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Country of origin.
Brief history of share price.
Brand and branding: company vs. product
Marketing mix as it may or not be applied in various countries.
Taxes paid as a proportion of profit
Any issue in Taxation.
Favourable and unfavourable press or other media.
Corporate social responsibility.
Rolex is a multinational brand founded in 1905 by Hans Wilsdorf and Davis Wilsdorf. The brand name is synonymous with luxury as it is associated with precision, excellence, and innovation. It is a 108-year-old brand which has gained popularity for its world-class manufacturing, designing, and distribution. The company is known as the largest producer of premium brands that are purchased by high-class society people. It is headquartered in Geneva, Switzerland. The company comes under the top hundred brands of wristwatches in the global market. It manufactures more than eight lakh watches annually for its varied costumers (Sádaba and Bernal 2018). It relies on 4,000 watchmakers who manufacture watches in more than 100 countries across the globe. The brand value of the company is $9.1 B.
Jean-Frederic Dufour is the CEO of the company. The brand is pioneering in the watchmaking; it has registered 500 patents in the entire course of history. Some premium brands that are popular among the customers include Rolex Submariner, Rolex Explorer, Rolex GMT- Master II, Rolex Datejust, Rolex Day-Date, Rolex Cosmograph Daytona, Rolex Air King, Rolex Lady Date-Just and so on. After the death of Wilsdorf, the entire company was given in the hands of Wilsdorf foundation whose aim was to keep the company sustained at all costs. During that period, the company's goal was just to sustain in the market. They didn't need to focus on the growth and profitability of the company. The company survived all the odds and become the number one Swiss watch manufacturer in Switzerland.
Rolex develops, design, and produce all the components required for manufacturing watches. It does everything from casting the alloy to machining and crafting of the alloy. It finishes the development of dial, case, and bracelet. The headquarter at Geneva is home for management, research, and design, communication, and sale activities. It is here the final product gets packed for the sale. All the components designed from three different sites are accumulated and assembled into finish watches (Donzé 2020). It is at Plan-Les-Ouates site where all the production and development activities are carried out. These include casting of gold and machining and polishing of the raw materials which would be used for crafting the watch. This site has six wings and it is the largest of all the Rolex site. It is the home here Rolex prepares 18ct gold alloys for manufacturing watches. It develops yellow, white, and exclusive pink gold for its customers. It has another site known as Bienee, it is here all the production activity takes place. At this plant, more than 2000 employees work and assemble all the components of the watch.
The components are very tiny and this is why they are set with precision in the watch (Batat 2019). The employees meet the accuracy criteria that is it fulfills the Swiss Chronometer testing institute criteria. These regulatory movements are performed by the hands of the employees, this is why the company has hired highly skilled operators and watchmakers who can meet the expectations of the company. Employees now know the complex geometry is preferred by the officials. It has another site known as Chene Bourg (da Silva Lopes et al. 2019). This site houses the development of dials. It is here all the gem setting activities are carried out. In simple words, here the face of the Rolex watch is developed and manufactured with the help of technology and dial makers command as they know the traditional activities of how and why. After the manufacturing, testing of the watches is done so that people do not face any issue related to watch once they purchased it from the stores across the world.
The stock price of the luxurious conglomerate rice sharply this week due to the coronavirus spread slowdown. It is found that the watches from the Switzerland group has marked a jump of 11 percent. During the coronavirus, the stock price of the watch dropped £390 to £140 but it recovered to £214. It is outperforming in comparison to other retailers in the market. Despite the Covid-19 pandemic the company came out of the losses and has started recovering from the loss that has incurred in the past few months. The sale of Rolex accounts for 22.2 percent of the global watch sale in the year 2018. It was 11.6 billion rupees' worth to retailers all around the world. It has the largest share of the luxury watch market. The other brand Omega and Swiss watch market were very low in comparison to Rolex SA (Sádaba and Bernal 2018). The statistics curated show that Rolex has been the number one brand in the world market.
