Internship report

On
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 m
arket Present situation of Indian watch market Future challenges of watch market
CHAPTER-3 Company profile Company overview Mission and Vision Corporate Objecti
ves and Goals History and Evolution of Organization HMT Machine Tools ltd. HMT W
atches ltd. HMT Chinar Watches Ltd. HMT International Ltd. HMT Bearing Ltd. Prag
a Tools Ltd. HMT Tractor Business HMT Units, Divisions & Locations HMT Watch Fac
tory at glance Introduction of HMT WF I & WF II at Bangalore Corporate objective
s of HWL Important events of HWL Products of HWL Strategic Planning Organization
Structure Departments of HMT Watch Factory HRM Department Finance Department Sa
les Department Marketing Department Product Profile Competitors of HMT Watches S
WOT 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 3
1 33 36 38 40 41 43 46
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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 Watche
s 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 pe
rformance factors Managerial abilities factors General comment and overall asses
ment Page No. 16 28 28 29
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Chapter-1 Introduction
Organization is a systematically designed, scientifically planned sum total of v
arious function coordinate mutually, synchronized in a format to achieve the goa
ls and objectives of the company. HMT is one of the Government of India undertak
ings, which was established in the year 1953, with the objective of producing a
limited range of machine tools, required for building an industrial institute fo
r the country. HMT Watches Limited comprises of three manufacturing units at Ban
galore, Tumkur, Ranibagh and Uttarkhand. It manufactures Mechanical and Quartz A
nalog watches and Clocks. HMT limited, the first company to start Watch manufact
uring 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 mode
ls.
HMT is one of the reputed public sectors in India.
It is an organization with al
l 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 wor
king
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 str
ategies 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
.
4

To gain practical knowledge while conducting the study. This study would help HM
T Watches Limited to understand the gaps in the communication strategy regarding
brand repositioning exercises and further measures to be taken for effective ma
rketing communication.
1.3 Scope of the study
The study attempts to identify the reach of HMT Watches which would help the com
pany 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.
errors in the study.
5

There is a possibility of sampling

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 cu
riosity ingenuity. In the earliest of times, observation of the Suns course in th
e 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 wer
e only time counters, not true clocks. The mechanical clocks appeared during the
14th century. The portable clocks appeared soon after the invention of the spri
ng, 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 oscil
lator with high degree of precision. During 1675, Hugens invented as spiral spri
ng governor for clock called the balance wheel. The lever escapement, the most e
fficient kind ever invented and the most successful was developed by Thomas Mudg
e in 1769. In those days, emphasis was on producing artistic and fascinating clo
ck rather than accurate ones. Wrist watches became very popular after the First
World War. Chronographs with multiple functions were produce for special applica
tions. Self winding wrist watches were commercialized in 1924. The battery power
ed watch appeared in 1952, it featured a balance wheel with electric contracts.
First electronic watch, invented in 1960 by Max Hetzel for Bulova, featured flex
ion 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, variou
s companies in the USA, Switzerland and Japan started producing all electronic d
igital display watches of the light emitting diode type. By about 1972, quartz e
lectronic watches with liquid crystal display were introduce into the market and
simultaneously watches with conventional analogue display were also introduced.
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2.2 History of the Indian watch market

The Indian watch industry began in the year 1961 with the commissioning of the w
atch division of HMT. The first watch model manufactured by HMT was the Janata m
odel in the year 1962. HMT was the leader in the watch market till the Tatas for
med Titan Watches in association with Tamil Nadu Industrial Development Corporat
ion in the year 1987. They took a major strategy decision, which later changed t
he face of the Indian watch market- to manufacture only quartz watches. Liberali
zation in 1992 and the removal of quantitative restrictions due to WTO has opene
d the doors for many foreign brands in the Indian market the market stood to wit
ness 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 an
d 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 e
legance. Thus it is a buyers market with multitude of designs that have entered a
nd 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 contr
ibutes 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 s
egments can be identified here, namely low priced, medium priced, and high price
d watches. Many customers prefer mechanical and automatic watches, while others
prefer quartz watches. Newer segments are also on rise such as ladies watches, c
hildrens watches and gents watches. Customers usually base their preferences and b
uying decisions on a variety of factors like price, durability, utility, aesthet
ic appeal and brand name. A combination of all these points ultimately forms the
customers buying decision that translates into the purchase of a watch.
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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 un
organized sector in which the maximum number of watches are sold are below Rs.30
0. 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 four
th of the sales by volume comes from watches that are priced below Rs.1000. Plas
tic 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 to
ughness 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 r
eplacement rate of watch is 33.8 %( Source: India market demographics report, 20
03). 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 r
eport, 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 dem
and for watches. This along with the low penetration levels represents the untap
ped market potential for watches in India.
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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, C
alvin klein, Giordano, Espirit.
Mass: (<Rs.400) Grey market, Chinese, Etc.
(Source: indiaindustrystatistics.blogspot.com)
9

