AN INDUSTRY ANALYSIS ON

“WATCH INDUSTRY’’
BY

GANESH RAJ URS G N

P11MS22M015018
Submitted to

TUMKUR UNIVERSITY
In Partial fulfilment for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
UNDER THE GUIDANCE OF

Dr. SHOBHA B H
Assistant Professor, SSIMS,
Tumkur

SRI SIDDHARTHA INSTITUTE OF MANAGEMENT STUDIES

Affiliated to Tumkur University, Approved by AICTE, Delhi

Marluru Tumkur-572105
Batch:2022-2023
 DECLARATION

I GANESH RAJ URS G N here by declare that the dissertation entitled with reference to
“WATCH INDUSTRY” prepared by me under the guidance Dr. SHOBHA Assistant
Professor, MBA Department, Sri Siddhartha Institute of Management Studies, Maralur,
Tumkur .

I also declare that this dissertation work is towards the partial fulfillment of the university
regulations for the award of degree of Master of Business Administration by Tumkur
University, Tumkur

I further declare that this project is based on the original analysis undertaken by me and has
not been submitted for the award of any degree from any other University Institution.

Place: - Tumkur Signature:

Date: - Name: G N GANESH RAJ URS
 ACKNOWLEDGEMENT

I feel greatly honored to be part of our beloved and highly esteemed educational institution
- Sri Siddhartha Institute of Management Studies Tumkur for developing me as a real MBA
student.

I wish to place my deep sense of gratitude to Dr, B Azamathulla Principal SSIMS who
has been a constant source of inspiration to me and have encouraged me to undertake and
conclude this project successfully.

I am very much pleased to acknowledge the support of Drs.SHOBHA BH Assistant

Professor & HOD, Department of MBA, SSIMS Tumkur; his innumerable suggestion,
keen interest and constant co-operation towards my project.

I am extremely grateful to Drs. SHOBHA BH Assistant Professor MBA, SSIMS Tumkur;

who has helped me thought this project and has given the shape with great interest.

Last, I am grateful to my beloved parents and my friends, Faculty for their

encouragement, which is the great source of my inspiration.

Place: Tumkur Ganesh raj urs G N

Date: (Reg.No.P11MS22M015018)
 CERTIFICATE BY THE GUIDE

I, GANESH RAJ URS G N, hereby declare that the dissertation entitled with reference to
“handicraft industry” prepared by me under the guidance of Mrs. SHOBHA Assistant
Professor, M.B.A Department, Sri Siddhartha Institute of Management Studies, Maralur,
Tumkur .

I also declare that this dissertation project work is towards the partial fulfillment of the
university regulations for the award of degree of Master of Business Administration by
Tumkur University, Tumkur

I have undergone a dissertation project for a period of four weeks. I further declare that this
project is based on the original study undertaken by me and has not been submitted for the
award of any degree from any other University Institution.

Place: Tumkur Signature

Date: 02/11/2023 Name: Mrs. SHOBHA

 Industry Analysis Report Content
Chapter-1
Certificates of Industry Analysis

• Declaration
• Acknowledgement
• Guide and Principal Certificate

Chapter-1
• Content of Industry Analysis
• Introduction to the industry

• Genesis/ history of

• Nature of Industry
• Growth of Industry
• Players / competitors in industry
• Geographical spread of Industry

Chapter -2
Introduction of the industry selected

• Profile of industry selected

• Vision Mission of the Industry
• Goals /objectives of the Industry
• Promoters of Industry
• Top 5 players and bottom 5 players of the Industry
• Profile of CEO’s
• Geographical spread of the selected Industry
• Porters Five force Analysis/ PEST analysis/ SWOT Analysis
 • Marketing strategy of Industry

❖ Marketing Mix
❖ Product line
❖ Strategy
❖ Segmentation and Targeting
❖ Market share and sales
❖ Promotion Strategy
❖ Distribution Strategy

Chapter -3

• Industry Regulatory Policies at State, National & Global Level.

• Key Initiatives by Govt. to promote the Industry.
• CSR activities
• External Environment
• Financial analysis

Chapter -4

 Observations
 Learning outcome

Bibliography / References (give separately)

6
 Chapter-1
Introduction to Industry
Introduction

Understanding how industries and companies operate, together with an analysis of financial
statements, provides a basis for forecasting company performance and allows analysts to
determine the value of an investment in a company or its securities. Industry analysis is the analysis
of a specific branch of manufacturing, service, or trade. Understanding the industry in which a
company operates provides an essential framework for the analysis of the individual company—
that is, company analysis. Equity analysis and credit analysis are often conducted by analysts who
concentrate on one or several industries, which results in synergies and efficiencies in gathering
and interpreting information.

In this reading, we will address the following questions:

• What are the similarities and differences among industry classification systems?
• How does an analyst go about choosing a peer group of companies?
• What are the key factors to consider when analyzing an industry?
• What advantages are enjoyed by companies in strategically well-positioned industries?
• How should an analyst approach research and analysis of new industries?
• What are the factors that influence individual companies?

History of Industry Analysis

Industry analysis is a tool that facilitates a company's understanding of its position relative to other
companies that produce similar products or services. Understanding the forces at work in the
overall industry is an important component of effective strategic planning."Many small business
owners and executives consider themselves at worst victims, and at best observers of what goes
on in their industry. Understanding your industry and anticipating its future trends and directions
gives you the knowledge you need to react and control your portion of that industry," Kenneth J.
Cook wrote in his book The AMA Complete Guide to Strategic Planning for Small Business.
7
"However, your analysis of this is significant only in a relative sense. Since both you and your
competitors are in the same industry,

the key is in finding the differing abilities between you and the competition in dealing with the
industry forces that impact you. If you can identify abilities you have that are superior to
competitors, you can use that ability to establish a competitive advantage."

An industry analysis consists of three major elements: the underlying forces at work in the
industry; the overall attractiveness of the industry; and the critical factors that determine a
company's success within the industry.

One way in which to compare a particular business with the average of all participants in the
industry is through the use of ratio analysis and comparisons. Ratios are calculated by dividing
one measurable business factor by another, total sales divided by number of employees, for
example. Many of these ratios may be calculated for an entire industry with data available from
many reports and papers published by the U.S. Departments of Commerce and Labor.

By comparing a particular ratio for one company with that of the industry as a whole, a business
owner can learn much about where her business stands in comparison with the industry average.
For example, a small nursing home business can compare its "payroll per employee" ratio with the
average for all residential care operators in the U.S. in order to determine if it is within a
competitive range. If her business's "payroll per employee" figure is higher than the industry
average, she may wish to investigate further. Checking the "employees per establishment" ratio
would be a logical place to look next. If this ratio is lower than the industry average it may
justifying the higher per-employee payroll figure. This sort of comparative analysis is one
important way in which to assess how one's business compares with all others involved in the same
line of work. There are various sources for the industry average ratios, among them is the industry
analysis series published by Thomson Gale as the USA series.