It was found from the annual report of 2017 that the company was looking ahead for free trade agreement which was done 2014. Bilateral discussions were done to negotiate the custom duties. The discussion also stated that the company wanted the government of China to dismantle the maximum tariff barriers so that it can sell its products to Chinese people without having many difficulties. The Federation of the Swiss watch made these requests to the government intending to achieve liberalization in the market. In addition to this, it was also identified that Swiss watch being a single brand entity got the permission of selling its watches in India in 2015 when the government facilitated the companies to sell through online channels provided that they have the permission to sell in the brick and mortar store (Shin 2020). It was observed that the domestic sourcing needs to reckon before the company establishes its store and start operations here. From both the above companies it got cleared that the company entered or expanded its business in the foreign market through foreign direct investment policies.
The company did not merge with any of the watch brands nor even acquired a company. It entered the market when it found that the tax which is to be paid is less or the customs duty applied on the watch would be less and it can easily earn profit by selling its products in the foreign market. Everything seemed early due to globalization but later it was found that the company needs to understand the local market. If it will not understand the needs and lifestyle of the foreign market, it would not be able to sell its products among the people there (Atwal and Bryson 2017). Ultimately the company would then have to suffer. The company to sell its products has partnered with different groups like the Yacht club. It was one of the company's marketing strategy to sell its watches in the United States. The company even used celebrity endorsement technique to attract the customers towards it. Despite the effort, the biggest challenge for the company was to duplicate watches sold in the market. Many small companies to provide the feel of the luxurious watch started creating its replica. They then sold the same watch at a very affordable rate. The company saw a little setback but later it cut all the odds in the foreign market.
Rolex has developed itself based on two synergies that are innovative thinking and powerfully creative ideas. Rolex has always been known for having a culture of excellence in all the spheres be it blending technical perfection or functionality and aesthetics in watchmaking. It has one of the finest buildings for operations. It was in 2001 when the company faced a shortage of skilled laborers. The company thus even opened a school for providing training to young people to service high-quality wristwatch. It supported young talented architects under the philanthropic Rolex mentor and other arts initiatives. It manages the very operation of the company properly be it logistics, supply chain management, or manufacturing or testing part. The mangers of the company take care of each part and ensure that all the activities are carried out without any difficulty.
ROLEX is and stays a fantasy, a symbol of the Swiss extravagance watch industry. There is no other watch that has got such as a statistic symbol as gained by Rolex in the entire world. Rolex pays attention to its branding that is a sign of all the shops in which the Rolex watches are sold are decorated with recognizable crystal prism as it is a subject of pride for the organization. Rolex partner with only those companies that are renowned in the market place and have large stores to keep its product. The partners have to provide certain services to the clients like engraving the name of the purchaser at the back of the watch and so on. It did the branding of its products in such a way that consumers started considering the watch as close to the ideal (Khezri 2019). To gain such a strong position in the market, the company properly did brand positioning based on its concept of uniqueness. The limited stock of the Rolex in the market also helped it in gaining Rolex privilege. The brand name Rolex is a symbol of its image. It creates a positive attitude in the organization and guarantees the buyers about the high quality of its products. It tries to meet the expectation of its customers by maintaining brand loyalty.
It has positioned itself in the market as a brand which does not compromise in the quality of the services and focus only the sustained growth through profits. The biggest competitive advantage of the brand is that it believes in providing good quality with an extraordinary look. It has an excellent channel distribution facility because of which it has created its hold in the entire world market. It has launched a variety of exciting advertisements for creating sales and inquiry of the product. Rolex uses a differentiation strategy by targeting small markets where people can pay for a premium brand whereas other brands try to focus on a specific customer group (Borel and Christodoulides 2016). The company describes the uniqueness of its brands to the customer. It understands the value of the high proportion which allows the company to put the high price for the Rolex brand. It says no to the second life strategy. There are several instances but the company remains static as it does not want to lose its reputation of making world-class quality watches. Despite its strategies, the company was facing a challenge that is being global and emphasizing on locality.
To understand the local market while maintaining its global presence the company needs to understand what consumers want to see from the watch (Marchl 2019). It needs to emphasize active listening. It will help the company to identify what the customers' expectations are and how the company can fulfill it. It will also help the company understand that the buying behavior of the customers has changed now people are looking for the extra feature that the watch will provide like roman numerals on the watch. The company needs to come with strategies that will attract the local customers towards it like did you know series and so on. Rolex commercial tagline which states that it does not just tell time, it tells history became popular in the market, this campaign earned a lot of appreciation from the people all around the globe. The company if wants its product to be sold in the local market then it needs to local only then it would be able to attract local people towards the luxurious brand. The company needs to understand how much competition it is going to face from the other companies and how the local dealer of the Rolex need to market about the watch (Lee et al. 2018). The product manufactured is phenomenal, it is because the products the company can create and maintain its brand image in the market.