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

Incorporating new functionalities in the wristwatch with the help of new technol
ogy: Spot watches which offer advanced features such as automatic time adjustmen
t 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 tha
t literally zaps information from IBM Linux based wristwatch.
Tapping rural mark
et: Huge size of the rural market.
As tele-destiny and infrastructure of the rur
al India improves, it offers scope for sophisticated form of advertising and met
hod of sales Indian rural bazaar is displaying a market trend towards consumeris
m and demand for durable products.
More and more focus on new technology and mul
tifunctional utility.
The focus should increase on spreading the market to rural
areas. Greater price segmentation, specially lower end 2 fold advantages: Deman
d, 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 w
hims and notions of fickle public. The fashion element that never goes out of st
yle 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 2
012 compared to 10% first half of 2011. Watch exports from Switzerland climbed 1
9.2% 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 b
illion by 2017 ( source: Global Industry Analysts, Inc)
Future watches
Watch makers in Europe are building complex, intricate machines t
hat tell time with micro-second accuracy. These are masterpieces where each comp
onent is handcrafted by Masters of Horology and designed by master designers. Br
eguet falls into that category.
The demand for wrist watches, especially from As
ia 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 y
ear 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 enorm
ous volume throughput, local watch brands will be beneficiaries of some interest
ing volume sales. (Source: http://www.thehindubusinessline.com/todayspaper/tpbra
ndline/article1112102.ece).
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Chapter-3 3. COMPANY PROFILE Company Name Established : HMT WATCHES LIMITED : 19

61
Registered Office : HMT Bhavan #59, Bellary Road, Bangalore-560032 Factories Web
site : Bangalore, Tumkur, Ranibagh and Uttarkhand. : www.hmtindia.com
12

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, re
quired 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 good
s, precision engineering, consumer goods and tractor markets in the country. The
company has, over the years, imbibed and developed cutting edge technologies an
d today offers total manufacturing solutions to the engineering goods manufactur
ing sector. In its progression from a single-unit, single-product company to a m
ulti-product, multi-unit conglomerate, HMT has laid the foundation for the evolu
tion of a network of engineering component manufacturers throughout the nation t
hat 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, Bang
alore. HMT Watches Limited, Bangalore.
HMT Chinar Watches Limited, Jammu & Kashm
ir. HMT Bearings Limited, Hyderabad.
HMT Praga Tools Limited, Secunderabad.
HMT
International Limited, Bangalore. Joint Venture Company SUDMO-HMT Process Engine
ers (India) Limited.
3.2 Mission and Vision To establish ourselves as one of the worlds premier compan
ies in the engineering field having strong international competitiveness.
To ach
ieve market leadership in India through ensuring customer satisfaction by supply
ing internationally competitive products and services. To achieve sustained grow
th 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 engineer
ing goods and services of world class excellence.
To maintain technological lead
ership through continuous efforts to update product technology and manufacturing
methods. To globalise our operations by developing a mix of international marke
ts 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 germinat
ed only after India got its freedom. A committee was set up in 1948, which sugge
sted 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 prop
osed company. Another four years rolled by, the Government rechristened, Hindust
an Machine Tools was formally registered in 1953. HMT ltd. a public sector enter
prise is a multi-product and multi-technology engineering conglomerate, with sta
te-of-art enterprise acquired from world leaders and harnessed with indigenous e
xcellence. HMT is synonymous with excellence in precision engineering in India.
A multitechnology engineering complex, HMT is built on a strong foundation of te
chnical know-how acquired from world leaders in machine tools such as Oerlikon,
Manuhrin, Glidemeister, Liebherr, Renault, Fritz, Werner, Pegerd etc., From simp
le 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
14

