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From
being an OEM supplier to a distributor to a manufacturer,
this company has seen it all. But just when you thought that
this was it, the company revealed it has more aces up its
sleeve, with an entry into the software arena. Shipra Arora
profiles the company and narrates how it is giving its competitors
a run for their money
A
strong determination to succeed and the ability to adapt to
changing times have been distinguishing features of the Rs
200 crore Delhi-based Vintron Informatics. Constantly re-orienting
itself to meet market dynamics has been the name of the game
for this 13-year old company, which has grown by leaps and
bounds from being an OEM supplier and distribution major to
a full-fledged manufacturer and brand owner. Of course, it
is still to achieve the brand recall it so vehemently desires,
but if the past is any indication, this too will come to pass.
Humble beginnings
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Agrawal
says only manufacturing could ensure it a place of pride
on the Indian manufacturing scene |
Established
in the year 1988 as Vintron Industries Limited, the management
of the company decided to re-christen the company Vintron
Informatics Limited, as they felt the former was too generic
and did not embody its specific area of operations. This name
change however, was not restricted to merely a change in name,
but engulfed the complete business values of the company in
sync with the changes in the industry.
Vintron started off its journey as an OEM supplier and small
time manufacturer. However, with the tide turning in favour
of systems integrators, the company made a strategic decision
to enter this segment in an effort to tap its huge potential.
Says Manish Agrawal, director-operations, Vintron Informatics,
“Since system integrators had started gaining increasing
prominence in the Indian market during that time, we decided
to channelise our efforts and resources in that direction.”
1994 marked another important year for the company when it
made ventured into the channels business. Even as it continued
its efforts on the manufacturing front, it was distribution
that formed the core of its business. In fact, during the
year 1995-96, the company with brands such as Logitech, Viewsonic,
Intel, HP and Microtek (Scanners) under its umbrella came
to be identified with the distribution business.
Enter the manufacturer
Even though the company scaled heights as a distributor, the
lure of moving up the value chain was irresistible and this
led the company to explore new frontiers in the IT business.
Realising that there was hardly any scope for value-addition
in the distribution business, the company decided to undergo
a makeover. “Considering the growth that the industry
had been witnessing, manufacturing held promise. We therefore
decided to position ourselves as a manufacturing vendor, as
a lot of value addition could be done this way,” says
Agrawal. This involved the complete shedding of the distribution
image and a conscious shift in positioning from a component
manufacturer to a PC manufacturer, distributor to manufacturer
and more importantly, distributor to brand manufacturer.
Complimenting this movement has been a sound business strategy
guiding each aspect of the re-orientation exercise, whether
it be marketing, channel or product strategy. This, Agrawal
points out, is critical to the company’s success especially
in the face of stiff competition arising from both domestic
and international quarters. In fact, during the last three
years Vintron has been constantly re-inventing itself in an
effort to establish itself as a major player in the IT market.
The first bold step in this direction was the severance of
all its distribution ties with giants such as Viewsonic, HP,
Logitech, etc and realigning all its marketing and financial
resources towards the new mission in 1999. “It was not
possible to continue with the distribution business while
launching our own brand as that would mean entering into a
direct competition with our customers,” explains Agrawal.
He adds that the company has been significantly enhancing
not only its manufacturing base but its product portfolio
as well. It has added two manufacturing units in Parwanoo
and Daman to take the total number of units to three. In terms
of product line, the company boasts of a portfolio, which
started out with keyboards and monitors, moving on to modems,
mice, UPS and finally graduating to motherboards and branded
PCs. During the last financial year, Vintron made heavy investments
to the extent of Rs 15 crore towards upgrading the manufacturing
infrastructure. “This will almost double the manufacturing
capacities, especially that of motherboards,” Agrawal
points out. The company is today capable of producing 4,00,000
motherboards and about 75,000 PCs each year.
