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Casio (1)

  1. 1. CASIO G-SHOCK Executive Summary The study is basically focused on product and brand management of G-shock watches, a product of Casio Watch. The study tries to unveil the history of company, the technologies used, the marketing efforts they have put into the product. The G-shock MTGS1000BD-1 watches uses digital platform and many innovation technique like Tough Solar Power Triple G Resistant (Shock Resistant, Vibration Resistant, Centrifugal Force Resistant) Smart Access Electronic Crown w/Quick-lock Tough Movement Auto hand home position correction 200M Water Resistant Neo-brite Luminous Hands Dual Time Selectable 29 times zones (29 cities + UTC), city code display, daylight saving on/off, home city/world time swapping) Beeper Alarm 1/20 second chronograph Measuring capacity: 1:59'59.95" Measuring modes: Elapsed time, split time Other: Auto-start Countdown Timer Measuring unit: 1 second Countdown range: 120 minutes Countdown start time setting range: 1 to 120 minutes (1-minute increments) Full Auto-Calendar (pre-programmed until the year 2099) Day & Date Display 12/24 Hour Formats Accuracy: +/- 15 seconds per month (with no signal calibration)
  2. 2. Storage Battery: Solar Rechargeable Battery Power Saving Function Low Battery Alert Approx. Battery Life: 5 months on full charge (without further exposure to light) Core Gaurd Structure w/Alpha Gel® Sapphire Crystal w/Anti-Glare coating Forged Stainless Steel Caseback Layered Panel Composite Band (Solid Stainless Steel & Fine Resin) One-touch, 3-fold Buckle Module: 5369 In its product development. It has given a competitive edge against its competitors in the market thus achieving the targeted marketed shares that has directly impacted the company‟s profitability. Introduction The Casio Computer Company, Limited is a multinational electronics manufacturing company headquartered in Shibuya, Tokyo, Japan. Its products include calculators, mobile phones, cameras, musical instruments and watches. Founded: 1946, Tokyo, Japan Headquarter: - Shibuya, Tokyo, TKY CEO: Kazuo Kashio Casio was established in April 1946 by Tadao Kashio, an engineer specializing in fabrication technology. Kashio's first major product was the yubiwa pipe, a finger ring that would hold a cigarette, allowing the wearer to smoke the cigarette down to its nub while also leaving the wearer's hands free. Japan was impoverished immediately following World War 2, so cigarettes were valuable, and the invention was a success. After seeing the electric calculators at the first Business Show in Ginza, Tokyo in 1949, Kashio and his younger brothers used their profits from the yubiwa pipe to develop their own calculators. Most of the calculators at that time worked using gears and could be operated by
  3. 3. hand using a crank or using a motor (see adding machine). Kashio possessed some knowledge of electronics, and set out to make a calculator using solenoids. The desk-sized calculator was finished in 1954 and was Japan's first electro-mechanical calculator. One of the central innovations of the calculator was its adoption of the 10-key number pad; at that time other calculators were using a "full keypad", which meant that each place in the number (1s, 10s, 100s, etc...) had nine keys. Another innovation was the use of a single display window instead of the three display windows (one for each argument and one for the answer) used in other calculators. n 1957 Casio released the Model 14-A, sold for 485,000 yen, the world's first all-electric compact calculator, which was based on relay technology. 1957 also marked the establishment of Casio Computer Co., Ltd. In the 1980s, its budget electronic instruments and home musical keyboard instruments gained huge popularity. The company also became well known for the wide variety and innovation of its wristwatches. It was one of the earliest manufacturers of quartz watches, both digital and analog. It also began selling calculator watches during this time. It was one of the first manufacturers of watches that could display the time in many different time zones and of watches with temperature, atmospheric-pressure, altitude, and even Global Positioning System displays. A number of notable digital cameras firsts have been made by Casio, including the first consumer digital camera with an LCD screen, the first consumer 3 megapixel cameras, the first true ultra-compact model, and the first digital camera to incorporate ceramic lens technology. With the launch of its first watch in 1974, Casio entered the wristwatch market at a time when the watch industry had just discovered digital technology. As a company with cutting-edge electronic technology developed for pocket calculators, Casio entered this field confident that it could develop timepieces that would lead the market. In developing its own wristwatch, Casio began with