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Internship report

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A study on the organization study of HMT Watches Limited At HMT Bhavan, Bangalore Submitted To Bangalore university, Bangalore In partial fulfilment for the award of the degree of Master of Commerce By Anil Kumar. S

Bangalore University Bangalore 560 001. July 2010


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TABLE OF CONTENTS
Sl. No. 1 2 2.1 2.2 2.3 2.4 3 3.1 3.2 3.3 3.4 3.4.1 3.4.2 3.4.3 3.4.4 3.4.5 3.4.6 3.4.7 3.5 4.1 4.2 4.3 4.4 4.5 5 6 7 7.1 7.2 7.3 7.4 8 9 10 11 12 Introduction CHAPTER-2 Industry Profile Evolution of watch industry History of Indian watch market Present situation of Indian watch market Future challenges of watch market CHAPTER-3 Company profile Company overview Mission and Vision Corporate Objectives and Goals History and Evolution of Organization HMT Machine Tools ltd. HMT Watches ltd. HMT Chinar Watches Ltd. HMT International Ltd. HMT Bearing Ltd. Praga Tools Ltd. HMT Tractor Business HMT Units, Divisions & Locations HMT Watch Factory at glance Introduction of HMT WF I & WF II at Bangalore Corporate objectives of HWL Important events of HWL Products of HWL Strategic Planning Organization Structure Departments of HMT Watch Factory HRM Department Finance Department Sales Department Marketing Department Product Profile Competitors of HMT Watches SWOT Analysis Suggestions & Recommendations conclusion Contents CHAPTER-1 Page No. 1 3 3 4 5 7 9 10 10 11 11 13 13 13 14 14 15 15 16 17 17 19 20 21 22 24 25 25 31 33 36 38 40 41 43 46

List of charts
Sl. no 2.3 4.2 6.0 7.1 7.2 7.3.1 7.3.2 Contents Watch market in India HMT Watches Limited Organization structure of HMT watches limited Organization chart of HR Department Organization chart of Finance Department Organization chart of Sales Department Activity flow chart Page no 6 19 24 25 31 34 35

List of tables
Sl. No. 3.5 7.1.1 7.1.2 7.1.3 Contents HMT Units, Divisions and Locations Job performance factors Managerial abilities factors General comment and overall assesment Page No. 16 28 28 29

Chapter-1 Introduction
Organization is a systematically designed, scientifically planned sum total of various function coordinate mutually, synchronized in a format to achieve the goals and objectives of the company. HMT is one of the Government of India undertakings, which was established in the year 1953, with the objective of producing a limited range of machine tools, required for building an industrial institute for the country. HMT Watches Limited comprises of three manufacturing units at Bangalore, Tumkur, Ranibagh and Uttarkhand. It manufactures Mechanical and Quartz Analog watches and Clocks. HMT limited, the first company to start Watch manufacturing in India, has incorporated HMT WATCHES LIMITED as its fully owned subsidiary. The manufacture of wristwatches started as part of diversification strategy of HMT in the year 1962, under Technical collaboration with CITIZEN Watch Company of Japan. The purpose of the study is primarily to explore the knowledge on HMT Watches and then gain the consumer insights for the acceptance of new watch models.

HMT is one of the reputed public sectors in India. It is an organization with all the departments under one roof and study of the
organization structure will be more useful and meaningful.

It has got many programs to help the students by giving exposure to the real working
environment.

The production and distribution network is very efficient and large size.

1.2 Objectives of the study


To study the current scenario of Indian Wristwatch industry. To review brand strategies of different sub-brands of HMT Watches. To analyze the brand strategies of HMT. To study the Organization Structure of HMT Watches Limited and functions.
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To gain practical knowledge while conducting the study. This study would help HMT Watches Limited to understand the gaps in the communication strategy regarding brand repositioning exercises and further measures to be taken for effective marketing communication.

1.3 Scope of the study


The study attempts to identify the reach of HMT Watches which would help the company in formulating suitable strategies. The study also identifies the attitudes and preference of the consumers. The study also focused on media through which the product reaches the consumers.

1.4 Limitations of the study


The study is confined to Bangalore city only. There is a possibility of sampling errors in the study.

Chapter-2 2. INDUSTRY PROFILE 2.1 Evolution of watch industry


The story of time measurement stand as a striking example of mans never ending curiosity ingenuity. In the earliest of times, observation of the Suns course in the heaven obviously afforded the only way measure, though roughly, the passage of time. The Sumerians are credited with the invention of the Sun Dial about 4,000 years ago. Later, hour glasses and cleps dras or clocks appeared, but these were only time counters, not true clocks. The mechanical clocks appeared during the 14th century. The portable clocks appeared soon after the invention of the spring, often attribute to Peter Heinlein of the Nuremberg 1511. The pendulum, first imagined by Galileo, was perfected by Hugens in 1657.The device was first oscillator with high degree of precision. During 1675, Hugens invented as spiral spring governor for clock called the balance wheel. The lever escapement, the most efficient kind ever invented and the most successful was developed by Thomas Mudge in 1769. In those days, emphasis was on producing artistic and fascinating clock rather than accurate ones. Wrist watches became very popular after the First World War. Chronographs with multiple functions were produce for special applications. Self winding wrist watches were commercialized in 1924. The battery powered watch appeared in 1952, it featured a balance wheel with electric contracts. First electronic watch, invented in 1960 by Max Hetzel for Bulova, featured flexion resonator-a turning fork. It was followed in 1966 by first electronic watch with derived balance developed and built in Switzerland in 1967. In 1970, various companies in the USA, Switzerland and Japan started producing all electronic digital display watches of the light emitting diode type. By about 1972, quartz electronic watches with liquid crystal display were introduce into the market and simultaneously watches with conventional analogue display were also introduced.

