SITUATION ANALYSIS:

“Time and tide wait for none.” The proverb is aptly applicable in the present case.HMT watches
a household name in the yester years have come to a stage where no one is even aware of the
brand name itself barring few of our elders. What actually happened? What made HMT lose its
sheen? HMT is known for high quality and reliability. But somewhere along the line HMT has
forgotten to tighten its bolts. Let us discuss about some of the key issues regarding HMT.
Internal environment: Company has a record of good industrial relations and it has never had
any labor or industrial relations problem. Company’s liquidity position has been quite
comfortable and it has adequate land and buildings available. Apart from all these company has
an established production technology, which is flexible enough to adapt to new technology. But
there are some downsides too. The company seems to suffer from bad work habits. There is a
lack of team spirit and discipline. Its selective retailer policy did not do very well. Some of the
authorized retailers started acting as whole sellers. Because of this HMT completely lost control
over final consumer price and the trade. One major downside of HMT was that its production
was not market driven. They were producing whatever they wanted. They did not take any cue
from the market. Hence they paid very little attention to the design, aesthetics and packaging.
External environment: HMT has very strong competitors. Titan and Timex. Both these
companies are highly market driven and have the greatest market shares, titan being the market
leader. Both these brands have excellent products in their armor which appeals to the people.
They have whole range of watches for different segments of the society. Titan has a
commendable sales and repair service. There are attractive titan showrooms,franchise shops and
titan have distribution stockists for reaching out to retail outlets. The other competitors for HMT
could be:
CITIZEN, CASIO, SEIKO, SWATCH, RADO, MAXIMA QUARTZ
FASHION HOUSES: DKNY, GUCCI, ADIDAS, BVLGARY etc.
Customer environment: HMT has a very strong brand image due to its high quality and
reliability. Loyalty does exist for HMT. But HMT is not using the leverage of its brand equity.
Customers preferences have changed over time, and HMT failed to read the same. While others
made hay while the sun shone, HMT did not. It did conduct market studies but made no use of
that. HMT did have an idea of its customer segmentation but positioned it wrong.There are
customers in the market who associate themselves with the brand(HMT) emotionally. HMT
needs to come up with a strategy to cater the needs of prevailing market and make a niche of its
own. HMT dominates the base with quality and low price as its weapons. But titan has hijacked
the upper end using design as its edge. But the toughest battle which HMT faces is that of titan –
timex and they are ready to swoop the middle and lower segments of the watch market.

SWOT analysis of HMT:

Strengths:
Mechanical watches: HMT is the market leader in mechanical watches which serves to the lower
segment of the society. HMT has a strong hold in this segment but to make sure that players like
titan and timex do not occupy the stance HMT needs to do its homework.
Brand equity: HMT has a very strong brand image. People know HMT because of its quality
and reliability.
Production and training facility: production facility is flexible enough to adapt to new
technologies. Training program is one of the best in the country.
Industrial relations: company has very good industrial relations. Till today company did not
encounter any kind of labor or industrial relations problem which can put company in to
jeopardy.
Adequate assets: company has commensurate amount of land, building and machinery available.

Weaknesses:
No emphasis on R&D and design: HMT did not pay much attention to aesthetics and design.
While its competitor titan kept innovating its products with latest technology, features and
design, HMT was still grappling with its basic design models.
Retailer policy: HMT did not have control measures over its retailers; hence they lost control
over prices and the trade.
Lack of team spirit and awareness: HMT’s motivational strategies-punishment/reward have been
inadequate, resulting in low utilization of human and machine capacities.
Trade audits: No regular trade audit was being carried out by the company to check what was
actually happening in the market.
Management levels:The ground level HMT staff has nearly six rungs of bureaucracy to go
through before a general manager in sales or marketing could take a field decision.
Opportunities:
Diversification of products: there are good diversification possibilities in products. Apart from
mechanical watches HMT can also focus on anadigi, digiana, multifunction, digital, stopwatch,
alarm, thin etc.
Exports: export market can be tapped.
Market segmentation: company can expand the market launching products suitable for different
customer profiles e.g.: youth, gift fashion, sports, novelty etc.
Enlarge network of sale outlets: An effective distribution system is mandatory for company’s
success.
Product improvement: Company can manufacture product based on current customer
preferences, combining technology and aesthetic appeal together to enhance the experience.
Threats:
From competitors: titan, timex, citizen, swatch etc.
Spurious operators: People who indulge in fraudulent activities. Misusing the brand name.
Authorized service agents: For foreign smuggled watches.
Regional players: With their cheap prices and availability.
Unorganized manufacturing.

