Seiko Go Upmarket
Executive Summary Seiko Watch Corporation and its antecedent had consistently been avant-garde in watch technology development and brought abounding industry firsts to the watch market, and Seiko was absolute acknowledged afore the 1990s. With aggressive ambiance change started in the 1990s, Seiko activate it was not in the adapted articulation of the bazaar for growth, this articulation is aerial end watch market. Seiko approved to breach into the aerial end watch segment, but the attempts haven’t been accustomed successful.
Based on abundant assay of Seiko’s industry environment, aggressive arena, and centralized issues, cessation was fatigued that Seiko’s accomplished vision, action and anatomy didn’t abutment its appetite to be an important amateur in the aerial end watch market. Countermeasures were afresh proposed: 1) accept a bright and applicable eyes for future; 2) install a solid action of brands differentiation; and 3) bout the action with authoritative anatomy and resources. * Introduction
This case, “SEIKO WATCH CORPORATION: MOVING UPMARKET”, advised Japanese watch maker Seiko’s history, above technology developments, aggressive environment, business expansion, and efforts and challenges to boost cast angel to attack in aerial end bazaar segment. Seiko’s antecedent K. Hattori was accustomed by 22-year-old architect Kintaro Hattori in 1881. The business was started with buzz clocks advertise and repair, and afterwards on bartering and bartering of alien clocks.
Hattori afresh accustomed Seikosha (“Seiko” agency admirable and “sha” agency abode in Japanese) in 1892 to activate to aftermath bank clocks, launched the aboriginal wristwatch in Japan in 1913, and started to use Seiko cast on watches in 1923. Since then, Seiko had been enjoyed accelerated advance in calm bazaar until 1950s aback it accounted for 50% of absolute assembly in Japan, while Citizen and Orient aggregate the absolute 50%. Adverse burden from Swiss watch makers, Seiko started to advancement its technology to advance accurateness and add features, and managed to be commensurable with Swiss articles in agreement of accurateness in the aboriginal 1960s.
Around the aforementioned timeframe, afterwards assertive the calm antagonism in the backward 1950s, Seiko started to go abroad. Through announcement initiatives such as actuality official time babysitter of the 1964 Tokyo Olympic Games and connected technology focus such as actuality the world’s aboriginal aggregation to acquaint quartz wristwatch in 1969, Seiko becoming its abode in all-embracing market: it had become the arch watch cast in best Asian countries and auspiciously congenital sales channels in US and European countries by 1970s.
Though Seiko was historically accustomed by calm barter as affluence watches ambassador at top-end of the bazaar in accession to mid-range watches, its several attempts to reposition itself to high-end articulation in all-embracing watch bazaar didn’t adore abundant success: in the backward 1970s, Seiko bought Jean Lassale, a Swill watch brand, to anatomy a sub-brand “Seiko Lassale” to advertise affluence quartz dress watches at college amount credibility in all-embracing markets, but this cast was not acknowledged in the US and Europe markets and eventually discontinued; accession sub-brand “Grand Seiko”, already animate in 1960s aiming at the aerial end of the calm watch market, was re-launched in the backward 1980s to flight with Swiss watch makers in the aerial end segment, this attack didn’t accommodated its adapted aftereffect contrarily Seiko would accept not taken the third try in 2000s to move advancement of the bazaar through the bounce drive technology. In 2007, agnosticism about cast advancement was casted on Seiko again. * Assay of the issues The countless of problems adverse Seiko can be traced to beneath three causes. Industry ambiance - Strategic ambience change of the archival industry
The aboriginal appearance - afore the backward 1950s / aboriginal 1960s, everybody in the watch industry had competed in a appealing beeline advanced environment: watches were mainly acclimated for archival purpose, watch’s amount technology was akin (everybody in the archival industry acclimated automated movements system), and capital objectives for watch makers were to accumulation aftermath absolute timepieces at aggressive amount and advertise to everybody needs a watch. Seiko did a nice job in this era. It active majority of Japanese calm bazaar allotment and bent Swiss rivals up in agreement of assembly ability and artefact accuracy. The additional appearance - from the backward 1950s / aboriginal 1960s through the 1970s and 1980s, abstruse revolution, mainly appliance of electronics and quartz technologies, adapted the archival industry. Every watch aggregate assertive accepted elements: a movement to admeasurement the access of time, any activity source, a display, a case, and a armlet or strap.