the basic question, "What is a wristwatch?" Rather than simply making a digital version of the conventional mechanical watch, we thought that the ideal wristwatch should be something that shows all facets of time in a consistent way. Based on this, Casio was able to create a watch that displayed the precise time including the second, minute, hour, day, and month - not to mention a.m. or p.m., and the day of the week. It was the first watch in the world with a digital automatic calendar function that eliminated the need to reset the calendar due to the variation in month length. Rather than using a conventional watch face and hands, a digital liquid crystal display was adopted to better show all the information. This culminated in the 1974
  4. 4. launch of the CASIOTRON, the world first digital watch with an automatic calendar. The CASIOTRON won acclaim as a groundbreaking product that represented a complete departure from the conventional wristwatch. In 1983, Casio launched the shock-resistant G-SHOCK watch. This product shattered the notion that a watch is a fragile piece of jewelry that needs to be handled with care, and was the result of Casio engineers taking on the challenge of creating the world's toughest watch. Using a triple protection design for the parts, module, and case, the GSHOCK offered a radical new type of watch that was unaffected by strong impacts or shaking. Its practicality was immediately recognized, and its unique look, which embodied its functionality, became widely popular, resulting in explosive sales in the early 1990s. The GSHOCK soon adopted various new sensors, solar-powered radio controlled technology, and new materials for even better durability. By always employing the latest technology, and continuing to transcend conventional thinking about the watch, the G-SHOCK brand has become Casio's flagship timepiece product. G-SHOCK –Product Introduction G-Shock is a brand of watches manufactured by Casio, known for its resistance to shocks (e.g. hard knocks and strong vibrations). They are designed primarily for sports, military and outdoor adventure oriented activity; virtually all G-Shocks have some kind of stopwatch feature, countdown timer, light and water resistance. The first G-Shock was in the 1983 Casio DW-5000Cdesigned by an engineer working for Casio named Kikuo Ibe "around the triple ten concept: the concept for a watch that has a 10 year battery life, is water resistant to 10 bar, and can survive a 10m fall onto a hard surface. 200 prototypes were tested by dropping them from rooftops, or third story windows. Its shock resistant design has 10 layers protecting the quartz time mechanism, the major ones being the urethane rubber outer bumper protecting the steel watch case, the stainless steel case, the hardened mineral glass watch crystal, the stainless steel screwed down case back, and the "floating module" concept where the quartz mechanism floated free in a urethane foam cradle, with things like the outer buttons, and LCD module attached with flexible cables, with the buttons mounted to the watchcase, rather than the quartz module. It was released in April 1983,
  5. 5. seizing the unfilled recreational and sporting market for bulky, functional watches. For the next few years Casio released a handful of new models each year. The Baby-G models were released in 1991. The popularity of G-Shocks increased rapidly throughout the 1990s. By 1998, 19 million G-Shocks had been sold worldwide and there seemed to be a peak in demand as over 200 new models were released in that year alone. MTGS1000BD-1 The MT-G, Metal Twisted G-Shock, is a completely refined G-SHOCK series crafted at Casio's Yamagata factory in Japan for select premium styles. Meticulously assembled from materials and components made entirely inhouse, the elegance of a luxury timepiece is combined with a rugged performance chronograph to take you across oceans and continents. The stainless steel covering of the MT-G employs G-SHOCK's advanced Core Guard Structure of stainless steel, resin and alpha Gel® to ensure mechanical integrity, coupled with LED-infused Tough Movement for ongoing precision. Multi-Band 6 atomic timekeeping ensures accuracy through radio-controlled time/date updates from global transmitting stations, along with Triple G Resist for shock, gravitational drop and centrifugal force resistance. This limited 30th Anniversary edition MT-G has a black IP colorway with red & gold highlights and includes a eye-catching red resin paneled band for a truly unique look. Multi-Band 6 Atomic Timekeeping Tough Solar Triple G Resist Tough Movement Panel Composite Band (Solid Stainless Steel / Fine Resin) 200M Water Resistant