The marketing mix is a strategy applied by the company to understand what the brand currently stands for and whether it is popular in the minds of the consumers or not (Išoraitė 2016). The biggest challenge of the company is how to maintain its global presence and increase its sale in the local market. Here are some findings of the strategy which state that the company does not focus on locality it just wants to have a global presence in the world market.
Rolex is the first company that has introduced many breakthroughs in the market. It has manufactured waterproofs wristwatches for its customers, created wristwatches in which the date and time on the dial would change automatically, developed a watch which can show two time zones together, and has even earned chronometer certification. The company sells its products under five broad categories and each of them has a different product line. It has a wide range of products which makes it easy for the customer to select according to their choices (Armstrong et al. 2018). It sells highly differentiated products that are not manufactured or sold by its competitors in the market. The product served is of high quality and thus customers are willing to pay the high prices charged by the company. It is famous for its traditional design as they are practical for the consumer to use. The company to target local customers need to provide additional benefit. Must bring new products with the latest trends in the market, it needs to widen its product portfolio and come up with a new packaging style of the watch.
Rolex focuses on a niche segment and it sets a high price for its products. The price starts from $5000 and goes beyond millions. Generally, the price of the product depends on the model and price of the material used in manufacturing. The pricing strategy of the company depends on the quality, type of product developed, and competition in the market. Besides this, it was identified that the labor cost of the company is also high as it hires skilled people to build the masterpieces. The exclusive product is created for the wealthy class people. Rolex is also known as a price setter. It does not set the price of the products based on the competition in the market rather it set the price based on its products (Wibisono and Setiawan 2019). It does not even provide any kind of sale to its customers. It also uses the product bundling strategy in which the products are bundled together and sold at a price lower than the individual price of the wristwatches. The charge of the product on websites is higher than the store price because it includes the delivery charge of it as well. For local customers, the company must introduce discounts and allowances. It must use a price penetration strategy for creating its presence in the local market.
Rolex uses an aggressive promotion strategy that uses media. It has a very simple logo containing a crown. It indicates that the crown is precious and there are very few persons who get to wear the crown. This shows that its product is a symbol of success, luxury, and prosperity. It promotes its brand in the profile events like car races, Wimbledon, and many golf tournaments. It has always tried to make its connection with tennis where Rolex is an official timekeeper. It has always marketed its products as a personalized watch for its high-end users. It does not choose to market abut its products on national television or no radio. The brands are always associated with some global celebrities like Rodger Federer, Tiger Woods, Phil Michaelson, Lindsey Vonn, and so on. It advertises its products on social media platforms like Facebook, YouTube, Twitter, and so on. The company has one thousand likes or following on the official page. The company even undergoes personal selling that is it has a large sales force which increases its presence in retail stores (Sonawane 2018). It uses a percentage of sale methods for identifying the promotion budget for the year. The company to sell its products in the local market needs to adopt digital marketing strategies, advertising campaigns for regional people, and so on.
The company sells its products in the market through two different channels that are as a retailer and a wholesaler. It sells its products directly to the customer with the help of an online website or else it to wholesalers who then sell its products to different retailers located all over the country. It uses an intensive marketing strategy to sell its products to as many retailers as possible. This is done with a motive that the product reaches the customer present at a different part of the country at the earliest. The company even have a substantial amount of traffic on a website it thus has partnered with numerous service delivery person who can provide the delivery of the customer on a timely basis (Wibisono and Setiawan 2019). It also uses the Omnichannel distribution service that is it has integrated it both online and offline stores for its customers so that they can have easy access to the products. It has 500 suppliers that provide raw material to the company for manufacturing purposes. The company has created a good relationship with the suppliers. The company allows them to work with them to add new and attractive features to its product. The place plays a very important role thus it must understand its local customers where it is planning to sell its luxurious watch. It can even start company-operated retail stores to increase their local sale.