the application needs of every industry. HMT also has the distinction of manufac
turing 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 dive
rsification and expansion which resulted in the duplication of Bangalore unit an
d the setting up of new units at Pinjore, Kalamassery and Hyderabad to become th
e worlds widest range of machine tools manufacturers under a single corporate ent
ity. With a Watch Factory already established in 1961-62, additional capacities
for watch production were contemplated to provide a greater cushion against cycl
ical fluctuations in capital goods markets and also to meet the bargaining deman
d 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 Tool
s 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 Trac
tor business commenced its operations in 1971 in technical collaboration with M/
s MOTOKOV, Czechostovkia Republic. The company achieved market leadership in tra
ctors by enlarging its range to cover most of the applications for the farming c
ommunity. In the 1980s HMT as a part of vertical integration of efforts launched
units to manufacture Watches at Ranibagh, Watch cases at Bangalore, Stepper moto
rs 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 an
other subsidiary. In 1990s, it involved n formation of a Machine Tools Business G
roup as part of Business Re-Organization, formation of Central Reconditioning Di
vision at Bangalore. Today, HMT comprises six subsidiaries under admit of a Hold
ing company which also manages the Tractors business directly.
15

3.4.1 HMT MACHINE TOOLS Ltd. HMT Ltd, the pioneer in machine tools industry in I
ndia and manufacturers of a diversified range of products has incorporated HMT MA
CHINE TOOLS Ltd. as its fully owned subsidiary on 9th august 1999. HMT Machine To
ols Ltd is a multi unit, multi location, multi technology unit manufacturing a w
ide 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 i
n 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 compr
ises of three manufacturing units at Bangalore, Tumkur and Ranibagh while its ma
rketing headquarters is based in Bangalore. All its manufacturing units have obt
ained the ISO 9001 certification. The product range of HMT WATCH Ltd include mor
e than 1500 models to choose from catering to all segments of the market from ec
onomy to premium and young to the old. HMT brand enjoys very high brand equity i
n the Indian market. The brand has consecutively been adjusted as one of the bes
t 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 manufac
turing 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 w
ound watch. Marketing, Sales and after sales service for watches of HMTCWL is ca
tered to by HMTWL. 3.4.4 HMT (INTERNATIONAL) Ltd. HMT (INTERNATIONAL) Ltd. was s
et up in 1974 as a wholly owned subsidiary of HMT Ltd., to undertake export good
s manufactured by HMT and other leading Indian manufacturers. HMT(I) is headquar
ter at Bangalore and has a global network extending over 38 countries with 67 re
presentations to service its all worldwide. HMT (I) has sold over 12,500 machine
s in more than 70 countries with efficient after sales service. HMT (I) also off
ers a comprehensive package of consultancy of technical and engineering services
from concept to commissioning on turnkey basis its track record include prestig
ious in. Algeria, Indonesia, Kenya, Malaysia, Tanzania, UAE and other countries.
HMT (I)s business portfolio include trading in :
Machine tool and industrial mac
hinery 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 estab
lished in technical collaboration with M/s Koyo Seiko Co. Ltd. JAPANS an interna
tionally 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 Pra
ga Tools Corporation Ltd to manufacture Machine Tools with headquarter at Secund
rabad. 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 holdin
g in the year 1988. Praga Tools Ltd manufactures Machine Tools for various appli
cations including CNC Machines. In the years Praga has collaboration with world
famous machine tool manufacturers. 3.4.7 HMTS TRACTOR BUSINESS HMTs tractor busine
ss commenced its operations in 1971 in technical collaboration with M/s MOTOKOV,
Czechoslovakia republic. Initially, HMT started the operation with the manufact
ure 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 t
he applications for farming community. Currently the company has there three tra
ctor 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 recogni
zed by the department of scientific and industrial research, the government of I
ndia. The tractor business group of HMT has been a proud recipient of a number o
f 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 manufact
uring and assembly operations. It has an in house marketing organization comprisi
ng b17 area offices, 11 stockyards and over 300 dealers spread across the countr
y. HMT tractors is ably supported by over 40 ancillary units.HMT has produced an
d 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 Wat
ches 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 T
umkur, Ranibagh and Jammu. The division consists of fine production shop, namely
:
Press shop. Machine shop. Tool room. Polishing shop. Electroplating shop.
19

