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395. If it had to manufacture the range, it would have had to invest at least Rs 2.5 million just for the machinery to make the moulds for the watches. Similarly, the Fast rack range of digital watches was also priced in the range of Rs 650 to Rs 1500, keeping in mind the target segment - youth in the 15-24 age groups. Titan could price the range so attractively because the watches were completely sourced from Hong Kong and Taiwan.

In December 2001, while the income from the watch division increased by 4%, the figure was 10% for the company as a whole. This was because Tanishq, the jewellery division had posted a 32% growth. It was clear that the company needed to work towards strengthening the watch business in order to reap the full benefits of its marketing and outsourcing efforts.

The line was extended to the digital watch market with Fas track Digital, positioned on the fashion platform. According to company sources, the success of these two watches was due to the fact that they were outsourced. By 2001, with revenues of Rs 7 billion and net profit of Rs 235 million, Titan emerged as the country's largest watchmaker with a 25% market share of the total domestic market and a 50% share among nationally recognized brands. 

The liberalisation policy of Indian economy and the subsequent removal of restriction in import of watches in late 1990's forced Titan focus more on marketing strategies rather than on its manufacturing activities.so as to retain the competitive advantage.

IS OUTSOURCING A VIABLE OPTION FOR TITAN

According to analysts, Titan's multibillion investments 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. This loss was due to the high overheads, excise duties and marketing spending in 1999-00, which increased expenditure by Rs 1.5 billion. Moreover, net profits had come down by 47% o Rs 146.4 million in 1998 from Rs 275.7 million in 1996.

Company watchers partly attributed this to the heavy investments in the manufacturing setup.

Taking into account the above factors, Titan had no other option but to settle for outsourcing. Around the same time, Titan decided to change its focus to generating more volumes rather than value. This was because the growth in the premium segment of the watch market, which was Titan's mainstay, had been below its expectations. The company wanted to build up a base in the lower value segment and extend its reach. According to company estimates, outsourcing worked out be around 30% cheaper than manufacturing in-house

Another reason why Titan wanted to reduce its focus on manufacturing was the high employee costs -11.2% of its revenues in 2000. This was because in the days when the company had no other option but to manufacture, the Hosur factory had a huge worker base. In 1997 and 2000, the company entered into variou本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。