Case Study Description of Seiko Watch Corporation: Moving Upmarket
Founded in 1881, Seiko gained prominence for introducing the world's first quartz watch in 1969 and is often associated with the "quartz revolution" of the 1970s that threatened to destroy the Swiss watchmaking industry. Competition from inexpensive Chinese watch producers, a resurgent Swiss watch industry, domestic rivals, and a profusion of new fashion brands have led the company to reconsider its sales-oriented strategy of offering numerous products at various price points. Having become nearly obsolete in the face of quartz technology, the mechanical watch business was thriving once more, as a number of predominantly Swiss firms attracted luxury watch buyers. Since the 1960s, Seiko has produced luxury and complex mechanical watches for the domestic market under the brands "Grand Seiko" and "Credor." In 2003, Shinji Hattori, a great grandson of Seiko's founder became Seiko Watch Company's president and CEO and felt that Seiko should raise its perceived image outside Japan. In management's view, Seiko could claim distinction as the only "mechatronic manufacturer" in the world--a vertically integrated watchmaker that excelled in both mechanical watchmaking and micro-electronics. The launch of an innovative new watch movement--the Spring Drive--presented an opportunity for Seiko to make a timely foray into high-price segments in the international watch market. Examines the legacy of Seiko's watch business and provides a basic overview of the world watch industry. Considers the manner in which watches have evolved as a product category, and how a company like Seiko has attempted to reconcile its competitive advantage with its brand positioning in a highly crowded market.
Authors :: Amir Hoosain, Mary Ho, Ali Farhoomand, Thomas M. Hout
Swot Analysis of "Seiko Watch Corporation: Moving Upmarket" written by Amir Hoosain, Mary Ho, Ali Farhoomand, Thomas M. Hout includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Seiko Watch facing as an external strategic factors. Some of the topics covered in Seiko Watch Corporation: Moving Upmarket case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Seiko Watch Corporation: Moving Upmarket casestudy better are - – there is increasing trade war between United States & China, increasing energy prices, increasing transportation and logistics costs, increasing commodity prices, wage bills are increasing, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
there is backlash against globalization, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Seiko Watch Corporation: Moving Upmarket
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Seiko Watch Corporation: Moving Upmarket case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Seiko Watch, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Seiko Watch operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Seiko Watch Corporation: Moving Upmarket can be done for the following purposes –
1. Strategic planning using facts provided in Seiko Watch Corporation: Moving Upmarket case study
2. Improving business portfolio management of Seiko Watch
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Seiko Watch
Strengths Seiko Watch Corporation: Moving Upmarket | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Seiko Watch in Seiko Watch Corporation: Moving Upmarket Harvard Business Review case study are -
Ability to recruit top talent
– Seiko Watch is one of the leading recruiters in the industry. Managers in the Seiko Watch Corporation: Moving Upmarket are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Seiko Watch has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Seiko Watch digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Seiko Watch has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Seiko Watch is present in almost all the verticals within the industry. This has provided firm in Seiko Watch Corporation: Moving Upmarket case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Sustainable margins compare to other players in Sales & Marketing industry
– Seiko Watch Corporation: Moving Upmarket firm has clearly differentiated products in the market place. This has enabled Seiko Watch to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Seiko Watch to invest into research and development (R&D) and innovation.
Organizational Resilience of Seiko Watch
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Seiko Watch does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Seiko Watch has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Seiko Watch to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Seiko Watch is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Seiko Watch is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Seiko Watch Corporation: Moving Upmarket Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Seiko Watch has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Seiko Watch Corporation: Moving Upmarket Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Seiko Watch in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Seiko Watch Corporation: Moving Upmarket Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Sales & Marketing field
– Seiko Watch is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Seiko Watch in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Seiko Watch Corporation: Moving Upmarket | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Seiko Watch Corporation: Moving Upmarket are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Seiko Watch Corporation: Moving Upmarket, in the dynamic environment Seiko Watch has struggled to respond to the nimble upstart competition. Seiko Watch has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Seiko Watch needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Amir Hoosain, Mary Ho, Ali Farhoomand, Thomas M. Hout suggests that, Seiko Watch is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Seiko Watch Corporation: Moving Upmarket, it seems that the employees of Seiko Watch don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Seiko Watch has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High operating costs
– Compare to the competitors, firm in the HBR case study Seiko Watch Corporation: Moving Upmarket has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Seiko Watch 's lucrative customers.
Slow to strategic competitive environment developments
– As Seiko Watch Corporation: Moving Upmarket HBR case study mentions - Seiko Watch takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Seiko Watch Corporation: Moving Upmarket, is just above the industry average. Seiko Watch needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Seiko Watch is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Seiko Watch needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Seiko Watch to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Seiko Watch Corporation: Moving Upmarket HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Seiko Watch has relatively successful track record of launching new products.
High cash cycle compare to competitors
Seiko Watch has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Seiko Watch Corporation: Moving Upmarket | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Seiko Watch Corporation: Moving Upmarket are -
Learning at scale
– Online learning technologies has now opened space for Seiko Watch to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Seiko Watch is facing challenges because of the dominance of functional experts in the organization. Seiko Watch Corporation: Moving Upmarket case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Seiko Watch can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Seiko Watch can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Seiko Watch can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Seiko Watch can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Seiko Watch in the consumer business. Now Seiko Watch can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Seiko Watch can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Seiko Watch can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Seiko Watch in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Seiko Watch has opened avenues for new revenue streams for the organization in the industry. This can help Seiko Watch to build a more holistic ecosystem as suggested in the Seiko Watch Corporation: Moving Upmarket case study. Seiko Watch can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Seiko Watch can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Seiko Watch to increase its market reach. Seiko Watch will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Seiko Watch can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Seiko Watch Corporation: Moving Upmarket, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Seiko Watch Corporation: Moving Upmarket External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Seiko Watch Corporation: Moving Upmarket are -
Shortening product life cycle
– it is one of the major threat that Seiko Watch is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Seiko Watch
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Seiko Watch.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Seiko Watch can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Seiko Watch high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Seiko Watch in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Seiko Watch has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Seiko Watch needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Seiko Watch needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Seiko Watch business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Seiko Watch in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Seiko Watch can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Seiko Watch Corporation: Moving Upmarket .
Environmental challenges
– Seiko Watch needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Seiko Watch can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Seiko Watch Corporation: Moving Upmarket Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Seiko Watch Corporation: Moving Upmarket needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Seiko Watch Corporation: Moving Upmarket is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Seiko Watch Corporation: Moving Upmarket is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Seiko Watch Corporation: Moving Upmarket is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Seiko Watch needs to make to build a sustainable competitive advantage.