4.1 HMT WATCH FACTORY AT GLANCE

It was Pt. Jawaharlal Nehrus vision that he wanted to setup a watch industry in I
ndia. 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 manufa
cture 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, th
e industrial minister. Accordingly, a technical collaboration agreement was sign
ed on 25 March 1960 between the governments of India M/s. Citizen Watch Company,
Japan for manufacturing wristwatches in India. Industrialization in India had f
irst begun. There were hardly any takes for microprecision field like watches. A
t 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 proje
ct was handed over to HMT. Thus HMT was factory came into picture. The foundatio
n 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 pre
mises of HMT Watch Factory Bangalore. The formal inauguration took place on 15 t
h 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 Bangal
ore 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 mor
e 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 foun
dation 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 too
ls division in Bangalore, acquired by HMT from the government of Mysore. The con
struction of manufacturing shops, air-conditioned assembly and inspection shop,
the administration and
20

colony buildings were completed within a record time of 13 months. The assembly
wrist watches from the important component was started. Initially , Watch Factor
y, Bangalore started with a humble production of 14439 watches with a turnover o
f Rs.100 Lakhs during the year 1962-63.The indigenous contents of a watch initia
lly was about 32% & then increased to 64%.The unit started production of Hair sp
ring , Main spring & shock absorbers during the year 1976 & increased the indige
nous content of a watches.
21

Chart No.4.2- HMT WATCHES LIMITED

HMT WATCHES LIMITED
Marketing Division
Manufacturing Units
Watch Factory Bangalore & Timing Systems Division Bangalore Watch Case Factory B
angalore Watch Factory Ranibagh Watch Factory Tumkur
Source: Sectional Manual HMT Watches Ltd. 4.3 CORPORATE OBJECTIVES of HWL
Ensuri
ng customer satisfaction through market leadership. Achieve sustainable competit
ive advertisement through the value edge and technological leadership. Achieve s
ystematic business growth through generalization of adequate interest of the res
earch. To globalize the co- operation by developing a mix of international marke
t and net foreign exchange earnings.
Development and retain human skills and tal
ents.
Improving the Quality of work life.
Introducing the Innovative products.
22

Development of ancillaries, small industries, rural and backward areas.

Promote
ecological balance and quality of social life. Sound and ethical business practi
ces.
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 Techn
icians returned from Japan after one year Training at the works of M/s Citizen W
atch Co. ltd., Plant & Machinery for the first phase of production installed. 19
63- Watch Factory-I inaugurated. Initially three types of Watches were manufactu
red. Japanese technicians in batches helped to stabilize production activities f
or three years. 1969- Technical collaboration agreement with M/s CWCL concluded
for the manufacture of Automatic Day Date Watches. 1970- Setting up of Watch Fac
tory at Srinagar exclusively with the Technical know-how for HMT WF, Bangalore 1
975- 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 S
rinagar.
1976- Project for manufacturing 1.25 million sets of Hair Spring, Main Spring an
d Shock Absorbers to cater to in-house requirement and other HMT Watch Units est
ablished. 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 s
tarted. 1983- Specialized Watch Case Division established at Banagalore.
23

1985- Establishment of WF-V at Ranibagh for manufacture of 2 million Watch compo

nents. Miniature Battery Unit at Guwahati started.
1989- Uday HMT Ladies Welfare Association established for the Assembly operation
s, exclusively employing dependents of deceased/retired employees of HMT. 1990Quartz Ana-Digi Watch Assembly started in WFB. PCB Manufacturing established in
WFB.
1991- Quartz Multi-Function Digital Display Watch Assembly started in WFB. 1993To 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 Septe
mber 1998- Company launched 15 new models in automatic day/date range. - Introdu
ced 350 range of Citizen watches in Mumbai along with its latest Eco-Drive model
s.
4.5 PRODUCTS OF HMT Keeping pace with the changing fashion, several different mo
dels of Hand Wound Watches, Pocket Watches, Ladies Watches, Braile watches for b
lind people, Automatic Day Date, Quartz Ana-Digi and Quartz Multi-Function Digit
al Display watches. Additionally printed circuit boards are also being manufactu
red for various electronic application including Quartz watches. The productivit
y Aids department manufactures and supply vibratory bowl feeders to other Watch
Units.
24

