Titan

Case Study
Introduction about Case:

The big question- will diversification is advantage to the

organization or just to be loyal to the consumer ?
The answer lies in the gains that a company reaps after
diversification.
Corporate strategies will give a chance to grow and diversify into
new businesses.
 Diversification is a form of growth strategy.
Growth strategies involve a significant increase in performance
objectives (usually sales or market share).
 Titan industries, the watch and jewelry major is also changing its
approach to its portfolio.
Titan, Rs.3,000 crores industry is moving towards a new segment
what we call the life space.
 Vision
We create elevating experiences for the people
we touch and significantly impact the world we
work in.
 Mission
We will do this through a pioneering spirit and
a caring, value-driven culture that
fosters innovation, drives performance and
ensures the highest global standards in
everything we do.
Titan Case Introduction:

The foundation of the Tata Group was laid in 1868 by Jamsetji

Nusserwanji Tata He learned the ropes of business while
working in his father's banking firm and he established a trading
company in Bombay.
Tata helped pave the path to industrialization in India by
seeding pioneering businesses in sectors such as steel, energy,
textiles and hospitality.
Expansion:

The Tata Group expanded regularly into new spheres of business.

The more prominent of these ventures were
Tata Chemicals (1939),
Tata Motors and Tata Industries (both 1945),
Voltas (1954),
Tata Tea (1962),
Tata Consultancy Services (1968) and
Titan Industries (1984).
 Titan, a joint venture between Tamil Nadu Industrial
Development Corporation (TIDCO) and the renowned Indian
business group Tata's, entered the watch market in 1984.
Titan changed the watch market in India completely by making
quartz watch the centerpiece of its strategy.
Entry to New market:
Initially started as a watch company, Titan Industries diversified
into Jewellery in 1994.
Titan branched into
precision engineering components & sub-assemblies,
machine building & automation solutions,
tooling solutions and electronic sub-assemblies in 2005.
It later entered into eyewear with Titan Eye plus in 2007.
Titan now also offers accessories like belt, bag and wallets and
has entered fragrance market under the brand name Skin in
2013.
It changed its corporate identity from Titan industries to Titan
Company in 2013.
Titans Growth:
Since its inception in 1984, Titan Company continues to grow
and set new standards for innovation and quality.
With more than 984 retail outlets across 218 towns, having a
carpet area of over 1.3 million sq. ft., it has Indias largest retail
network.
Apart from the 11,000 multi-brand dealer outlets for watches,
367 World of Titan stores and 147 Fastrack stores and kiosks, it
also operates as the largest jewelry retailer in India with over
159 Tanishq boutiques and Zoya stores as well as over 33 Gold
Plus stores.
It also sports more than 248 Titan Eye+ stores and is backed by
over 7000 employees. The distribution channel handles well over
50% of the watch business of the company.
Globalization:

Titan also has presence globally.

Titan went global in 1991, with the launch of Titan watches in
the UAE, Oman, Bahrain and Qatar.
Operations in Kuwait and Kingdom of Saudi Arabia were
launched in 1995-96.
Titan further expanded into South East Asia, offering products in
Singapore, Malaysia, Thailand, Vietnam and recently, in the
Philippines and Indonesia.
The African footprint, having started with distribution in Kenya
and Mauritius in the mid-nineties, is also steadily growing, with
operations in South Africa launched in 2010.
 Titan watches are also available in the adjoining countries of
Djibouti, Uganda, Ethiopia, Nigeria and Ghana.
As of 2014, Titans presence spans across more than 2000 stores,
in over 30 countries.
With a customer base of 135 million globally, its no wonder that
there is a Titan watch being owned, somewhere in the world
every 3 seconds.
Segments:
Titan operates in four segments:
Wrist Watch Segment
Jewellery Segment
Eyewear Segment
Precision Engineering Components.
Marketing Strategy:

Titan initially pioneered the concept of "Gifting watches".

The ads captured the essence of gifting and along with the trendy
music, easily caught the imagination of the market.
Customers who were fed up with ugly time machines welcomed
the brand and Titan had a dream run for many years.
Arise of problem:

Titan entered the watch market as a premium watch.

But the unorganized sector and low priced options from HMT
gave Titan serious competition.
With the import duty reduced to 25% (earlier 50%) and with the
import license for watch movement being easy to obtain, many
smalltime players cropped up.
These small players offered competition to Titan on the price
front.
 Titan made a big mistake. It wanted to play the volume game.
For that Titan launched another brand Sonata. Sonata was a
huge success because it was a cheap product but at the cost of the
mother brand Titan.
Titan was perceived to be a premium brand but with Sonata (at
that time "Sonata from Titan") endorsed by Titan took away the
premium image from the mother brand.
It was a big costly mistake.
Another problem with Titan has been that it mainly operates in
the mid-priced segment.
And competitors accuse Titan of keeping the segment
underdeveloped on account of its sheer dominance.
Creating Brand Freshness:
Titan realizing that the market wanted something to be excited
about watches and carefully segmented the market and
developed different sub brands for each segment.
Sub brands like Edge, Steel, Dash, Nebula, Classique, Royale,
Fast Track, Raga, and the recently launched Wall street .
By having various products / models and sub brands, Titan was
able to create freshness about the brand.
Idea of Diversification:

