Business Env.30

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INTERNATIONALBUSINESS

ENVIRONMENT

ANALYSIS ON TITAN

WATCH INDUSTRY

Submitted by:

Pragya Dhakar ,

MBA Ist Yr( core b)


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Contents

y Introduction to Business Environment

y About TITAN , company History, corporate information

y Company profile

y Products

y Business divisions

y Strategy

y SWOT analysis

y Analysis ofInternational market

y Strategies to go global

y Business expansion in DUBAI

y PEST analysis of UAE

y Conclusion


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OVERVIEW OF BUSINESS ENVIRONMENT

The term Business Environment refers to all the relevant forces external , to and

beyond the control of , an individual business enterprise and its management .Theseforces exercise a significant and meaningful influence on the life and growth patterns

of individual enterprises.

The environmental factors vary from country to country , even region to region.The

environment of business is , an extremely complex and dynamic phenomenon.

Business Environment may be defined as a set of conditions Social, Legal,

Economical, Political or Institutional that are uncontrollable in nature and affects the

functioning of organization. Business Environment has two components:

1.InternalEnvironment

2. External Environment

Internal Environment: It includes 5 Ms i.e. man, material, money, machinery and

management, usually within the control of business. Business can make changes in

these factors according to the change in the functioning of enterprise.

External Environment: Those factors which are beyond the control of business

enterprise are included in external environment. These factors are: Government and

Legal factors, Geo-Physical Factors, Political Factors, Socio-Cultural Factors, Demo-

Graphical factors etc. It is of two Types:

1.Micro/OperatingEnvironment

2. Macro/General Environment


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Micro/Operating Environment: The environment which is close to business and

affects its capacity to work is known as Micro or Operating Environment. It consists of

Suppliers, Customers, Market Intermediaries, Competitors and Public.

(1)S

uppliers: They are the persons who supply raw material and requiredcomponents to the company. They must be reliable and business must have multiple

suppliers i.e. they should not depend upon only one supplier.

(2) Customers: - Customers are regarded as the king of the market. Success of every

business depends upon the level of their customers satisfaction. Types of Customers:

(i)Wholesalers

(ii)Retailers

(iii)Industries

(iv)Government and OtherInstitutions

(v) Foreigners

(3) Market Intermediaries: - They work as a link between business and final

consumers.

Types:-

(i)Middleman

(ii)MarketingAgencies

(iii)FinancialIntermediaries(iv) Physical Intermediaries

(4) Competitors: - Every move of the competitors affects the business. Business has to

adjust itself according to the strategies of the Competitors.

5) Public: - Any group who has actual interest in business enterprise is termed as

public e.g. media and local public. They may be the users or non-users of the product.

Macro/General Environment: It includes factors that create opportunities and threats

to business units. Following are the elements of Macro Environment:

a) Economic environment

b) Non-economic environment


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Economic environment consists of factors like fiscal policy, the monetary policy,

Industrial policy,physical limits on output, price and income equation , nature of

economic system , pace of economic development etc .

Non- economic environment refers to social ,cultural, political, legal, technological

factors etc. Despite this segregation, the economic environment has non economicimplications , just as the the non economic environment has economic implications.

ELEMENTS OF THE ECONOMIC ENVIRONMENT OF

BUSINESS

The critical elements of economic environment from the stand point of both corporate

business and national economic management in India , are as follows ;

Institutional framework of the environment : The economic system ,

to a large extent , will determine the responsibilities of private, public and joint

sector.

Physical framework of the environment : The level of economic

development and the structure of economy defines the physical framework the

environment. The level and composition of per capita income indicate the level of

growth and development. Available natural resources, human resources, and

material resources of a country set a limit , which determines its production.

Physical anatomy of national income : The national economy

is a combination of household sector, the corporate business sector , the

government administration ,capital markets, and foreign sector.

Functioning of the economy : Money is the most

important factor of business activity and economic system. The flows of

consumption, investment, savings, income, employment and output are all

affected by it.


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Economic planning and programmes : Economic planning

gives a direction to the changes in the economic environment. Most economies

today function through one kind of planning or the other to overcome their

environmental constraints .

Economic policy statements and legislations : Planning must be

followed by proper implementation. This calls for economic policy statements

which affects both industry and agriculture.

Fluctuations and trends in macro-economic variables : The functioning

of an economy is reflected in short term fluctuations, and long term trends ,in

macro economic variables like income, money supply, price, production ,

employment etc.

Economic problems and prospects : Problems likeinflation, unemployment, recession etc. are a big challenge to corporate and

national economic management.

SOCIO-CULTURAL ENVIRONMENT OF BUSINESS

Business is not only an economic activity, but it has also a social purpose.

A number of factors like social values, culture, beliefs, traditions and

conventions, social attitudes, social institutions , class structure, social

group pressure, etc. Business ethics are very much influenced by socialmovements ,social systems and social preferences.

ELEMENTS IN THE SOCIO CULTURAL ENVIRONMENT OF

BUSINESS

Social institutions and systems : Examples include the caste system,

the joint family system, child marriage, the patriarchal family have evolved over

time through history.

Social values and moves : Changing social values and moves

are beginning to question the basics of age old social institutions and systems.

Customs, traditions, and conventions are not rigid anymore.


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Education and culture : Attitudes towards education, need for

business education, role of business schools and their impact on business ethics,

Business morality and organizational culture.