2.2 History of the Indian watch market


The Indian watch industry began in the year 1961 with the commissioning of the watch division of HMT. The first watch model manufactured by HMT was the Janata model in the year 1962. HMT was the leader in the watch market till the Tatas formed Titan Watches in association with Tamil Nadu Industrial Development Corporation in the year 1987. They took a major strategy decision, which later changed the face of the Indian watch market- to manufacture only quartz watches. Liberalization in 1992 and the removal of quantitative restrictions due to WTO has opened the doors for many foreign brands in the Indian market the market stood to witness intensive competition between foreign and Indian manufacturers like Timex, Titan, Movado, Longines, Rado, Rolex, Frderique Constant, Mont Blanc, Swatch, and many others. Many watch makers have made significant inroads in the industry and others are in the process of establishing themselves, currently. Besides this, buyers are extremely choosy about the brand and type of wrist watches they wear. Being extremely brand conscious, their tastes have evolved over the years and have gone beyond the realms of durability to choose in terms of aesthetics and elegance. Thus it is a buyers market with multitude of designs that have entered and flooded the market place. The size of the watch market currently is estimated to be around 40 to 45 million pieces annually. The organized sector alone contributes up to 30 percent of this figure, and the rest of the demand is being met by the unorganized grey sector. The watch market has been segmented on basis of multiple proportions such as price, benefits and types of watches. The price of the watches is a major motive in the minds of the customer. Accordingly, three segments can be identified here, namely low priced, medium priced, and high priced watches. Many customers prefer mechanical and automatic watches, while others prefer quartz watches. Newer segments are also on rise such as ladies watches, childrens watches and gents watches. Customers usually base their preferences and buying decisions on a variety of factors like price, durability, utility, aesthetic appeal and brand name. A combination of all these points ultimately forms the customers buying decision that translates into the purchase of a watch.

2.3 Present scenario of the Indian Watch Market


The Indian watch market is today of 40 million units, out which 60% is in the unorganized sector in which the maximum number of watches are sold are below Rs.300. Quartz watches form two thirds of the organized sector and the rest is split between mechanical and digital watches. Even in the organized sector, three fourth of the sales by volume comes from watches that are priced below Rs.1000. Plastic as such is not acceptable to average Indian consumers, especially those from the small towns and rural areas who regard it as cheap and flimsy. They want toughness which translates into a good quality metal model at a reasonable price. Watch is one of the consumer durables whose replacement rate is very high. The replacement rate of watch is 33.8 %( Source: India market demographics report, 2003). This is also due to the fact that the estimated scrap rate of wrist watches is 7.8%, which is applicable after 6 years (Source: India market demographics report, 2003). So due to high scrap rate, outdated models, and the shift from the mechanical watches to the quartz watches is causing a very high replacement demand for watches. This along with the low penetration levels represents the untapped market potential for watches in India.

The watch market in India


1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Mid Upper: (Rs.1000-5000) Titan, Citizen, HMT, Timex, S watch, Espirit

Low End: (Rs.400-1000) Sonata, HMT, Maxima

33% 43%

13% 11%

Premium: (>Rs.5000) Swiss Brands: Tissot, Omega, Rolex Fashion Brands: Fossil, Calvin klein, Giordano, Espirit.

Mass: (<Rs.400) Grey market, Chinese, Etc.

(Source: indiaindustrystatistics.blogspot.com)

2.4 Future challenges of the watch industry in India and in world


Incorporating new functionalities in the wristwatch with the help of new technology: Spot watches which offer advanced features such as automatic time adjustment based on location access to continually updated contents such as news, traffic alerts, weather reports, stock quotes, sports scores and instant messaging. The Times Data Link Watch utilizes a revolutionary new communication technology that literally zaps information from IBM Linux based wristwatch. Tapping rural market: Huge size of the rural market. As tele-destiny and infrastructure of the rural India improves, it offers scope for sophisticated form of advertising and method of sales Indian rural bazaar is displaying a market trend towards consumerism and demand for durable products. More and more focus on new technology and multifunctional utility. The focus should increase on spreading the market to rural areas. Greater price segmentation, specially lower end 2 fold advantages: Demand, Market spread. Greater competition from invisible sector and foreign brands.

2.5 Future challenges of watch industry in world


World of fashion is transient; it changes with the seasons and dictated by the whims and notions of fickle public. The fashion element that never goes out of style is Swiss Automatic watches. Elegant yet dependable, popular yet not a slave fashion, the Swiss watch is timeless and permanent. There are hundreds of brands of Swiss watches. Some of the well-known brands include Gucci, Cartier, Rolex, Breguet, Movado,Omega, Piguet and Longines. Data from Federation of Swiss Watch Industry (FHS) further revealed that exports jumped 16.4% in the first half of 2012 compared to 10% first half of 2011. Watch exports from Switzerland climbed 19.2% in 2012 earning over $20 billion.

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Global Watches market to reach $46.65 billion and Clocks market to reach $5.42 billion by 2017 ( source: Global Industry Analysts, Inc)

Future watches Watch makers in Europe are building complex, intricate machines that tell time with micro-second accuracy. These are masterpieces where each component is handcrafted by Masters of Horology and designed by master designers. Breguet falls into that category. The demand for wrist watches, especially from Asia in so strong that watchmakers have been struggling to ensure adequate supply. There are watches already that read the pulse rate and watches that can be used in emergency as a cell phone. Soon there will be watches incorporating the GPS for navigating the cars and carrying entire medical history to be referred to by doctors in emergency. The Swiss watch industry holds 95 per cent of this market and is believed that this market will continue to grow at about 10 per cent a year over the next decade. Cheap watches priced between $1 and $30 and will grow at about 20 per cent annually. The Swiss have only a 5 per cent of this market. This is where all local players survive and grow. As this market will have enormous volume throughput, local watch brands will be beneficiaries of some interesting volume sales. (Source: http://www.thehindubusinessline.com/todayspaper/tpbrandline/article1112102.ece).