  6. 6. Technical space Multi-Band Atomic Timekeeping (US, UK, Germany, Japan, China) Receives time calibration radio signals which keep the displayed time accurate Auto receive function (up to 6 times per day/up to 5 times per day for China) Manual receive function Signal: US WWVB, UK MSF, Germany DCF77, Japan JJY40/JJY60, China BPC< Frequency: US 60kHz, UK 60kHz, Germany 77.5kHz, Japan 40/60kHz, BPC 68.5kHz Size of case/total weight MTGS1000D 58.6 x 53.5 x 15.5mm / 188g MTGS1000BD 58.6 x 53.5 x 15.5mm / 188g MTGS1030BD 58.6 x 53.5 x 15.5mm / 188g Segmenting Targeting Positioning (STP) Segmenting : Middle Income Men and Women Target Group: Urban Upper middle class Youth Positioning : Watches that are technologically advanced USP : Advancements in timepiece technology SWOT ANALYSIS STRENGTH Casio has the strength of unique product offerings. No one else makes watches or phones that are comparable to what Casio offers. They create truly unique and inspiring products. Another strength that Casio has is the founding Kashio brothers. They have brought inspiration and vision to this company for the past 50 years. However, these brothers are getting older. One has already passed away but fortunately, Casio has been able to absorb the mindset of these founding brothers in the corporate policy of "Creativity and Contribution". Casio has the advantage of free promotion for their products. None of their competitors have anything close to this, so it has acted as a vital competitive advantage. Casio has the advantage of having production centers that are able to produce multiple product lines within different plants. This has proved to be
  7. 7. extremely valuable following the Tsunami that has disrupted the supply chain of most of its competitors. 1. Casio G-Shock, Baby-G, Edifice and Pathfinder as sub-brands are targeted for different groups and marketed accordingly. Thus, targeting for each sub group is clear and focused. 2. Casio is been positioned as being technology advanced. Casio designed world‟s first LCD watch having a full auto calendar. These, with many other innovations are synonymous with the brand image 3. Casio has sponsored events in the area of sports that can prove beneficial to the brand image 4. Considered value for money and excellent quality 5. Casio brand is protected with 1,986 registered trademarks in 187 countries around the world Weakness Casio's product line is both strength and a weakness. A downside of their product line is that none of their products are essential items. This gives them an extremely correlated performance to the global economy as a whole. Nothing has made this clearer than the recent economic recession that has caused Casio's sales to plummet. Another weakness that Casio faces is that they are not as large as their competitors. This means that they do not have the same economy of scale benefits that Sony or Toshiba may possess. 1. Perceived more as a watch brand than as an electronics brand 2. Design of the watches more often than not is visually too simple Opportunity Casio has the opportunity to expand into the emerging tablet market. They do not sell conventional laptops but they do sell smart phones with Internet capabilities. This is a young market that has yet to develop. If Casio is able to develop this technology, potential with a joint venture, they could quickly become a market leader. Joining this exciting new market may also bring brand awareness to their other products. Casio has the opportunity to expand on its watch line. Casio watches are truly unique and even have a cult following. Casio has made a further investment in their watch line, by establishing a new woman's line. We have yet to see how this
  8. 8. will pay off. Finally, Casio's mobile phones currently have no visibility outside the Japanese market, and can potentially replicate the global success of its watch products. 1. Tie-up with fashion houses and sponsoring events 2. More innovative designs and styles to attract the youth Threats Casio faces constant competitive rivalry from its larger competitors. The consumer electronics industry is constantly evolving. If Casio makes the wrong R&D decisions, their products could quickly become obsolete in this constantly changing industry. Also Casio's sales are concentrated in the Japanese market. If Japan is unable to recover from the recent tsunami, Casio could see its sales drop significantly. 1. Facing threat of counterfeit Casio products 2. Competition in watches with the „sport look‟ in the market is heavily populated and can prove to be a threat Competitors 1. Hublot 2. Timex 3. Citizen G-Shock Market Analysis Being a highly reputable brand of watches, G-Shock has successfully penetrated in Singapore market. Presently, G-Shock Protection series have quickly penetrated due to the brand, the style and the benefit that it has attributes such as shock resistance, water resistance. Moreover, world time, solar power and other features are actually loaded into a G-Shock Protection. A box bag and the gift wrapping are such extra services that consumers can get when purchasing the product.
