Seiko Moving up Market - Situational Analysis

Running Head: Seiko Case Analysis

Seiko Moving Up Market

Situational Analysis:

Company:

Seiko's goals have traditionally been to bring technically advanced watches to their customers. In 1969, Seiko achieved international recognition by successfully integrating quartz technology into a wristwatch. Seiko is able to accomplish these ambitious goals because they use a vertically integrated management system and consist of many different firms, which focus on various aspects of watch production. This structure means they are able to mass-produce technologically advanced watches at affordable prices. Seiko has established itself the premier watch manufacturer in Japan and most parts of Asia. This can be attributed back to Seiko's origins when founder Kintaro Hattori's vision was to bring the best product possible to their customers. They made this vision a part of their very identity by naming the company "Seiko," which means exquisite in Japanese. With a strong following in their domestic market, Seiko expanded their product offering with the creation of a line of high-end luxury watches. The Credor collection and The Grand Seiko represent Seiko's luxury watch lines with prices of some pieces reaching $10,000 USD. These watches do very well in their domestic market because of Seiko's strong reputation of quality and technical excellence.

Despite all their success in their domestic high-end market and their ability to deliver watches as precise as Swiss products, Seiko's international perceptions were seen as cheap and inferior. One reason for this inferior international recognition can be attributed to the fact that Seiko's scope never defined a specific target markets. Seiko has historically faced a problem of being a production-oriented company by mass marketing and mass-producing their watches. Seiko sold their watches at price levels in the low (0-$150), mid ($151-$500), and high-end ($5,000 and above) markets in an effort to please as many customers as possible. These misconceptions have restricted Seiko and its goals to become internationally recognized as a manufacturer of high-end luxury watches.

In 2001, Seiko began an effort to revamp their image as a premier watch manufacturer in the international market; Seiko chairman Reijiro Hattori created a subsidiary of Seiko called Seiko Watch Corporation (SWC). SWC's goal