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Chapter-3 3. COMPANY PROFILE Company Name Established : HMT WATCHES LIMITED : 1961

Registered Office : HMT Bhavan #59, Bellary Road, Bangalore-560032 Factories Website : Bangalore, Tumkur, Ranibagh and Uttarkhand. : www.hmtindia.com

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HMT is one of the Government of India undertakings, which was established in the year 1953, with the objective of producing a limited range of machine tools, required for building an industrial institute for the country. HMT Ltd. a leading PSU, is a name to reckon with and has a significant presence in the capital goods, precision engineering, consumer goods and tractor markets in the country. The company has, over the years, imbibed and developed cutting edge technologies and today offers total manufacturing solutions to the engineering goods manufacturing sector. In its progression from a single-unit, single-product company to a multi-product, multi-unit conglomerate, HMT has laid the foundation for the evolution of a network of engineering component manufacturers throughout the nation that has since developed substantially and forms the bulwark f the manufacturing capability of the country. HMT has in its fold 18 manufacturing unit spread over 10 states. It is now restricted and comprise of six subsidiaries under order of words of Holding Company. Subsidiary units are: HMT Machine Tools Limited, Bangalore. HMT Watches Limited, Bangalore. HMT Chinar Watches Limited, Jammu & Kashmir. HMT Bearings Limited, Hyderabad. HMT Praga Tools Limited, Secunderabad. HMT International Limited, Bangalore. Joint Venture Company SUDMO-HMT Process Engineers (India) Limited.

3.2 Mission and Vision To establish ourselves as one of the worlds premier companies in the engineering field having strong international competitiveness. To achieve market leadership in India through ensuring customer satisfaction by supplying internationally competitive products and services. To achieve sustained growth in the earnings of the group on behalf of shareholders.

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3.3 Corporate Objectives and Goals


To encourage the modernisation of Indian Industry through the supply of engineering goods and services of world class excellence. To maintain technological leadership through continuous efforts to update product technology and manufacturing methods. To globalise our operations by developing a mix of international markets and businesses. To ensure a satisfactory return on capital employed, to meet the growth needs and the aspirations of our stakeholders. To present an active, pleasant and productive working environment.

3.4 History and Evolution of the HMT


The idea of setting up of a machine tools industry in the public sector germinated only after India got its freedom. A committee was set up in 1948, which suggested the establishment of machine tool factory. In 1949, the Government of India decided to enter into a Joint Venture with the Swiss firm Oerlikon Machine Tool Works, Buchrle & Co., Zurich. They were to buy 10% of equity shares in the proposed company. Another four years rolled by, the Government rechristened, Hindustan Machine Tools was formally registered in 1953. HMT ltd. a public sector enterprise is a multi-product and multi-technology engineering conglomerate, with state-of-art enterprise acquired from world leaders and harnessed with indigenous excellence. HMT is synonymous with excellence in precision engineering in India. A multitechnology engineering complex, HMT is built on a strong foundation of technical know-how acquired from world leaders in machine tools such as Oerlikon, Manuhrin, Glidemeister, Liebherr, Renault, Fritz, Werner, Pegerd etc., From simple lathes to multi station transfer lines from stand alone CNC machines to state-of-art CNC machines, leading to factory automation, HMTs broad range of machine tools covers general purpose machines, special purpose machines and CNC machines to meet
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the application needs of every industry. HMT also has the distinction of manufacturing its own CNC systems in association with Siemens. During the 1960s with the success achieved in the initial years, the company launched a bold plan of diversification and expansion which resulted in the duplication of Bangalore unit and the setting up of new units at Pinjore, Kalamassery and Hyderabad to become the worlds widest range of machine tools manufacturers under a single corporate entity. With a Watch Factory already established in 1961-62, additional capacities for watch production were contemplated to provide a greater cushion against cyclical fluctuations in capital goods markets and also to meet the bargaining demand for watches. The 1970s witnesses the fructification of all the diversification plans as envisaged. HMT set up HMT International Limited as a subsidiary company to channel HMTs product and technical services abroad and took over Machine Tools Corporation at Ajmer as its Sixth Machine Tools unit. Two more units for watch manufacture set up at Srinagar(Jammu & Kashmir) and Tumkur(Karnataka). HMTs Tractor business commenced its operations in 1971 in technical collaboration with M/s MOTOKOV, Czechostovkia Republic. The company achieved market leadership in tractors by enlarging its range to cover most of the applications for the farming community. In the 1980s HMT as a part of vertical integration of efforts launched units to manufacture Watches at Ranibagh, Watch cases at Bangalore, Stepper motors at Tumkur. CNC systems and Ball Screws for use on CNC machines at Bangalore. Also, HMT Tools took over Indo-Nippon Precision Bearing Ltd. a state owned units as a subsidiary, which was renamed HMT BEARINGS Ltd. and PRAGA TOOLS Ltd. as another subsidiary. In 1990s, it involved n formation of a Machine Tools Business Group as part of Business Re-Organization, formation of Central Reconditioning Division at Bangalore. Today, HMT comprises six subsidiaries under admit of a Holding company which also manages the Tractors business directly.

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3.4.1 HMT MACHINE TOOLS Ltd. HMT Ltd, the pioneer in machine tools industry in India and manufacturers of a diversified range of products has incorporated HMT MACHINE TOOLS Ltd. as its fully owned subsidiary on 9th august 1999. HMT Machine Tools Ltd is a multi unit, multi location, multi technology unit manufacturing a wide variety of State of the Art Machine Tools. All manufacturing units of HMT MTL are also ISO 9001 certified.

3.4.2 HMT WATCHES Ltd. HMT Ltd. the first company to start watch manufacturing in India has incorporated HMT WATCH Ltd. as its fully owned subsidiary on 9th august 1999. It manufactures mechanical and quartz analog watches. HMT WATCH Ltd comprises of three manufacturing units at Bangalore, Tumkur and Ranibagh while its marketing headquarters is based in Bangalore. All its manufacturing units have obtained the ISO 9001 certification. The product range of HMT WATCH Ltd include more than 1500 models to choose from catering to all segments of the market from economy to premium and young to the old. HMT brand enjoys very high brand equity in the Indian market. The brand has consecutively been adjusted as one of the best Indian brands in surveys by leading agency in the country. HMT brand continue to be the main stream brand among major watch dealers in the domestic market.

