Seiko Case Study Summary

1725 WordsApr 4, 20127 Pages
Company background First founded in Tokyo in 1881, Seiko rose from a company repairing and selling second-hand clock to one of the leading names in the watch industry. Over the course of its history, Seiko has proved to be a very innovative company; it was the first company to launch the quartz wristwatch in 1969, it produced the battery-free Kinetic line in the late 1980 and launched the mechanical/quartz hybrid technology under the Spring Drive brand in 1999. While Seiko is a well-known producer of inexpensive and luxury watches alike in Japan, its brand image is significantly different abroad. Their watches are globally considered very reliable and having an excellent price to quality ratio, but are not considered luxury and are not…show more content…
Buyer Power: Buyer power can force the product prices down, however, as luxury watches target a specific population which is focused on prestige, luxury, status, and quality, this should not impact Seiko Spring Drive luxury watch prices. Threat of Entry: The luxury high-end segment of the watch market is the most profitable and has increased remarkably since 2002. This segment of the watch market is dominated by well branded mechanical luxury watch makers already competing in this market. Being the most profitable segment, this could attract more competitors looking to achieve profits; however, new entrants will have a difficult time entering this market as the barriers of entry are high. Nevertheless, Seiko’s advantage in this market with their new hybrid technology high-end watch is a long standing reputation for innovation and quality, as well as existing luxury watches in the domestic market. Threat of Substitutes: The threat of substitutes shapes the competitive structure of an industry. Seiko is dominant in the hybridisation of mechanics and electronics, with few if any competitors possessing the necessary expertise to develop a similar movement. High-end consumers are likely to be very specific about the product they want, and if they choose this hybrid watch they will probably add it to their collection of watches. Thus, the threat of substitutes is low. Problem

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