5. STRATEGIC PLANNING To achieve the objectives and goals of the Unit and to opt
imize the utilization and capitalizing the strengths, the following strategies h
ave 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. Ancill
iarisation and sub-contracting of low technology and high labour intensive opera
tions. Re-training and re-orienting of manpower through ancilliarization and sub
contracting. Reduction in Manufacturing Cycle Time through Technology Developmen
t and use of Productivity Devices. Increase in Productivity through Participativ
e Management. Standardization, Cost Reduction, Productivity Improvement and Impo
rt substitution. CAD/CAM for flexibility in manufacture to meet customers demand.
b) PROCUREMENT Preventing suppliers from forming cartels by reducing the depende
nce on them to the barest minimum by in-house manufacturing. Reducing the raw ma
terials and other semi-finished good inventory by scientific planning.
c) FINANCE High accent on internal resources generation and ploughing back of WB
G surpluses in expansion. Effective control measure on committed cost. Efficient
Working Capital Management Better work-in-process and Inventory Control.
25

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 Product
ion 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 manpowe
r 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 Manufactu
ring etc.
6. ORGANIZATION STRUCTURE of HWL Chairman heads the Board of Directors of the Co
mpany 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 Mana
ger, Deputy General Manager heading various departments/disciplines within the u
nit. Under them are Assistant General Manager (AGM), Manager & Deputy Manager. O
fficers and Workmen
26

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
27

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.
I
nduction and training. Performance appraisal.
Wage and salary administration.
Em
ployment of casual contract labour. Industrial communication.
Providing welfare
facilities to the employees like houses, transport and award of compensation.
28

Recruitment Recruitment is the process of finding attracting capable applicants

for employment. The process begins when their applicants are submitted. In HMT r
ecruitments are done by i. ii. Campus recruitment Open all India advertisement.
Selection All the applicants have to undergo preliminary written tests for the s
election. Written tests will be conducted by entrusting the work to a reputed in
stitution 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 on
ly on the condition that they should have passed successfully the course with re
quisite 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 Discussio
n. 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 s
elected candidates for engineering and other professional areas shall undergo in
duction training for a period of one year. The induction training will be coordi
nated by Center for Manpower Development and Research Department of Corporate Pe
rsonnel Directorate which will plan the induction training schedule for the enti
re year. Induction training schedule is as follows: 1 month - classroom training
to give the trainees knowledge of the company products, process and people. 2 m
onths - implant training, to give an understanding of shop floor. 3 months - to
give the trainees specialized inputs in their respective area of specialization.
29

4-6 months - rotation between different sections. 7-12 months on the job trainin
g in the section in which the trainee is placed. After completion of the trainin
g period the trainees shall be on probation for a period of one year. On success
ful completion of their probation period, the trainees will be confirmed on thei
r job. Performance Appraisal An accepted system of performance appraisal is a gr
eat asset in the development of human resources in an organization. Objectives
T
o 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 f
or 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 o
n base, multi-skills, multi-operations and experience. Appraisal process in HMT
1. Appraisal rating of the employees on: i) Job Performance Factors ii) Manageri
al Abilities Factors 2. General comments and overall assessment including develo
pment needs. 3. A review discussion between the appraiser and appraise. 4. Follo
w up action.
Appraisal Rating Individual factors falling within the above broad areas, a sepa
rate weight age is given for Supervisory and Executive groups are as under:
30

Table No7.1.1 - Job Performance factors. Sl. No. Particulars Weight age Supervis
ory 1 2 3 4 5 Total Source: Sectional manual HMT Watches Ltd Job knowledge Quali
ty of work Target fulfillment Cost/Time control Safety consciousness 6 6 6 6 6 3
0 Executive 4 4 4 4 4 20
Table No.7.1.2- Managerial abilities Factors Sl. No. Particulars Weight age Supe
rvisory 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 C
ommitment 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 m
anual HMT Watches Ltd Executive 2 4 4 3 2 3 3 3 4 2 30
31