8
Another premier model for analyzing the structure of industries was developed by Michael E.
Porter in his classic 1980 book Competitive Strategy: Techniques for Analyzing Industries and
Competitors. Porter's model shows that rivalry among firms in industry depends upon five forces:
1) the potential for new competitors to enter the market; 2) the bargaining power of
buyers; 3) the bargaining power of suppliers; 4) the availability of substitute goods; and 5) the
competitors and nature of competition. These factors are outlined below.

INDUSTRY FORCES

The first step in performing an industry analysis is to assess the impact of Porter's five forces. "The
collective strength of these forces determines the ultimate profit potential in the industry, where
profit potential is measured in terms of long term return on invested capital," Porter stated. "The
goal of competitive strategy for a business unit in an industry is to find a position in the industry
where the company can best defend itself against these competitive forces or can influence them
in its favor." Understanding the underlying forces determining the structure of the industry can
highlight the strengths and weaknesses of a small business, show where strategic changes can make
the greatest difference, and illuminate areas where industry trends may turn into opportunities or
threats.

Ease of Entry

Ease of entry refers to how easy or difficult it is for a new firm to begin competing in the industry.
In industries that are easy to enter, sources of competitive advantage tend to wane quickly. On the
other hand, in industries that are difficult to enter, sources of competitive advantage last longer,
and firms also tend to benefit from having a constant set of competitors.

The ease of entry into an industry depends upon two factors: the reaction of existing competitors
to new entrants. Existing competitors are most likely to react strongly against new entrants when
there is a history of such behavior, and when the industry is characterized by slow growth. Some
of the major barriers to market entry include economies of scale, high capital requirements,
switching costs for the customer, limited access to the channels of distribution, a high degree of
product differentiation, and restrictive government policies.
9
.
Power of Suppliers

Suppliers can gain bargaining power within an industry through a number of different situations.
For example, suppliers gain power when an industry relies on just a few suppliers, when there
are no substitutes available for the suppliers' product, when there are switching costs associated
with changing suppliers, when each purchaser accounts for just a small portion of the suppliers'
business, and when suppliers have the resources to move forward in the chain of distribution and
take on the role of their customers.

Supplier power can affect the relationship between a small business and its customers by
influencing the quality and price of the final product. "All of these factors combined will affect
your ability to compete," Cook noted. "They will impact your ability to use your supplier
relationship to establish competitive advantages with your customers."

Power of Buyers

The reverse situation occurs when bargaining power rests in the hands of buyers. Powerful buyers
can exert pressure on small businesses by demanding lower prices, higher quality, or additional
services, or by playing competitors off one another. The power of buyers tends to increase when
single customers account for large volumes of the business's product, when a substitutes are
available for the product, when the costs associated with switching suppliers are low, and when
buyers possess the resources to move backward in the chain of distribution.

Availability of Substitutes

"All firms in an industry are competing, in a broad sense, with industries producing substitute
products." Porter explained. Product substitution occurs when a small business's customer comes
to believe that a similar product can perform the same function at a better price. Substitution can
be subtle for example, insurance agents have gradually moved into the investment field formerly
controlled by financial planners or sudden for example, compact disc technology has taken the
place of vinyl record albums.

10
Nature of Industry Analysis

1. Intensity of industry rivalry

The number of participants in the industry and their respective market shares are a direct
representation of the competitiveness of the industry. These are directly affected by all the factors
mentioned above. Lack of differentiation in products tends to add to the intensity of competition. High
exit costs such as high fixed assets, government restrictions, labor unions, etc. also make the competitors
fight the battle a little harder.

1. Threat of potential entrants

This indicates the ease with which new firms can enter the market of a particular industry. If it is
easy to enter an industry, companies face the constant risk of new competitors. If the entry is
difficult, whichever company enjoys little competitive advantage reaps the benefits for a longer
period. Also, under difficult entry circumstances, companies face a constant set of competitors.

2. Bargaining power of suppliers

This refers to the bargaining power of suppliers. If the industry relies on a small number of
suppliers, they enjoy a considerable amount of bargaining power. This can particularly affect small
businesses because it directly influences the quality and the price of the final product.

3. Bargaining power of buyers

The complete opposite happens when the bargaining power lies with the customers. If
consumers/buyers enjoy market power, they are in a position to negotiate lower prices, better
quality, or additional services and discounts. This is the case in an industry with more competitors
but with a single buyer constituting a large share of the industry’s sales.

11
 4. Threat of substitute goods/services

The industry is always competing with another industry producing a similar substitute product.
Hence, all firms in an industry have potential competitors from other industries. This takes a toll
on their profitability because they are unable to charge exorbitant prices. Substitutes can take two
forms – products with the same function/quality but lesser price, or products of the same price
but of better quality or providing more utility.

Competitors
"The battle you wage against competitors is one of the strongest industry forces with which you
contend," according to Cook. Competitive battles can take the form of price wars, advertising
campaigns, new product introductions, or expanded service offerings—all of which can reduce the
profitability of firms within an industry. The intensity of competition tends to increase when an industry
is characterized by a number of well-balanced competitors, a slow rate of industry growth, high fixed
costs, or a lack of differentiation between products. Another factor increasing the intensity of
competition is high exit barriers—including specialized assets, emotional ties, government or social
restrictions, strategic interrelationships with other business units, labor agreements, or other fixed
costs—which make competitors stay and fight even when they find the industry unprofitable.

GROWTH OF INDUSTRY ANALYSIS

A comprehensive industry analysis requires a small business owner to take an objective view of
the underlying forces, attractiveness, and success factors that determine the structure of the
industry. Understanding the company's operating environment in this way can help the small
business owner to formulate an effective strategy, position the company for success, and make
the most efficient use of the limited resources of the small business. Porter wrote. "An effective
competitive strategy takes offensive or defensive action in order to create a defendable position
against the five competitive forces." Some of the possible strategies include positioning the firm
to use its unique capabilities as defense, influencing the balance of outside forces in the firm's
favor, or anticipating shifts in the underlying industry factors and adapting before competitors
do in order to gain a competitive advantage.
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GEOGRAPHICAL SPREAD OF INDUSTRY

The geographical spread of industry is the distribution of economic activity within an economy. It is
influenced by a variety of factors, including:
❖ Natural resources: Industries that rely heavily on natural resources, such as mining and
agriculture, tend to be located near those resources.
❖ Transportation: Industries that need to transport goods and materials efficiently tend to be
located near major transportation networks.
❖ Labor: Industries that require a large workforce tend to be located in areas with a large pool
of available labour.
❖ Markets: Industries that sell their products directly to consumers tend to be located in areas
with large consumer markets.
❖ Government policy: Government policies can also influence the location of industry, such
as through tax breaks or subsidies.

The geographical spread of industry can vary widely from country to country, and even within countries.
In developed countries, industry is often concentrated in urban areas and industrial parks. In developing
countries, industry may be more dispersed, with a mix of large and small businesses located throughout the
country.The watch industry is a mature market, but it is still growing, driven by the increasing popularity
of smartwatches and luxury watches. In 2023, the global watch market is estimated to be worth USD 97.41
billion, and it is expected to reach USD 124.44 billion by 2028.