  9. 9. „‟Consumer market is the target market of G-Shock Protection that is a group those who has similar request‟‟ The attributes and the sport-styles of G-Shock Protection are being interested by middle-aged consumers as the group that has similar request. Based on the demand of this group, G-Shock Protection provides many makes and models that come in various styles and colors. Therefore, G-Shock Protection is more likely to be a consumer product. In Singapore, many consumers enquire about various brands of watches from the internet, other consumers or shops. This is point out that consumers usually spend a long time looking on the stylish of the product, including the G-Shock Protection products. Besides, many consumers are willing to accept a substitute product which its style and quality are similar to the G-Shock Protection product that they cannot find, because there are many G-Shock Protection‟s competitors. G-Shock Protection has experiences of more than twenty years in Singapore‟s market and brings the trustworthiness in a high level for consumers. To compare with its competitors such as Rolex, Burberry and FJ Benjamin, as indicated, there are not only the brand name and logo make differences but also the attributes and features. The G-Shock Protection packaging is clearly labeled the brand name, logo and country of organizing. It is for consumers to realize the real product as well as for G-Shock Protection to protect their brand. G-Shock Protection product exists in monopolistic competitive market in Singapore, since there are many watch brands in the market. Their products might have some similarities such as basic features and styles. However, by using branding, advertising, different quality and so on, they make their products be different that consumers are able to perceive, consumers can also perceive by the range of prices For the first time-consumers of G-Shock Protection, they care about the attributes and are willing to buy the product. Thus, the consumer demand could be elastic. However, for the consumers
  10. 10. who already have purchased the product, the consumer demand could be inelastic due to the long life time of the product or short-brand loyalty. It is important to note that the business‟s costs will be relevant in determining the price for GShock Protection. The component of the business‟s costs includes fixed cost and variable cost. Fixed cost is such as wages for staffs and administrators, rent and insurance that does not change. Variable cost is such as materials and wages for manufacturing labor. In the future, the variable cost is likely to be increasing. One of the major causes could be the inflation rates and clearly, this can lead to an increasing in the price of G-Shock Protection products. Currently, as a product that exists in monopolistic competitive market, the price of G-Shock Protection is ranged as the same as the price of its competitors. More so, the price of G-Shock Protection is expensive that makes a high risk of purchase. Therefore, when consumers make a purchase decision for G-Shock Production, they do not only base on price but also base on all of the things, including the product image, features and quality. In Singapore, consumers can buy the G-Shock Protection product directly from the factory that made it. Furthermore, they can also buy indirectly from many other retailers. This also point out that there are a lot of shops where consumers can purchase G-Shock Protection product. Based on that information and the below shops‟ location, it shows that G-Shock Protection has a selective distribution. To purchase directly, consumers can go to Casio G-Factory Shop in Bugis Junction, ION Orchard, J Cube, Marina Bay Sands, Nex, Tampines Mall or Vivo City. So that and consumers can go to department stores in Isetan Scotts and Takashimaya. To purchase indirectly, consumers can go to Mustafa Centre, BHG and Jurong Point and many other retailers throughout the central, east, north and west Singapore . Those locations bring conveniences for most consumers and they can easily find and go to the nearest location by bus, MRT or even by walking. However, there are some models which might not have in some retailers. Therefore, consumers should
  11. 11. As G-Shock Protection has a selective distribution, consumers buy the product as a homogeneous shopping product. Furthermore, the product lasts a durable time. The price of GShock Protection is high as well as the value of branding. Consumers might purchase less frequent, however they could often go to the shop to compare the range of items. Currently, G-Shock Protection adopts a variety of promotional message in Singapore. They can be divided into 2 types: traditional and non-traditional. One of the most efficient of them is the using of Internet as a non-traditional promotion. This is mainly used by teenagers and it can be very helpful to find any information about the product. Another promotional message is traditional print such as newspaper and brochure that is used by most consumers who are old prefer to read on paper rather than using technology or they do not know how to use. These consumers may use G-Shock Protection or buy for their child. Additionally, it is important to note that all the promotions must send the same message to consumers. This is to prevent perception which means G-Shock Protection provides the exact information for consumers with the purpose of protecting consumers and also their company from external stimuli . Presently, the promotion is the discount: “sale up to 40% off” from 12 June 2012 until 22 July 2012 . To accomplish the promotion of the products, as many other companies, G-Shock Protection has two strategies: push and pull. Push strategies are that by marketing activities the company or manufacturer will go after and offer bonuses for retailers and wholesalers who push to the consumers. Then based on the consumer demand, the retailers and wholesalers will report it to the company, also for their demand. Pull strategies are that the company or manufacturer will communicate to consumers by marketing activities, then consumers will ask retailers and wholesalers for the product and if there are enough consumers, the retailers and wholesalers will buy the product from the company. Brand positioning can be understood as an activity of creating a market perception of a particular brand. This refers to the target customer‟s mind. All brands are in consumer's mind in different levels of things which are usually the product attributes . In the market, a company will identify