The company has trained sales team that plays a vital role in marketing. These people have a persuasive technique to attract customers. They also give respect to the customer's consideration and preferences. It has put some people in the customer service department. Customers can approach these people in case of any issue in the product. These people guide the customer by helping them out in getting the issue resolved (Pogorelyy 2017). Then there is a team that collects raw material from the supplier and ensure that the product manufactured is of high quality. It has some people working at the retail stores as well. These people help the customer on-site by answering their questions and helping them decide which product will suit them the best. The company to attract local customers must give training so that they can deal with the customers effectively.
The company makes sure that its products are always available at the retail store. The company has installed a system in the inventory which notifies the retailers that there is no stock of a particular watch. It helps the company retailers to order for the new stock for the company so that the needs of the customer get satisfied. It has a delivery process that is aligned with stock inventory as soon as the request is made the stock is selected and delivered to the client. It explores the market to understand the needs of the client. It collects about the clients understanding by gaining criticism in the form of feedback. The company needs to always look to improve the efficiency and cost of the products.
The store packages the item in a unique color and puts them on the distinct color shelves so that a customer when visiting the store can easily analyze the color on the shelf and take out the product he or she is willing to purchase. It even has an online site where clients can see items in top-notch pictures taken from different points (Bivand and Wong 2018). The company must take feedback from its local customers about the product and packaging and make improvements taking the key issues stated by them into consideration.
Rolex defines itself has a responsible taxpayer. It says that it is compliant with UK tax laws. The company states that it has a reputed trust about its brand in the market and thus it tries to maintain the trust of its consumers by paying the correct amount of the tax to the United Kingdom. It does not delay in paying the tax at the correct time (Kernstock et al. 2017). It connects with HMRC in an open and very transparent way. With the sudden growth in the sale, the company paid twice as much as tax in 2017 as was paid in the previous year. The HRMC collected £8.06m from the business which was 90 percent more than the £4.13m that it took in the year 2016. The increase in the tax was due to its unprecedented profit that the company has experienced in the United Kingdom last year. The profit that year doubled as a result tax officials were helping themselves to 19.25 percent of the figure. It was also identified from the findings that the tax corporation tax has lowered to 1 percent and it will get lower in April 2020.
It was found through researches that Rolex was started in London but post-war the company decided to shift its headquarter to Geneva because as it was a good tax haven at that time and the company wanted to maximize its profit percentage (Turban et al. 2018). The company selected Geneva because it has a very low rate of taxation for foreign investors. This is enough to find out that the company always found a country or a place where it has to pay minimum tax to the government of that country. There is no issue in the Taxation part of the company as it pays the tax that has been filed to the concerned authority of the company. It is a responsible taxpayer but tries to take the facility of effective tax rates so that it can increase the profit revenue of the company.
Press has always been favorable to the company. It has helped in promoting the strategies of the company to its varied customers all across the globe. It is because of the social media the company has gained its potential clients. The marketing strategy of Rolex flying at Mount Everest and similar cases has attracted a lot of people towards it. The company has always targeted its customer through celebrity endorsement. It is because of the celebrity endorsement; people are willing to purchase the high price Rolex watches. The company also sponsored sports events such as Tennis, China sea race and golf, and so on. It is another strategy to attract people towards it. The company is even sponsored by 89th Oscar in 2017. Rolex watches have the power to inspire. It became part of the Cinema's culture (Choi et al. 2018). It became the iconic symbol of the storytelling which is an essential element of the cinema's plot. Each watch symbolizes its own story of a personality. The same message is conveyed by the media to the people who are willing to purchase the watch for themselves or their loved ones to reflect that they have achieved great heights.
Rolex believes that there are several ways by which we can save our planet. Rolex is getting into it to find solutions. It is one of the most luxurious brands but at the same time, it is supports project which makes the world a better place to live in. It has some charitable foundations and has even donated millions of money to improve the world. The company has a Rolex enterprise award which is given to young laureates who work to overcome the challenges faced by the environment (Steenkamp 2017). The company believes in the philosophy that with the right passion anyone can change anything. The laureates for the award are selected by an international jury which typically includes scientists, conversationalists, doctors, educators, and so on. The program earlier was for adults but later it was started for visionaries between 18 and 30 years of age. It supports people who are trying to track and understand the reason for shark migration in the sea along with other similar kinds of projects.
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