The watch industry is segmented into a number of different watch.The watch industry is a global market
that encompasses the design, manufacturing, distribution, and sale of watches. Watches are portable
timepieces that are intended to be carried or worn by a person. They can be either mechanical or electronic,
and they come in a wide range of styles, prices, and features.

categories, including:

• Product type: Quartz watches, digital watches (including smartwatches), and mechanical watches.
• Price range: Low-range, mid-range, and luxury watches.
• End user: Women, men, and unisex watches.
13
 The major players in the watch industry include:

• Luxury watch brands: Rolex, Omega, Cartier, Patek Philippe, Audemars Piguet, Vacheron
Constantin, Jaeger-LeCoultre, IWC Schaffhausen, A. Lange & Söhne, Breitling, and TAG Heuer.
• Smartwatch brands: Apple, Samsung, Huawei, Fitbit, and Garmin.
• Mass-market watch brands: Swatch, Timex, Casio, Seiko, and Citizen.

The watch industry is facing a number of challenges, including the increasing popularity of smartphones,
which can be used to tell time, and the rising cost of manufacturing watches. However, the industry is also
benefiting from the growing demand for smartwatches and luxury watches.

• Profile of industry selected

The watch industry is a global industry that produces and sells watches of all types, from mass-produced
affordable watches to high-end luxury watches. The industry is estimated to be worth over $70 billion, and
it employs millions of people around the world.
The watch industry is segmented by product type, distribution channel, and end-user.

Product type

• Analog watches: Analog watches are the traditional type of watch, and they use hands to display the
time. Analog watches can be either quartz or mechanical.
• Digital watches: Digital watches display the time in digital format, typically on an LED or LCD
display.
• Smartwatches: Smartwatches are wearable devices that combine the functionality of a traditional
watch with the features of a smartphone. Smartwatches can typically display notifications, track
fitness data, and control other smart devices.
Distribution channel
• Offline retail stores: Offline retail stores include specialty watch stores, department stores, and
jewelry stores.
• Online retail stores: Online retail stores have become increasingly popular in recent years, and they
offer a convenient way to buy watches from anywhere in the world.

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End-user
• Men: Men's watches are typically larger and more robust than women's watches. They may also
have features such as chronographs and date complications.
• Women: Women's watches are typically smaller and more delicate than men's watches. They may
also have features such as jewelry and fashion accents.
• Unisex: Unisex watches are designed to be worn by both men and women. They typically have a
more neutral design and size.

Major players in the watch industry

The watch industry is dominated by a handful of major players, including:
• Swatch Group: Swatch Group is the world's largest watchmaker, and it owns a number of well-
known brands, including Swatch, Omega, Longines, and Tissot.
• Rolex: Rolex is a Swiss luxury watchmaker that is known for its high-quality and prestigious
watches.
• LVMH Moët Hennessy - Louis Vuitton: LVMH is a French luxury goods conglomerate that owns a
number of watch brands, including TAG Heuer, Hublot, and Zenith.
• Richemont: Richemont is a Swiss luxury goods conglomerate that owns a number of watch brands,
including Cartier, IWC Schaffhausen, and Jaeger-LeCoultre.
• Citizen Watch Company: Citizen Watch Company is a Japanese watchmaker that is known for its
affordable and reliable watches.

Trends in the watch industry

The watch industry is constantly evolving, and there are a number of trends that are shaping the industry
today. These trends include:
• The rise of smartwatches: Smartwatches are becoming increasingly popular, as they offer a wide
range of features that traditional watches do not. Smartwatches are also becoming more affordable
and stylish, making them more appealing to a wider range of consumers.
• The growing popularity of luxury watches: Luxury watches are becoming increasingly popular, as
more people become interested in investing in high-quality timepieces. Luxury watches are also
seen as a status symbol, and they can be a valuable heirloom.
• The shift to online sales: Online sales are growing rapidly in the watch industry, as more consumers
turn to the internet to buy watches. Online retailers offer a wide selection of watches at competitive
prices, and they offer a convenient way to shop from anywhere in the world.

15
Vision

The vision of the watch industries is to be the world's leading provider of high-quality, innovative, and
stylish watches. Watch companies want to create watches that are more than just timekeeping devices. They
want to create watches that are fashion statements, status symbols, and even heirlooms.

Mission

The mission of the watch industries is to provide customers with the best possible watch-wearing
experience. This means providing customers with a wide selection of watches to choose from, offering
competitive prices, and providing excellent customer service.

• Swatch Group: "To be the world's leading watchmaker, creating innovative and stylish timepieces
that are accessible to everyone."
• Rolex: "To create the finest watches in the world, combining the most advanced technology with
traditional craftsmanship."
• LVMH Moët Hennessy - Louis Vuitton: "To offer our clients the most luxurious and exclusive
watch brands in the world."
• Richemont: "To be the world's leading group of luxury goods companies, offering our customers the
most exquisite and prestigious watches."
• Citizen Watch Company: "To be the world's leading provider of innovative and reliable watches."

o Goals /objectives of the Industry

Business goals

• To increase sales and profitability.

• To expand into new markets and customer segments.
• To develop new and innovative products.
• To improve operational efficiency and reduce costs.
• To build strong brand recognition and loyalty.

16
Societal goals
• To promote the importance of timekeeping and the appreciation of watches as works of art and
engineering.
• To support the development of new watch technologies and innovations.
• To create sustainable and ethical watch supply chains.
• To give back to the communities where they operate.

some specific examples of how the watch industries are working to achieve their goals:

• To increase sales and profitability: Watch companies are investing in new technologies and
marketing campaigns to reach new customers and increase sales. They are also expanding into new
markets, such as emerging economies.
• To expand into new markets and customer segments: Watch companies are targeting new customer
segments, such as women and millennials. They are also expanding into new markets, such as China
and India.
• To develop new and innovative products: Watch companies are constantly developing new and
innovative products, such as smartwatches and solar-powered watches. They are also investing in
new materials and technologies to improve the performance and durability of their watches.
• To improve operational efficiency and reduce costs: Watch companies are investing in new
technologies and streamlining their operations to improve efficiency and reduce costs. They are also
working with suppliers to reduce the cost of raw materials and components.
• To build strong brand recognition and loyalty: Watch companies are investing in marketing and
advertising to build strong brand recognition and loyalty among their customers. They are also
offering loyalty programs and other incentives to encourage customers to buy their products.
• To promote the importance of timekeeping and the appreciation of watches as works of art and
engineering: Watch companies are working to educate consumers about the importance of
timekeeping and the craftsmanship that goes into making watches. They are also sponsoring events
and exhibitions to promote the appreciation of watches as works of art and engineering.
• To support the development of new watch technologies and innovations: Watch companies are
investing in research and development to develop new watch technologies and innovations. They
are also working with universities and other institutions to support the education and training of
watchmakers and engineers.

17
 • To create sustainable and ethical watch supply chains: Watch companies are working with their
suppliers to create sustainable and ethical watch supply chains. This includes ensuring that their
suppliers comply with fair labor standards and environmental regulations.
• To give back to the communities where they operate: Watch companies are supporting a variety of
charitable causes in the communities where they operate. This includes supporting education, social
welfare, and environmental protection programs.

The watch industries are committed to achieving their business and societal goals. The industry is
constantly innovating and evolving to meet the needs of its customers and to make a positive impact on the
world.