Titan launched Tanishq in 1995, India's largest, most desirable

and fastest growing jewelry brand in India.
Diligent care and quality processes ensure that the Tanishq
finish is unmatched by any other jeweller in the country.
 Tanishq challenged the age-old jeweller's word with TATA's
guaranteed purity.
It exploded the market with facts about rampant impurity across
India.
It introduced technology-backed challenge in a category
completely governed by individual trust.
Tanishq introduced innovations like Karat meter, the only non
destructive means to check the purity of gold.
Be More Concept:

Titan is changing its portfolio by shifting its focus from product

attributes to the yearnings, emotions, experiences and
aspirations by introducing new products and they are-
Titan Aviator: Titan Octane:
-Inspired by the -Inspired by Cockpit of one car
World war II fighter plane formula
WWF Collection Titan Raga Diva
Inspired by the endangered Inspired by Beauty and
species sensuousness
 With the success of Titan watches and jewellery segment and
their recent entry in eyewear they are more comfortable with
developing lifestyle brands.
 Under the brand Fastrack comprising watches and
sunglasses Titan is now looking at the possibility of adding
accessories like bags and belts and so on.
To make this segment more attractive, Titan is planning to
open exclusive Fastrack stores.
 Eyewear is fast becoming a fashion statement and Titan is
focusing on design and retail.
Titan has also entered in prescribed eyewear segment and has
opened 30 stores across 12 cities.
Each of them is positioned as a complete optical store where
under one roof customer can have a wide range of frames and
lenses including some very famous global brands.
Back to Tanishq:

Tanshiq's makeover over the year as well is indicating the shift of

Titan in life style segment.
From being a fashion brand for young people with its light weight
jewellery Tanishq added mainstream wedding jewellery to its
portfolio.
The association with Bollywood through movie like Amol
Palekar's Paheli and more recent Jodha Akbar has also brought
the brand close to the consumer.
 The key drivers in this sector are brand equity, design and retail
experience.
The Indian jewellery market is estimated to be around Rs. 70,000
crore to Rs.80, 000 crore and organized sector a small local
players account only for 4,000 crore.
So opportunity for a player like Tanshiq with strong brand equity
and first mover advantage is tremendous.
Great Oppurtunity:
Tanshiq as a part of its expansion strategy has become global
recently.
It has opened a showroom in Chicago, USA targeting the average
American.
US is the largest jewellery market in the world and Tanishq has
an opportunity to position itself between expensive brand Tiffiny
and discounted brand Wal-Mart.
Competitor Observation:
Titan is going strong on all fronts but is equally aware of
changing market dynamics and its competitors.
Titan is very closely watching its closest competitor Reliance.
Reliance is the only corporate house after Titan that has entered
both in the jewellery and eyewear markets.
Turnover of Titan:
For the year 2007-2008 of Titan's turnover of Rs 3041 crore, the
jewellery business accounted for Rs. 2027 crore while watches
accounted for Rs. 918 crore. This is one of the main reasons Titan
is leaning on its jewellery business.

Segment Sales (2008) Sales(2007)

Watches 918.69 783.77

Jewellery 2,028.00 1,291.66

Others 96.03 62.71

Total 3042.72 2138.44

 Titan grew at 43% last year and crossed the sales of Rs. 3,000
crore. Net profit stood at Rs. 150 crore as compared to 94 crore
last year. With these great figures, Titan is still going
strong..
The Net sales include watches, jewellery and others segments.

S.No Year Net Profit Net Sales*

1 2004 10.27 804.53
2 2005 24.95 1136.60
3 2006 73.62 1483.15
4 2007 94.13 2138.44
5 2008 150.27 3042.72
Questions Need to be Answered:
Titan has been a dominant player in mid price segment with its
brands Titan and Sonata. What were the reasons for the expansion
strategy led by Titan to launch various brands in different
segments?

The Titan there is growth of 9% per annum so, it created the big
opportunity to become organized player in India.
As different sub brands create the freshness about the brand and
also satisfies the needs and wants of the customers, the Titan has
launched different brands in different segments.
As it knows the taste and preference of the customer, it is been
able to expand and increase its sales.
The Titan never failed understanding the customers and did its
best all the time.
It has expanded to various brands in different segments because
it want to give service to customers under one tree.
Titan diversified into jewellery business in the year 1995 as a
part of its growth strategy. Growth strategies involve a
significant increase in performance objectives (usually sales
or market share) beyond past levels of performance. Did
Titan's diversification into jewellery business is good. Justify
the above said statement?
Diversification is the form of the growth strategy.
Diversification leads to improve financial performance.
Tanishq is India's fastest growing jewelry brand with a premium
range of jewellery, studded with diamonds or colored gems in 18
kt gold, 22 kt pure gold and platinum jewellery.
These brands contribute to over Rs.2000 million USD, and are
still flourishing. Truly a phenomenon in itself, Tanishq is our
pioneering Indian brand storming a market of over 400,000
independent jewellers.
Hence the diversification brings revenue, then the titans
diversification is good and improves the business of Titan
Company.