The first pillar I have selected is cost and quality leadership and the company reviewed is Zerodha.

About the pillar:

Cost leadership is a strategy used by an organisation who wants to establish itself as the cheapest
provider of a product or service without compromising on quality. Cost management and reduction is
a continuous process in any organisation. The management must work constantly on reducing costs at
every level to remain competitive.
There are many ways to achieve cost leadership such as mass production, economies of scale, product
design and development, process innovation, learning curve benefits, etc.
Advantages of cost leadership are high profitability, increased market share, sustainability, capital for
growth,
However, to maintain low costs position, firms might reduce costs in critical areas such as customer
service which may lead to eventual loss of customers. Also, this may mean lack of innovation or
introduction of new products. As a result, the original product may go out of the market soon.

About the organisation:

Zerodha is a financial services company incorporated in 2010 that offers retail and institutional
broking, currencies and commodities trading, mutual funds, and bonds.
Zerodha is the outcome of all the challenges faced by the founder brothers – Nikhil and Nithin Kamat
– in their early years of trading. “Rodha” is Sanskrit means “barrier”. Zeordha means zero barriers,
the main motive to start the business.
With their disruptive pricing models and in house technology, Zeodha has been able to become one of
the largest stock broker firms in India.
Products offered
Zerodha has built its own trading applications for customers which includes mobile apps, websites,
trading terminals, which are offered for free to customers. Applications include
 Kite 3.0
 Kite mobile
 Coin and other partner products.
Facts and figures
Founders: Nithin Kamath & Nikhil Kamath
What it does: Provides end-to-end discount brokerage services
Year of founding: 2010
Revenue: INR 442.4 crs on standalone profit as on 31st March, 2020.
Revenue from operations: 1034.8 crs as on Mrch 31st, 2020.
No. of users: 3.14 million users as on Jan 31st, 2021.
No. of employees: 1000-3000

Cost and Quality leadership strategy at Zeordha

Founder Nithin Kamath who had been trading for more than 15 years, found a lot of gaps between
what the traders wanted and what the brokers offered. To start with, brokers offered services on online
platforms but operations took place on offline platform. For this, a huge team of sub-brokers,
relationship managers, regional heads were hired to serve the clients. And the increasing costs burden
was transferred to the clients in the form of brokerage.
The idea was simple, to work completely in online mode, provide excellent support, offer a fast &
reliable trading platform and pass back the benefit of reduced costs to the client. When the costs don’t
go up with the size of the order, then why should brokerage? This is called discount broking, a
concept originated in US and is now adopted by most of the developed countries. By staying
completely online, the firm was able reduced overhead costs and pass on the benefit to its clients.
Zerodha disrupted the market with the concept of discount broking in India. All equity investments
made in India are free. For trading, Zerodha charges 0.01 per cent or INR 20 per executed order,
whichever is lower on all challenges, including trades for equities (intraday), futures and options,
currencies, and commodities. Zerodha has a daily exchange turnover of over Rs 10,000 crore in all the
segments of the markets.
Another key cost component of most business is advertisement and marketing. For first three years,
Zerodha did not spent a single penny on advertisements, newspaper inserts, google ads, etc. and
Zerodha was among top 15 retail brokers nationally. The best advertisement has been through word of
mouth from the clients who are also part of Zerodha Associate program which is a client referral
program. Even today, Zerodha has zero marketing budget.
The key to growth is not only pricing but also the quality of service. The services offered to the clients
are highly standardised. A client with an INR 1000 trading account or INR 10,000 or INR 1,00,000
will get the same deal. This means improvement in quality and efficiency in services. This also
improves operational efficiency, faster service and seamless transactions.
Zerodha is also known as Robin hood of trading community.

Zerodha vs Upstox vs Angel Broking Charges Comparison

CHARGES ZERODHA UPSTOX ANGEL BROKING
Depository CDSL CDSL CDSL
Account Opening Rs. 300 Zero Zero
Charges
AMC Charges Rs.300 per Annum Rs.300 per Annum Rs.240 per Annum

Equity Delivery Zero Zero Zero

Equity Intraday Rs. 20 or 0.03% Rs. 20 or 0.05% Rs. 20
(which is lower) (which is lower)
Future Rs. 20 or 0.03% Rs. 20 or 0.05% Rs. 20
(which is lower) (which is lower)
Option Rs. 20 per order Rs. 20 per order Rs. 20 per order
Commodity Rs. 20 or 0.03% Rs. 20 or 0.05% Rs. 20
(which is lower) (which is lower)
Currency Rs. 20 or 0.03% Rs. 20 or 0.05% Rs. 20
(which is lower) (which is lower)
DP Charges Rs. 13.5 + GST Rs. 18.5 + GST Rs. 20 + GST
Call & Trade Rs. 50 + GST Rs. 20 + GST Rs. 20 + GST
Charges