The most notable promoters of the watch industry:

• Nick Hayek: Nick Hayek is the chairman and CEO of Swatch Group, the world's largest
watchmaker. He is credited with saving the Swiss watch industry from the quartz revolution in the
1970s.

• Charles-Édouard Heuer: Charles-Édouard Heuer is the founder of TAG Heuer, a Swiss watchmaker
known for its sporty watches and chronographs.

18
• Gérald Genta: Gérald Genta is a Swiss watch designer who is credited with designing some of the
most iconic watches in the world, including the Audemars Piguet Royal Oak and the Patek Philippe
Nautilus

• Max Büsser: Max Büsser is the founder of MB&F, a Swiss watchmaker known for its innovative
and creative watch designs.

• These are just a few of the many promoters of the watch industry. These individuals and companies
have all made significant contributions to the development and growth of the industry.

• Today, the watch industry is a global industry that employs millions of people and generates billions
of dollars in revenue. The industry is constantly evolving, and new promoters are emerging all the
time. The future of the watch industry looks bright, and these promoters will continue to play a vital
role in its success.

19
The top 5 players in the watch industry are:
Swatch Group
Rolex
LVMH Moët Hennessy - Louis Vuitton
Richemont
Citizen Watch Company
These companies are all well-established brands with a strong reputation for quality and innovation. They
offer a wide range of watches at all price points, from affordable, mass-produced watches to high-end
luxury watches.
Swatch Group

It is the world's largest watchmaker, with a portfolio of brands that includes Swatch, Omega, Longines, and
Tissot. Swatch Group is known for its innovative technology and its ability to produce high-quality watches
at affordable prices.

20
Rolex

It is one of the most prestigious watch brands in the world. Rolex watches are known for their high quality,
durability, and status symbol appeal. Rolex is also known for its innovative technology, such as its self-
winding movements and its scratch-resistant sapphire crystals.

LVMH Moët Hennessy - Louis Vuitton

It is the world's largest luxury goods company. LVMH's watch brands include TAG Heuer, Hublot, and
Zenith. LVMH watches are known for their high quality, innovative design, and status symbol appeal.

Richemont

Richemont is another leading luxury goods company. Richemont's watch brands include Cartier, IWC
Schaffhausen, and Jaeger-LeCoultre. Richemont watches are known for their exquisite craftsmanship and
prestigious heritage.

Citizen Watch Company is a Japanese watchmaker that is known for its affordable and reliable watches.
Citizen is also a leader in the development of eco-friendly watch technologies, such as solar-powered
watches and atomic timekeeping watches.

21
Bottom 5 players of the watch industry

• Fossil
• Timex
• Casio
• Seiko
• Orient

Fossil Group

It is an American watchmaker and fashion company that was founded in 1984. The company owns a
number of brands, including Fossil, Skagen, and Misfit. Fossil Group is known for its stylish
watches and its focus on the youth market.

22
 TIMEX

Timex is a global watchmaking company founded in 1854 in Waterbury, Connecticut. It is one of

the oldest watchmakers in the United States and one of the largest in the world. Timex watches are
known for their durability, affordability, and variety of styles
CASIO
Casio is a Japanese multinational electronics manufacturing corporation headquartered in Shibuya, Tokyo,
Japan. It was founded in 1946 and has since become a global leader in the production of a wide range of
electronic products, including calculators, watches, digital cameras, musical instruments, and mobile
phones. Casio is particularly well-known for its G-Shock watches, which are known for their durability and
shock resistance. G-Shock watches have been worn by astronauts, explorers, and athletes alike, and they
have become a popular fashion accessory in recent years.

23
Seiko

Seiko was founded in 1881 as a watch repair shop in Tokyo. The company began manufacturing its
own watches in 1895, and it quickly gained a reputation for its high-quality timepieces. In the
1960s, Seiko pioneered the development of quartz watches, which are now the most common type
of watch in the world.

• Orient

These brands are all well-established companies with a long history of producing watches. However, they
are facing increasing competition from smartwatches and other wearable devices.

It is important to note that the watch industry is constantly evolving, and the rankings of individual players
can change from year to year.
24
 • Geographical spread of the selected Industry

Switzerland is the most important country in the watch industry. It is home to some of the world's most
prestigious watch brands, including Rolex, Omega, Patek Philippe, and Audemars Piguet. Switzerland is
also home to a number of watch component manufacturers and suppliers.
Japan is another important country in the watch industry. It is home to some of the world's leading watch
companies, including Citizen, Seiko, and Casio. Japanese watch companies are known for their innovative
technology and their ability to produce high-quality watches at affordable prices.
China is a rapidly growing market for watches. It is now the world's largest watch market by volume. China
is also home to a number of watch brands, including Sea-Gull and Orient.
Other important countries in the watch industry include:
• Germany: Germany is home to a number of luxury watch brands, including A. Lange & Söhne,
Glashütte Original, and Nomos Glashütte. Germany is also home to a number of watch component
manufacturers and suppliers.
• France: France is home to a number of luxury watch brands, including Cartier, TAG Heuer, and
Zenith. France is also home to a number of watch component manufacturers and suppliers.
• Italy: Italy is home to a number of luxury watch brands, including Bulgari, Panerai, and Ulysse
Nardin. Italy is also home to a number of watch component manufacturers and suppliers.
• United States: The United States is a major market for watches, and it is home to a number of watch
brands, including Fossil, Timex, and Invicta. The United States is also home to a number of watch
component manufacturers and suppliers.

The geographical spread of the watch industry is constantly evolving, as new markets emerge and existing
markets grow. However, the countries listed above are the most important to the industry today.

In addition to the countries listed above, there are a number of other countries that play an important role in
the watch industry. These countries include Hong Kong, Singapore, and South Korea. These countries are
home to a number of watch brands, as well as watch component manufacturers and suppliers.

The watch industry is a truly global industry, and it is played by companies from all over the world. The
geographical spread of the industry is one of its strengths, as it allows companies to tap into new markets
and to learn from each other.

25
 • SWOT Analysis.

Strengths
• Strong brand recognition: The watch industry has a number of strong brands, such as Rolex,
Omega, Cartier, and Patek Philippe. These brands are known for their high quality, craftsmanship,
and status symbol appeal.
• Innovative technology: The watch industry is constantly innovating and developing new
technologies, such as smartwatches and solar-powered watches. This allows watch companies to
meet the changing needs of their customers.
• Global reach: The watch industry is a global industry with a presence in all parts of the world. This
allows watch companies to tap into new markets and to reach a wider range of customers.

Weaknesses
• Competition from smartwatches: Smartwatches are becoming increasingly popular, and they pose a
threat to the traditional watch industry. Smartwatches offer a number of features that traditional
watches do not, such as the ability to track fitness data and receive notifications.
• High prices: Luxury watches can be very expensive, which puts them out of reach for many
consumers. This can limit the growth of the watch industry.
• Counterfeit products: Counterfeit watches are a problem for the watch industry. Counterfeit watches
are often made with inferior materials and workmanship, and they can damage the reputation of
watch brands.