3.4.3 HMT CHINAR WATCHES Ltd. HMT Ltd., the first company to start watch manufacturing in India has incorporated Chinar Watch Ltd. as its fully owned subsidiary on 4th September 2000 with Jammu as its head quarters.

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The product range of Chinar Watches Ltd. consists of the mechanical Gents hand wound watch. Marketing, Sales and after sales service for watches of HMTCWL is catered to by HMTWL. 3.4.4 HMT (INTERNATIONAL) Ltd. HMT (INTERNATIONAL) Ltd. was set up in 1974 as a wholly owned subsidiary of HMT Ltd., to undertake export goods manufactured by HMT and other leading Indian manufacturers. HMT(I) is headquarter at Bangalore and has a global network extending over 38 countries with 67 representations to service its all worldwide. HMT (I) has sold over 12,500 machines in more than 70 countries with efficient after sales service. HMT (I) also offers a comprehensive package of consultancy of technical and engineering services from concept to commissioning on turnkey basis its track record include prestigious in. Algeria, Indonesia, Kenya, Malaysia, Tanzania, UAE and other countries. HMT (I)s business portfolio include trading in : Machine tool and industrial machinery Watches Tractors and agricultural implements General engineering products. Industrial commodities Projects and services

3.4.5 HMT BEARING Ltd. HMT Bearings Ltd, formerly known as Indo-Nippon Bearings Ltd was incorporated in the year 1970.It is the only company of its kind in the public sector set up to manufacture Ball &Roller Bearings. The company was established in technical collaboration with M/s Koyo Seiko Co. Ltd. JAPANS an internationally reputed manufacturer of Bearings. In 1981, the company became a wholly owned subsidiary of HMT Ltd. The manufacturing unit is located in Hyderabad and marketing and sales offices cater to the whole India.
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3.4.6 PRAGA TOOLS Ltd. Praga Tools Ltd was incorporated on 20th May, 1943 as Praga Tools Corporation Ltd to manufacture Machine Tools with headquarter at Secundrabad. It was renamed as Praga Tools Ltd in 1963. HMT Ltd took over Praga Tools Ltd as one of its subsidiaries with the transfer of majority of the share holding in the year 1988. Praga Tools Ltd manufactures Machine Tools for various applications including CNC Machines. In the years Praga has collaboration with world famous machine tool manufacturers. 3.4.7 HMTS TRACTOR BUSINESS HMTs tractor business commenced its operations in 1971 in technical collaboration with M/s MOTOKOV, Czechoslovakia republic. Initially, HMT started the operation with the manufacture of 25 HP tractor at the manufacturing plant established in Pinjor, Haryana. Over the years, it has develops tractors ranging from 25HP to 75HP. The company achieved market leadership in tractors by enlarging its range to cover most of the applications for farming community. Currently the company has there three tractor manufacturing units in India located at Pinjor in Haryana, Mohali in Punajb and Hyderabad in Andhra Pradesh. It has a well equipped R&D center duly recognized by the department of scientific and industrial research, the government of India. The tractor business group of HMT has been a proud recipient of a number of national level-productivity awards. It has also been certified for ISO-9001 by KEMA, Netherlands. It has an installed capacity of 18,000 tractors for manufacturing and assembly operations. It has an in house marketing organization comprising b17 area offices, 11 stockyards and over 300 dealers spread across the country. HMT tractors is ably supported by over 40 ancillary units.HMT has produced and marketed over 3, 00,000 tractors since inception.

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Table No. 3.5 - HMT Units, Division & Locations.


Units HMT I & II Product Division Location State Karnataka

Machine Tools & Die-casting Bangalore Ball Screws

HMT III HMT IV

Machine tools &Tractors Machine Machinery Tools

Pinjore Printing Kalamassery

Harayana Kerala

HMT V HMT VI Dairy Machinery

Machine Tool Printing Press Machine Tools Dairy Machinery

Hyderabad Ajmer Aurangabad Bangalore

Andhra Pradesh Rajasthan Maharashtra Karnataka

Watch Factory I & Watches II Chinar Limited Watch Factory IV Watch Factory V Watches Watches Watches Watches

Srinagar

Jammu Kashmir

&

Tumkur Ranibagh Bangalore

Karnataka Uttar Pradesh Karnataka

Specialized Watch Watch Case Case Division

3.6 Specialized Watch Case Division


It was started in 1980-81 to produce special watch cases to various units like Tumkur, Ranibagh and Jammu. The division consists of fine production shop, namely: Press shop. Machine shop. Tool room. Polishing shop. Electroplating shop.

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4.1 HMT WATCH FACTORY AT GLANCE


It was Pt. Jawaharlal Nehrus vision that he wanted to setup a watch industry in India. How HMT entered the field of watch making is itself interesting. Visiting Japan in the late fifties, Prime Minister Nehru was struck by large-scale manufacture of beautiful and not so costly watches there. Why cant we make such watches for our people to wear. He thought and job was entrusted to Mr. Manubhai Shah, the industrial minister. Accordingly, a technical collaboration agreement was signed on 25 March 1960 between the governments of India M/s. Citizen Watch Company, Japan for manufacturing wristwatches in India. Industrialization in India had first begun. There were hardly any takes for microprecision field like watches. At that time, HMT was in the field of making huge precision machine tools. It was therefore since the watch is also tiny for session machinery product; the project was handed over to HMT. Thus HMT was factory came into picture. The foundation stone of the watch factory was lead on 28th Jan 1961.Assembly of wrist watches for 100% imported component was started in an air-conditioned cellar in the premises of HMT Watch Factory Bangalore. The formal inauguration took place on 15 th august 1963. Subsequently, in order to meet the growing demand from the public for watches a second unit for manufacturing day and watches was setup in Bangalore during 1972, Third unit is Srinagar (J&K) during 1972, fourth unit is Tumkur during 1978, and fifth unit is Ranibagh during 1985 were established giving more scope to local employment.

