Seiko Go Upmarket

Executive Summary Seiko Watch Corporation and its predecessor had of all time been innovative in chequer technology development and brought many fabrication maidens to the envision grocery, and Seiko was very(prenominal) achieverful before the 1990s. With hawkish surround re die hard started in the 1990s, Seiko found it was not in the right discussion section of the commercialise for growth, this segment is advanced closure enamor market. Seiko tried to break into the game end squargon up segment, solely the attempts havent been proved successful.Based on detailed analysis of Seikos fabrication milieu, competitive subject area, and internal issues, demonstration was drawn that Seikos past visual sense, strategy and structure didnt indorse its ambition to be an important player in the utmost end regulate market. Countermeasures were consequently proposed 1) have a clear and executable vision for future 2) install a solid strategy of bulls eyes diametricia tion and 3) chink the strategy with organisational structure and resources. * IntroductionThis case, SEIKO WATCH CORPORATION MOVING upscale, examined Nipponese watch maker Seikos history, major technology developments, competitive environment, business expansion, and efforts and challenges to uplift brand image to compete in high end market segment. Seikos predecessor K. Hattori was established by 22-year-old break come on Kintaro Hattori in 1881. The business was started with second-hand clocks sell and repair, and recentlyr on retail and wholesaling of imported clocks.Hattori then established Seikosha (Seiko means exquisite and sha means kinsperson in Japanese) in 1892 to begin to produce wall clocks, launched the first wrist watch in Japan in 1913, and started to use Seiko brand on watches in 1923. Since then, Seiko had been enjoyed rapid growth in national market until 1950s when it accounted for 50% of total crosswayion in Japan, while Citizen and Orient shared the re main 50%. Facing pressure from Swiss watch makers, Seiko started to bring up its technology to improve accuracy and add features, and managed to be comparable with Swiss products in terms of accuracy in the early 1960s.Around the same timeframe, later despotic the domestic controversy in the late 1950s, Seiko started to go abroad. Through publicize initiatives such as being official time keeper of the 1964 capital of Japan Olympic Games and continued technology centering such as being the worlds first company to introduce quartz wrist watch in 1969, Seiko earned its place in transnational market it had grow the leading watch brand in most Asian countries and successfully built sales channels in US and European countries by 1970s.Though Seiko was historicly accepted by domestic customers as luxury watches maker at give-up the ghost-end of the market in addition to mid(prenominal)(prenominal)(prenominal)-range watches, its sev sequencel attempts to reposition itself to high -end segment in international watch market didnt enjoy more success in the late 1970s, Seiko bought Jean Lassale, a S bequeath watch brand, to form a sub-brand Seiko Lassale to sell luxury quartz dress watches at higher price files in international markets, but this brand was not successful in the US and Europe markets and eventually discontinued some separate sub-brand Grand Seiko, once alive in 1960s aiming at the high end of the domestic watch market, was re-launched in the late 1980s to outflow with Swiss watch makers in the high end segment, this attempt didnt meet its desired effect otherwise Seiko would have not interpreted the third try in 2000s to move upward of the market by dint of the spring drive technology. In 2007, doubt about brand upgrade was casted on Seiko again. * Analysis of the issues The myriad of problems facing Seiko can be traced to on a lower floor three causes. Industry environment Strategic context change of the horological industryThe first phas e before the late 1950s / early 1960s, everybody in the watch industry had competed in a pretty straight forward environment watches were generally used for chronometric purpose, watchs core technology was unvarying (everybody in the horological industry used machinelike exertions system), and main objectives for watch makers were to galvanic pile produce precise timepieces at competitive cost and sell to everybody require a watch. Seiko did a victorian job in this era. It occupied legal age of Japanese domestic market share and caught Swiss rivals up in terms of end product facility and product accuracy. The second phase from the late 1950s / early 1960s through the 1970s and 1980s, technological revolution, mainly application of electronics and quartz technologies, reshaped the horological industry. Every watch shared certain parking lot elements a effect to measure the passage of time, any vigour source, a display, a case, and a bracelet or strap.Electronics altered the stereotype of energy source and display, while more significantly, quartz timekeeping technology broke the usance of mechanical movement to bring much more accuracy to watch benefiting from its properties of a quartz crystal oscillating at precise frequencies. examine to mechanical components, electronics and quartz components could be produced and assembled at more stable, economic, and fashionable way, Watches then could be offered to customers with unprecedented accuracy, lower cost, and fashion statement. To embrace the change or be changed, all players of the industry went through an era of uncertainty and innovation. Seiko was very creative in the time and pioneered many watch technologies to the market. Seiko started dramatiseing overseas and its international brand image was formed during the period. In the meanwhile, Seiko began efforts to setup sub-brand to move up in market.People would not have known ramifications of what they were doing when in process of histor ical events, but looking back into history, we know today the seed of Seiko dilemma was planted in the 1970s and 1980s under the soil of its success. The third phase the 1990s was a no name decade for Japanese watch makers including Seiko. Domestic economy was staggering. Watch technology was still in evolution, but there was no break-through invention like quartz could hassle up the arena. Low cost economies such as China and Hongkong were arising to have over in mid-priced and low-end watch market. Swiss watch makers firmly seized celebrate of high-end watch market while fighting back in mid to low end market.Watch Competitors came out from outside of the chronological industry small digital device made watch no considerableer a helpal necessity for timekeeping purpose. Seiko sales declined in the decade. The fourth phase after the millennium, prevalence of cell phones further deteriorated watches position as personal first-string timekeeping accessory. People bought wat ches not for time telling but for social spatial relation and prestige distinguishing. Global demand for luxury grievouss grew, and high-end segment of the watch market was emerging as the most net incomeable and the fastest