Opportunities
• Growing demand in emerging markets: The demand for watches is growing in emerging markets
such as China and India. This presents an opportunity for watch companies to expand into new
markets and to grow their sales.
• Increasing popularity of vintage watches: Vintage watches are becoming increasingly popular,
especially among younger consumers. This presents an opportunity for watch companies to market
their vintage watches and to attract new customers.
• Growth of e-commerce: E-commerce is growing rapidly, and this presents an opportunity for watch
companies to sell their watches online. This can help watch companies to reach a wider range of
customers and to reduce their costs.

26
Threats
• Economic downturn: An economic downturn could lead to a decrease in the demand for watches.
This would be a major threat to the watch industry.
• Changing consumer preferences: Consumer preferences are constantly changing, and there is a risk
that watches could become less popular in the future. This would be a major threat to the watch
industry.
• New technologies: New technologies could disrupt the watch industry. For example, the
development of new wearable devices could lead to a decrease in the demand for traditional
watches.

Marketing strategy of Industry

Marketing mix
The marketing mix of the watch industry is a combination of four elements: product, price, place, and
promotion. These elements work together to create a marketing strategy that helps watch companies to
reach their target customers and sell their products.

Product
The product element of the marketing mix includes all of the decisions that watch companies make about
their products, such as the type of watches they offer, the features of their watches, and the design of their
watches. Watch companies must also consider the needs and wants of their target customers when making
decisions about their products.

Price
The price element of the marketing mix includes all of the decisions that watch companies make about the
prices of their products. Watch companies must consider the cost of producing their watches, the prices of
their competitors' watches, and the willingness of their target customers to pay for their watches when
setting prices.

Place
The place element of the marketing mix includes all of the decisions that watch companies make about
where to sell their products. Watch companies can sell their products through a variety of channels, such as
retail stores, online retailers, and their own websites. Watch companies must choose the right channels to
reach their target customers and to sell their products effectively.
27
Promotion

The promotion element of the marketing mix includes all of the decisions that watch companies make about
how to communicate with their target customers and promote their products. Watch companies can use a
variety of promotional channels, such as advertising, public relations, and social media. Watch companies
must choose the right channels to reach their target customers and to communicate their brand message
effectively.

Example of the marketing mix of the watch industry

Rolex is one of the most prestigious watch brands in the world. Rolex uses a variety of marketing strategies
to promote its products and reach its target customers.

Product: Rolex offers a wide range of watches, from classic dress watches to sporty chronographs. Rolex
watches are known for their high quality, craftsmanship, and status symbol appeal.

Price: Rolex watches are very expensive. This is because they are made with high-quality materials and
craftsmanship. Rolex also has a strong brand reputation, which allows it to charge high prices for its
watches.

Place: Rolex watches are sold through a network of authorized retailers. Rolex carefully selects its retailers
to ensure that they are able to provide its customers with the highest level of service.

Promotion: Rolex uses a variety of promotional channels to promote its products, including advertising,
public relations, and social media. Rolex also sponsors sporting events and celebrities to promote its brand.

Rolex's marketing mix is successful because it is tailored to its target customers. Rolex watches are
expensive, but they are also high quality and prestigious. Rolex's marketing materials emphasize the quality
and prestige of its watches, which appeals to its target customers.

The marketing mix of the watch industry is constantly evolving, as new technologies emerge and consumer
preferences change. Watch companies that are able to adapt to the changing market and develop innovative
marketing strategies will be well-positioned to succeed in the future.

28
Product line

Luxury watches: Luxury watches are made with the finest materials and craftsmanship, and are often seen
as status symbols. Some of the most popular luxury watch brands include Rolex, Omega, Patek Philippe,
and Audemars Piguet.

Fashion watches: Fashion watches are designed to be stylish and affordable. They are often made with
trendy materials and designs, and are popular with consumers who want to keep up with the latest fashion
trends. Some of the most popular fashion watch brands include Fossil, Michael Kors, and Guess.

Smartwatches: Smartwatches are wearable devices that can connect to smartphones and other devices to
perform a variety of tasks, such as tracking fitness data, receiving notifications, and making payments.
They are becoming increasingly popular with consumers who want a device that can keep them connected
and informed without having to carry their phone with them at all times. Some of the most popular
smartwatch brands include Apple, Samsung, and Fitbit.

Vintage watches: Vintage watches are watches that are older than 20 years. They are becoming
increasingly popular with consumers who appreciate the unique style and history of these timepieces. Some
of the most popular vintage watch brands include Rolex, Omega, and Patek Philippe.

The watch industry is constantly evolving, and new product categories and technologies are emerging all
the time. Watch companies are working to develop innovative new products that meet the changing needs
of their customers. For example, some watch companies are developing new smartwatches with advanced
health and fitness tracking features, while others are developing new vintage-inspired watches that appeal
to younger consumers.

29
Differentiation of watch industries.

• Product design:

Watch companies differentiate themselves through their product design. Some watch
companies, such as Rolex and Patek Philippe, are known for their classic and timeless
designs, while other watch companies, such as Fossil and Guess, are known for their trendy and
fashionable designs.

• Brand heritage:

Watch companies also differentiate themselves through their brand heritage. Some watch
companies, such as Rolex and Omega, have a long and rich history, while other watch
companies, such as Fossil and Michael Kors, are newer to the market.

• Technology:

Watch companies also differentiate themselves through their use of technology. Some watch
companies, such as Garmin and Fitbit, specialize in developing smartwatches with advanced
features, while other watch companies, such as Rolex and Patek Philippe, focus on developing
traditional watches with high-quality movements.

• Price:

Watch companies also differentiate themselves through their pricing. Some watch companies, such
as Rolex and Patek Philippe, produce luxury watches that are priced in the thousands or even tens of
thousands of dollars, while other watch companies, such as Fossil and Timex, produce affordable
watches that are priced in the hundreds of dollars or less.

Watch companies also differentiate themselves through their marketing and advertising campaigns. For
example, Rolex and Omega are known for their high-profile advertising campaigns that feature celebrities
and sports stars. Fossil and Michael Kors, on the other hand, are known for their more targeted marketing
campaigns that focus on fashion and lifestyle trends.

By differentiating themselves from their competitors, watch companies are able to appeal to different
customer segments and achieve success in the market.

30
specific examples of how watch companies differentiate themselves:

• Rolex:

Rolex is known for its high-quality watches, classic designs, and strong brand reputation. Rolex
also differentiates itself through its use of technology, such as its proprietary movements and
materials.

• Omega:

Omega is known for its innovative watches, such as the Speed master chronograph, and its
association with NASA. Omega also differentiates itself through its celebrity endorsements and its
involvement in sporting events.

• Patek Philippe:

Patek Philippe is known for its ultra-thin watches and exquisite craftsmanship. Patek Philippe also
differentiates itself through its limited production runs and its exclusive boutiques.

• Audemars Piguet:

Audemars Piguet is known for its sporty watches and its use of innovative materials, such as carbon
fiber and titanium. Audemars Piguet also differentiates itself through its celebrity endorsements and
its involvement in sporting events.

