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Patek phillipe final
The document discusses Porter's Five Forces analysis of the luxury watch industry and analyzes key players such as Swatch and Patek Philippe. It notes trends in design moving towards nostalgia and understated luxury as well as industry consolidation and expansion in Asian markets. The strategies and strengths of Patek Philippe are highlighted, including its family ownership, vertical integration, and focus on quality, tradition and emotional brand value.
Patek phillipe final
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- 2. PORTER’S FIVE FORCES Exclusive brand image Threat of new entrants Patented technology High capital (Low) Access to distribution Swatch dominates Bargaining power of Bargainingcontrol of Brands power components suppliers Rivalry Attractive Innovation distribution customers High cost vertical M&A Retailers influences (High) integration Industry (High) Luxury Brands (Low) customers decision Counterfeits Threat of substitutes Jewelry Luxury mobile phones (Moderate) Other luxury products
- 3. EXCLUSIVE LUXURY DIRECT COMPETITORS PATEK PHILIPPE AESTHETICS TECHNICAL ACCESSIBLE LUXURY
- 4. THE WORLD LUXURYWATCH INDUSTRY AT A GLANCE Continued strong Growth until 2008 The crisis of 2009 mainly involved the accessible luxury segment Recovery in 2010 and expected record sales in 2011 Asia fastest growing market China grew 47% in 2009, 57% in 2010 Continued Growth expected in China and India Total value (CHF bb) 20 Countries Value 2010 increase % Share % 15 Hong Kong 3185,5 46,90% 19,70% 10 USA 1674,4 13,80% 10,40% France 1167 20,50% 7,20% 5 China 1099,5 57,00% 6,80% 0 Italy 923,3 2,60% 5,70% O. Countries 8108,4 15,50% 50,20% 2005 2006 2007 2008 2009 2010 Total 16158,1 22,10% 100,00%
- 5. LAST TRENDS INTHE LUXURY WATCH INDUSTRY Trends in taste and design - Moving away from extravagance and excess - Move towards nostalgia and the past - Highlighting original Swiss savoir - faire - Understated Luxury/ Neoclassic Other trends - Attempt to vertical integration from other players - Consolidation (Richemont, LVMH) - New entrants from fashion world - Diversification - Higher attention to Asian tastes (automatic watches) - Modern technology to attract younger targets (touch screen) - Increasing counterfeit market
- 7. 1839 1844 1851 1932 2009 Company was purchased by Mr. Patek met Charles and French Jean Stern. watchmaker, Mr. “Patek Philippe Adrien Philippe. S.A.” Pioneering stem winding and Presidency transmitted setting system by from the 3rd to the 4th the crown generation: Mr. Thierry Mr. Philippe 2 Polish immigrants, officially Stern became AntoniPatek associated with president (Businessman) and the company, FranciszekCzapek “Patek Philippe (Watchmaker) found &Cie” “Patek, Czapek&Cie” Geneve
- 8. PATEK PHILIPPE Familyowned company Flexibility & creativity Completely integrated Total quality control Tradition Aspirational brand / Lifetime value Brand museum Controlled distribution: Salons in Paris, Geneva and London 500 carefully selected retailers Independence, Tradition, Innovation, Quality and Workmanship, Rarity, Value, Aesthetics, Service, Emotion, Heritage
- 9. STRATEGY COMPETITIVE ADVANTAGE KEY RESOURCES CORE CAPABILITIES • Patents • Heritage and expertise • Skilled workforce • Internal production of all • History and reputation components • Advanced technology • Culture of innovation • Pursuit of perfection • Emotional value of the brand (family transmission) 10
- 10. ESSENCE, NATURE, MEANS Essence Nature Means Functional Emotional Quality Verticalpopulated Highly integration “Lasting value is Trust Competition on technology Innovation effort -Time of art / - Piecekeeping Exclusive BENEFITS - Precision Family Values /Heritage HERITAGE both material and High techonoligy MANAGEMENT High negotial power of Understand Industry&Customers Respect of traditions supplier Management Supply&Retailers - High technology Brand r recognition emotional” Aligns with values of customers New trends Family business/independence Client Company Business
- 11. SWOT WEAKNESSES STRENGTHS Perceived conservatism Brand recognition Limited volume production Autonomy and flexibility High product time to market Vertical Integration/quality control Poor design of website and other online Incomparable product complexity platforms SWOT OPPORTUNITIES THREATS Use scarcity to increase exclusivity Change in consumers’ taste Expand the brand (jewelry) New entrants (luxury brands) Supply movements to other M&A: new colosses with higher financial manufacturers resources New targets: women, younger people Scarcity might prevent gaining market New markets: Asia share in Asian countries, leaving room to competitors