Social groups and social movements: In a society, individuals, form groups on

the basis of caste, creed, religion, language, trade & profession etc.

Socio economic order : In a plularistic society, like ours (with differences in

food,dress, language, religion, and subcultures ); a dual economy i.e.

technological dualism. This order gets disturbed, modified or changed

,hopefully for the better through social movements and social policy formation.

S

ocial prob

lems and prospects: These are often offshoots of a changingsocio- economic order. As society moves from pre industrial to post industrial ,

stage of development, it may experience growing unemployment , poverty and

other problems.

POLITICO- LEGAL ENVIRONMENT OF BUSINESS

The government is a political institution. It has a social purpose ; it

enacts and executes social policies and exists with social consent

,providing means of maximizing social benefits. Quite a few of thegovernment policies are executed through legislations. These legislations

are issued by the government.

ELEMENTSIN THE POLITICO-LEGAL ENVIRONMENT

Form and structure of the Government : The form of the Government can be

democratic, communist, capitalist or a mix.

The strength of the opposition in legislature: A strong , fair , firm andconsistent opposition may ensure constructive criticism of the existing

Govt. policies affecting business.

The role and responsibilities of the bureaucracy: The Governments

administrative machinery must run without a break.


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The direction and speed of Govt. policies and programmes :

Policies may be formulated with tremendous speed .They may

come one after the other but their , though their direction may

not be clear.

Socio economic legislations: Business laws are numerous innumber and diverse in form .They are enacted to protect the

interests of various groups in the society.

Politico legal institutions : The functioning of legislative,

executive and judicial organs of Government affect business

through organizations and institutions.


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ABOUT TITAN

Titan Industries is the world's fifth largest and India's leading manufacturer of watches.The company has manufactured more than a 100 million watches till date; and has acustomer base of over 80 million.

The brand Titan is committed to offering its consumers watches that represent thecompass of their imagination. Titan's customers are therefore consistently introduced toexciting new collections, which connect, with various facets of their deeprootedyearnings for self-expression. The new brand philosophy of Titan, encapsulated in thewords "Be More", touches this as well as all other aspects of the brand.

The Titan brand architecture comprises several collection and subbrands, each of

which is a leader in its segment. Notable among them are: Titan Edge The world'sslimmest watch which stands for the philosophy of "less is more"; Titan Raga thefeminine and sensuous accessory for today's woman, Nebula crafted in solid 18k goldand precious stones. Several other popular collections like Heritage, Aviator, Regalia,Octane & WWF also form a part of the Titan wardrobe.

Today, the Titan portfolio has over 60% of the domestic market share in the organisedwatch market. The company has 247 exclusive showrooms christened World of Titan',making it amongst the largest chains in its category backed by 700 aftersalesservicecenters.

Company History

In 1984 the company was incorporated on 26th july at Chennai.


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In 1992 an MOU was signed with Casio computer company of Japan tomanufacture 2million digital and Ana-digital watches.

In 1987 the company set up a manufacturing facility at Hosur.

In 1989 the case plant at Hosur was commissioned. In 1992 over 150models were introduced.

CORPORATE INFORMATION

In 2003 Mr.Jacob Kurien tenders his resignation to the company.

In 2006 Mr. Harish Bhatt was being appointed as chief operating officer inwatches and accessories division.

In 2007 Mr.Sunil Palliwal was inducted as additional director in the boardof the company.

LA

TES

TN

EWS

Titan Industries has announced the launch of its new retail format, Titan

One, in Chennai. 6 Aug, 2010

Titan Industries Ltd. Income grows by 42% and net profit up by 76.5% in

27 Jul, 2010

Titan Industries ranked among Top 25 in India's Best Companies to Work

for 2010 25 Jun, 2010


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Titan re-inventing watches brand with new tagline

Titan is planning to invest Rs.15 crore in the next two years towards a re-branding exercise for its brand of watches. Currently, the watch maker is

reinventing its brand with anew logo and tagline Be More. Titan is re-inventing thebrand today through new designs, retail strategy andadvertising.

COMPANY PROFILE

Titan Industries is the organization that brought about a paradigm shift in the Indian

watch market when it introduced its futuristic quartz technology, complemented byinternational styling. With India's two most recognized and loved brands Titan and

Tanishq to its credit, Titan Industries is the fifth largest integrated watch manufacturer in

the world.

The success story began in 1984 with a joint venture between the Tata Group and the

Tamil Nadu Industrial Development Corporation. Presenting Titan quartz watches that

sported an international look, Titan Industries transformed the Indian watch market.

After Sonata, a value brand of functionally styled watches at affordable prices, Titan

Industries reached out to the youth segment with Fastrack, its third brand, trendy and

chic. The company has sold 100 million watches world over and manufactures 12million watches every year.

With a license for premium fashion watches of global brands, Titan Industries repeated

its pioneering act and brought international brands into Indian market. Tommy Hilfiger

and Hugo Boss, as well as the Swiss made watch Xylys owe their presence in Indian

market to Titan Industries.

Entering the largely fragmented Indian jewellery market with no known brands in 1995,

Titan Industries launched Tanishq, Indias most trusted and fastest growing jewellery

brand. Gold Plus, the later addition, focuses on the preferences of semi-urban and rural

India. Completing the jewellery portfolio is Zoya, the latest retail chain in the luxury

segment.

Titan Industries has also made its foray into eyewear, launching Fastrack eyewear and

sunglasses, as well as prescription eyewear. The organization has leveraged its

manufacturing competencies and branched into precision engineering products and

machine building.