4.2 INTRODUCTION OF HMT WF I & II, AT BANGALORE


HMT WF I & II, is situated in JALAHALLI, 13kms from the Bangalore City. The foundation stone of the HMT WF was late by the Industrial Minister Mr. Manubhai Shah on 28th Jan, 1961 on the sprawling 182 acres of the land, adjoining machine tools division in Bangalore, acquired by HMT from the government of Mysore. The construction of manufacturing shops, air-conditioned assembly and inspection shop, the administration and

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colony buildings were completed within a record time of 13 months. The assembly wrist watches from the important component was started. Initially , Watch Factory, Bangalore started with a humble production of 14439 watches with a turnover of Rs.100 Lakhs during the year 1962-63.The indigenous contents of a watch initially was about 32% & then increased to 64%.The unit started production of Hair spring , Main spring & shock absorbers during the year 1976 & increased the indigenous content of a watches.

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Chart No.4.2- HMT WATCHES LIMITED

HMT WATCHES LIMITED

Marketing Division

Manufacturing Units

Watch Factory Bangalore & Timing Systems Division Bangalore Watch Case Factory Bangalore Watch Factory Ranibagh Watch Factory Tumkur

Source: Sectional Manual HMT Watches Ltd. 4.3 CORPORATE OBJECTIVES of HWL Ensuring customer satisfaction through market leadership. Achieve sustainable competitive advertisement through the value edge and technological leadership. Achieve systematic business growth through generalization of adequate interest of the research. To globalize the co- operation by developing a mix of international market and net foreign exchange earnings. Development and retain human skills and talents. Improving the Quality of work life. Introducing the Innovative products.
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Development of ancillaries, small industries, rural and backward areas. Promote ecological balance and quality of social life. Sound and ethical business practices.

4.4 Important events in the history of HMT Watch Factory-I&II


1960- Govt. of India entered into a technology collaboration agreement with M/s Citizen Watch Company ltd, Japan, for the manufacture of Wrist watches in India. 1961- First batch of Watches released. 1962- First batch of Engineers and Technicians returned from Japan after one year Training at the works of M/s Citizen Watch Co. ltd., Plant & Machinery for the first phase of production installed. 1963- Watch Factory-I inaugurated. Initially three types of Watches were manufactured. Japanese technicians in batches helped to stabilize production activities for three years. 1969- Technical collaboration agreement with M/s CWCL concluded for the manufacture of Automatic Day Date Watches. 1970- Setting up of Watch Factory at Srinagar exclusively with the Technical know-how for HMT WF, Bangalore 1975- Phase wise addition of Plant & Machinery to increase production capacity of Hand Wound Watches at 0.7 million per year at WFB. Establishment of WF-III at Srinagar.

1976- Project for manufacturing 1.25 million sets of Hair Spring, Main Spring and Shock Absorbers to cater to in-house requirement and other HMT Watch Units established. 1979- Establishment of FF-IV at Tumkur to manufacture 2 million Watch components. 1980- Enhancement of production capacity of Hair Spring, Main Spring and Shock Absorbers to 3.25 million sets. 1981- Quartz Analogue Watch Project started. 1983- Specialized Watch Case Division established at Banagalore.

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1985- Establishment of WF-V at Ranibagh for manufacture of 2 million Watch components. Miniature Battery Unit at Guwahati started.

1989- Uday HMT Ladies Welfare Association established for the Assembly operations, exclusively employing dependents of deceased/retired employees of HMT. 1990- Quartz Ana-Digi Watch Assembly started in WFB. PCB Manufacturing established in WFB.

1991- Quartz Multi-Function Digital Display Watch Assembly started in WFB. 1993- To capture the growing urban market for fashionable watches, two new brands viz., Ramani for gents and Utsav for ladies were launched. 1997- Launched Swarna series on august 15. - Introduced ADD and dater watches priced at Rs. 750-900 in September 1998- Company launched 15 new models in automatic day/date range. - Introduced 350 range of Citizen watches in Mumbai along with its latest Eco-Drive models.

4.5 PRODUCTS OF HMT Keeping pace with the changing fashion, several different models of Hand Wound Watches, Pocket Watches, Ladies Watches, Braile watches for blind people, Automatic Day Date, Quartz Ana-Digi and Quartz Multi-Function Digital Display watches. Additionally printed circuit boards are also being manufactured for various electronic application including Quartz watches. The productivity Aids department manufactures and supply vibratory bowl feeders to other Watch Units.

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5. STRATEGIC PLANNING To achieve the objectives and goals of the Unit and to optimize the utilization and capitalizing the strengths, the following strategies have been chalked out in major areas like Production, Procurement, Finance, Cost Reduction, Productivity Improvement and Personnel & Human Resource Development.

The strategies are


a) PRODUCTION Orient productions systems to suit the fast changing requirements of the market. Critical machines will be operated in the multiple shifts. Ancilliarisation and sub-contracting of low technology and high labour intensive operations. Re-training and re-orienting of manpower through ancilliarization and subcontracting. Reduction in Manufacturing Cycle Time through Technology Development and use of Productivity Devices. Increase in Productivity through Participative Management. Standardization, Cost Reduction, Productivity Improvement and Import substitution. CAD/CAM for flexibility in manufacture to meet customers demand.

b) PROCUREMENT Preventing suppliers from forming cartels by reducing the dependence on them to the barest minimum by in-house manufacturing. Reducing the raw materials and other semi-finished good inventory by scientific planning.

c) FINANCE High accent on internal resources generation and ploughing back of WBG surpluses in expansion. Effective control measure on committed cost. Efficient Working Capital Management Better work-in-process and Inventory Control.
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d) COST REDUCTION & PRODUCTIVITY IMPROVEMENT Incentives linked to productivity. Training and Development. Job enrichment and job rotation to break the monotony of work-life. Process improvements. Use of low cost work-aids, jigs & fixtures. Better Material Handling Systems. Quality Assurance. Energy Conservation Production redesign and Value Engineering. Standardization of products, raw-materials, tools etc

e) PERSONNEL Educating the employees about the difficult phase which the company is passing through. Exposing the employees to the market environment especially in regard to the competitors and their products. Retraining of existing manpower to take up new technology products. Reframing comprehensive personnel systems covering Discipline, Promotions, Motivation and Incentives. Addition of manpower for High technology areas such as CNC machining, computerization, ECB Manufacturing etc.