Table No.7.1.3 - General comment and overall assessment The final overall assess
ment 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 fo
ur times in their particular scheduled shift.
Every workman shall when entering
the establishment register his/her attendance near the gate. All workmen shall b
e at work at the times fixed and notified. No workman will be allowed to leave t
he 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 o
r 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 fo
llowing types of leave in a year: a) Casual leave Employees who are covered unde
r ESI Act-10 days Employees who are not covered under ESI Act-7 days
b) Sick leave Covered under ESI Act-8 days
32

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 t
he company, which includes the employees eligible spouse, parents and children. C
ompany also runs a hospital at its township. Medical bills exceeding basic and d
earness allowance, the total of basic and dearness allowance will be reimbursed
to the employees. Some of the good multi-specialty hospitals are being recognize
d by the Organization, where the employees can avail the medical facility. Cante
en HMT has good canteen facility for its employees for both Executive and NonExe
cutives. 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 thei
r place of work. Transportation Excellent transportation facility is given to th
e 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. Securi
ty 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 receive
d from the suppliers security checking is done at the gate. Up to Manager level2.5 days Above Manager level-2.75 days
33

7.2 FINANCE DEPARTMENT The finance department of a business takes responsibility

for organizing the financial and accounting affairs including the preparation a
nd presentation of appropriate accounts, and the provision of financial informat
ion for managers. The Finance department is divided into different sections
Outw
ard Billing System Material account section
Financial concurrence and Inward bil
ls 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
34

Functions Finance Manager

To maintain accounts To adverse management on all fina
ncial matters
Budget formulation Resource utilization
Inventory management Cost
ascertainment/costing system Pricing policy
Taxation planning policy Customer cr
edit 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 obtai
n authority sanction for the purchase order. The duties of the finance departmen
t is to Insist invoice from the suppliers
If supplied more, finance department w
ill ask the purchase department to regularize If supplied less or material is re
jected the finance department will ask the purchase department to fulfill backlo
g or replacement of rejected material Stores department When the payment to supp
liers 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 to
wards low quality material, which will be found out by operator. Sub-contracting
is done in this factory. The Accounts department keeps in touch with contractin
g section regarding material components which have been issued to the subcontrac
tor for job works and obtain detailed statement for having issued the material t
o
35

enable the Accounts department to deduct the value of the same, if any the subco
ntractor fails to fulfill the obligation. Sales department Accounts department i
nteracts 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 di
spatched to the HMT Watch Marketing Division through Carrying and Forwarding Age
nts(C&FA) who are appointed by them. Under the Excise Act of the Central Governm
ent 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 manu
facturing concern. The different types of products classified from Central Excis
e point of view are as follows: i. ii. iii. iv. v. Watches (Mechanical & Quartz)
Watch components spares Watch screws Tools Machine spares
36

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 a
nd boxing operation. The required straps and boxes are drawn from Main Stores an
d supplied to strapping unit. After completion of strapping and boxing the watch
es are collected and handed over to Carrying & Forwarding Agents (C&FA).
37

The detailed dispatch procedure is as below: Chart No.7.3.2 - Activity flow char
t 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
38

7.4 MARKETING DEAPARTMENT Marketing deals with the identification and meeting hu
man and social needs. One of the shortest definitions of marketing can be meetin
g the need profitably. The marketing concept holds that the key to achieving its
organizational goals consists of the company being more effective than the comp
etitors in creating, delivering and communicating customer value to its chosen t
arget markets. Functions of Marketing Manager
To collect information for sales f
orecasting Search for new product area
Pricing the products as per the demand
appoint new dealers and distributors To market the product that involves- launc
hing, presentation, awareness and advertisement of the product To keep a watch o
n the actions and strategies of the competitors
To have full and perfect knowled
ge 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 % Advertise
ment
39

To

Distribution Channels
Companys exclusive showrooms for retail sale Franchise Deal
ers, Redistribution stockiest
Export network includes Australia Sultanate of Oman UAE Dubai Uganda Hong Kong N
epal Madagarskar Bhutan
40

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 an
d enhance the look of gardens, parks and corporate houses. Our Floral Clock is m
anufactured 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 res
istant and display accurate time
41