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With over 560 retail stores across a carpet area of over 7,09,000 sq. ft. Titan Industries

has Indias largest retail network. The company has over 300 exclusive World of Titan'

showrooms and over 740 after-sales-service centers. Titan Industries is also the largest

jewellery retailer in India with over 110 Tanishq boutiques and Zoya stores, over 25

Gold Plus stores and over 85 Titan Eye+ stores. The company has two exclusive designstudios for watches and jewellery.

PRODUCTS

Titan Industries, best known as India's pioneering manufacturer of quartz watches, has

also etched a niche for itself in some of the most competitive spaces in the fashion

industry such as jewellery and eyewear. Precision engineering is another area of

specialization that Titan Industries is proud of.

Watches: Being the world's fifth largest integrated watch manufacturer, Titan

Industries has created and sold more than a 110 million pieces the world over.

With a production rate of over 12 million watches per annum and a customer base of

over 100 million, Titan Industries owns manufacturing and assembly operation centers

in Hosur in Karnataka, Dehradun, Roorkee and Pant Nagar in Uttaranchal, Baddi in

Himachal Pradesh, and an Electronic Circuit Boards (ECB) plant in Goa.

Capturing the important market segments and the changing fashion trends, Titan

Industries has brought forth four core watch brands:

Titan is designed for the mid-premium segment

Fastrack is crafted to fit the trendy fashion space with a focus on the youth

Sonata is created for the mass market and has emerged as Indias largest selling

watch brand

Xylys is fashioned for the premium market, aiming at the high-end connoisseur and

new-age achieverThe Titan brand architecture comprises several sub-brands, each of which is a market

leader in own space. Notable among them are: Titan Edge, Titan Raga, Nebula,

Heritage and several other collections like WWF, Zoop, Orion, Purple, Obaku and the

Automatic series. The Titan portfolio owns over 60% of the domestic market share in

the organized watch market.


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BRAND PROFILE


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Titan Industries pride possession, a world-class design studio for watches and

accessories, is the place where some of the most coveted creations have been

conceptualized.

Exclusive World of Titan and Fastrack showrooms and over 12,000 outlets in more than

2,554 cities in India make these much-sought-after watches available to the buyers. The

watches are also offered internationally in 27 countries, with a special focus on the

Middle East and Asia Pacific regions. The after-sales service, a benchmarked operation

with a large network of exclusive service centers spread across the country, is one of

the operation units with the fastest turnaround time in the world.

Jewellery: Following the suit of time products, Titan Industries Tanishq has been

Indias largest, fastest growing and most popular jewellery brand.

Tanishq offers a premium range of innovatively created gold jewellery with an aesthetic

use of diamonds and precious, semi-precious stones in various hues. Arresting designs

in 22kt pure gold as well as platinum are among the most admired products on the

companys list.. GoldPlus the recent retail plain gold jewellery offering, is specifically

created for semi urban and rural Indian market. The brand offers gold jewellery, as well

as unique designs crafted with diamonds, American diamonds and other precious

stones.

Eye wear: Titan Eye+ of Titan Industries offers sunglasses under its Fastrack brand.Prescription eyewear such as lenses and contact lenses is also part of the range. Titan

Eye+ offers frames, sunglasses, and accessories of Titan Industries in-house brands as

well as other premium brands.

Precision Engineering: The Precision Engineering division of Titan Industries supplies

precision components to the aviation and the automotive industry. As an Original

Equipment Manufacturer (OEM), the company makes dashboard clocks for car

manufacturers in Europe and America.

AWARDS & ACCOLADES

Over the years, Titan Industries has received several prestigious awards and

distinctions. Some of the recent and most noteworthy recognitions are:


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Titan Industries received the Award for the Most Admired Timewear Brand of the Year

in 2009 for the ninth successive year for Titan, and the Most Admired Jewellery Brand

of the Year for the seventh consecutive year for Tanishq.

Goldplus bags 2 dragons and 2 certificate of merits at the Promotion marketing awards

of Asia 2009.

Jewellery Division was declared the winner of the GOLD AWARD" in FMCG sector in

the GreenTech Environment Excellence Award 2009.

Jewellery Division wins first prize in Innovation in Supply Chain Management

organized by Indian Institute of Material Management for the second consecutive year

and ranked amongst the t Titan brand won the Most Valuable Brand in the State award at the IIPM & The

Sunday Times STATE EXCELLENCE AWARD.

BUSINESS DIVISIONS


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TIME PRODUCTS DIVISION

The Time Products division is where the Titan story began. Today, this division has

placed Titan Industries among the worlds largest retail networks and earned the

company the place of fifth largest integrated watch manufacturer in the world. With over

2350 employees spread over 3 business units in Bangalore, India, a manufacturing unit

at Hosur and 3 assembly plants located in the north of India, the division continues to

add world-class brands to the companys portfolio.

JEWELLERY DIVISION

Tanishq Titans flagship line of jewellery is today a resounding success with discerning

customers. Tanishq has performed exceedingly well and has set standards, in whatcould best be described as a largely unorganised and unscrupulous jewellery market.

The growth of the brand has once again been a testament to our customer focus.

Tanishq is today a hallmark of trust, an island of purity. It is a certified division under the

ISO 9001:2000 Quality Management System Standards. Established to addresses the

urban market, its growth has transformed Titan into the largest integrated jewellery

manufacturer and outsourcing company of India.

