Fossil Group Inc.Pursuing the Art of Watchmaking

By Helga Gonda Keith Boone Howard Newell Elizabeth Brobbey Boris Tchokouani

Issue?

There are many substitutes for watches. With the increasing use of mobile devices, Fossil Group Inc. and the market find the demand for watches on the decline.

How to better compete against the makers of Rolex and the Omega watches

Gaining new markets? Setting up for the David/ Goliath battle

Company Analysis– Boris & Howard Financials/ SWOT Analysis/ Value Chain

The Fossil Group Inc. Story - ElizabethHistory/ Products/

Industry Analysis– KeithIndustry Environment/ General Environment, Porter’s 5 forces

Recommended Actions For the Future – HelgaCurrent Strategies/ changes recommended

Agenda

Item 1

Item 2

Item 3

Item 4

THE FOSSIL GROUP INC. STORY

Elizabeth

Company History● Fossil brand was born at its

headquarters in Richardson, Texas

● Fossil was founded by brothers, Tom and Kosta Kartsotis

● American vintage style

● Started to acquire assembly facilities in the early 1990s

● Fossil incorporated on December 26, 1991

Product Lines● Watches

○ fine watches○ premium branded

and designer watches

○ digital and analog watches

○ contemporary fashion and fashion brand names

● Fashion accessories● Apparel● Footwear

Scope of the Firm

● Geographic○ North America Wholesale segment○ Europe Wholesale segment○ Asian Pacific Wholesale segment○ Direct to Consumer segment

● Target customers○ Wholesale customer: department

stores and speciality retail stores○ Dillard’s, JCPennys, Kohl’s, Macys,

Nordstrom, Neiman Marcus, Saks Fifth Avenue, Target and Walmart

○ “Style-conscious consumers” ● Technologies

○ Collaboration with Intel: fashionable and wearable technology

INDUSTRY ANALYSISKeith

Key Competitors and Industry Revenue

● Kenneth Cole● Guess● Coach● Louis Vuitton● Swatch ● Rolex

How Companies Can Remain Relevant

● Have an established brand to maintain a clear market position.

● Multiple product lines with different price tiers.

● Build a customer base that focuses on brand loyalty.

● Maintain excellent customer relations to establish repeat clientele.

● Be in close proximity to key markets.

General Environment

● The accessory market is expected to increase 10% in 2015 to a U.S. Market Share of $54 billion.

● International trade programs allow for jewelry and watches to be imported from countries with lower manufacturing cost.

● Older customers are more likely to purchase from established department stores and jewelry stores

● Younger consumers are more likely to purchase accessories from discount retailers.

Key Threats and Opportunities

● Smartphones and wearable technology poses a significant threat to the accessory industry in particular the watch market.

● Smaller entrants will find it difficult to enter the industry because large corporations already hold a substantial portion of the market with their established brands.

● Integration of accessories in apparel stores poses a threat to retailers in this industry.

● Opportunities in the men accessories market currently exist.

● Opportunities exist for creating a digital experience that improves in-store and virtual experience.

Two Content Layout

The image on this page can be removed and used in other presentations. Just click on it, then copy and paste it onto another slide or in to another presentation.

COMPANY ANALYSIS- FINANCIALS

Boris

Financial Ratios Comparison-Net profit margin: Percentage of revenues that are kept as net income-Return on Assets: How efficient the firm is at turning assets to earnings. -Debt to Equity ratio: Indicates what portion of equity and debt the company uses to finance assets.

Geographic InformationNet sales and long-lived assets related to the Company’s operations in the U.S., Europe, Asia Pacific and all other international markets were as follows (in thousands):

Geographic Region Net Sales Long-term Assets

United States $1,525,107 $411,458

Europe 1,052,497 264,173

Asia Pacific 504,124 65,91

All other international

178,243 10,230

Consolidated $3,259,971 $750,952

Fossil, Inc Industry Median

Profitability

Gross Profit Margin 57.32% 44.33%

Net Profit Margin 10.43% 8.55%

Return on Equity 33.12% 21.66%

Return on Assets 17.21% 12.41%

Return on Invested Capital 24.10% 19.05%

Effective Tax Rate 31.24% 26.40%

Liquidity

Current Ratio 3.01 2.72

Quick Ratio 1.59 1.5

Debt Ratio

Total Debt/Equity 0.48 0.25

Interest Coverage 8.76 10.19

Growth

12 Month Revenue Growth 14.08% 9.48%

12 Month Net Income Growth 10.12% 6.68%

36 Month Revenue Growth 17.09% 9.60%

36 Month Net Income Growth 14.01% 9.21%

Market performance You can add a description of the picture here.

In PPT 2007 or newer, this is a custom layout and can be modified under the slide master view.

