Titan: The Outsourcing Journey

            
 
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Case Details:

Case Code : OPER016
Case Length : 11 Pages
Period : 1999 - 2002
Organization : TITAN
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Watch manufacturing

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Background Note

Titan was promoted as Titan Watches Ltd. jointly by Questar Investments Limited (a Tata group company), Tata Sons, Tata Press and the Tamilnadu Industrial Development Corporation Limited (TIDCO).

The company was incorporated in July 1984 in Chennai, India, in technical collaboration with one of the world's largest manufacturers of watch movements, France Ebauches, a French company. Unlike Hindustan Machine Tools (HMT), the leading manufacturer of mechanical watches at that time, Titan Watches decided to concentrate on manufacturing quartz watches. The company established its first manufacturing facility in Hosur, Tamil Nadu in 1987.

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

The state-of-the-art manufacturing facility, set up with technical know-how from Europe and Japan, had an installed capacity of 3.5 million watches per annum. In 1988, the company established a component manufacturing facility and in 1990, it started a case manufacturing plant, both located close to the Hosur plant. In 1992, the company integrated backwards to manufacture step motors4. During the same period, it began manufacturing electronic circuit blocks, used in its watch movements. The Rs 2.7 billion watch and clock manufacturing facilities were spread over a built-up area of 42,000 square metres.

The company also set up a watch assembly unit with a capacity of 5 lakh watches in Dehradun, Uttaranchal. In 1992, Titan Watches entered into a joint venture with Timex Corporation of USA to market Timex watches in India. The same year the company set up a joint venture with the Economic Development Board of Goa to manufacture electronic circuit boards in Goa in an effort towards indigenization. Titan set up its fully integrated, Rs 400 million jewellery plant in 1994 over a built-up area of 13,500 square metres in Hosur. The plant had a capacity of manufacturing four tonnes of gold a year. Due to poor market response the company discontinued the manufacture of jewelry watches.

The company also set up a separate manufacturing facility for solid link, sheet metal bracelets, alarm timepieces and premium table clocks in 1995. In 1995, Titan Watches overtook the market leader HMT by selling 3.2 million watches against the latter's 3 million...

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4] The stepping motor controls the gears in a watch, which in turn rotates the hands of the watch.

 

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