Tanishq is India's fastest growing jewellery brand with a premium range of jewellery,

studded with diamonds or coloured gems in 18-karat gold, 22-karat pure gold and

platinum jewellery. We are now one of India's largest speciality retailers and are

transforming Indias jewellery market with a Pan-India presence. Titan felt a need and

created a means to offer elegant gold jewellery to smaller towns and rural markets.

The recent launch of a retail initiative - GoldPlus caters to the need.

Both brands contributed to over Rs.450 million USD, and are still flourishing. Truly a

phenomenon in itself, Tanishq is our pioneering Indian brand storming a market of over

300,000 independent jewelers. The brand is evolving faster than the market and is

either leading or closing gaps between competitors in urban markets where we have a

presence.

The trust connotations that the Tata -Titan association evokes, never fails to attract

increasing numbers of jewellery seekers to the fledgling designer brand. Titan ensures

that they are spoilt for choice, transparency and a great shopping experience with

Tanishq, the jewel of its crown.


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Tanishq is a trustworthy, popular jewellery brand from Indias largest integrated

jewellery manufacturer.

Zoya, by Tanishq is a chain of luxury jewellery boutiques which targets elite, discerning

ladies seeking designer wear of international standards. Zoya is a best-in-class

shopping experience. Stores offer exquisite, artistically styled masterpieces, studded indiamonds, apart from traditional, fusion polki and kundan jewelry. There are magnificent

designs to choose from, all in ultra-premium luxury, these outlets showcase luxury

unsurpassed.

Zoya creations are world-class in terms of quality and have been crafted in India and

abroad. It boasts the finest quality in India and is on par with the best in the world.

EYEWEAR DIVISION

Titan Eye+, the third major venture of consumer business by Titan Industries, launched

into the eyewear segment in March 2007.

Titan Eye+ provides an impressive range of stylish and contemporary eyewear, through

exclusive optical outlets. Titan Eye+ heralded standardization by benchmarking with the

worlds best, in sync with the TATA principles of quality and trust. Sales counters now

offer products and services of international quality standards coupled with transparency

in pricing, style, and upbeat designs.

Titan Eye+ stores are now staffed with professional optometrists who deal with every

eye-care requirement be it a need for prescription eyeglasses for distance or

nearsightedness, reading, vision correction, contact lenses or eye protection. Titan

Eye+ stores are equipped to fill prescriptions for single vision lenses, progressive no line

or bifocal lenses.

INTERNATIONAL BRANDS

Titan Eye+ stocks a selection of fashion and prescription frames as well as sunglasses

from internationally renowned apparel brands such as Esprit, Tommy Hilfiger, Hugo

Boss, Versace and Armani


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a)


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The Titan Eye + stores also offer high-end lifestyle brands such as Mont Blanc,

Swarovski and Bulgari all of which cater to the premium segment of Titans clientele .

These international brands enhance every look, be it trendy, sporty, casual or formal.

With prices ranging between Rs.3,000 and Rs.30,000, the brands suit every wallet.

New offerings from the brands mirror the international fashion seasons, with collection

launches coinciding with the Spring-Summer and Autumn-Winter sequences.

PRECISION ENGINEERING DIVISION

Leveraging precision engineering core competencies from watch making, Titan initiated a PRECISION

ENGINEERING DIVISION in 2002, catering to global majors across industry verticals like aerospace, automotive, oil

& gas, engineering, hydraulics, solar and medical instruments.

With an investment of over $10 million, the setup has four main business units

Precision Engineering Components & Sub-Assemblies (PECSA)

Machine Building & Automation Solutions

Tooling Solutions

Electronic sub-assemblies

Precision Engineering Division is ISO 9001:2000 and ISO 14001:2004 certified.

Additionally the unit catering to Aerospace segment is AS 9100B certified and the unit

catering to automotive segment is TS 16949 certified.

The Division has demonstrated consistent quality and delivery performance through

several customer accolades like the ford Q1 award and the Continuous improvement

award received from the CEO of UTC, Louis Chenevert.

Depicting a significant and progressive growth drive, listed below are some of the

Divisions top customers

3M ARVIN MERITOR BEHR BOSCH


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DELPHI DELPHI-TVS ENDURANCE GKN DRIVELINE

HONEYWELL IFB KNORR BREMSE LUCAS-TVS

Titan introduces Titan Exchange offer 2010 (strategy)

Wish to replace your old watch with a stylish one, matching the latest design trend?Heres your opportunity! Titan, Indias most admired watch brand, announces the much-awaited Titan Exchange Offer 2010. The exchange offer allows the customer toavail a flat 20% discount on exchange of any old watch. This annual offer is a greatdelight to all our customers as it offers a chance to choose from wide assortment ofstylish and trendy watches ranging from Rs 995/- to Rs 17000/-.

Speaking about the exchange offer, Mr. Ajoy Chawla, Vice President, Titan Watchessaid, In sync with the changing lifestyle trends, we at Titan continuously strive to offerthe latest and the best. With our innovative designs and warm shopping experience weexpect around 8 lakh consumers to avail this offer during this three week event.

Titan offers a fine blend of traditional and modern watches that bring out different facetsof customers personality. To name a few: TitanPurple infused with style, attitude andcharisma brings international fashion trends to India, Titan Tycoon for the realtycoons,Raga Flora, an exquisite range of feminine and sensuous watches for todays womeninspired by exotic flower and TitanAutomatic is a premium collection that has beenintricately crafted to bring together technology and aesthetics.