  12. 12. the reason why consumers buy products of a brand in preference to other brands and also comparing itself to competitors. All information has to be carefully selected. Then, by marketing activities to show product attributes, the company will create an advantage in consumer's mind that differs from its competitors, in other words, it is in order to have special or unique products In Singapore, based on climate, local population and urban location, geographic segmentation is considered in segmenting markets of G-Shock Protection. Firstly, Singapore's climate is tropical which is hot, humid and rainy . As a result, G-Shock Protection comes out with many makes and models. It also brings an advantage for G-Shock Protection because their product's attributes include water resistance. Secondly, Singapore is a small country, however, in July 2012, Singapore has a local population of 5.3 million . There are various types of preferences from consumers. Therefore, as the climate, this also leads to many makes and models of G-Shock Protection. Thirdly, it is important to note that Singapore is highly urbanized. In 2010 the urban population is approximately 100% of total population . This shows that Singapore is a welldeveloped country and clearly, G-Shock Protection can operate, do their marketing activities easier and more importantly, the company can get more purchasers. Demographic segmentation is an important-segmenting market. For G-Shock Protection, demographic segmentation is mainly based on sex, age, gender, income and family life cycle. GShock Protection is designed for male and primarily for Generation X, who are middle-aged, that were born in the 1960s and 1970s. Almost of Generation X are workers, they have an active life and care more about the product's attributes. Furthermore, Generation X has high opportunities to purchase G-Shock Protection products because they have high income. The target market of G-Shock Protection is also primarily focused on the income of $4000 per month. In addition, as Generation X, the family life cycle is considered that focuses on middle-aged married couples with dependent children. As one of the most important segmentations, the psychographic segmentation of G-Shock Protection has two methodologies: Roy Morgan Values segment and VALS. In Roy Morgan Values segment, the values segment is real conservatism which Generation X is attracted to established brands. The company has responded from Generation X who is cautious towards new ideas and things. Furthermore, Generation X has inclined to looking for the information on
  13. 13. magazines and documentary TV programs. They might find advantages for their purchasing. In the VALS segment, as G-Shock Protection is primarily designed for Generation X who is mature and most have well-educated professionals, value-oriented and open to new ideas. Therefore, these are from thinkers group and G-Shock Protection can communicates with the target market easier . In Singapore, as indicated above, most consumers are in Generation X, they are willing to purchase G-Shock Protection product due to a lot of benefits that it has. Furthermore, Generation X is not only to expect G-Shock Protection having more benefits but also promotions. G-Shock Protection's brand positioning is strong with the brand loyalty which is also high. It is in Generation X's mind as a high quality product. Clearly, the high volume usage rate of the target market for G-Shock Protection has also facilitated the high degree of loyalty to the product. Therefore, when they purchase the product, the risk of price is low. Moreover, if G-Shock Protection has promotions, there might have an increase in numbers of purchasing. 4PS OF CASIO G-SHOCK Products Casio manufactures and sells Digital Cameras, Watches, Mobile Phones, Electronic Dictionaries, Label and Disk Title Printers, Industrial Devices, Musical Instruments, Projectors, Cash Registers, Point of Sale Devices, and Electronic Components. Mobile Network Solutions (MNS), which include mobile phones and computing devices make up the largest component of Casio's most recent sales figures but the largest single product that they offer is their watch line. Casio's time pieces have grown from 12% of sales to 18% of sales in just the past 5 years. This is the most significant growth by any of their product lines. The only other product that had a significant change was the sale of electronic components. In the same time period, these have shrunk from 14% of sales to only 5%, A sign that Casio may be leaving this market. By selling the diverse product line that they do, Casio benefits from economies of scale. Because their products are all in the personal electronics category, Casio is able to profit off of their core competency of electronic expertise in not just a single product line, but through a diverse product offering. This gives them a number of benefits. One benefit is that when Casio orders electronic components for its products it is able to place extremely large orders, giving them a discount on