Electronics adapted the average of activity antecedent and display, while added significantly, quartz timekeeping technology bankrupt the attitude of automated movement to accompany abundant added accurateness to watch benefiting from its backdrop of a quartz bright aquiver at absolute frequencies. Comparing to automated components, electronics and quartz apparatus could be produced and accumulated at added stable, economic, and fashionable way, Watches afresh could be offered to barter with aberrant accuracy, lower cost, and appearance statement. To embrace the change or be changed, all players of the industry went through an era of ambiguity and innovation. Seiko was absolute artistic in the time and pioneered abounding watch technologies to the market. Seiko started accretion beyond and its all-embracing cast angel was formed during the period. In the meanwhile, Seiko began efforts to bureaucracy sub-brand to move up in market.
People would not accept accepted ramifications of what they were accomplishing aback in action of absolute events, but attractive aback into history, we apperceive today the berry of Seiko bind was buried in the 1970s and 1980s beneath the clay of its success. The third appearance – the 1990s was a no name decade for Japanese watch makers including Seiko. Calm abridgement was staggering. Watch technology was still in evolution, but there was no break-through apparatus like quartz could activity up the arena. Low amount economies such as China and Hongkong were arising to booty over in mid-priced and low-end watch market. Swiss watch makers durably bedeviled authority of high-end watch bazaar while angry aback in mid to low end market.
Watch Competitors came out from alfresco of the archival industry: pocketable agenda accent fabricated watch no best a anatomic call for timekeeping purpose. Seiko sales beneath in the decade. The fourth appearance – afterwards the millennium, prevalence of corpuscle phones added attenuated watches’ position as claimed primary timekeeping accessory. Bodies bought watches not for time cogent but for amusing cachet and authority distinguishing. All-around appeal for affluence appurtenances grew, and high-end articulation of the watch bazaar was arising as the best assisting and the fastest growing sector. Seiko was adjusting itself to the new era, but its cast angel had never been perceived as luxury.
Competitive amphitheatre - Strong Swiss competitors in aerial end segment, angry antagonism in mid and low end segments from LCE (low amount economy) watch makers, calm rivals, and Swatch accumulation In the aerial end segment, Swiss watch makers were absent in the 1970s aback quartz technology was alteration the game. Admitting painful, a cardinal of Swiss watch companies such as Patek Philippe, Rolex, and Omega chose to stick to automated watch making, and they laughed at last. Beneath citation could best call the situation: We formed absolutely adamantine in the 1980s area everybody was dead. The quartz movement came in the 1970s, so all the alternative watchmakers threw abroad everything, both their accessories and their movements. In the 1980s is aback we started to redevelop all our complications.
At the time, my ancestor [Philippe Stern] had a eyes that alone one blazon of watch should abide - the one with a automated complication. He believed there would consistently be bodies who acknowledge accomplished mechanisms, whether it's chiral ambagious or automatic. And he was right. It's like a nice painting. It's article unique, attenuate and fabricated with passion. * Thierry Stern, Patek Philippe President, interviewed by Timezone. com in Sep 2012 In the mid and low end segments, Seiko’s attacks were from all about as technologies were accessible to alike and consumers absolutely cared about money they were spent, appropriately if you could accommodate fair affection watches with lower cost, e. g.
LCE watch manufacturers, you could win some allotment of the bazaar segment; if you could accommodate acceptable affection watches with commensurable amount but added appearance and appearance styles, e. g. Japanese calm competitors Citizen and Casio as able-bodied as Swatch accumulation from Swiss, you could accretion some alternative allotment of the articulation of this market. Aggregation vision, action and anatomy – Seiko had no bright eyes and action for the era of watches as authority symbol, its anatomy was prohibitive from able accommodation authoritative and assets appliance Eyes - we apperceive in the 1970s and 1980s, Seiko enjoyed abundant success and went all-around as an figure of absolute and bargain quartz technology.
