Pestel analysis of Titan Watches
PESTEL analysis :
Pestel stands for Political, Economical, Sociocultural, Technological Environmental, Legal analysis of the external environment affecting the business.
PESTEL analysis is done by managers to understand the macro environmental factors affecting the business. These analysis are strategic tools for understanding market growth, market share, latest trends etc.
Political factors : These refer to the relevant government policies that affect the business environment. For eg. Tax policy,labour law , minimum wages law ,tariff rates etc *
Economic factors : These refer to the macro economic factors that may affect the business. For eg. Inflation, Gross National Income, Gross domestic product, REPO rate, reverse Repo rate. *
Socio-cultural factors : These refer to the various social and cultural factors prevalent in the business environment. For eg. Greater awarness of the people towards environment, changes in taste of the consumers, average age of the consumers etc. *
Technological factors: These include the technological factors such as R&D activity, automation and other innovations which has changed the way business is conducted. For eg MP3 players, IPOD, Iphone, Tele conferencing, cloud computing to name a few. *
Environmental factors: These include the environmental and ecological factors that affect the business for eg climate change, global warming, and rapid depletion of our natural resources. *
Legal factors: These refer to the legal environment in which the business is conducted. For eg. Trade barriers, consumer law, anti dumping duty, corporate acts.
Titan was formed in 1984 with the joint venture of Tata group and the Tamil Nadu international development corporation. It is mainly present in the watch industry although it has successfully forayed into the jewellery segment with the launch of Tanishq. Some of the notable brands of Titan are Sonata and Fastrack .It has made successful JV with international brands like Tommy Hilfiger,Hugo Boss,fcuk and made their presence felt in India. It has also made foray into eyewear with the launch of Fastrack eyewear and sunglasses. Alongside Tanishq, Titan has Zoya, the largest retail chain in luxury segment. It has a total of 665 retail outlets all over India backed by a committed workforce of around 5000 employees.
PESTEL analysis of Titan
Political factors : The Watch industry in India was started by the Indian government with the launch of HMT(Hindustan machine tools) in 1961.Till 1991 HMT enjoyed market leadership due to the trade barriers in the form of quantitative restrictions imposed on foreign products. There were very few players giving serious competition to HMT. But the scenario drastically changed with the formation of Titan and the liberalization policy adopted by the Indian government in 1991.As the trade barriers reduced, more and more players entered the Indian Watch industry which has one of the least watch penetration ratio all over the world (27%).Although the Indian government has successfully reduced the taxes and duties on imported watches and components it is still 50 to 60 percent over and above the watch prices in Singapore or Dubai. Due to this smuggling and tax evasion is quite prevalent in India.
Economic factors : The Indian Economy is on a boom. It is having an impressive growth of 8-9 % per year which is second only to china. There is a huge influx of foreign investment in India in all the sectors including watch industry. Many International brands are have set up their retail outlets in india. The Indian watch Industry is growing at an impressive growth of 20% for the last two to three years. The luxury and the premium watch segment is the fastest growing segment with 25% growth per annum. The percapita income of the middle class Indian has increased many folds from a meager...
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