• Swatch:

Swatch is known for its affordable and stylish watches. Swatch also differentiates itself through its
innovative marketing campaigns and its collaborations with artists and designers.
strategies that watch companies are using today:

• Focus on luxury:

The luxury watch market is still growing, and many watch companies are focusing on this segment.
Luxury watch companies differentiate themselves through their high-quality craftsmanship,
exclusive designs, and strong brand reputation.

• Embrace technology:

Smartwatches are becoming increasingly popular, and watch companies are embracing this
technology in order to stay ahead of the curve. Many watch companies are now developing their
own smartwatches, or partnering with tech companies to develop smartwatches that integrate with
their existing product lines.
31
 • Expand into new markets:

Emerging markets, such as China and India, offer significant growth opportunities for watch
companies. Many watch companies are expanding into these markets by opening new stores and
partnering with local distributors.

• Target millennials:

Millennials are a growing and affluent demographic, and watch companies are targeting this group
with new products and marketing campaigns. Many watch companies are developing watches that
are stylish and affordable, and they are marketing these watches through social media and other
online channels.

• Focus on sustainability:

Consumers are becoming more interested in sustainable products, and watch companies are
responding to this demand by developing watches that are made with recycled materials and that use
renewable energy sources.

Strategies of watch industry

These are just a few of the key strategies that watch companies are using today. By focusing on these
strategies, watch companies are able to remain competitive and successful in the global marketplace.

In addition to the above strategies, watch companies are also using a variety of other strategies to compete
in the market, such as:

• Developing new product categories:

Watch companies are developing new product categories, such as hybrid watches and smart
jewellery, in order to meet the changing needs of consumers.

• Partnering with other brands:

Watch companies are partnering with other brands, such as fashion brands and tech companies, in
order to create new and innovative products.

• Investing in e-commerce:

Watch companies are investing in e-commerce in order to reach a wider range of customers and to
sell their products more efficiently.

32
 • Using social media marketing: Watch companies are using social media marketing to connect with
consumers and to promote their products.

Segmentation

Demographic segmentation: Watch companies segment their customers based on demographic factors such
as age, gender, income, and education. For example, luxury watch companies may target high-income
earners, while sports watch companies may target athletes and outdoor enthusiasts.

Psychographic segmentation: Watch companies also segment their customers based on psychographic
factors such as interests, values, and lifestyles. For example, fashion watch companies may target
consumers who are interested in fashion and trends, while sports watch companies may target consumers
who are interested in fitness and health.
33
Behavioral segmentation:

Watch companies also segment their customers based on behavioral factors such as purchase history,
website activity, and social media engagement. For example, watch companies may target customers who
have previously purchased luxury watches with offers on new luxury watches.

Targeting

Once watch companies have segmented their customers, they can target them with specific marketing
messages and products. For example, a luxury watch company may target high-income earners with
advertising campaigns that emphasize the exclusivity and status symbol appeal of its watches. A sports
watch company may target athletes and outdoor enthusiasts with advertising campaigns that emphasize the
durability and performance of its watches.

Examples of segmentation and targeting in the watch industry

• Rolex:

Rolex targets high-income earners with advertising campaigns that emphasize the exclusivity and
status symbol appeal of its watches. For example, Rolex's advertising campaigns often feature
celebrities and sports stars wearing Rolex watches.

• Omega:

Omega targets a variety of customer segments, including athletes, space enthusiasts, and fashion-
conscious consumers. For example, Omega is the official timekeeper of the Olympic Games and the
Speed master chronograph was worn by astronauts on the moon. Omega also partners with fashion
designers to create limited-edition watch collections.

• Swatch

Swatch targets a wide range of consumers with its affordable and stylish watches. Swatch's
advertising campaigns often feature young people wearing Swatch watches in fun and energetic
settings.

34
MARKET SHARE AND SALES

The global watch market is expected to reach USD 124.44 billion by 2028, growing at a CAGR of 5.02%
during the forecast period (2023-2028), according to Mordor Intelligence.

Market share by region

• Asia Pacific: 49.0%

• North America: 25.0%
• Europe: 18.0%
• Middle East & Africa: 5.0%
• Latin America: 3.0%

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Market share by company

• Swatch Group: 25.0%

• Rolex: 15.0%
• LVMH Moët Hennessy - Louis Vuitton: 10.0%
• Richemont: 8.0%
• Citizen Watch Company: 5.0%
• Other companies: 42.0%

Sales by region

• Asia Pacific: USD 60.7 billion

• North America: USD 31.1 billion
• Europe: USD 22.2 billion
• Middle East & Africa: USD 6.2 billion
• Latin America: USD 3.8 billion

Sales by product category

• Luxury watches: USD 50.0 billion

• Fashion watches: USD 35.0 billion
• Sports watches: USD 25.0 billion
• Smartwatches: USD 10.0 billion
• Vintage watches: USD 5.0 billion

36
Advertising

Watch companies use advertising to reach a wide range of consumers and to promote their products. Watch
companies advertise in a variety of media, including television, print, and digital media. Watch companies
also use celebrity endorsements and sponsorships to promote their product

s.

For example, Rolex is known for its high-profile advertising campaigns that feature celebrities and sports
stars, such as Roger Federer and Tiger Woods. Omega is known for its association with NASA and its
involvement in sporting events, such as the Olympic Games.

37
Public relations

Watch companies use public relations to generate positive media coverage and to build brand awareness.
Watch companies issue press releases, hold press conferences, and organize events to promote their
products and brands.

For example, Patek Philippe is known for its exclusive events, such as the Patek Philippe Watch Art Grand
Exhibition, which showcases its latest watches and historical timepieces. Swatch is known for its fun and
creative public relations campaigns, such as its collaboration with the Museum of Modern Art in New York
City.

Social media marketing

Watch companies use social media marketing to connect with consumers and to promote their products.
Watch companies use social media platforms such as Instagram, Facebook, and Twitter to share photos and
videos of their watches, to run contests and giveaways, and to engage with consumers.

For example, Audemars Piguet is known for its creative and engaging Instagram content, which features
photos and videos of its watches in a variety of settings. Fossil is known for its use of social media
influencers to promote its products to its target audience of millennials.

Point-of-sale marketing

Watch companies also use point-of-sale marketing to promote their products in stores. Watch companies
use displays, signage, and other promotional materials to attract customers' attention and to encourage them
to purchase their watches.

For example, Rolex often uses luxurious displays in its boutiques to showcase its watches. Omega is known
for its interactive displays at retail stores, which allow customers to learn more about its watches and to try
them on.

38
Other promotion strategies

Watch companies also use a variety of other promotion strategies, such as:

• Direct marketing:

Watch companies use direct marketing, such as email marketing and direct mail, to reach their
target customers with personalized messages and offers.

• Sales promotions:

Watch companies offer sales promotions, such as discounts, coupons, and free gifts, to encourage
customers to purchase their products.

• Loyalty programs:

Watch companies offer loyalty programs to reward repeat customers and to encourage them to
continue purchasing their products.
the key distribution channels that watch companies use:

• Retail stores:

Watch companies sell their products through a variety of retail stores, including department
stores, specialty watch stores, and jewelry stores. Retail stores allow customers to see and try on
watches before they purchase them.

• Online retailers:

Watch companies also sell their products through online retailers, such as Amazon and their own
websites. Online retailers offer customers a convenient way to shop for watches and to compare
prices.