Zoop, the kids offering from Titan, offers a pack of goofy bands on purchase ofany Zoop watch. Goofy Bands, worn on the wrist like a bracelet, is the latest crazeamongst kids all round the globe. Titan brings this trend to India giving a chance tofollow this worldwide trend. The 20% exchange offer is not valid on Zoop watches.


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Company`s turnover :

The company currently has its 281 World of Titan stores across 123

cities.35 % of the Group`s turnover of Rs 3500 crore came from its

watches Business. The company was growing at a rate of 17 percent

every year. Titan industries reported a turnover of Rs.3,847.72 crore.


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Competitive factors


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TITAN PRICING STRATEGY:

Pricing Objectives

Survival (i.e. Titan Exacta)

. Market share (i.e. Titan Sonata)

Market skimming (i.e. Titan Nebula

Product quality

Pricing method. Mark-up pricing

Product line pricing,promotional pricing .

Advertising mediaTelevisionPrintInternet

Titan brand ambassador

Titan Brand: Aamir KhanSonata: Mahendra Singh DhoniRaga: Gul Panag, Rani MukherjeeXylys: Rahul Bose Titan tagline: Be more

Fast track tagline: How many you have?

Public relation

Gift conceptPromotion On Occasions


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Sales promotion

Sponsorship

Seasonality

Promotion through Contests

SWOT Analysis of TITAN

Titan has a domestic marketshare in excess of 50 per cent,in the organized watch market.India's leading watchmanufacturer and theworld'sfifth largest . Their globalsourcing and economies ofscale give a significant price advantage and enable to offeran easy entry for consumers to the branded world at this price point. Herewe will focus on the SWOT analysis of Titan.

STRENGTH

The Indian watch market is increasing rapidly & Titan is the leader.

Sonata is currently India's largest-selling watch brand.

Market segments with large potential: women, youth,children, sportsmen,the budget-conscious and, of course, the big spenders.Successful story of Fastrack, Orion, Raga, Octane,Xylys etc. The currentyear has seen the launch of thechildren's range, Dash & Nebula (Premiumclass).

112 'The World of Titan' across 89 Cities and a chain ofto being present in

over 5545 dealer outlets in 1470towns across the country.Customer value and offered after sales service in a showroomenvironment. Proper differentiation from other.


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WEAKNESS

Titan has no suchweakness, but it has lots ofproduct in watch. Whichdontcreate brand equity toa particular brand Main USP is low cost watch.

Cant utilize properly the resources (domestic parts suppliers).

Distribution channel.

OPPURTUNITY

Growth of Indian watch market is very fast & huge opportunity in

organized watch market.

Nearly 34 million watches are sold through grey market

channels.

THREAT

Premium international watch brandssuch as Swatch, Esprit, Tissot,Longines, Citizen, Rado and Omegaentered in India.

Now that the Indian market is widelyopen to importations, it will beextremely difficult for the Indian playersto maintain a sustainable growth.

y Too many players will dilute the market & the profit marginy Mobile phones acting as substitutes of the watches.


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INTERNATIONAL MARKET ANALYSIS

OF TITAN

Titan is a leading watch brand of India. Its parent company, Titan Industries, is the

world's fifth largest and India's leading manufacturer ofwristwatches. The companys

website claims that it has manufactured more than a 100 million watches till date with a

customer base of over 80 million. No doubt, those are impressive numbers as many

countries do not even have total population of 80 million. Titan also claims to be the

first watch company of India that introduced quartz technology with international

styling.

. The Titan brand architecture has several collection and subbrands and each sub-brand is strongly positioned or is already a leader in its segment. Titan offers Titan Edge

claimed to be the worlds slimmest watch and this sub-brand stands for the philosophy less is more. On the other hand is the brandTitan Raga the feminine andsensuous accessory for contemporary women, Nebula is crafted in 18 carat gold andother precious stones. Titans other popular collections are Heritage, Aviator,Octane, Titan Regalia and WWF

Titan has captured over 60% of the Indian watch market (includes only the organizedwatch market as there many local non-branded watch sellers) with over 250 exclusiveshowrooms branded as World of Titan and these outlets are backed by more than 700after-sales-service centers. The Company also has a state of the art design studio thatis focused on inventing new trends in wrist watches. It continuously brings new modelsinto the market. Another unique marketing strategy that has been instrumental inmaking Titan a very successful brand is the catalogue advertising. This unique directselling model has enabled Titan to directly reach to its customers and regularly engagewith them with new watch models.


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Like many otherbrands of Tata, Titan is indeed an international brand with wide

popularity especially in those markets where there is a significant presence of

NRIs. Titan has also been successful in making inroads into European market

and Asia Pacific markets. Titan watches are available in UK, Spain, Portugal,

Greece in Europe and Singapore, Malaysia. No doubt that it has over 100 million

satisfied customers.

TITAN STOPS TICKING IN EUROPE

Titan has finally wound up its European operations after suffering losses of Rs 110

crore in the continent during the last decade.

According to the company, it has provisioned for these losses from FY03 and made the

final provision during FY07.

The Rs 2,000 crore company had entered 12 countries in Europe in the early '90s and

exited in December 2006.

The company, however, made losses throughout the 1990s and, in 2004, withdrew from

eight of these countries.