6. ORGANIZATION STRUCTURE of HWL Chairman heads the Board of Directors of the Company along with one GOI Nominee Director. Director Finance. Each Manufacturing Unit is head by General Manager. He is supported by a team of Joint General Manager, Deputy General Manager heading various departments/disciplines within the unit. Under them are Assistant General Manager (AGM), Manager & Deputy Manager. Officers and Workmen

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Chart No.6.0 - Organization Structure of HMT Watches Ltd.


Board Of HMT watches ltd

Chairman

Managing Director

Unit Chief Watch Factory Tumkur

Unit Chief Watch Factory Bangalore

Unit Chief Specialized Watch Case Division

Unit Chief Marketing

Unit Chief Watch Factory Ranibagh

Human Resource Chief

Finance Chief

Source: Sectional manual HMT Watches Ltd

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7. DEPARTMENTS OF HMT WATCH FACTORY 7.1 Human Resource Management Department


Human Resource Management means the task of dealing with human relationship with in an organization. It is concerned with peoples dimension in the organization. It is the process that helps managers to recruit, select and develop members for the organization. Chart No.7.1 - Organizational chart of HR Department

General Manager (HR)

Deputy General Manager

Office/HRD/ Administration/PR

Welfare, IR & Estd/Admn

Legal

Source: Sectional manual HMT Watches Ltd

Functions of the General Manager Manpower planning, recruitment and selection. Induction and training. Performance appraisal. Wage and salary administration. Employment of casual contract labour. Industrial communication. Providing welfare facilities to the employees like houses, transport and award of compensation.

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Recruitment Recruitment is the process of finding attracting capable applicants for employment. The process begins when their applicants are submitted. In HMT recruitments are done by i. ii. Campus recruitment Open all India advertisement.

Selection All the applicants have to undergo preliminary written tests for the selection. Written tests will be conducted by entrusting the work to a reputed institution in order to ensure objectivity. Candidates whose results have not been declared at the time of application will be permitted to appear for the test only on the condition that they should have passed successfully the course with requisite marks when they appear for interview. Candidates are ranked on basis of the performance in the test and will be called for the Interview/Group Discussion. Candidates are selected based upon the performance in the interview and they are sent appointment letters. Selection Committee consists of senior executives not below the rank of Joint General Manager & Officer-in-charge. Induction The selected candidates for engineering and other professional areas shall undergo induction training for a period of one year. The induction training will be coordinated by Center for Manpower Development and Research Department of Corporate Personnel Directorate which will plan the induction training schedule for the entire year. Induction training schedule is as follows: 1 month - classroom training to give the trainees knowledge of the company products, process and people. 2 months - implant training, to give an understanding of shop floor. 3 months - to give the trainees specialized inputs in their respective area of specialization.
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4-6 months - rotation between different sections. 7-12 months on the job training in the section in which the trainee is placed. After completion of the training period the trainees shall be on probation for a period of one year. On successful completion of their probation period, the trainees will be confirmed on their job. Performance Appraisal An accepted system of performance appraisal is a great asset in the development of human resources in an organization. Objectives To effect a system of promotion consistency with skills and opportunities for the various categories of workmen in the company. To provide for a planned growth for the different categories of workmen in the technical and other area providing scope for the reward for performance. To develop a workforce with multi skills that will match the future needs of the organization in terms of qualification on base, multi-skills, multi-operations and experience. Appraisal process in HMT 1. Appraisal rating of the employees on: i) Job Performance Factors ii) Managerial Abilities Factors 2. General comments and overall assessment including development needs. 3. A review discussion between the appraiser and appraise. 4. Follow up action.

Appraisal Rating Individual factors falling within the above broad areas, a separate weight age is given for Supervisory and Executive groups are as under:

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Table No7.1.1 - Job Performance factors. Sl. No. Particulars Weight age Supervisory 1 2 3 4 5 Total Source: Sectional manual HMT Watches Ltd Job knowledge Quality of work Target fulfillment Cost/Time control Safety consciousness 6 6 6 6 6 30 Executive 4 4 4 4 4 20

Table No.7.1.2- Managerial abilities Factors Sl. No. Particulars Weight age Supervisory 1 2 3 4 5 6 7 8 9 10 Planning & Organizing Problem analysis and Decision making Inter-personnel skills Communication skills Self-motivation/initiative Commitment Responsiveness to change/innovation Developing subordinates Management of human resources Active discipline 2 2 2 2 2 2 2 2 2 2 20 Source: Sectional manual HMT Watches Ltd Executive 2 4 4 3 2 3 3 3 4 2 30

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Table No.7.1.3 - General comment and overall assessment The final overall assessment is arrived at as under

Total appraisal score 200 & above 180 & above 150 & above 120 & above Below 120 Source: Sectional manual HMT Watches Ltd Attendance and Maintenance