- 12. PATEK PHILIPPE ALTERNATIVES APPEAL TO A EXPAND TO ASIA YOUNGER TARGET EXPAND TO THE CONQUER ASIA SAME PEOPLE CONQUER Acquisition of new INCREASE Prod. capacity WOMEN WILLINGNESS TO technology EXCLUSIVITY PAY MORE Risk to alienate the Knowledge of men Move away from APPEAL TO A (grow through price) market tradition (Crisis) YOUNGER Brand dilution (microcomponents) Right target ? TARGET Brand dilution PRODUCT BRAND + BRAND POSSIBLE BRAND CAPABILITIES ? POSSIBLE BRAND MARKET DILUTION DILUTION EXTENSION EXTENSIONS NEW SAME NEW MARKET
- 13. RECOMMENDATIONS Maintain exclusive positioning Raise online brand awareness Enhance women’s business Measured approach towards China
- 14. 1 MAINTAIN EXCLUSIVEPOSITIONING • Maintain their exclusive positioning • Focus on core resources and capabilities Objective • Growth through price not volume • Focus on innovation and branding • The only independent watchmakers in Geneve Rationale • Unique positioning and perpetuating the ‘legend’ • Collector’s edition watches (priced above 100k Euro) • Exclusive membership clubs Suggested Tactics • Propose updated versions of old models • Unique service: engraved customer’s initials, free extendend repair service
- 15. 2 RAISE ONLINEBRAND AWARENESS • Reinterpretate traditional values of the brand in a modern way • Engage brand advocates, communicating 360º Objective • Attract new potential customers • Reach good positioning also on online media • Part of the Patek Philippe customers use Internet to seek information about luxury watches. Need to build loyalty also on Rationale the net • Patek Philippe’s technological edge is consistent with the use of interactive media • Revamp company and museum website • Specific SNS’ targeting HNWI Suggested • Proprietary social media platform (Membership, Benefits) Tactics • Create the myth of Patek Philippe on traditional social networks • Interactive videos: collections, watchmaking process, etc.
- 16. 2 RAISE ONLINEBRAND AWARENESS
- 17. 3 ENHANCE WOMEN’SBUSINESS Objective • Increase sales from women’s collection • Women’s watch market is growing Rationale • Risk: a feminine brand image may alienate male customers • Women designs should share sober traits of men’s collection Suggested • Communication should relate more to a feminine audience Tactics , without “feminizing” traditional brand image • Message focused on values rather than gender (heritage)
- 18. 4 MEASURED APPROACHTOWARDS CHINA • Avoid brand dilution by appealing the Chinese new rich Objective • Remain an object of desire among the upper-crust in China • China is potentially the most lucrative market for Patek Philippe Rationale • New rich are currently seeking for status only and may not fully appreciate the Patek Philippe’s brand • Study evolution of the market Suggested • Slow and selective distribution (main cities, top retailers) Tactics • Build awareness and communicate through Chinese brand advocates / ‘friends’ of Patek Philippe
- 19. “You never actuallyown a Patek Philippe. You merely look after it for the next generation”
- 20. Q&A GROUP B LIA BUDIMAN LUCIA CALDERON ADRIAN CHAN CHUN DEBORA CURBI HOWARD CUSHING VALERIA DESERTO CARLOS FERRIS SURYANATA HATTA
Editor's Notes
- #6 TrendsAsia is fastest growing marketChina 57% in 2010, Hong Kong 46%Growing trend towards Mechanical watches
- #7 TrendsAsia is fastest growing marketChina 57% in 2010, Hong Kong 46%Growing trend towards Mechanical watches
- #13 STRENGTHSBrand recognition (long-time quality tradition + company values intensely publicized throughout media)Autonomy and flexibility (family-run business)Non-dependence on movement suppliers (verticalised production)Incomparable product complexity High quality of printed advertisingClose relation to customers (connection to Stern family + product registration + exclusive magazine subscription) Records in auctions augment brand equity WEAKNESSESPerceived conservatism (restricted audience)Dealing with extreme high-end product (no growth through volume allowed)Limited design flexibility (non-adherence to fashion trends)Limited volume productionLong product time to market Poor design of website and other online platformsOPPORTUNITIESExtend womens’ product offer (increasing clientele and brand recognition)Enter jewelry businessSupply movement to other manufacturersIncrease prices due to scarcity Enhance brand awareness through online marketingTHREATSChange in consumers’ tasteNew entrants (economy of scope of other high brand equity companies)Voluntary scarcity might prevent gaining market share in Asian countries, while leaving room for competitors