Following this, it was present only in Britain, Spain, Greece and Portugal.

Since December 2006, it has ended its European operations completely, except for

selling the Titan Edge watches in a small territory through an old distributor.

The company lost out in Europe on three counts. First, it was not able to compete with

the popularity of the Swiss and the Japanese watches in those markets. Second, Titan

made the mistake of not spending enough time and money on acquainting people with

the brand in Europe.

Third, the company, owned by the Tatas and Tidco, did not spend enough money on

advertising and launched its brand in all the 12 territories in a very short time, instead ofgradually testing the market and opening in phases.

With the foreign expansion of its jewellery division, Tanishq, on the cards, Titan is more

careful this time around and will open in a small way first and gradually expand to other


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territories after testing the markets. Till the end of 2006, Titan had suffered cumulative

losses of Rs 110 crore and by the end of FY07, it had made up for these losses by way

of provisions.

Titan started provisioning for the losses from FY03 and by the end of FY04, it had

already provisioned for Rs 63 crore.

Between FY05 and FY07, it provisioned for the remaining Rs 47 crore.

"Starting from 2002-03, Titan Industries [ Get Quote ] has been providing for the losses

and has made all necessary provisions to date," said K F Kapadia, executive vice-

president, finance, Titan.

The company, however, has not abandoned its foreign operations completely.

At present, it has operations in 27 countries in Asia and Africa and plans to foray into

Thailand, South Africa [ and Iran soon. International operations contribute 15 per cent to

Titan's watch division's total revenue.

Explaining why Titan failed to make a mark in Europe, Harish (Titan's group

manager for Asia Pacific said:

"Europeans are very conservative when buying watches. They look at it as a

durable."

If they were to spend money, they would go for a traditional Swiss brand. If

people wanted a disposable, they picked up a Japanese watch. "Italy and

France have a marginal designer watch market, but that's about it.

"We miscalculated on that. We spent (millions of rupees) on advertisements,

which we thought would help make a dent in the European market. It didn't

happen. We have learnt our lessons," Harish added.

Now, Titan retains a presence in only four European countries: Britain,Spain, Greece and Portugal.

But the experience made Titan more determined to capture global attention.

Titan has opened shops in the Middle East, where there is a huge Indian


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presence. In Oman, Titan is the largest watch seller.atches are of good quality,

stylish and cost-friendly."foreign operations by 70-80 per cent..

Titan then focussed attention on India's neighbouring countries and South

East Asia -- where it concentrated on Singapore and Malaysia.

Titan sells more than 100,000 watches a year in these two countries.

Mustafa's, one of the largest watch stores in Singapore, has now redesigned

its showroom and given Titan the largest display space.

The company is also opening outlets in Thailand and the Philippines, and is

looking at far away Brazil and Argentina as well.

"We don't want to spread out just quantitatively. We have been approached bydistributors in Canada and we are looking at the possibility of beginning in

a small way in that continent," said Harish

So, gone are the days when watches meant Made-in-Switzerland. From Brazil to

Singapore, an Indian watch company is going places.


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GLOBAL MARKET AND STRATEGY TO GO

INTERNATIONAL

Titan Industries entered the international watch market with their business endeavour inthe Middle East in 1991. This launched the Titan brand of watches in the UAE, Oman,Qatar and Bahrain. Saudi Arabia and Kuwait were added in 1994.

Titan Industries has distributors in every country it operates in. The distributors set upexclusive and multi brand stores to sell Titan products. Apart from this arrangement,retail also takes place via high street retailers, power retailers and department stores.

To remain a successful global player, Titan has further reinforced its thrust in theinternational markets by evolving products to suit the tastes of the local consumer aswell as being contemporary keeping the current international trends in mind.

Being the fifth largest integrated watch manufacturer in the world, Titan emphasizesworld-class quality supported by excellent after-sales service policy that goes beyondthe international norms. At the international level, Titan operates in the mid-premiumprice segment category. With innovative technology-driven products like Titan Edge -the slimmest watch in the world - Titan is presently the market leader in its category inOman and Bahrain, and at No. 2 position in the Middle East.

Titan expanded to Asia Pacific in the late nineties. Singapore, Dubai, Malaysia, Oman,and Vietnam are some of the major countries where the brand is offered. Thecustomers include non-residential Indians as well as Thais, Arabs and Filipinos.Through a combination of contemporary style, excellent quality and affordable prices,Titan has put together an exceptionally appealing proposition for the people of thesecountries.

With over a hundred million satisfied consumers world over, Titan has successfullyestablished the brand value internationally.


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Timed to perfection

For Titan, the 1990s were a good decade. It set new trends in watch designs using

innovative technology, and was the market leader in India. Where does one go when

one has already reached the top at home? The next logical step was to move into

world markets; a challenge the company was keen on. Titan's first step in its

internationalisation journey was the Middle East. Why? The decision was based on

market research and one simple indisputable fact the region had a large Indian

population, for whom Titan was already an established and well-known brand.

In 1991, Titan set up a company called Titan International (ME) FZE in Dubai to

handle its business, which is responsible for Titan's operations in the Middle East and

Africa. Titan products made their debut in the UAE the largest market in the region.

Soon, people in Oman, Qatar and Bahrain were wearing Titan watches. In 1994, the

brand expanded to Saudi Arabia and Kuwait. It entered Iran in 1999 and Iraq in 2003.

Today, Titan is a well-established brand in the region, known as much for its designs

as for its technological innovations.