  14. 14. the per unit cost. An example of this is that some of the same components found in a Casio keyboard can be found in a Casio personal calculator. This enables them to cut down on parts costs. Assembly costs are also reduced because their plants have the capability of producing more than a single product. This also gives them the benefit of production flexibility. If one product is in higher demand than the other, they can simply choose to produce more of the popular good, in order to meet demand. Their products are also able to benefit off of the same research and development investment. For example, Casio has released a waterproof phone that uses technology that Casio developed for the G-Shock watch series. Another example of this is through mobile network solution investment. Casio has deeply invested in R & D for this category. These advances will be applied not only to Casio‟s personal computers, but also their phone line and potentially even their watch line. Casio's watches have benefited from Casio‟s wide array of R&D. They have developed watches that come equipped with GPS service, act as a calculator, serve as a data storage device, and even control your TV. These are just several examples of how Casio is able to use the technology that it invents to improve each and every one of its devices. Casio's product line up gives it distinct advantages and economies of scale that companies in each of these individual markets can only dream of. Price Casio prices all of its products at a competitive rate. They offer products at the low and high end in each of their respective segments. They have cameras that start at $129 and go up to around $300. There are high-end cameras that are much more expensive than this but this is the normal range for the average digital camera. Their calculators and cash registers start out with basic functions and models but have high-end alternatives that cost considerably more. The same goes for their music instruments, projectors, label makers, and phones. G-Shock watches are reasonably priced for the value that they add to the consumer. Watch prices range from $10 to over $1 Million. G-Shocks start at $99, with most models priced under $200. This is very reasonable. They do have limited edition watches that run slightly high but they are not directly competing with the very high-end watches like Rolex and they are not directly competing with the very low watch models that you will find at a retailer like Target or Walmart. G-Shocks are a product for young consumers with disposable income that are looking to standout from their peers.
  15. 15. Place Casio offers its products through online sale Shop Casio . This makes it easy to order any of the Casio products without having to drive to a retail location. Casio products are also offered at the major electronic retail stores as well as department stores. This gives them a presence in the physical marketplace as well as the virtual. When most people buy gifts for relatives, they may walk around the mall. Having a presence where indecisive shoppers are can be key. The purchasers of Casio products may be unaware of the product they will end up buying, until they see it in the store. Casio is distributed by the retailing giants Macy's, Sears, and Best Buy. Promotion Casio has invested in various television and magazine adds but these are relatively minimal. They have advertised for their cameras and keyboards on TV in the past but no longer continue this strategy. Most people who buy these products will make the decision to purchase these more expensive products after doing their own research, whether it's in store or online. Casio does still run magazine ads for their G-Shock watch series but this is only in fashion magazines or outdoor magazines. This is to directly target the G-Shock market, those who wear it because they are fashionable and those who wear it because of its functionality. Casio's G-Shock watch brand has been a stylistic icon since its release in the early 1990's. In 2008, Casio launched the SHOCK THE WORLD tour.These are parties that bring together the who's who in fashion and music, for a night a celebrating art, music, and G-Shocks. Casio uses these events to introduce their new products to the market in a fun and cool way. Last years stop on the New York tour was attended by Donald and Ivanka Trump, Erykah Bedu, Russel Simmons, Common, and featured a performance by Kanye West. Selecting an artist such as Kanye West, who is well known for his fashion sense, to promote your product can be a highly effective marketing technique. Nothing is more celebrated in rap culture than exclusive fashion. If you can get one rapper to endorse your product, other artists and listeners will follow. The music itself turns into free promotion. Many artists have made references to G-Shock watches in their rap songs, including: Big Sean ft. Chip Tha Ripper - Okay "We just hop on planes and change the time... so let me set me G shock Sean tell them my state of mind"
  16. 16. Bow Wow ft. Soulja Boy - Marco Polo "New g-shock(check) Yellow Lamborghini(bow) Bc shirt with a fresh pair of jeans (wow) Black card spending when I hit the mall (stunting) You can't catch me I'm so ahead of ya'll (it's)" You can't buy the type of free promotion that Casio is receiving from these artists. Not only are they advertising that they endorse G-Shocks, but they are making it a part of a glamorized life style. The average person who listens to rap music is not able to afford Lamborghinis or elaborate trips but they may be able to afford a $100 watch. For them this may be the closest that they are able to come to this life style. No other watch brand has ever had this type of endorsement other than Rolex, but Rolex and Casio aren't competing for the same consumer base. This gives them a huge advantage over any of the other watch companies in their price range. Collaborations The G-Shock watch series has been around for almost two decades but it stays relevant with updated models each year. G-Shock has come out with