Zenith Inc., an American company that manufactures and sells consumer electronic products like TV sets, audio equipment, boom boxes, speakers etc, is confronted by the following facts. In the field of boom-boxes it finds it has a very low market share with companies like Sony and JVC dominating the market and the rate of growth for the industry is negative; in the case of LED curved screen TV sets, the industry has an increasing and substantial rate of growth (about 16%) and Zenith too has a rate of growth that is about 25%. Its market share is about 34%. In the case of audio equipment Zenith has a low market share (about 3% only), however the industry rate of growth is almost 28% annually. The current main earner for Zenith is its wireless listening transmitter and earphone set, that is used with Television Sets. This is a product that has matured in the market, and while the rate of growth of the industry is almost zero or nil, Zenith was one of the pioneers and has 84% market share. Hence even if the future for the product is not bright, Zenith today is selling high numbers (though at low per unit margins) due to its market share.

1.When you divest from a product (please specify which one) please list and explain what you consider to be the possible consequences for Zenith. How would you deal with these consequences in terms of strategy.

2.Zenith tries to sell off or spin off its boom box division and sell it as a separate company-however, it does not find any buyers. What can Zenith do with this part