growing sector. Seiko was adjusting itself to the clean era, but its brand image had never been perceived as luxury.Competitive arena Strong Swiss competitors in high end segment, fierce competition in mid and low end segments from LCE (low cost economy) watch makers, domestic rivals, and Swatch group In the high end segment, Swiss watch makers were muddled in the 1970s when quartz technology was changing the game. Though painful, a number of Swiss watch companies such as Patek Philippe, Rolex, and Omega chose to foil to mechanical watch devising, and they laughed at last. Below quotation could best list the situation We worked really hard in the 1980s where everybody was dead. The quartz movement came in the 1970s, so all the other watchmakers threw aw ay everything, both their equipment and their movements. In the 1980s is when we started to redevelop all our complications.At the time, my father Philippe Stern had a vision that completely one type of watch should remain the one with a mechanical complication. He believed there would eer be people who appreciate attractive mechanisms, whether its manual winding or automatic. And he was right. Its like a nice painting. Its something unique, rare and made with passion. * Thierry Stern, Patek Philippe President, interviewed by Timezone. com in Sep 2012 In the mid and low end segments, Seikos attacks were from all around as technologies were light to duplicate and consumers really cared about money they were spent, thus if you could provide sane woodland watches with lower cost, e. g.LCE watch manufacturers, you could win some share of the market segment if you could provide good quality watches with comparable cost but more features and fashion styles, e. g. Japanese domestic competitors Citizen and Casio as well as Swatch group from Swiss, you could gain some other share of the segment of this market. familiarity vision, strategy and structure Seiko had no clear vision and strategy for the era of watches as prestige symbol, its structure was prohibitive from effective decision making and resources utilization Vision we know in the 1970s and 1980s, Seiko enjoyed much success and went world(prenominal) as an icon of precise and inexpensive quartz technology.Seiko didnt foresee that the greater success it appreciated the stronger consumer would tie it to the quartz brand, and handsome craftiness of mechanical watch making would override in the future. Seiko has always been innovative in technology development, but failed to grasp a watchs implication to todays consumer time is unaltered and priceless consumers would eventually wish their watches as seen carrier of time are timeless and invaluable as well. Quartz or electronics is perceived by consum ers as ephemeral and cheap consumable stuff. Strategy Seiko made mistakes in brand portfolio strategy. It launched two sub-brands to go up of the market segment in the years.The Seiko Lassale outfit with quartz movement was launched in the late 1970s and discontinued when it turns out not welcomed in US and European markets. The Grand Seiko featuring mechanical movement was alive from 1960-1975 within Japan domestic market only, and had been stopped for more than a decade in the quartz era until re-launch in 1988 for global market featuring quartz movement, after another(prenominal) decade, the Grand Seiko sluggishly began to shift to high grade mechanical movement. Both the Seiko Lassale and the Grand Seiko were too destination to Seiko name and technology of quartz to reverse the quartz image of normally non-luxury items. In addition, it seemed Seiko didnt have a carefully planned long range brand strategy.High end sub-brands were created and abandoned. The recent example was that Spring Drive, Seikos latest breakthrough mechanical movement technology bared centering hope to upgrade brand image, first debuted in lower Seiko product line rather than high end Grand Seiko line. Seikos another high end brand Credor, though had long history and good acceptance at home, had never been marketed in international markets. Structure Seiko historically had too complicated structure arrangements a sales company purchased Seiko watches from its conjure company owned manufacturing arms, and the arms were competing with each other and developed into firms with watch as minor business.The good thing was Seiko management realized this point and reorganized the company in 2001 to streamline decision making and focus on branding. * Conclusion and Recommendation Seikos vision, strategy, and structure didnt attention the company to gain advantage over its rivals in the competitive environment in recent two decades. Recommendation for Seiko is to build prudent and viable company vision amp strategy, link the vision and strategy unitedly with organization structure and resources, and get the vision and strategy realized. Details are following Seiko needs to re-think that who are Seikos intended, actual, potential, and future customers, and what do these customers pass judgment in a watch.Watch collectors and enthusiasts, successful executives, and younger generation of rich families should be target clients for top end watches. These people care about watches craftsmanship and uniqueness, aesthetic and intricate style, status and symbol indication, as well as investment and heritage value, much more than superior accuracy and function for daily use. Seiko should take care of the demands of these people. However, Seiko shouldnt give up the mid to low end market. Consumers of this market segment need a quality watch for money, fashion, function features, and some kind of status symbol will be plus. Seiko needs to have a solid strategy of distinct bra nds to server dissimilar segment demands.Seiko can get best perpetrate idea and lessons learned from companies in the watch industry, such as Swatch group, and in other industries, such as VW group in automotive industry and LOreal group in cosmetic industry. Though the basic sexual technology and formula could be shared across different brands and models, the outside(prenominal) and style must be different. Different brands should convey clear different messages to customers. It would take too many resources and too long time to move the current Seiko brand up. The Grand Seiko name is no significant different from Seiko name thus is not appropriate to be a top end brand, but could cover the segment in between.The brand Credor is suggested to hold back over the high end segment responsibility and needs to expand globally under intensive and well-designed promotional campaign. Seiko made a ordained move to centralize and streamline watch company organization the bordering step would be to match brand differentiation needs with organizational structure and resources. The Credor, Grand Seiko, Seiko, and other brands could share RampD, production facility, IT, finance, HR and administration. But segmental marketing and sales, brand management, and some other specialized tasks cant be shared. Each brand should be led by experienced and proved executives and take its own profit and loss responsibility.