The above mentioned analysis gives us a fair idea of the industry and the HMT watch company
as such. Situation analysis and swot helps us to understand the pillars on which a company
stands as well as the vulnerabilities. Both these helps in formulating a strategy catering to
company’s needs in the near future.
The possible opportunities for HMT could be (based on swot and sa):
Make its mechanical niche stronger, by improvising designs and smart pricing.
Company has good manufacturing and production units; it is possible to go for a joint venture
with an established partner which is capable of providing good leadership and direction to the
company.
Since titan and other competitors are catering to the upper segment of the market, HMT can
continue to focus on the lower strata with attractive plans and offers.
Company can also go for diversification of products as titan has done but this looks little risky
because titan already has a strong hold there.
My strategy: I would like to capitalize on the brand equity of HMT. It can continue to serve the
lower segments as it is, but to make its presence felt in the market, company has to use a
promotional and advertising strategy zeroing on the emotional attachment and bond with the
customers. It will be a strategy focused on the rejuvenation of the brand but at the same time
making customers realizes the trust and reliability about the brand. And based on this leverage
HMT does have an option to launch a new series of products in to the market.
Company will make handcrafted watches (first to do in India). It will have boutiques at strategic
points. Customers can choose the color and dial shape for the low end watches, but for the high
end ones customers can have choice of choosing functions(alarm, chronometer, cosmographetc.)
at a little extra premium. The elite customer can also choose metal of his strap(gold, silver,
platinum etc.) the delivery time for these watches will be one week. Company can enhance its
image by providing excellent sales, service and reparability centers. This strategy is somewhat
similar to what swatch had used. Apart from all this company can also give watches for a trial
period of two days with a little advance and proof of residency to let customer feel the watch,
whether it suits his/her style or personality and status.
After the first advertising campaign, company can launch a second campaign for its new product
series with a tag line “WATCH YOURSELF”. This campaign would be targeted towards urban
and fashionable youth whose demands keep changing with the latest fashion. Company will
capitalize on the current fashion trend and make watches according to the market demand.
For lower segment attractive pricing and discounts would be helpful. These watches must be
rugged and should work in extreme conditions.
Company can also improvise the website by providing features of online shopping, exhibiting
various designs, new products, store locations etc.
SEGMENTATION:
Generic product class : watch
Generic need : to tell time
Product categories : clock, wrist watch, pocket watches, cell phone, pda’s , laptops, etc.
Variants : analog ,quartz
Customer segmentation : students,farmers,labour, aspirers, fashionable youth, achievers,
affluents.

Based on the response difference,different segments are as follows:

Students
Price range: 600-1500
Product: functional quartz, digital, attractive colors.
Average frequency of purchase &occasion: parents give them gifts may be every two years.
%age of users: 20%
%age of margin: 10%
Promotion: through TV commercials, student products (school bags, health drinks, stationery
etc.)
Demographic: educated
Psychographic: carefree, not money conscious, wants cool looks.
Labors
Price range: 400-1000
Product: rugged, basic time function, can be mechanical or quartz, steel make.
Average frequency of purchase: once in 10 years.
%age of users: 20%
%age of margin: 10%
Promotion: pos, cinemas, radio programs
Demographic: not educated barring few.
Psychographic: religious, money conscious, want value.

Farmers
Price range:1500-2500
Product: steel or gold make, quartz/analog, rich looks
Average frequency of purchase: every five years, big festivals when he has a good harvest.
%age of users: 8%
%age of margin: 10%
Promotion: village fairs, pos, newspapers, radio, TV.
Demographic: educated
Psychographic: traditional, believe in quality and word of mouth of their elders, religious.
Urban youth
Price range: 1000-5000
Product : flankier, trendy, attractive, must go with the style, colorful.
Average frequency of purchase: every year.
%age of users: 22%
%age of margin: 18%
Promotion: internet, magazines, events, sports, TV
Demographic: educated and style savvy.
Psychographic: fun loving, expressive, fad conscious.
Executives/achievers
Price range: 5000-30000
Product: automatic, multifunctional, quartz, digital
Average frequency of purchase: 5-7 years
%age of users: 12%
%age of margin: 25%
Promotion: magazine( fortune,forbes etc.), TV, internet.
Demographic: highly educated
Psychographic: reminder of what he is, has achieved,wants good things always.
Affluent
price range: >50000
product: jeweled, automatic, gold, platinum classy and artistic looks
average frequency of purchase: every two years.
%age of users: 5%
%age of margin: 15
Promotion: jewellary shops, magazines
Demographic: educated, status conscious
Psychographic: hedonistic.
Ladies exclusive
Hmt can open an exclusive outlet only for ladies. This outlet will have watches for the urban
teenage girls, housewives, working women, as well as for affluent ladies. Ladies can come and
choose their colors, style, matching jewelry etc. They will have an option to customize their
needs. Special orders for marriages and engagements will be considered. Promotions can be done
through TV and ladies specific events like teej, raksha bandhan, karva choth, etc.

MARKET:
Indian watch market is very heterogeneous and is estimated at 25 million watches a year, with
50% being sold by the organized sector.
Titan is the runaway market leader, with domestic sales of 6 million watches a year.
There are 190 million watch-owning Indians; between them they own about 210 million watches.

Urban India accounts for 120 million of these watches and 90 millions are on rural wrists.
More men than women own watches in India, and more working women than housewives own
watches.
Hmt should focus first on tier 1 and tier two cities and then gradually penetrate towards tier three
towns and cities. Company has to position itself very carefully because other product variants
like mobi-watch (watch with a cell phone) and handheld devices may try to snatch the market
share. The whole idea of buying and wearing a watch must be an experience. If HMT can deliver
above mentioned offerings with a strong distribution chain, a controlled retailer policy, with a
wide market research, future is no longer beyond their control. HMT will emerge as a winner.