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HMT Watches Limited

Nov 29, 2014




Fallen Of HMT Watches, including SWOT Analysis and 4ps to see what are the reason behind fallen of HMT watch.

Presented By
Rajesh Kumar Sao
Sagar Pati
School Of Management
NIT Rourkela

  • 1. Presented By Sagar Pati Rajesh Kumar Sao School Of Management NIT Rourkela 1
  • 2. Incorporated in 1953 by the Government of India as a Machine Tool manufacturing company. 2
  • 3. The manufacture of wristwatches started as part of diversification strategy of HMT in the year 1961, under Technical collaboration with CITIZEN Watch Company of Japan. HMT Limited, the first company to start watch manufacturing in India; has incorporated "HMT WATCHES LIMITED" as its fully owned subsidiary on 9th August 1999. The first batch of Hand Wound Wrist Watches manufactured at this factory was released by the then Prime Minister of India, Jawaharlal Nehru. It manufactures Mechanical and Quartz Analog watches. HMT WATCHES LIMITED comprises of three manufacturing units at Bangalore, Tumkur and Ranibagh All its manufacturing units have obtained the ISO 9001 certification 3
  • 4. 1978 - Expand the capacity of Watch Factory to 4 lakh watches in 1979 and 5 lakh watches in 1980. 1980 -Adding new models to the existing range of Horizontal boring machines with Pegard S.A. of Belgium . 1981 - Manufactured silver oxide miniature batteries in collaboration with Hitachi-Moxcell Ltd., Japan. 1993 Launced two model Ramani and Utsav to capture urban market. 1997 - Production also suffered due to slowdown in the economy coupled with stiff competition from imported machines. 1998- Introduced 350 range of Citizen watches in Mumbai. 1999-Share capital increased from 135 carore to 200 carore. 2001- Mr Manohar Joshi, Union Minister for Heavy Industries and Public Enterprises, has unveiled the HMT 4922 tractor at a launch ceremony. 2003-Agri Farm Scheme to promote Agriculture mechanisation in south India. 2004-Signs MoU with State Bank of India (SBI) for tractor finance. 2011-Shri S.G. Sridhar has been appointment as Chairman & Managing Director of the Company. 2012-Dr. Vijay Shankar Madan has been appointed as Part-time Official Director on the Board of the Company. 4
  • 5. STRENGTH Strong government support. Good brand image and market leadership due to high quality, low price and reliability. Adequate availability of tangible assets such as land and buildings. Record of good industrial relations. 5
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  • 7. Weakness Its prime product category (mechanical watches) was in the decline stage of PLC. Insufficient emphasis on R&D and design. HMT didnt embrace new quartz technology to a great extent & suffered because of their adherence to mechanical watches. Aesthetics and packaging of watches have not been duly attended too. 7
  • 8. Worldwide decline in the production and demand of mechanical watches due to growing acceptance of Quartz watches. Significant competition from Allwyn and Titan. Competitors successfully exploited the lifestyle segmentation which HMT failed too. Titan had started marketing its watches in unconventional outlets like boutiques and jewellery shops. 8
  • 9. The demand for Watches is growing rapidly both in domestic and international market. Spin off a subsidiary for Quartz segment. In coming years Fashion brands, luxury watches and watches with multiple functions are considered as the product segment with the biggest growth. Leveraging brand equity of HMT to products such as sports gear, personal accessories. 9
  • 10. Product Few Designs as compared to competitors. There is less emphasis on product research and development. HMT has not been able to be a leader in Quartz watches segment & underestimation of this segment. Another flaw in its product strategy was scant attention to aesthetics and packaging of its watches. 10
  • 11. Price HMT positioned the quartz watches as the space age generation watches & charged high prices for this category which means that only the affluent middle aged consumer could afford it. 11
  • 12. Place Didnt strategize its established marketing network according to growing competition. In mid 80s HMTs selective retailer policy began going against it. Since retailers have enough foreign brands they were simply not interested in HMTs home grown products as a result it had to sell through its 13 branch offices for Machine tool equipment. The retailer margins provided by HMT were 2% less than what its most prominent competitor, Titan 12
  • 13. Promotion Though HMTs advertising was distinctive and did cater to the lifestyle segment, it failed to communicate the uniqueness of HMTs quartz design vis--vis other HMT watches. 13
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  • 15. No time for new custom -It is a widely known fact that HMT lost out to quartz watches. But few know that its failure was its own doing. Not cosmetic enough - Till 1991, HMT ruled the Indian watch market with almost 90 per cent market share for three decades, with the tagline of 'Desh ki Dhadkan'. - Bhaskar Bhatt says HMT failed to understand that "a watch was no longer a time-keeping machine. It was becoming a fashion accessory for both men and women. Consumers wanted a well-designed product to match their style. ". 15
  • 16. Pavan Padaki, director (insights & strategy), Brand-Comm, a brand consultancy, says, "HMT got associated as a reputed but chunky mechanical watch manufacturer. Titan, on the other hand, got recognised as 'Today's watch manufacturer', with sleek watch models. Production out of time - Even when HMT attempted to prop up its image with campaigns for brand new watch models, there were reports that the models advertised would be in short supply at stores. - It was manufacturing, again, which tripped it up financially. Former CMD N Ramanujan says, "Everything was going smoothly for HMT, which was a public-sector jewel, till 1989-90. It went into losses when production at its Srinagar factory stopped. - The net losses for 2013-14 stood at Rs 233.08 crore, compared to Rs 242.47 crore in the previous year. 16
  • 17. HMT watch had a complete monopoly during 1960s to 1990s till the new competitor enters. The main reason behind the fall of HMT watch was the entrance of TATA with the brand of TITAN which ruled over watch market after 90s. Innovation was the most important missing factor from HMTs culture and strategy all through years. To regain the market its better for them to come with new name and new innovation. HMT badly needs marketing efforts to make its sales revenue go up and to get its old brand image back. 17
  • 18. THANK YOU 18
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