numerous, high-end collaborations. These models are pricier and are limited in number. This level of exclusivity helps to build up demand. G-Shock has come out with collaborations with BAPE, KRINK, BURN RUBBER SNEAKER BOUTIQUE, AIR JORDAN, and LRG, to name a few. G-Shock has also collaborated with celebrities including SPIKE LEE, METHOD MAN, and ERIC HAZE to give them each signature models. By collaborating with these well-loved clothing brands and celebrities, G-Shock continues to offer fresh products and gains more awareness, piggy backing off of the influence that these collaborators have over consumers. Porter’s 5-Forces Analysis Supplier Power The tsunami in Japan has limited the ability of many of the tech industry suppliers, located there, from being able to supply the consumer electronics industry giants. Casio is lucky that only one of their suppliers were affected but fewer parts suppliers means greater supplier power, as Japan recovers from the effects of the tsunami and the following aftershock earth quakes. This means
  17. 17. higher component costs for all companies in the tech industry, whether these will be absorbed by production companies or passed along to consumers remains to be seen. Buyer Power Buyers hold a large amount of power over Casio. This is true for most companies in the consumer electronics market. This industry has an intense competitive rivalry among the major players. This competition means that the buyers have many options to choose from. Most of the goods in the consumer electronics market are made by at least 5 different companies and these companies' models happen to be very similar, if not interchangeable. This leads to very low customer loyalty. Consumers want electronic goods that are able to meet their needs at a competitive price. Competitive Rivalry The competitive rivaly that Casio faces in the consumer electronics market is steep. Competitors such as Sony, Toshiba, and other large electronics companies offer products in many of the categories that Casio does. The consumer electronics market is always facing the pressure of developing new: cheaper, smaller, and lighter technology. This forces Casio to invest in research and development, in order to remain at the forefront of their industry. Casio has a research and development center in San Jose California, strategically located near Silicon Valley, that "explores new product concepts, strategic directions, and business opportunities for Casio". They feel that by having a research center in Silicon Valley, they will be able to work with computer and internet experts to further develop their future product. Threat of Substitutes Casio faces extreme competition within the consumer electronics market but that being said, there aren't many substitutes for the products in this market. Electronic Label Makers - Unless you are operating a small business, most people simply label things with a marker. This has a high threat of substitutes. I do not think that this will be a shrinking market however, because all of the substitutes for electronic label makers have been around before electronic label makers were invented. Watches - Casio's G-shock watch series face competition from the non-electronic watch market. Lately, G-Shock's have become somewhat of a fashion accessory and may face competition from more traditional forms of jewelry.
  18. 18. Cash Registers and Industrial Services - Some stores may use non-electronic cash registers as a novelty but almost all now use them. There is no other substitute. Threat of New Entrants Casio has a limited threat of new entrants. It is no easy feat to start an electronics company. It requires extremely advanced engineering knowledge and a substantial financial investment. Supply Chain Management Multiple Production Centers Casio has been extremely smart in creating a flexible supply chain. Casio maintains at least two different production centers for the majority of its products. Each of these production centers are equipped with excess capacity in the event that something were to happen to the other production center. Having a flexible supply chain allows them to hedge the risk of disruption at any given production site. This has proven to be incredibly important, in light of the recent tsunami that has struck Japan. Casio even has a risk management committee who'd job it is to set Risk level policies and goals that will be implemented throughout the company. Corporate Governance Casio has a corporate governance structure in place, in order to ensure that all management decisions are made quickly and properly. Casio also aims for transparency in all of its decisions. In June 1999, Casio adopted a corporate officer system that clearly separates the management oversight and execution functions. They set up an oversight board that is responsible for making important policy decisions that aid in daily operations. There are also internal and external auditors that aid in decision making and make sure that these decisions comply with corporate policy. They have internal audit accounting officers who give recommendations for policy improvement. They also have a committee for corporate social responsibility, whose job it is to ensure that they are not harming the community that they operate in. This may seem like an extremely redundant management strategy but they feel that by properly managing their work force, they will be able to produce the optimal level of "Creativity and Contribution". Supplier Relationships Casio aims to build long lasting relationships with its suppliers. They work together to develop technologies mutually, through reciprocal efforts. Casio monitors its relationships with suppliers based on compliance with laws and social norms, environmental protection, proper information security, respect for intellectual property, sound and stable corporate management, superior
