Seiko Watch Corporation: Moving Upmarket Harvard Case Solution & Analysis


The paper attempts to describe the evolution of watches which has been developed as a product category, and focuses on the consumers’ perception and their buying behavioral patterns for watches. The paper also provide detailed internal analysis of Seiko through the application of SWOT analysis and provides a general segmentation of watches along with the positioning strategy of Seiko. Moreover, the paper describes a comprehensive strategy of Seiko’s Spring Drive Technology (SDM).

Lastly, the paper attempts to provide the challenges to be faced by Seiko in the execution of the particular SDM strategy.

Problem Statement

Seiko’s long term competitive advantage has remained upon providing high technological product in its domestic market with its entire focus on reliability. However, the growing buying behavior and perception of consumers for the high-end luxurious watch market, the company is shifting its focus on moving up-market while competing with the Swiss watchmakers which have long deserved expertise in the high-end market. Therefore, the company faces a huge task in meeting its sales target for 2013 and wants to implement the SDM strategy in the international market.

Watches evolved as Product Category

Long before in the 15th century, the concept of watches had evolved as a spring-driven technology. However, it was in the 17th century when people started to wear watches in their pockets. One school of thought widely believes that the concept of watches have evolved from England from where the word has derived. Woecce, an old English word is referred to as a watchman who had a watch in their pockets to track time during shifts of work. However, the other school of thought addresses that the term has evolved from sailors who used to track time during their travel. As the time passed in the same century, a technological shift for watches had taken place converting from the balance spring to balance wheel. This invention increased the accuracy of time in an entire day (Fey & Rivin, 2005).

The concept of wrist watches were entirely worn by woman, whereas, the pocket watches were worn by man. However, military troops started to wear wrist watches in 19th century to synchronize their strategies during war. Since then, the patents for developing wrist watches appeared in the 19th century. The first quartz watch was introduced in the year 1969 which was a revolutionary change brought about by Seiko by introducing its first quartz wristwatch. The particular revolutionary change has introduced an interest of wearing wristwatch as a fashion and more than a time telling machine. Since the introduction of new technologies with respect to the change in time, the companies introduced a concept of mechanical watches and now Seiko has blend the concept of mechanical with electronic watches. As the development of interest for wristwatches, many companies tried to differentiate itself from its competitors by offering different categories of watch at differentiated rates. Some companies targeted the high-end market, and some stuck itself to cater the low-end market with low margins but catering the mass audience (Bhide, 2003).

SWOT Analysis


Seiko has gained a competitive advantage in its business on strong Research and Development (R&D) Centers which has allowed the company to develop state of the art designs. A very strong brand awareness of Seiko as 70% of its customers of Seiko recognizes it as a watchmaker. The company’s business has diversified over the years due to merger and acquisitions with other companies. Seiko is the first company to introduce the concept of mechanical watch making and micro-electronics.


The company’s automated production capabilities are an expensive way of developing watches which created a gap for low cost watches. The particular gap was filled by Chinese watchmakers. Increased spending on R&D also increased the cost of the organization. The company is strong in the domestic market, but the international perception has grown that Seiko’s products are inferior. The company has been too flexible in meeting the demands of all of its customers and they seek the desire of pleasing everyone which makes them more vulnerable to segmentation. The focus on targeting a particular set of customer has been widespread. The company’s positioning had many variations even in different parts of Asia where a majority of people would perceive Seiko brand as cheap, whereas, in other Asian markets the brand would be perceived as high-tech product.......................

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Founded in 1881, Seiko became known for introducing the first quartz watch in the world in 1969, and is often associated with the "quartz revolution" of the 1970s, which threatened to destroy the Swiss watch industry. Competition from low-cost Chinese manufacturers hours, reviving the Swiss watch industry, internal rivals, and the abundance of new fashion brands have led the company to reconsider its sales-oriented strategies offer multiple products in different price points. becoming almost obsolete in the face of quartz technology, the mechanical clock business flourished again, and the number of mainly Swiss company attract customers luxury watches. Since 1960 , Seiko released a luxurious and sophisticated mechanical watches for the domestic market under the brand "Grand Seiko" and "Credor". In 2003, Shinji Hattori, the great-grandson of the founder became president of Seiko Seiko Watch Company and Chief Executive Officer, and felt that Seiko should increase their perceived image outside of Japan. According to the management, Seiko can claim the distinction as the only "mechatronics manufacturer" in the world - a vertically integrated watchmaker that excelled in both the mechanical clock and micro-electronics. launch innovative new movement watch - Spring Drive - provides an opportunity for Seiko, a timely foray into the high price segments in the global watch market. Considers heritage Seiko watch business and provides an overview of the major watchmaking world. Considers how the clock turned into a product category, and how companies like Seiko tried to reconcile their competitive advantage with its positioning of the brand in a very crowded market. "Hide
by Amir Hoosain, Maria Ho, Ali Farhoomand, Thomas M. Hout Source: University of Hong Kong, 31 pages. Publication Date: June 27, 2007. Prod. #: HKU658-PDF- ENG

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