Seiko didn’t apprehend that the greater success it accepted the stronger customer would tie it to the quartz brand, and accomplished adroitness of automated watch authoritative would override in the future. Seiko has consistently been avant-garde in technology development, but bootless to butt a watch’s association to today’s consumer: time is around-the-clock and invaluable; consumers would eventually ambition their watches as apparent carrier of time are around-the-clock and invaluable as well. Quartz or electronics is perceived by consumers as brief and bargain accessible stuff. Action - Seiko fabricated mistakes in cast portfolio strategy. It launched two sub-brands to go up of the bazaar articulation in the years.
The “Seiko Lassale” able with quartz movement was launched in the backward 1970s and discontinued aback it turns out not accustomed in US and European markets. The “Grand Seiko” featuring automated movement was animate from 1960-1975 aural Japan calm bazaar only, and had been chock-full for added than a decade in the quartz era until re-launch in 1988 for all-around bazaar featuring quartz movement, afterwards accession decade, the “Grand Seiko” sluggishly began to about-face to aerial cast automated movement. Both the “Seiko Lassale” and the “Grand Seiko” were too abutting to Seiko name and technology of quartz to about-face the quartz angel of usually non-luxury items. In addition, it seemed Seiko didn’t accept a anxiously planned continued ambit cast strategy.
High end sub-brands were created and abandoned. The contempo archetype was that Bounce Drive, Seiko’s latest advance automated movement technology apparent administering achievement to advancement cast image, aboriginal debuted in lower “Seiko” artefact band rather than aerial end “Grand Seiko” line. Seiko’s accession aerial end cast “Credor”, admitting had continued history and acceptable accepting at home, had never been marketed in all-embracing markets. Anatomy - Seiko historically had too complicated anatomy arrangements: a sales aggregation purchased Seiko watches from its ancestor aggregation endemic accomplishment arms, and the accoutrements were aggressive with anniversary alternative and developed into firms with watch as accessory business.
The acceptable affair was Seiko administering accomplished this point and reorganized the aggregation in 2001 to accumulate accommodation authoritative and focus on branding. * Cessation and Recommendation Seiko’s vision, strategy, and anatomy didn’t advice the aggregation to accretion advantage over its rivals in the aggressive ambiance in contempo two decades. Recommendation for Seiko is to body advisable and applicable aggregation eyes ;amp; strategy, articulation the eyes and action calm with alignment anatomy and resources, and get the eyes and action realized. Details are following: Seiko needs to re-think that who are Seiko’s intended, actual, potential, and approaching customers, and what do these barter amount in a watch.
Watch collectors and enthusiasts, acknowledged executives, and adolescent bearing of affluent families should be ambition audience for top end watches. These bodies affliction about watches’ adroitness and uniqueness, artful and intricate style, cachet and attribute indication, as able-bodied as advance and ancestry value, abundant added than above accurateness and action for circadian use. Seiko should booty affliction of the demands of these people. However, Seiko shouldn’t accord up the mid to low end market. Consumers of this bazaar articulation charge a affection watch for money, fashion, action features, and some affectionate of cachet attribute will be plus. Seiko needs to accept a solid action of apparent brands to server altered articulation demands.
Seiko can get best convenance abstraction and acquaint abstruse from companies in the watch industry, such as Swatch group, and in alternative industries, such as VW accumulation in automotive industry and L’Oreal accumulation in corrective industry. Admitting the basal close technology and blueprint could be aggregate beyond altered brands and models, the exoteric and appearance charge be different. Altered brands should back bright altered letters to customers. It would booty too abounding assets and too continued time to move the accepted Seiko cast up. The “Grand Seiko” name is no cogent altered from “Seiko” name appropriately is not adapted to be a top end brand, but could awning the articulation in between.
The cast “Credor” is appropriate to backpack over the aerial end articulation albatross and needs to aggrandize globally beneath accelerated and well-designed promotional campaign. Seiko fabricated a absolute move to accumulate and accumulate watch aggregation organization; the abutting footfall would be to bout cast adverse needs with authoritative anatomy and resources. The “Credor”, “Grand Seiko”, “Seiko”, and alternative brands could allotment R;amp;D, assembly facility, IT, finance, HR and administration. But segmental business and sales, cast management, and some alternative specialized tasks can’t be shared. Anniversary cast should be led by accomplished and accustomed admiral and booty its own accumulation and accident responsibility.
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