patek phillipe final
DESCRIPTION
strategic plan for Patek Philippe exclusive luxury brandTRANSCRIPT
GROUP B
PORTER’S FIVE FORCES
Rivalry(High)
Bargaining power of suppliers
(High)
Threat of new entrants (Low)
Threat of substitutes(Moderate)
Bargaining power of customers
(Low)
CounterfeitsJewelry
Luxury mobile phonesOther luxury products
Exclusive brand imagePatented technology
High capitalAccess to distribution
Retailers influences customers decision
Brands control distribution
Swatch dominates components
High cost vertical integration
InnovationM&A
Luxury Brands
Attractive Industry
ACCESSIBLE LUXURY
EXCLUSIVE LUXURYAESTH
ETICS
CONNOISSEURSTE
CHN
ICA
L
SPORT
LIFESTYLE
JEWELRY
FASHION
DIRECT COMPETITORS PATEK PHILIPPE
THE WORLD LUXURY WATCH INDUSTRY AT A GLANCEContinued 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
02468
1012141618
2005 2006 2007 2008 2009 2010
Total value (CHF bb)
Countries Value 2010 increase % Share %
Hong Kong 3185,5 46,90% 19,70%
USA 1674,4 13,80% 10,40%
France 1167 20,50% 7,20%
China 1099,5 57,00% 6,80%
Italy 923,3 2,60% 5,70%
O. Countries 8108,4 15,50% 50,20%
Total 16158,1 22,10% 100,00%
LAST TRENDS IN THE 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
1839 1844 1851 1932 2009
2 Polish immigrants, AntoniPatek (Businessman) and FranciszekCzapek (Watchmaker) found “Patek, Czapek&Cie” Geneve
Mr. Patek met French watchmaker, Mr. Adrien Philippe. Pioneering stem winding and setting system by the crown
Mr. Philippe officially associated with the company, “Patek Philippe &Cie”
Company was purchased by Charles and Jean Stern. “Patek Philippe S.A.”
Presidency transmitted from the 3rd to the 4th generation: Mr. Thierry Stern became president
Family owned company Flexibility & creativity
Completely integrated Total quality control
TraditionAspirational brand / Lifetime valueBrand museumControlled distribution:
Salons in Paris, Geneva and London500 carefully selected retailers
Independence, Tradition, Innovation, Quality and Workmanship, Rarity, Value, Aesthetics, Service, Emotion, Heritage
PATEK PHILIPPE
9
STRATEGY COMPETITIVE ADVANTAGE
KEY RESOURCES• Patents• Skilled workforce• History and reputation• Advanced technology
CORE CAPABILITIES• Heritage and expertise• Internal production of all
components• Culture of innovation• Pursuit of perfection• Emotional value of the brand
(family transmission)
HERITAGE MANAGEMENTBENEFITS
ESSENCE, NATURE, MEANS
Functional-Time keeping- Precision- High technology
Essence MeansNature
Client BusinessCompany
Emotional - Piece of art / Exclusive- Family Values /Heritage- Brand r recognition
BENEFITS
QualityTrust
High techonoligyRespect of traditions
Aligns with values of customers
“Lasting value is both material and
emotional”HERITAGE
Highly populatedCompetition on technology
High negotial power of supplier
New trends
Vertical integrationInnovation effort
Understand Industry&CustomersManagement Supply&RetailersFamily business/independence
MANAGEMENT
SWOT
OPPORTUNITIESUse scarcity to increase exclusivityExpand the brand (jewelry)Supply movements to other manufacturersNew targets: women, younger peopleNew markets: Asia
THREATSChange in consumers’ tasteNew entrants (luxury brands)M&A: new colosses with higher financial resourcesScarcity might prevent gaining market share in Asian countries, leaving room to competitors
SWOT
INCREASE EXCLUSIVITY
(grow through price)
EXPAND TO ASIACONQUER WOMEN
APPEAL TO A YOUNGER TARGET
BRAND EXTENSION BRAND + MARKET EXTENSIONS
PRODUCT
MARKET
SAME
NEW
SAME NEW
CAPABILITIES ? POSSIBLE BRAND DILUTION
PEOPLE WILLINGNESS TO
PAY MORE(Crisis)
EXPAND TO ASIAProd. capacity
Knowledge of the market
Right target ?
APPEAL TO A YOUNGER TARGETAcquisition of new
technologyMove away from
tradition (microcomponents)
Brand dilution
PATEK PHILIPPE ALTERNATIVES
POSSIBLE BRAND DILUTION
CONQUER THE WOMEN
Risk to alienate menBrand dilution
RECOMMENDATIONS
Maintain exclusive positioning
Raise online brand awareness
Enhance women’s business
Measured approach towards China
MAINTAIN EXCLUSIVE POSITIONING1
• Maintain their exclusive positioning• Focus on core resources and capabilities• Growth through price not volume• Focus on innovation and branding
Objective
• The only independent watchmakers in Geneve• Unique positioning and perpetuating the ‘legend’Rationale
• Collector’s edition watches (priced above 100k Euro)• Exclusive membership clubs• Propose updated versions of old models• Unique service: engraved customer’s initials, free extendend repair service
Suggested Tactics
RAISE ONLINE BRAND AWARENESS•Reinter
pretate traditional values of the brand in a modern way
•Engage brand advocates, communicating 360º
•Attract new potential customers
•Reach good positioning also on online media
Objective
•Part of the Patek Philippe customers use Internet to seek information about luxury watches. Need to build loyalty also on the net
•Patek Philippe’s technological edge is consistent with the use of interactive media
Rationale
• Revamp company and museum website•Specific
SNS’ targeting HNWI
•Proprietary social media platform (Membership, Benefits)
•Create the myth of Patek Philippe on traditional social networks
•Interactive videos: collections, watchmaking process, etc.
Suggested Tactics
2
RAISE ONLINE BRAND AWARENESS2
ENHANCE WOMEN’S BUSINESS3
• Increase sales from women’s collectionObjective
• Women’s watch market is growing• Risk: a feminine brand image may alienate male
customersRationale
• Women designs should share sober traits of men’s collection• Communication should relate more to a feminine
audience , without “feminizing” traditional brand image• Message focused on values rather than gender (heritage)
Suggested Tactics
MEASURED APPROACH TOWARDS CHINA 4
•Avoid brand dilution by appealing the Chinese new rich
•Remain an object of desire among the upper-crust in China
Objective
•China is potentially the most lucrative market for Patek Philippe
•New rich are currently seeking for status only and may not fully appreciate the Patek Philippe’s brand
Rationale
• Study evolution of the market • Slow and selective distribution (main cities, top retailers)•Build
awareness and communicate through Chinese brand advocates / ‘friends’ of Patek Philippe
Suggested Tactics
“You never actually own a Patek Philippe. You merely look after it for
the next generation”
Q&A
GROUP BLIA BUDIMAN
LUCIA CALDERON ADRIAN CHAN CHUN
DEBORA CURBIHOWARD CUSHING VALERIA DESERTO
CARLOS FERRISSURYANATA HATTA