report
Zenith Computers Ltd - Consumer
Electronics - India
Zenith Computers Ltd - Consumer
Electronics - India
Strategic Direction
·
Zenith Computers Ltd is a
domestic company that is a significant player in India’s non-retail computer
products market. In retail markets,
however, it has struggled to compete with the more aggressive multinationals
like Hewlett-Packard and Lenovo, which have the advantages of deeper pockets
and greater access to products.
·
The company is looking to
increase its exports beyond the Rs 1 billion mark. and also to increase its income from the
monitor business by playing on its
strengths in the institutional market.
·
The company may metamorphose
into a player in the distribution and retail sectors in the future, undertaking
OE manufacture. This will enable it to avoid the need to spend on
brand-building, and exploit its established dealer network.
Key Facts
Full name
of company:
|
Zenith
Computers Ltd
|
Address:
|
Zenith
House, 29 MIDC, Central Road, Andheri (E), Mumbai 400 093
|
Tel:
|
+91 22 2837
7300
|
Fax:
|
+91 22 2836
6030
|
www:
|
http://www.zenith-india.com/
|
Activities:
|
Manufacture
and marketing of computers and computer peripherals
|
Source: Company website
2003 (Mar
04)
|
2004 (Mar
05)
|
2005 (Mar
06)
|
|
Net sales
(Rs million)
|
2,609.1
|
2,812.1
|
3,171.0
|
Net profit
(Rs million)
|
31.5
|
46.7
|
146.2
|
Number of
employees
|
n.a.
|
n.a.
|
1,000
|
Source: Trade press, Company research
Company Background
·
Zenith Computers was set up in
1980, and it is now a public limited company headed by the technocrat-entrepreneur,
Raj Saraf. Zenith is the second-largest
Indian brand, after HCL, in the IT business in India.
·
After starting out as a
manufacturer of electronic components, Mr Saraf moved into the manufacture of
desktops in 1980, by setting up Zenith
Computers, which now also manufactures laptops and other peripherals, including
displays.
·
Zenith is present in the
in-home sector, and specifically in the desktops and peripherals subsectors,
and in portable consumer electronics, in the laptops sector.
·
Zenith Computers Ltd is a very
strong player in non-retail markets, especially in the corporate sector in
western India, where it benefits from its competitive price and has built its
business on high-volume, low-margin b2b sales.
·
The company saw steady growth
in both volume and value sales between 2004 and 2006, but its margins are under
pressure from competition in the non-retail, low-margin markets. Also, Zenith has been unable to grow as fast
as other MNCs, and it is therefore also losing market share overall.
·
Zenith has built up a strong
distribution network, with 900 dealers and 450 exclusive showrooms, for its
products across the country. In order to
capitalise on its strength in distribution, it launched a separate division
called Zenith Technologies in 2007, which is taking on distribution of IT
products for other companies as well.
·
Another new venture has been
Zenith’s tie-up with Vu Technologies, USA, to assemble display panels. This division is called Zenith Infotech, and
it aims to exploit the growing b2b and retail market for digital display
panels.
Production
·
Zenith’s manufacturing base is
located in Goa, where it has the production capacity to manufacture up to
15,000 desktops per month and has also been assembling 15- and 17-inch LCD panels
since 2006. No other production
statistics were available.
·
The company is strong in
exports, which are handled by Zenith International. Zenith-branded laptops are being sold in
several countries in the Gulf region. In
2007, the company announced the launch of sub-$500 laptops for the
international market.
·
Zenith also assembles the Vu
brand of display panels under licence.
Competitive Positioning
·
Zenith Computers Ltd is a
strong b2b player in the IT business. It
is now developing its strong position in the distribution sector as a separate
profit head.
·
Desktops, laptops, displays and
peripherals are all available under the Zenith brand, but it has lost share in
the review period, as its sales have grown by less than the retail market
average.
·
The company enjoys a strong
position in the economy end of the market, and has a strong corporate
philosophy of making computers that are affordable to the masses.
·
Zenith is among the top ten
brands in India, but its share of retail sales has been declining as the MNCs
have been very aggressive in promoting and marketing in the retail end.
Product
type
|
Volume
share (%)
|
Rank
|
Desktops
|
2.3
|
8
|
Laptops
|
2.7
|
7
|
Source: Euromonitor International
If you want Project Report on Zenith Computers Limited, than Contact Mahasagar Publications.