The watch industry in West Asia is extremely competitive. Every international brand isavailable, in a plethora of designs and prices. From luxury brands starting at $2,000 tothe lowest-priced range that retails at $10, there is a watch for everyone, for everyoccasion.

With innovation and technology,is

carving for itself a sizeable niche in the

competitive West Asian market


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To succeed in this 'shopping mall of the world', a company must have a wide distributionnetwork, attractively designed retail outlets, efficient after-sales service and focusedadvertising. These were issues Titan had successfully addressed at home. Thatknowledge and experience would now be tested in the global markets.

The process of gaining a foothold in this region has been one of intense learning for thecompany. It got a first-hand feel of international competition and customer expectations,

getting valuable inputs about handling foreign markets. Bhaskar Bhat, managing

director of Titan, says: "These inputs were very useful. They even helped us to compete

against global brands when they entered our domestic market.

The company has evolved from selling watches to developing special product ranges tosuit the tastes of local customers. As watches moved up from being just time measuringdevices to fashion accessories, the company kept pace, offering designs in tune withchanging customer demands. Titan now targets its collections at specific customersegments, based on age and demographics.


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TITAN opens showroom in DubaiSeptember 1, 2005

Watch brand Titan Industries Limited is strengthening its international presence

through retail expansion in its core markets. Dubai- the new destination for travel &

tourism is spearheading the explosion of retail through Shopping Malls.

Emirates Trading Agency LLC (ETA), the exclusive distributors of Titan in the UAE

has invested further in the brand by opening yet another 'TITAN Showroom' at the

newly opened IBN BATTUTA Mall.

Named after 14th Century Arabian Explorer, Ibn Battuta, the mall has six courts -

China, India, Persia, Egypt, Tunisia, Andalusia giving invaluable glimpse into the

past & evoking a sense of wonder & adventure. TITAN fits the theme of the mall with

its exquisite line of watches made to suit the tastes of the region.

India's leading watch maker firm TITAN connotes the association of the Tata Group

in the form of Tata Industries and the Tamil Nadu Industrial Development

Corporation. It thus signifies the joint venture between the Tata Group and TIDCO.

The company is India's leading watch brand and India's only national jewellery brand

- using design, technology and people for unchallenged market leadership.


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PEST ANALYSIS

.

Political factors include government regulations and legal issues and define both formaland informal rules under which the firm must operate.

y tax policyy employment lawsy environmental regulationsy trade restrictions and tariffs

Economic Factors

Economic factors affect the purchasing power of potential customers and the firm's costof capital. The following are examples of factors in the macroeconomy:


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y economic growthy interest ratesy exchange ratesy inflation rate

TechnologicalF

actors

Technological factors can lower barriers to entry, reduce minimum efficient productionlevels, and influence outsourcing decisions. Some technological factors include:

y R&D activityy automationy technology incentivesy rate of technological change

PEST ANALYSISOF United Arab Emirates (UAE)

History

y The United Arab Emirates were bound by truce (Trucial States) To GreatBritain until WWII.

y The seven Emirates formed a federation in 1971 and have sinceworked closely together to build a stable economy and political climate.


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UAE Economy

Introduction

The economic development of the UAE and China make these developing nations

excellent choices for overseas expansion, globalization and foreign direct investment

(FDI). Globalization of developing nations strengthens their economies and global

distribution channels. The UAE is now considered one of the wealthiest and fastest

developing nations worldwide. China is fast becoming an economic leader and

manufacturer in the world, famous for its cheap labor factory workers. The UAEs

wealthy economy has been increasing at a rapid pace due to its real estate boom

attracting huge FDI. China has eliminated many of its trade barriers and now has anopen free trade economy that appeals to many global nations seeking new target

markets and consumers for their products. Both the UAE and China are quickly

becoming significant growth economies that attract global FDI from countries all over

the world wanting to expand and find new import/export partners for their goods.

UAE PEST Analysis

Political

The UAE Government is made up of a Federation of the seven Emirates ruled by

President, Sheikh Khalifa bin Zayed Al-Nahyan, who is also the ruler of Abu Dhabi. The

UAE government is very supportive of their free trade open society and encourages FDI

and globalization. The court system is still being established since its rulings are not

always enforceable due to the large foreign population. The legal regulations are similarto the western world and becoming stricter each year.


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Economic

The UAE population consists of three million people and 60% of them are in the

workforce. The UAE population growth rate is currently 9.4%, with only 13% of UAE

Nationals making up the workforce and 87% foreigner expatriates taking over

the Emirates market. With such a large expatriate workforce (87%) entering UAE due

to the real estate development and investments in the region. The UAE GDP increased

by 15% to 450 billion dirhams in 2007, and the economy grew even faster at a pace of

16.7%. Its GDP real growth rate is 10%, and it shows $99 billion in oil revenues, and

$121 billion in non-oil revenues.

The UAE exports equal $48 billion with partners in Korea, Singapore, India, Thailand

and Japan. The oil and gas exports equal $75 billion. The UAE imports equal $30 billion

of manufactured goods, transportation equipment, animals and food products from the

UK, USA, Europe and Japan. The primary language is English, however, Arabic, Farsi,

Hindi, Urdu, Chinese, Tonga and Russian are also common. The dominant religion in

the country is Islam, however, there are also manyChristians in the nation. The

minorities include the local UAE Nationals, Russians, Chinese and westerners, while

Indians are the dominant nationality. The minorities religious rights are respected by the

majority. It is a very multicultural society and Hofested's cultural dimensions framework

can be used to describe the culture of the country. UAE is showing high economic

growth that is attracting new foreign investors, which helps to generate more revenuesand demand for the real estate sector (20%) (Ahmed, 2007, 1-3).