  19. 19. technological development ability, right price and quality, stable supply capabilities and electronic transaction systems. In order to avoid conflicts of interest, Casio employees are not allowed to have relationships with suppliers. Casio works with multiple suppliers to ensure a fair price and to ensure a steady, uninterrupted, flow of components. Financial and Operating Metrics Financial metrics in millions of Yen Casio has seen a drastic fall in sales over the past two years. In 2008, Casio had net sales of 620,769 but by 2010 they had fallen to 427,925(in millions of Yen). Sales are down across the board, in each of Casio's product segments. Sales peaked for each of the companies segments in either fiscal year 2007 or 2008. The decrease in sales is likely due to the economic recession that occurred in 2008. Consumers worldwide were hurt by this global recession. This caused a huge problem for Casio as consumer electronics and new watches are typically the first purchases cut during hard times. Consumers simply didn't have the disposable income to spend on "gadgets". This is an industry that is extremely correlated with market performance as a whole. Casio remains a market leader in the consumer electronic industry so as the economy rebounds, so too should Casio's profits. Comparison with Competitors Casio has several major competitors in the consumer electronics business. There is no company that offers the exact product line that Casio does but the major consumer electronics companies have product offerings that are very similar. It is common for electronics companies to offer digital cameras, mobile phones, and projectors the way that Casio does. However, other major electronics companies tend to be more invested in tablets and televisions. Casio does not sell these products but they sell watches and calculators, which most electronics companies do not. Casio does offer personal computing devices that can stream to the Internet but these are extremely simple, striped down model, laptops when compared with the computing capacity of a regular laptop. These products are not even offered in the American market. As you can see from the data below, all of the major players in this industry have been affected by the current recession. Casio - had an all time sales peak in 2008 but since then, sales have fallen 31% in the past two years. This can be atributed to the recession but their competitors have started to bounce back in
  20. 20. 2010, while Casio has continued to do worse. As the economy improves, Casio's sales should start to bounce back. The reason that Casio has been so badly hurt by the recession is that their products are seen as "Gadgets", cool toys, but nothing that anyone deems necessary. Toshiba and Sony offer products that people view as more important to their daily lives, such as TV‟s and laptops. People value their work and cheep entertainment in hard times and TV's and laptops are key to these. In this case, Casio's product line hurts them, in comparison to their competitors. It is not until consumers are feeling more confident in their income that Casio's sales will return. Casio had the highest Asset turnover ratio in 2008 but it has since fallen to the lowest. Casio's products have a lower markup than Sony and Toshiba's so Casio relies on a high asset turnover ratio, in order to remain profitable. This business model has hurt them in the short term, now that sales are down. Human Resources Philosophy - Casio has always had a policy of meeting societies needs by developing truly innovative products. They refer to it as the going from 0 to 1 approach. By developing truly unique products you are able to astonish and inspire people, starting new trends, revitalize industries, and contribute to culture. This started in the 1950's when Toshio Kashio invented the first personal electronic calculator. This policy allows them to add value to shareholders and society as a whole. Tsunami Effect On March 14th, Casio released a statement about the effects of the tsunami on the Casio Group‟s operations. They were happy to report that none of the workers were injured in the tsunami. They claim that they are currently inspecting all of their facilities and that production will resume when the inspections are finished. They have said that there is expected to be no damage to business buildings and structures but that business activities could be affected due to interruptions in essential utilities, as the region re-builds. Casio has donated money to the relief effort in the region. Recording artist Nicki Minaj is working with Casio to auction off a signed version of her signature model Casio camera. Casio has stated that they will issue a statement once these inspections are finished but no such statement has been issued yet. Even if Casio comes away from the Tsunami unscathed, they will most likely not see the same sales volume that they have been accustomed to in recent years. Over 50% of Casio‟s annual sales are
  21. 21. accounted for domestically. Japanese consumers affected by the tsunami will most likely not have any money to spend on Casio‟s products. Many of these people have family members in the country that they may now be relying on. This drains even more people‟s disposable income and decreases the likely hood that they will be purchasing these products. It is still too soon to see the long term effects that the tsunami will have on the on the consumer electronics industry and the nation of Japan as a whole, but it will clearly take many years to recover from this catastrophe.
  22. 22. References 1. Casio Product Web Site 2. Consolidated Financial Results 3. Shock The World Tour 4. Casio U.S. Research and Development Center Website 5. Stable Supply of Products 6. Responsibilities to Suppliers 7. Sony Annual Report 8. Toshiba Annual Report 9. Casio Corporate Website 10. Segment Information 11. 831786.htm