Rating Outstanding Very good Good Marginal Poor

Every employee is provided with punch card and they shall record the punching four times in their particular scheduled shift. Every workman shall when entering the establishment register his/her attendance near the gate. All workmen shall be at work at the times fixed and notified. No workman will be allowed to leave the workshop during working hours without prior permission in the prescribed form as amended from time to time. Manner of Entry and Exit No workmen shall enter or shall leave the premises of the establishment except by the gate provided for the purpose. Annual leave with wages A permanent employee is entitled for the following types of leave in a year: a) Casual leave Employees who are covered under ESI Act-10 days Employees who are not covered under ESI Act-7 days

b) Sick leave Covered under ESI Act-8 days


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Not covered under ESI Act-10 days

c) Earned leave Covered under ESI Act-1.5 days Not covered under ESI Act Medical facilities Employees in the service avails the medical facilities provided by the company, which includes the employees eligible spouse, parents and children. Company also runs a hospital at its township. Medical bills exceeding basic and dearness allowance, the total of basic and dearness allowance will be reimbursed to the employees. Some of the good multi-specialty hospitals are being recognized by the Organization, where the employees can avail the medical facility. Canteen HMT has good canteen facility for its employees for both Executive and NonExecutives. It is operated under contract basis. Minimum amount of money is charged for the food consumed. Tea and coffee are also provided to the employee at their place of work. Transportation Excellent transportation facility is given to the employees with the buses covering all the routes of the city. A minimum amount of money is charged from the employee using the transportation facility. Security Each and every worker before entering the production unit and at the time of leaving the unit, are checked by the security department. When materials received from the suppliers security checking is done at the gate. Up to Manager level-2.5 days Above Manager level-2.75 days

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7.2 FINANCE DEPARTMENT The finance department of a business takes responsibility for organizing the financial and accounting affairs including the preparation and presentation of appropriate accounts, and the provision of financial information for managers. The Finance department is divided into different sections Outward Billing System Material account section Financial concurrence and Inward bills section Main accounts section Costing section Wages section Expenses account section Cash section

Chart.No.7.2 - Organization chart of Finance Department

General Manager

Deputy General Manager

Manager (Finance) Manager (Accounts)

Accounts Officer

Source: Sectional manual HMT Watch Factory


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Functions Finance Manager To maintain accounts To adverse management on all financial matters Budget formulation Resource utilization Inventory management Cost ascertainment/costing system Pricing policy Taxation planning policy Customer credit policy Preparing operational plans of the unit

Duties of Finance department concerned with other department Purchase department Purchase orders and concurrence for the value of purchases ordered and to obtain authority sanction for the purchase order. The duties of the finance department is to Insist invoice from the suppliers If supplied more, finance department will ask the purchase department to regularize If supplied less or material is rejected the finance department will ask the purchase department to fulfill backlog or replacement of rejected material Stores department When the payment to suppliers arises, Accounts department needs the MIS (Material Inward Slips) which is the primary duty of Stores department to issue MIS as soon as material comes in. Finance department can raise objection regarding the acceptance of material towards low quality material, which will be found out by operator. Sub-contracting is done in this factory. The Accounts department keeps in touch with contracting section regarding material components which have been issued to the subcontractor for job works and obtain detailed statement for having issued the material to
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enable the Accounts department to deduct the value of the same, if any the subcontractor fails to fulfill the obligation. Sales department Accounts department interacts with the Sales department to obtain model wise details of watches to be dispatched to marketing division.

7.3 SALES DEPARTMENT The Watches manufactured by the Watch Factory I & II are dispatched to the HMT Watch Marketing Division through Carrying and Forwarding Agents(C&FA) who are appointed by them. Under the Excise Act of the Central Government the manufactured items before being sent out of the factory premises has to complete the Excise formalities and Excise Duty has to be paid on it by the manufacturing concern. The different types of products classified from Central Excise point of view are as follows: i. ii. iii. iv. v. Watches (Mechanical & Quartz) Watch components spares Watch screws Tools Machine spares

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Chart No.7.3.1 - Organizational chart of Sales Department

General Manager

Deputy Manager (Sales, FPS, Strapping)

Sales

Workman 1 No.s

Source: Sectional manual HMT Watches Ltd

Activity in Sales The components are drawn from Finished Parts Stores (FPS) and issued to Watch Ancillary Units by observing the necessary formalities, Watches after assembly and inspection watches are sent to Strapping Unit for strapping and boxing operation. The required straps and boxes are drawn from Main Stores and supplied to strapping unit. After completion of strapping and boxing the watches are collected and handed over to Carrying & Forwarding Agents (C&FA).

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The detailed dispatch procedure is as below: Chart No.7.3.2 - Activity flow chart A) Watches B) Spares/Components

Issue of watch components to Ancillary Units

Draw spares/components from FPS against demand note

Collection of finished watches from Ancillary units-Under 57 F (4)

Dispatch to Units Showrooms Customers

Hand over watches to Finished Parts Stores

Against Central Excise Invoice

Receive watches from FPS and dispatch to C & FA- against Central Excise Invoice

Source: Sectional manual HMT Watches Ltd

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7.4 MARKETING DEAPARTMENT Marketing deals with the identification and meeting human and social needs. One of the shortest definitions of marketing can be meeting the need profitably. The marketing concept holds that the key to achieving its organizational goals consists of the company being more effective than the competitors in creating, delivering and communicating customer value to its chosen target markets. Functions of Marketing Manager To collect information for sales forecasting Search for new product area Pricing the products as per the demand To appoint new dealers and distributors To market the product that involves- launching, presentation, awareness and advertisement of the product To keep a watch on the actions and strategies of the competitors To have full and perfect knowledge of marketing conditions and policies To attend grievances, complaints if any regarding product and services To emphasis on product promotion in certain areas Assessing exact customer requirement

Four Ps of Marketing

Product Place Price Promotion

Watches Direct Marketing/Indirect Marketing Cost + Overhead + Profit % Advertisement

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Distribution Channels Companys exclusive showrooms for retail sale Franchise Dealers, Redistribution stockiest

Export network includes Australia Sultanate of Oman UAE Dubai Uganda Hong Kong Nepal Madagarskar Bhutan

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8. PRODUCT PROFILE

Inox Wrist Watch We offer an elegant range of INOX Wrist Watches that are suited for people of all age groups. These INOX Wrist Watches are water resistant and display accurate time. These Wrist Watches available at market

Floral Clock We offer Floral Clocks that create a sense of natural aesthetics and enhance the look of gardens, parks and corporate houses. Our Floral Clock is manufactured using latest technology and can be customized

Elegance Wrist Watch We have an elegant range of ELEGANCE Wrist Watches that are suited for people of all age groups. These ELEGANCE Wrist Watches are water resistant and display accurate time

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Inox gold Wrist Watch We offer a wide assortment of INOXGOLD Wrist Watches that is at par with the industry standards. These INOXGOLD Wrist Watches are a compulsory item in everyday life

Solar Clock We are offering Solar Clocks, which are available in round shape. These Solar Clocks are offered at industry leading price, range of Solar Clocks can be customized as per customers specifications

Tower Clock Tower Clocks are available in square shape. Offered at industry leading price, range of tower clocks can be designed with single sided dial to four sided dial.