The level of foreign direct investment (FDI) in the economy is very high, with the

majority of it going into real estate development and trade. The primary suppliers of FDI

to the country include Europe, the USA, UK and Russia. Globalization has greatly

improved the situation in UAE by bringing in thousands of products, services and

workers from all over the world which has helped to develop the economy worldwide.

The UAE legal system is honest and fair for local citizens. Foreign firms operating in the

country do not face any political risk. The UAE belongs to the GCC regional trade bloc

and has been a member of the WTO, World Bank and the IMF for almost seven years.

The countrys huge wealth has resulted in not needing to borrow funds from the World

Bank or the IMF. The UAE has experienced a balance of payments trade surplus in the

past year of over 100 billion dirhams, due to the construction and real estate markets.

Its official reserves account has increased by over 50 billion in the past year. The


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country's currency is called dirhams and its value relative to the dollar is 3.67, and 3.98

to the euro. The currency's value has increased a bit in the past five years relative to the

dollar and the euro because it is relying on a fixed exchange rate policy. The has no

trade barriers to imported goods because they are encouraging all products to be

imported and exported from the UAE since it re-exports 75% of its imports for profit.

Sociocultural

UAE citizens have a very high standard of living, western lifestyle, and their financial

positions have continuously increased over time. This has allowed for a verymaterialistic high society with lots of money to purchase houses, cars and other material

items. The society is open and free with all types of hotels, restaurants, tourism,

recreational activities and sports. The multicultural nature of the country allows for many

foreigners to go there to work in well-paying positions. An overall country analysis

shows the future trends of development and expansion that the UAE is undergoing will

lead to an estimated 4.8 million people living there by the year 2010 (Cateora, 2007,

68).

Technological

The UAE region is composed of a large population of very young professionals who are

extremely technologically-knowledgeable. The IT industry relates to the tourism, hotel,

computer and IT service sectors. The number of Internet users in the GCC region has

increased ten-fold since 1998. The Internet and IT software solutions industries in the

Gulf region have doubled the rate of Europe. Estimates of personal computer sales in

the GCC show about 12% growth in the quantity of units sold by 2003, compared to the

global growth of 8%. The UAE has the most satellite, Internet and mobile phone usersin the Middle East


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. UAE's watch imports reach 40 million units

3 March 2007

DUBAI -- Titan industries, India's leading watch-maker and part of the $24 billion TataGroup of India, is set for an export thrust by using the UAE -- a major showcase forleading global watch brands and accounting for an annual import volume of 40 millionpieces-- as the springboard.

S. Ravi Kant, Chief Operating Officer, International Business, Titan Industries Ltd., saidTitan, one of the world's largest integrated watch and jewellery companies, would beexpanding the brand's regional and global reach with new regional market forays and awider watch collections. The latest collections --Titan Wall Street and Titan Noctura,comprising a total of 150 models --are central to this ambitious growth plans, he said.

Kant, on a short visit to Dubai, where the brand was launched 15 years ago, said Titan,which is poised to record a 15 per cent business growth and an output of eight millionwatches in 2006-07, is looking at a wider global reach by entering South Africa, Russiaand Pakistan. Currently, the brand is exported to 25 countries.

"Dubai is vital to our global expansion strategy as it is a fashion showcase and re-exporthub," he said. Although the total watch imports to the UAE are estimated at 40 millionpieces, the local consumption is between 2.5 million and three million, a fact underliningthe market's vibrant re-export potential.

He said watch and jewellery businesses now contribute equally to Titan's annualturnover of $450 million. In the UAE, where Titan has three exclusive showrooms and apresence in more than 100 outlets, opening of more showrooms is in the pipeline.

Kant said as the world's sixth largest wrist watch manufacturer and a leading domestic

brand, Titan is on ambitious growth track. Export now account for only 10 per cent of the

total production, but plans are under way to boost it to 15 per cent. Having embarked its

global journey over 15 years ago in the UAE, Titan has strong presence in GCC

markets and built the brand and business with the support of able local partners. Today,

we among the top mid market brands in the region and the leader in Bahrain andOman," Kant said.

About 10 years ago, Titan started expanding presence to South and South East Asiaand today has a strong presence in Singapore, Malaysia, Vietnam, Sri Lanka andBangladesh. The brand has also been ranked among the top 150 brands in Asia, acrosscategories, in a recent study by Synovate, a leading research & consulting organisation.


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"Titan aims to continue to grow rapidly, especially in key markets like the UAE andSaudi Arabia. The economic conditions and market stature of brand Titan have set thestage for continued growth. Keeping in mind the evolving requirements of diverseconsumer groups we have exciting new product and marketing plans in place to supportour growth ambitions," he said.

Conclusion

The opening of the Indian market and the arrival of premium Swissbrands has certainly led to Indian consumers being exposed to globalbrands, styles and various price levels. To the Indian consumers, the

highprice of Swiss watches has helped them to realize thevalue ofIndian brands, particularly of Titan, which offers equivalent quality, butat lower prices and with better distribution and service. Titan hasshown its differentiation, and customer centric approach whichhelped them to get the market.

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