Timex is losing market share in the watch industry as younger consumers are not wearing watches. While there is still a market for watches, Timex is failing to capitalize on the growing smartwatch market. Timex needs to change its strategy to compete in new markets not dominated by other large brands by developing innovative smartwatch technologies, rather than continuing to compete in shrinking price segments. Capturing the blue ocean of an untapped smartwatch market represents an opportunity for Timex to reconstruct its brand image and relevance.
Regression analysis: Simple Linear Regression Multiple Linear Regression
TIMEX WAS ON THEIR SIDE' - Is Timex Missing the Smartwatch Opportunity
1. ‘TIMEX WAS ON THEIR SIDE’
Is Timex taking advantage of the new
Renaissance in watches?
a quick ‘memo’ for TIMEX shareholders
Notice: some of the data shown is old but my estimate is that the
situation has not changed for the better but gotten worse.
3. How many 8 to 18 y.o kids (in NY, LA, London and Milan) and 19 to 30 y.o.
people do You know that wear a wristwatch?
The bad news
I know none and probably you too!
The good news
There is still a market for watches and it will grow in 2014 & 2015
So is TIMEX catching this opportunity?
ALAS NO!
4. http://www.statisticbrain.com/wrist-watch-industry-statistics/
Watch Industry Statistics Data
Number of watches sold annually worldwide 1,200,000,000
Number of Swiss Watches sold annually 29,200,000
Number of watches produced by China
annually
663,000,000
Number of watches produced by Hong Kong
annually
354,000.000
Average cost of a Swiss watch $739
Average cost of a China watch $3
Switzerland watch market share in terms of value54 %
Watch Market Leaders by Sales Revenue Annual Revenue
Swatch / Omega annual sales $8,880,000,000
Rolex annual sales $4,500,000,000
Some figures…not too many!
5. 20%
10%
8%
6%
6%
50%
LARGEST BUYERS OF WATCHES BY PURCHASED VALUE
Hong Kong USA China France Germany other
http://www.statisticbrain.com/wrist-watch-industry-statistics/
Wow..it seems the US is still a large mkt! That’s the good news…but it’s the only one for Timex.
7. Data from HKU658 Seiko watch corp. (#8095-410101756-5479) www.hbr.com
1002
713.6
25
11
6.2
5.8
5.6
0 200 400 600 800 1000 1200
china
hong kong
switzerland
USA
thailand
france
japan
main exporting countries in 2004 (millions)
8. HKU658 Seiko watch corp. (#8095-410101756-5479)
157000
400000
645000
4140000
1562000
0 500000 1000000 1500000 2000000 2500000 3000000 3500000 4000000 4500000
+5000
1500-5000
500-1500
150-500
50-150
US WATCH MKT BY PRICE RANGE US $
9. HKU658 Seiko watch corp. (#8095-410101756-5479)
-10% -5% 0% 5% 10% 15% 20% 25% 30%
+5000
1500-5000
500-1500
150-500
50-150
dollar sales growth
TIMEX is here: very weak
10. So what do these numbers tell us?
1. When a company’s mkt share falls in the ‘other’ group (slide 5), it means it does not
have a brand equity. Its brand image does not exist in the minds of customers.
2. TIMEX is competing in a segment that is losing importance..the 50 to 150 $ segment
(dominated by Swatch) and the 150 to 500 $ is only 4%.
3. In the luxury segment where Rolex, Richemont and LVMH also dominate, the
existence of the Ferragamo, Versus and Versace brands is not enough to view TIMEX
as a ‘legitimate’ competitor.
4. In the sports segment where Citizen Casio Seiko, make up 9% of the mkt
(combined)..where is TIMEX?
If TIMEX continues to compete in this RED Ocean it will continue to be a marginal player.
TIMEX NEEDS TO COMPETE IN A BLUE OCEAN WITH NO COMPETITION.
11. TIMEX needs a change in strategy
This change cannot be in terms of ‘innovation only’.
The brand image must be reconstructed and the perception of customers
gradually changed
The market seems to be very receptive to new brands, new technogies, new
ways of using watches.
Just think of the recent APPLE + FERRARI project to develop a system to
manage the car? Can TIMEX do something even more daring? YES, IT CAN!
If Apple, Samsung LG are entering this mkt there must a good reason!
Watches are no longer just for telling the time..they are infinitely more
complex tools to do a number of things and we are barely scratching the
surface with the new applications.
Capturing a BLUE Ocean is not easy. There are potential mistakes and forces
that might want to keep the ‘status quo’. Will TIMEX be able of creating a new
market where no competitors exist? The brands in the following slides are trying
hard. It’s TIME for TIMEX to do the same.