Population Clock Population Clock is manufactured using latest technology and can be customized as per the specifications provided by clients. These Population Clocks are widely known for its durability and quality

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9. COMPETITORS TO HMT WATCHES Internal Environment Titan Purewal Omega Maxima Sonata Orpat Ajanta Indo-Swiss External Environment Citizen Casio Seiko Swatch Rado Maxima Quartz

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10. SWOT Analysis


STRENGTHS Strong Government support. Good brand image and market leadership due to high quality, low price and reliability. Companys liquidity position has been quite comfortable, adequate availability of tangible assets such as land and buildings. Record of good industrial relations. In 1991, HMT set up a product development center fro watch design. WEAKNESSES Weak organizational culture. Over reliance on the production concept of marketing and hence ignoring marketing concept. Insufficient emphasis on R&D and design engineering. HMT did not embrace new quartz technology to a great extent and suffered because of this adherence to mechanical watches. Bureaucratic and centralized decision making inhibited HMTs ability to respond quickly with respect to market changes. Virtually ignored to maintain good trade relations with retail outlets vis--vis completion (retail margin was lower than what was provided by the competitor). It restricted product development to quality development. Aesthetics and packaging of watches have not been dully attended to. THREATS Worldwide decline in the production and demand of mechanical watches due to growing acceptance of quartz watches. Significant competition from Allwyn and Titan. Competitors wooing HMTs Top Managers. Competitors successfully exploited the lifestyle segmentation on which HMT failed too.

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Titan had started marketing its watches in unconventional outlets like boutiques and jewellery shops. The authorized service agents (ASAs) for foreign smuggled watches in the country are also suffering competition to HMT.

OPPORTUNITIES The demand for watches is growing rapidly both in domestic and international market. Capitalize on attractive segments. Leveraging brand equity of HMT to products such as gear, personal accessories.

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11.1 SUGGESTIONS The suggestions to improve brand strategy of HMT Watches are as follows: To increase its visibility, HMT Company can sponsor events similar to fashion shows in which all latest designs launched are displayed. This would have multiplier effect as the latest designs launched by the company get noticed by different segments of the customers in varied ways. Tie up with FM radio channels for reminder advertisements and informing customers about various sales promotion offers from time-to-time. Invest more in R&D as customer expectations are changing rapidly. Though HMT has got more product collections, it should focus on introducing more varieties in already existing product collections. In other words, having a limited but more depth in product collections would be more advantageous. Introduce exclusive collection for youth segment which is more contemporary and complements both traditional and western wear. Majority of the population in India belongs to middle class segment so more innovative design should be made for them in a reasonable price and more of the exclusive show room should be set up. After sales service has to be improved. That is, the process of servicing and repairing of watches should be made faster. This can be done by ensuring the spare parts availability and training all sales personnel in Citizen Service centre to undertake these tasks. Tie up with international watch brands and make them available locally. Make use of internet to spread awareness among consumers about the brand.

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11.2 RECOMMENDATIONS Conduct market survey Involve leading market research organization along with your sales. Do it periodic every six months involve retail shops, shopping centres, department stores, dealers, sales force. Most popular, trend of consumers etc. Competition Competition among brands has been also getting stronger and a lot of effort to keep sales has been required. Watches without an appeal; watches without dear marketing hardly attract consumers in the marketing gutted with commodities. Train agents to set forth dear brand vision and efficient campaign. Shift to quality with new added value. Provide consumers with lot of information select their watch wisely and professionally according to their own taste.

Place Since retailers have enough foreign brands they were simply not interested in HMTs home grown products as a result it had to sell through its 13 branch offices for machines tool equipment. In mid 80s HMTs selective retailer policy began going against it. The retailer margins provided by HMT were 2% less than what its most prominent competitor, Titan. Promotion Though HMTs advertising was distributive and did cater to the lifestyle segment, it failed to communicate the uniqueness of HMTs quartz design vis--vis other HMT watches.

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Distribution Prepare retailer to meet the changing consumers trend. Watches just displayed in showcases cannot sell. It is absolutely necessary to present them together with the background such as original story of the watch, its functionality and benefits of after sales services. Pricing In the lower end HMT should seek to achieve cost advantage by exploiting the differences in cost behavior. The pricing strategy can be to understand main competitor by 10% using market penetration strategy. Promotion Special focus on sales during festival time like Diwali, Christmas, along with discount offer and finance schemes. Go for innovation and independent and modern dimensions of the watch collection.

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CONCLUSION

Now a days cell phones are substituted for watches for referring time, but with the cut throat competition all the leading brands, watches are managing well in the market and this shows that the charm of watches will never end. Whether it is an accessory for some and necessary for others. Interning at the HMT Watches Ltd. gave me a good insight and exposure to the watch industry. Internship training gave me deeper understanding and appreciation of the watch industry in our country. It has helped me gain knowledge about the organization structure and functions of the company. Working at HMT Watch Ltd. gave me the practical knowledge about the work carried on in different departments. Interning at the HMT Watches Ltd. has motivated me to continue working diligently as well as to further my studies in order to contribute greatly to the development of my country.

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