Titan - The Outsourcing Journey

Outsourcing at Titan Contd...

The company's management was also aware that outsourcing was the accepted norm in the global watch industry and many leading global watch brands were not manufactured by the companies that owned them. Kurien said, "We have to think global, not Hosur. Putting up plants and buying equipment is clearly not the answer to competing in the new environment. And as we find suitable vendors for full watches, we will opt for them increasingly." He added, "In the old days it would have made sense to put in huge investments in new technology because it was a protected market. But that is no longer the case."

According to analysts, Titan's multibillion investment in manufacturing facilities were proving to be a real drain on its profitability in the changed industry. Moreover, since the company relied heavily on its marketing finesse than operational excellence, these investments were deemed to be too high. Though the company had consistently posted yearly profits, in the first quarter of 1999-00, it reported a loss of Rs 52 million.