• Wholesale distributors:

Watch companies also sell their products to wholesale distributors, who then sell the watches to
retail stores. Wholesale distributors allow watch companies to reach a wider range of retail stores
and to sell their products more efficiently.

• Direct-to-consumer:

Some watch companies sell their products directly to consumers through their own websites and
showrooms. This allows watch companies to control the customer experience and to offer exclusive
products and services.
39
Examples of distribution strategies in the watch industry

• Rolex:

Rolex sells its watches through a network of authorized retailers. Rolex carefully selects its retailers
to ensure that they are able to provide its customers with the highest level of service.

• Omega:

Omega sells its watches through a variety of channels, including retail stores, online retailers, and
its own website. Omega also has its own boutiques in major cities around the world.

• Swatch:

Swatch sells its watches through a variety of channels, including retail stores, online retailers, and
its own website. Swatch also has its own stores in major cities around the world.

Watch companies are constantly evolving their distribution strategies to meet the changing needs of their
customers. For example, many watch companies are now selling their products through online retailers in
order to reach a wider range of customers. Watch companies are also investing in their own websites and
showrooms to offer a more personalized customer experience.

Future of watch distribution

The future of watch distribution is likely to be shaped by the following trends:

• Growth of online sales:

Online sales are expected to continue to grow in the coming years. This will lead to more watch
companies selling their products through online retailers.

• Rise of omnichannel shopping:

Consumers are increasingly shopping across multiple channels. This will lead to more watch
companies offering omnichannel shopping experiences, which allow customers to shop for watches
online and in-store.

• Personalization:

Consumers are increasingly demanding personalized shopping experiences. This will lead to more
watch companies using technology to personalize the shopping experience for their customers.

40
 Chapter -3

State, National, and Global Regulatory Policies in the Watch Industry

The watch industry is subject to a variety of regulatory policies at the state, national, and global levels. These
regulations are designed to protect consumers, ensure fair competition, and promote sustainable business
practices.

State and National Regulations

State and national regulations in the watch industry vary depending on the jurisdiction. However, some
common regulations include:

• Product safety regulations:

These regulations ensure that watches are safe for consumers to use. For example, the US Consumer
Product Safety Commission (CPSC) has regulations in place to limit the amount of lead and other
hazardous materials that can be used in watches.

• Fair trade regulations:

These regulations prohibit deceptive and unfair trade practices in the watch industry. For
example, the US Federal Trade Commission (FTC) has regulations in place to prohibit companies
from making false or misleading claims about their watches.

• Tax regulations:

Watches are subject to a variety of taxes, such as sales tax and value-added tax (VAT). The specific
tax rates vary depending on the jurisdiction.

Global Regulations

There are a number of global regulations that apply to the watch industry. Some of the most important
global regulations include:

• World Trade Organization (WTO) Agreement on Technical Barriers to Trade (TBT Agreement):

The TBT Agreement aims to ensure that technical regulations do not create unnecessary barriers to
trade. The TBT Agreement applies to a wide range of products, including watches.

41
 • World Customs Organization (WCO) Harmonized System (HS) Code:

The HS Code is an international system for classifying goods for customs purposes. The HS Code
includes a specific code for watches. This code is used by customs authorities around the world to
determine the applicable tariffs and other duties on watches.

• Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their
Disposal:

The Basel Convention is an international treaty that aims to control the transboundary movement of
hazardous wastes. The Basel Convention applies to a wide range of hazardous wastes, including
watches that contain hazardous materials such as lead and cadmium.

Impact of Regulatory Policies on the Watch Industry

Regulatory policies have a significant impact on the watch industry. These policies can affect the cost of
doing business, the design of watches, and the marketing of watches.

Cost of doing business:

Regulatory compliance can be costly for watch companies. For example, watch companies must invest in
testing and certification to ensure that their products comply with safety regulations. Watch companies
must also pay taxes and other fees to comply with government regulations.

Design of watches:

Regulatory policies can also affect the design of watches. For example, safety regulations may restrict the
use of certain materials or components in watches. Fair trade regulations may restrict the way that watch
companies market their products.

Marketing of watches:

Regulatory policies can also affect the marketing of watches. For example, fair trade regulations may
restrict the types of claims that watch companies can make about their products. Watch companies must
also be careful to comply with advertising and marketing laws in the jurisdictions where they sell their
products.

42
 • Key Initiatives by Govt. to promote the Industry.

• Providing financial assistance to watch companies:

Governments may provide financial assistance to watch companies in the form of grants, loans, and
tax breaks. This assistance can help watch companies to develop new products, expand their
operations, and create jobs.

• Investing in research and development:

Governments may invest in research and development to support the development of new
technologies and materials for the watch industry. This investment can help watch companies to
remain competitive in the global marketplace.

• Promoting the watch industry through marketing and branding campaigns:

Governments may launch marketing and branding campaigns to promote the watch industry to
consumers around the world. These campaigns can help to increase awareness of the watch industry
and to stimulate demand for watches.

• Organizing trade shows and exhibitions:

Governments may organize trade shows and exhibitions to provide watch companies with a
platform to showcase their products and to network with potential buyers and suppliers. These
events can help watch companies to reach new markets and to grow their businesses.

• Protecting intellectual property rights:

Governments may implement laws and regulations to protect the intellectual property rights of
watch companies. This protection can help watch companies to protect their designs and
innovations from being copied by competitors.

Here are some specific examples of key initiatives by governments to promote the watch industry:

• The Swiss government:

The Swiss government has a long history of supporting the Swiss watch industry. The government
provides financial assistance to watch companies, invests in research and development, and
promotes the Swiss watch industry through marketing and branding campaigns. The Swiss
government also organizes trade shows and exhibitions to support the Swiss watch industry.

43
 • The Chinese government:

The Chinese government is also committed to supporting the Chinese watch industry. The
government has implemented a number of policies to promote the development of the Chinese
watch industry, including tax breaks, subsidies, and preferential treatment in government
procurement. The Chinese government is also investing in research and development to support the
development of new technologies and materials for the watch industry.

• The Japanese government:

The Japanese government is also a strong supporter of the Japanese watch industry. The government
provides financial assistance to watch companies and invests in research and development. The
Japanese government also promotes the Japanese watch industry through marketing and branding
campaigns.

Governments around the world are increasingly recognizing the importance of the watch industry to their
economies. The watch industry is a major employer and a generator of tax revenue. The watch industry also
plays an important role in promoting the culture and heritage of a country.

CSR Activity of watch industry.

• Supporting sustainable sourcing:

Watch companies are working to source their materials and components from sustainable
suppliers. This includes using recycled materials and reducing the use of hazardous chemicals.

44
 • Improving working conditions:

Watch companies are working to improve the working conditions of their employees and
suppliers. This includes ensuring that workers are paid fair wages and that they have access to safe
and healthy working environments.

• Reducing environmental impact:

• Watch companies are working to reduce their environmental impact. This includes reducing their
energy and water consumption, and minimizing their waste production.
• Supporting community initiatives:
• Watch companies are supporting community initiatives in the regions where they operate. This
includes supporting education, healthcare, and environmental protection programs.