COMPANY ANALYSIS- SWOT/ VALUE CHAIN

Howard

Sample Table LayoutHere is the description of the graph. This chart is compatible with PowerPoint 97 – 2010.

Here is some more text. You may delete the graphical elements.

Geographic Region

Q1 Q2 Q3 Q4

United States 1254 1254 1254 1254

Europe and Asia 324 324 324 324

Strengths Weaknesses

32 32 32

1. Distribution channels

2. Designing and manufacturing

3. Financial performance

1. Few suppliers for key inputs

2. Inventory buildup

2 2 2

Opportunities Threats 1 1 1

1. Collaboration with technology companies to develop smart watches

2. Underdeveloped/Underserved markets

3. Fashion conscious consumers

4. Health conscious consumers

5. Increased online presence

1. Cellular phone proliferation

2. Competition

3. High end watchmakers

4. Counterfeit products

1 1 1

TOTALS 1614 1614 1614 1614

Comparison Page

Your Sub Title Here

This is a place holder for item one. Item one can be text, a picture, graph, table, etc. This is a place holder for item one. Item one can be text, a picture, graph, table, etc.

Your Sub Title Here

Change the YOUR LOGO area below by editing the Slide Master under the view tab.

All the graphical elements can be moved, copied, or deleted from the slide master view.

Example Pie GraphThis is a PowerPoint 2007 or higher enhanced graph. You may change this graph as you wish.

This chart utilizes features available in PowerPoint 2007 or higher.

Smart Art Page Layout

Stage 1• Second level of text

here• You can remove the

image.

Stage 2• Second

level of text here

Stage 3•Second level of text here

•Another Point Here•And Another

Stage4•Smart art is quite powerful

This chart utilizes Smart Art which is feature in PowerPoint 2007 or higher. If you wish to make charts like this and don’t have PPT 2007, we have provided the graphical elements to help you build this yourself.

CURRENT STRATEGIES AND RECOMMENDATIONS

Helga

Smart Art Page Layout

Stage 1• Second level of text

here• You can remove the

image.

Stage 2• Second

level of text here

Stage 3•Second level of text here

•Another Point Here•And Another

Stage4•Smart art is quite powerful

This chart utilizes Smart Art which is feature in PowerPoint 2007 or higher. If you wish to make charts like this and don’t have PPT 2007, we have provided the graphical elements to help you build this yourself.

Smart Art Page Layout

• Add Supporting Text Here

Step 1

• Add Supporting Text Here

Step 2

• Add Supporting Text Here

Step 3

This chart utilizes Smart Art which is feature in PowerPoint 2007 or higher. If you wish to make charts like this and don’t have PPT 2007, we have provided the graphical elements to help you build this yourself.

QUICK FACTA content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it. A content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it. A content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it.

A content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it.

QUICK FACTA content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it. A content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it. A content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it.

A Two Column Page Layout

Example Pie GraphThis is a PowerPoint 2007 or higher enhanced graph. You may change this graph as you wish.

This chart utilizes features available in PowerPoint 2007 or higher.

A placeholder for the second pictureMore information can be added here by changing this text.You can modify this page’s formatting by editing the page layouts under the slide master view.

A placeholder for the first pictureMore information can be added here by changing this text.You can modify this page’s formatting by editing the page layouts under the slide master view.

Two Picture Page Layout

QUICK FACTA content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it. A content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it. A content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it.

A content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it.

QUICK FACTA content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it. A content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it. A content placeholder. Use for text, graphics, tables and graphs. You can change this text or delete it.

A Two Column Page Layout

A description of the first

picture. You may change

this text.

A second place holder is

available here. Add as

much text as you would

like.

A description of the

second picture. You may

change this text.

A second place holder is

available here. Add as

much text as you would

like.

A description of the third picture. You may change this text.

Three Picture Page Layout

A description of the first

picture. You may change

this text.

A second place holder is

available here. Add as

much text as you would

like.

A description of the

second picture. You may

change this text.

A second place holder is

available here. Add as

much text as you would

like.

A description of the third picture. You may change this text.

Three Picture Page Layout

Smart Art Page Layout

• Add Supporting Text Here

Step 1

• Add Supporting Text Here

Step 2

• Add Supporting Text Here

Step 3

This chart utilizes Smart Art which is feature in PowerPoint 2007 or higher. If you wish to make charts like this and don’t have PPT 2007, we have provided the graphical elements to help you build this yourself.

A placeholder for the second pictureMore information can be added here by changing this text.You can modify this page’s formatting by editing the page layouts under the slide master view.

A placeholder for the first pictureMore information can be added here by changing this text.You can modify this page’s formatting by editing the page layouts under the slide master view.

Two Picture Page Layout