While having established its prominence to a large extent
in the peripherals market (18-20 percent market share in motherboards),
Vintron is now diverting its energies towards gaining a firm
foothold in the branded PC market as well. Says Agrawal, “PCs
provide a strong top line in terms of customer perception
as well as a strong brand positioning in the market.”
Currently, the company has two brands available in the PC
market Vintron Elixir@Home and Biz 123. Elaborating on the
company’s branding and positioning strategy, he explains
that the company started out with the SOHO segment as its
main target audience (70 percent of its business comes from
this segment). While SOHO continues to be the focus segment,
the company is now looking at moving up the value chain within
the PC business by strengthening its presence in the SME and
corporate segment with its Biz 123 range of PCs. Through this
move, the company hopes to strike a 50:50 balance between
revenues accrued from sales in the SOHO and SME segment.
Winning customers
While on the one hand Vintron is enhancing its manufacturing
facilities to cater to the required numbers, on the other
hand, it has unleashed a massive marketing campaign. In the
last year and half, the company has gone aggressive on the
marketing and advertising front in order to establish the
brand name. However, with the focus now increasing on the
SME segment, the company is now re-working its marketing strategies.
Agrawal adds that while advertising is the best medium for
getting its message across to the target segment, it will
also leverage below the line marketing activities such as
road shows and seminars. As part of this strategy, the company
also plans to work more closely with channel partners. The
management plans on having a 50:50 mix between above and below
the line marketing activities over a period of time as the
SME segment gains prominence in its business. Apart from deploying
intelligent marketing tactics, Vintron is touting the low-cost
advantage for the price sensitive Indian market as all its
models fall within the Rs 28,000-50,000 bracket. The company
has also been leveraging various value for money offers to
rake in the revenues. Giving the customers further value for
money, the company is strengthening its service network as
well setting up over 240 after sales service centres. In the
face of tough competition from Indian and MNC brands as well
as the unorganised market, the company is not only playing
its price and value for money card well, but also riding high
on the in-house capabilities of the brand. Agrawal maintains
that only 30 percent of the PC components (including hard
disk drive, processor and floppy disk drive) have been outsourced
thus giving the brand a unique advantage over the competition.
As part of its strategy, Vintron is also looking at gradually
moving to the retail business. The major business in the home
segment is shifting to the retail channel because of the increasing
demand for computers. Keeping this in mind, Vintron is looking
at leveraging the retail model in order to consolidate its
efforts in the branded PC segment. “The retail model
not only helps in giving a more upmarket look and perception
to the brand but also helps us give our customers the best
value for their money,” explains Agrawal. The company
plans to set up over 200 retail outlets across the country
with an investment of about Rs 1.5 crore over the next one
year. For this, it is tying up with franchising partners many
of whom are the company’s own dealers, through which
it hopes to hit the right notes through co-branding and co-promotional
exercises with dealers.
Learning the ropes
Though not an accomplished player in the fray, Vintron has
certainly learnt the rules of the game fast and well. Take
for instance the new channel strategy devised by the company
for having a separate channel for peripherals and PCs. “This
step has been taken in view of the larger goal of positioning
ourselves from being a distributor of variety of products
to being only a manufacturer of its own brand of PCs and components,”
explains Agrawal. For peripherals, the company now has a two-tier
distribution model with around 150 distributors and over 2,000
dealers. For PCs, there is a single tier distribution of 500
dealers. These PC dealers are attached to Vintron directly,
while for peripherals, all commercial activities with distributors
are performed through resellers. Agrawal adds, “Profiles
and orientation of PC dealers and resellers is quite different.
Hence, two different channels are being used for distribution.”
While consolidating its position in the IT hardware market,
the company is nevertheless keen not to miss out on the growing
opportunities in the software arena. With its eye on the software
market, Vintron set up its software division Vsoft, a few
months ago. From distributor to manufacturer to brand owner,
it’s not the end of the road for Vintron as there still
is new ground to be broken, new frontiers to be explored.
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