Zenith' Hdtv

Goal

Increase profit of per unit sales by developing new technology to get net income in the beginning of 1990ÐŽ¦s.

Impediment

Competitive TV market erode the unit profit

Solution:

Develop new technology to increase profit

Goal defense:

Despite sales volume increase, Zenith gets net loss of more and more in the end of 1980ÐŽ¦s. With strong brand and distribution, Zenith sale for continuing operation increase from $1,401 million in 1988 to $1,549 million in 1989, but the net loss of also increases from $11 mi1lion in 1988 to $17 million in 1989. That is to say, the profit of each unit decreases more than the amount of unit increase. How to increase the unit profit is most important to the board of Zenith, experienced on high technology make more profit to Zenith even in the late of 1980ÐŽ¦s. Develop new technology would be a good choice

Impediment Defense

Competitive market eroded TV unit profit, 1971 Zenith retail union price $898, 1980 decrease to $398 and 1989 down to 280, almost 3 times decrease in unit profit, only two time unit increase from 11,197 in 1971 to 24,689 in 1989. Zenith get more and more net lost in the end of 1980ÐŽ¦s

Solution Defense

According to the survey of HDTV adoption by Analogy, projection TV had penetrated 4% of US households with average retail price of around $2,500. And good profit margins with average retail prices around $1,000.

With normal profit around 10-20 pre unit, the profit of TV with new technology will reach around $300 per unit.

More over new technology would also change the image of Zenith in USA, it will help to attract more customers from different generation and increase the market share

...