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 - – increasing household debt because of falling income levels, increasing commodity prices, increasing transportation and logistics costs, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, geopolitical disruptions, 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 -
Highly skilled collaborators
– Seiko Watch has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Seiko Watch Corporation: Moving Upmarket HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Seiko Watch in the sector have low bargaining power. Seiko Watch Corporation: Moving Upmarket has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Seiko Watch to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Seiko Watch has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Seiko Watch Corporation: Moving Upmarket - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Innovation driven organization
– Seiko Watch is one of the most innovative firm in sector. Manager in Seiko Watch Corporation: Moving Upmarket Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Analytics focus
– Seiko Watch is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Amir Hoosain, Mary Ho, Ali Farhoomand, Thomas M. Hout can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
Cross disciplinary teams
– Horizontal connected teams at the Seiko Watch are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
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.
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 -
No frontier risks strategy
– After analyzing the HBR case study Seiko Watch Corporation: Moving Upmarket, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Seiko Watch is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Seiko Watch Corporation: Moving Upmarket can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Seiko Watch has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Seiko Watch supply chain. Even after few cautionary changes mentioned in the HBR case study - Seiko Watch Corporation: Moving Upmarket, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Seiko Watch vulnerable to further global disruptions in South East Asia.
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.
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.
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.
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.
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.
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 -
Using analytics as competitive advantage
– Seiko Watch has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Seiko Watch Corporation: Moving Upmarket - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Seiko Watch to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
Leveraging digital technologies
– Seiko Watch can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Seiko Watch to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Seiko Watch can use these opportunities to build new business models that can help the communities that Seiko Watch operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Seiko Watch Corporation: Moving Upmarket, Seiko Watch may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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.
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.
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.
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.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Seiko Watch.
Stagnating economy with rate increase
– Seiko Watch can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Seiko Watch will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.