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 compul
sory item in everyday life
Solar Clock We are offering Solar Clocks, which are available in round shape. Th
ese Solar Clocks are offered at industry leading price, range of Solar Clocks ca
n be customized as per customers specifications
Tower Clock Tower Clocks are available in square shape. Offered at industry lead
ing 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 ca
n be customized as per the specifications provided by clients. These Population
Clocks are widely known for its durability and quality
42

9. COMPETITORS TO HMT WATCHES Internal Environment

Titan
Purewal
Omega
Maxima
So
nata Orpat
Ajanta
Indo-Swiss External Environment
Citizen
Casio
Seiko
Swatch
o Maxima Quartz
43

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 bui
ldings. Record of good industrial relations. In 1991, HMT set up a product devel
opment center fro watch design. WEAKNESSES Weak organizational culture.
Over rel
iance on the production concept of marketing and hence ignoring marketing concep
t. 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 me
chanical watches. Bureaucratic and centralized decision making inhibited HMTs abi
lity to respond quickly with respect to market changes.
Virtually ignored to mai
ntain good trade relations with retail outlets vis--vis completion (retail margin
was lower than what was provided by the competitor). It restricted product deve
lopment to quality development. Aesthetics and packaging of watches have not bee
n dully attended to. THREATS Worldwide decline in the production and demand of m
echanical watches due to growing acceptance of quartz watches.
Significant compe
tition from Allwyn and Titan.
Competitors wooing HMTs Top Managers.
Competitors su
ccessfully exploited the lifestyle segmentation on which HMT failed too.
44

Titan had started marketing its watches in unconventional outlets like boutiques
and jewellery shops.
The authorized service agents (ASAs) for foreign smuggled w
atches in the country are also suffering competition to HMT.
OPPORTUNITIES The demand for watches is growing rapidly both in domestic and int
ernational market. Capitalize on attractive segments.
Leveraging brand equity of
HMT to products such as gear, personal accessories.
45

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 hav
e 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 channel
s for reminder advertisements and informing customers about various sales promot
ion offers from time-to-time.
Invest more in R&D as customer expectations are ch
anging rapidly. Though HMT has got more product collections, it should focus on
introducing more varieties in already existing product collections. In other wor
ds, having a limited but more depth in product collections would be more advanta
geous. Introduce exclusive collection for youth segment which is more contempora
ry and complements both traditional and western wear.
Majority of the population
in India belongs to middle class segment so more innovative design should be ma
de 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 servicin
g and repairing of watches should be made faster. This can be done by ensuring t
he 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 consumer
s about the brand.
46

11.2 RECOMMENDATIONS Conduct market survey

Involve leading market research organ
ization along with your sales. Do it periodic every six months involve retail sh
ops, shopping centres, department stores, dealers, sales force.
Most popular, tr
end 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 a
n appeal; watches without dear marketing hardly attract consumers in the marketi
ng gutted with commodities.
Train agents to set forth dear brand vision and effi
cient campaign. Shift to quality with new added value. Provide consumers with lo
t 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 off
ices 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 it
s most prominent competitor, Titan. Promotion Though HMTs advertising was distri
butive and did cater to the lifestyle segment, it failed to communicate the uniq
ueness of HMTs quartz design vis--vis other HMT watches.
47

Distribution Prepare retailer to meet the changing consumers trend. Watches just
displayed in showcases cannot sell. It is absolutely necessary to present them t
ogether with the background such as original story of the watch, its functionali
ty and benefits of after sales services. Pricing
In the lower end HMT should see
k to achieve cost advantage by exploiting the differences in cost behavior.
The
pricing strategy can be to understand main competitor by 10% using market penetr
ation strategy. Promotion Special focus on sales during festival time like Diwal
i, Christmas, along with discount offer and finance schemes. Go for innovation a
nd independent and modern dimensions of the watch collection.
48

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 i
s an accessory for some and necessary for others. Interning at the HMT Watches L
td. gave me a good insight and exposure to the watch industry. Internship traini
ng gave me deeper understanding and appreciation of the watch industry in our co
untry. It has helped me gain knowledge about the organization structure and func
tions 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 s
tudies in order to contribute greatly to the development of my country.
49