ENTREPRENEURSHIP

ASSIGNMENT 3
HMT WATCHES Case Study

Date of submission: 30th March 2020

Submitted to: Submitted By:

Vivek Kumar Mall

Mrs.Shipra Shrivastava
PGDM II- C

ABS/PGDM/19/164
Question 1. : Analyse the case and mention the lessons Entrepreneurs should learn
from the shutdown of HMT watches.
Answer 1.

1. Innovation Is Important
HMT was never big on innovation. It copied designs of foreign products available in
markets like Hong Kong and the Far East, which HMT officials would pick and bring
back to India to imitate. In fact, even till 1982, HMT had just four basic designs, giving
customers very little to choose from. Even two years after Titan, its biggest competitor to-
be was launched, HMT still did not launch any new products. Lack of innovation is said to
have gone against the company that at one point enjoyed a 34 per cent market share of the
watch market in India.

Lesson: The days of monopoly will be over sooner than you can imagine, so don't live in
a bubble. Always, always, keep on innovating.

2. Failure To Identify The Pulse Of The Market Can Permanently Rest Your Pulse
Even though they commissioned regular marketing audits and had detailed access to
changing customer demographics, HMT failed to tap in to the pulse of the youth market.
Their advertising was jaded compared to that of its competitors. HMT's average age of
first time buyers was 23, and it did little to decrease the average age of its buyers, and
move into the youth category, which is a highly lucrative target for most retailers.

Lesson: It is more important than ever to stay relevant to your audience, each day, each
minute. And in a business, you should understand the value of youth targeting, as it is one
market you cannot afford to ignore.

3. Not Enhancing Technology Is Lethal

HMT started out with building mechanical watches and failed to see the changing current
in the tide as the competitors began to aggressively push Quartz Analog watches.

Lesson: Technology is reckless. It kills products every day. You've got to keep enhancing
technology to keep the show running.

4. Bad Work Habits Can Crumble The Company

Lack of discipline and commitment are also to blame for the sad demise of HMT. Even
after possessing sufficient managerial talent and providing the employees with lots of
training facilities, there was a lack of skilled employees that HMT faced. Apart from this,
 there was a serious dearth of team spirit and the drive to innovate. HMT also suffered
from serious under-utilization of human and machines resources.

Lesson: It is imperative to keep the employees motivated not just towards personal goals,
but also organizational goals. Motivational strategies such as reward and punish (carrot
and stick approach) should be adopted

5. Good Design Rules

HMT paid little or no attention to aesthetics and packaging. It also failed to create a
suitable retail outlet-all cardinal sins for a product firm.

Lesson: Looks matter. Whether it is a website or a customer product, some attention

needs to be paid to design and aesthetics, as the customer today is highly discerning.

Question 2. : Do the problem identification in the case study of HMT watches.

Answer2.

1. Technology up-gradation
Technology is dynamic in nature always which create many opportunities in the
competitive world. HMT produced mechanical watches and unable to upgrade its
technology.

2. Failure to focus on Customer needs

HMT failed to identify the pulse of its customers even though they were
commissioned with consistent marketing research and thorough access of dynamic
customer needs.

3. Cost control Mechanism

Regular cost auditing mechanism must be installed for cost control in the company
otherwise cost overflow can make a profitable company to sick which leads to closure.
HMT watches didn’t set up adequate cost control mechanism.

4. Marketing Mix failure in Diversification

HMT has diversified with different categories such as stop watches, digital watches,
multi-function watches, analog digital watches and alarm clocks as well as overseas
market also. It has created many ranges in women watches also. Marketing mix as
well as promotion mix activities were unable to capture the market share.
5. Poor personal Management
Even after hiring adequate managerial personnel as well as facilitating lots of training
facilities, there was an absence of talented employees that HMT confronted. Apart
from this, a serious problem is team work spirit and creativity in HMT.

6. Lack of Innovation
HMT watches was not an immense on innovation. It adopted foreign product designs
from various markets like Hong Kong and Far East. HMT had very limited designs for
customer to choose from.

7. Lack of Coordination
Coordination between marketing department and production department is very less in
their functions.