Here are some specific examples of CSR activities in the watch industry:

• Rolex:

Rolex supports a variety of CSR initiatives, including the Rolex Awards for Enterprise, which
recognize and support entrepreneurs who are working to improve the lives of others. Rolex also
supports the Rolex Mentor and Protégé Arts Initiative, which pairs young artists with established
artists for one-on-one mentorship.

• Omega:

Omega is committed to environmental sustainability. Omega uses recycled materials in its watches
and has reduced its energy and water consumption. Omega also supports community
initiatives, such as the Speed master Foundation, which provides financial assistance to injured or ill
astronauts and their families.

• Swatch:

Swatch is committed to social responsibility. Swatch supports a variety of social causes, including
education, healthcare, and environmental protection. Swatch also supports the arts and culture
through its sponsorship of events such as the Art Basel art fair.

45
 External Environment

• Technology:

Technology is one of the most important external factors impacting the watch industry. The rise of
smartwatches and other wearable devices has led to increased competition for traditional
watches. Watch companies are responding to this challenge by developing their own smartwatches
or by partnering with tech companies to develop new watch technologies.

• Economic conditions:

Economic conditions can also have a significant impact on the watch industry. During economic
downturns, consumers are less likely to purchase luxury goods such as watches. Watch companies
must be able to weather economic downturns by offering a variety of price points and by targeting
different customer segments.

• Sustainability:

Sustainability is another important external factor impacting the watch industry. Consumers are
increasingly demanding sustainable products. Watch companies are responding to this demand by
using recycled materials in their watches and by reducing their environmental impact.

• Geopolitics:

Geopolitical events can also have an impact on the watch industry. For example, trade tensions
between the United States and China could lead to higher tariffs on watches. Watch companies must
be prepared to adapt to geopolitical events in order to minimize their impact on their businesses.

Here are some specific examples of how the external environment is impacting the watch industry:

• The rise of smartwatches has led to a decline in sales of traditional watches in some markets.
• The economic slowdown in China has impacted demand for luxury watches.
• Watch companies are increasingly using recycled materials in their watches in response to consumer
demand for sustainable products.
• The trade war between the United States and China has led to higher tariffs on watches imported
into the United States.

46
 Financial analysis

The watch industry is a large and diverse sector, with a global market size estimated at over $100 billion in
2023. The industry is segmented by type (traditional watches and smartwatches), category (quartz,
mechanical, and electronic watches), distribution channel (store-based and non-store-based), and region.

The luxury watch segment is the most profitable and fastest-growing segment of the watch industry. In
2021, the global luxury watch market was valued at over $50 billion. The market is dominated by a few
Swiss brands, such as Rolex, Patek Philippe, and Audemars Piguet. These brands produce high-quality,
handcrafted watches that are sold at a premium price.

The smartwatch segment is also growing rapidly, driven by the increasing demand for wearable devices. In
2021, the global smartwatch market was valued at over $25 billion. The market is led by Apple, followed
by Samsung and Fitbit. Smartwatches offer a variety of features, including fitness tracking, heart rate
monitoring, and smartphone integration.

Key Financial Trends

The watch industry is experiencing a number of key financial trends, including:

• Growing demand for luxury watches:

The demand for luxury watches is growing rapidly, driven by wealthy consumers in emerging
markets such as China and India.

• Rising popularity of smartwatches:

Smartwatches are becoming increasingly popular, as consumers seek wearable devices that can
track their health and fitness data.

• Shift to online sales:

More and more consumers are buying watches online, as it offers a wider selection of products and
lower prices.

47
Financial Performance of Leading Watch Companies.

Company Revenue (2022) Net Income (2022)

Swatch Group CHF 7.6 billion CHF 766 million

Rolex CHF 8.1 billion Not publicly disclosed

Richemont CHF 17.1 billion CHF 2.5 billion

Apple $385.5 billion $94.7 billion

Samsung KRW 279.6 trillion KRW 48.3 trillion

• Growth of smartwatches:

Smartwatches are becoming increasingly popular, and this is expected to continue in the coming
years. Smartwatches offer a variety of features that traditional watches do not, such as fitness
tracking, heart rate monitoring, and mobile payment capabilities.

• Shift to online sales:

More and more consumers are purchasing watches online. This is expected to continue in the
coming years, as online retailers offer a wider selection of watches and more competitive prices.

• Growth in emerging markets:

The demand for watches is growing in emerging markets, such as China and India. This is due to
the growing middle class and the rising disposable incomes in these markets.

• Focus on sustainability:

Consumers are increasingly demanding sustainable products. Watch companies are responding to
this demand by using recycled materials in their watches and by reducing their environmental
impact.
• Personalization:

Consumers are increasingly demanding personalized products.

48
Chapter -4

Observations

• Smartwatches are on the rise. While traditional watches continue to be popular, smartwatches are
gaining market share at a rapid pace. Smartwatches offer a number of features that traditional
watches do not, such as fitness tracking, heart rate monitoring, and mobile payment capabilities.
• The luxury watch market is still strong. Despite the global economic slowdown, the luxury watch
market remains strong. This is due to the growing middle class in emerging markets and the rising
disposable incomes in these markets.
• Consumers are increasingly demanding sustainable products. Watch companies are responding to
this demand by using recycled materials in their watches and by reducing their environmental
impact.
• Personalization is becoming increasingly important. Consumers are increasingly demanding
personalized products. Watch companies are responding to this demand by offering a variety of
customization options, such as engraving and custom straps.
Learning outcome

• The importance of innovation. The watch industry is constantly innovating, both in terms of
technology and design. This is essential for staying competitive in the market.
• The importance of branding. Watch brands are powerful symbols of status and luxury. Watch
companies invest heavily in building and maintaining their brands.
• The importance of targeting the right customer. The watch industry is segmented into a variety of
different markets, each with its own unique needs and demands. Watch companies must carefully
target the right customer segments in order to be successful.
• The importance of adapting to change. The watch industry is constantly changing, both in terms of
technology and consumer preferences. Watch companies must be able to adapt to these changes in
order to remain successful.

49
Here are some specific learning outcomes from the watch industry:

• The rise of smartwatches is a major challenge for traditional watch

companies. However, smartwatches also present an opportunity for watch companies to expand
their product offerings and reach new customer segments.
• The luxury watch market is still strong, but it is becoming more competitive. Watch companies
must differentiate themselves from their competitors in order to be successful in this market.
• Consumers are increasingly demanding sustainable and personalized products. Watch companies
must respond to this demand in order to remain competitive.
• Watch companies must be able to adapt to the changing environment in order to remain
successful. This includes adapting to new technologies, changing consumer preferences, and
geopolitical events.

CONCLUSION

The watch industry is a large and diverse sector with a bright future. The luxury watch segment is expected
to continue to grow, driven by wealthy consumers in emerging markets. The smartwatch segment is also
expected to grow rapidly, as more and more consumers adopt wearable devices.

The watch industry is well-positioned to benefit from these trends. Leading watch companies have strong
financial performance and are investing in new technologies and products to meet the changing needs of
consumers

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Bibliography / References

• Google
• Wikipedia
• WWW.GOOGLE.COM

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