8/14/2019 9788823851054_ABS.PDF

1/10

FOREWORD XI

Foreword

The myth of Kronos devouring his children still has today in fact, especially today an interesting objective correlative: theobservation, common to all men and thus truly democratic, thatthe passage of time relentlessly consumes our existence. But inthe myth Zeus, who was after all the father of the gods, the sym-bol of power and wisdom, was saved from the fury of the oldpagan god. In other words, the evolution of humanity, not tomention human life itself, depends on knowledge and the intel-ligent management of time. And theres no dynamic evolution

without an orderly measurement. A watch is not, and never has been, merely a time-telling

instrument. Managing, measuring and organizing time has al-

ways been an activity tied to the use of power. So much so that just two historical holders of power have had a similar potestas :kings and the Church. For both, the calculation and scansion oftime were essential activities in order to exercise power. Thanksto their commissions, master clockmakers were repeatedly askedto improve the performance of time measuring instruments,from the most primitive models up to the most sophisticated

jewels. At the same time, marking off the hours for princes and pon-

tiffs wasnt merely about collecting functional mechanisms. Theirforms, materials, stones, enamels, designs, which have beenshown off over the centuries, brought about a constant evolution

8/14/2019 9788823851054_ABS.PDF

2/10

XII TIME TO CHANGE

of the applied arts, and have had positive influences on all artis-tic output.

Today, a few square centimeters of noble metal holds theculmination of 600 years of history. Its the story of man and

time.The watch, especially the mechanical one, has always repre-sented not only the objective passage of time, but also its succes-sive and strong acceleration, an acceleration thats noticeable inparticular from the 17th century onward and which has neverstopped evolving from the Industrial Revolution to the conquestof space.

Originally a product for a select few, since the 1930s the watch has become widespread in society, taking on (especiallyafter the electronics revolution of the 1960s and 1970s) a valuethat is more and more about reflecting the personal style of thosethat wear it on their wrist.

Thanks to the constant changes in the creation, function andtechnology related to timekeeping, the mechanical watch hastaken on a role thats increasingly a reflection of ones personality.Brands and models, but also mechanisms and complications,have been studied and realized to represent and perhaps inspiredifferent lifestyles, whether its sports enthusiasts or those withmore audacious endeavors. There has been a constant evolution(sicut erat in principio ) and refined technical watchmaking hasattracted more and more fans to the topics that the long historyof timekeeping has touched upon.

In the last few years, weve witnessed an impressive and un-

checked development of the entire watchmaking industry, be itfrom a heuristic and hermeneutic point of view as well as incommercial terms. In particular, the Haute Horlogerie brandshave been protagonists of a diffusion that has seen an impres-sive and truly global growth, having revealed its preciseness butalso its alarming protean nature. From San Francisco to Mi-ami, New York to London, Moscow to Shanghai, brands offer-ings have multiplied, branched out and homogenized in coun-tries apparently similar from a business standpoint, yet totallyunique in terms of culture, customs and motivation when itcomes to acquiring goods (and also services) typical of HauteHorlogerie.

8/14/2019 9788823851054_ABS.PDF

3/10

FOREWORD XIII

The work you have between your hands,Time to Change , hasarrived at a crucial moment for this world: it serves as an instru-ment to help understand that which awaits brands and managersnow that the explosive growth has been put to the test by the

global economic and financial crisis.Several questions cannot be ignored: How does one stayfaithful to the founding values of Haute Horlogerie? How doesone preserve its exclusiveness? Which levers does one use to at-tract new clients (both the young and admiring fans), who aremotivated by different cultures, perceptions and outlooks? Aboveall, has the cycle that pushed production volumes and HauteHorlogerie values to difficult to replicate levels now come to anend?

Put another way, there was a rush forward and now one is abit out of breath. Perhaps its a sign to stop and inhale in order torecoup oxygen and energy. In 2010, in order to sustain effec-tively the original values of this sector (its fundamental culturalcues and its attractive exclusiveness), things need to change. In-deed, one could say: Its time to change.

This research, which has resulted in a new level of coopera-tion between the FHH and Milans Bocconi University (and

when we speak of universities we are talking about youth andculture), outlines the findings of an in-depth analysis of the sec-tors most important markets (U.S., Japan, Europe, Asia-Pacific,South America) through dozens of interviews with key players inmanagement, distribution and watch collecting.

CEOs, local managers, retailers, journalists, opinion leaders

and collectors have offered significant contributions to this workand for this I would like to express to them, in my capacity aspresident, my personal gratitude for having supported the FHHin this complex endeavor. This undertaking is firstly a scientificresearch and therefore represents an objective snapshot of thesituation. Objectivity and truth are born from the authors com-plete freedom to investigate, and which is objectively verifiablesince opinions expressed are put forth in conversations as op-posed to preconceived notions or hypotheses. The freedom to

judge is the basis on which to uncover the truth.From the information collected, one can outline the scenarios

that brands and managers may encounter in the next two years.

8/14/2019 9788823851054_ABS.PDF

4/10

XIV TIME TO CHANGE

The Haute Horlogerie Fondation, ever faithful to its mission, wants very much to remain the axis around which revolves this world, a world that must disseminate culture and quality in or-der to attain credibility and a future.

Culture has always been the founding principle for an art,namely watchmaking, that represents in a world ever more in-dividualistic a happy achievement for those who want to liveout time, their own time, in a true and earnest life.

I would like to thank those who have shared with the FHH,the authors and the brands of Haute Horlogerie a critical phasein our recent history, and I ask the patient readers to be aware ofone last thing. Namely, one has the personal and unrelentingresponsibility to always dedicate the maximum effort to guaran-tee the future for that which is our passion: the measurement oftime via the mechanical watch that has, in the words of Tosca,lived for art and lived for love, and which marks off the happyand beautiful days.

Franco Cologni,President,

Fondation de la Haute Horlogerie

8/14/2019 9788823851054_ABS.PDF

5/10

PREFACE XV

Preface

Today, every person who chooses to buy a quality mechanical watch has made a personal journey that touches on rationalityand emotion, subjectivity and individualism, but one that alsoexpresses the desire to represent their way of being with others

who share his life.The watchmaking world has gone through years of great

changes and evolutions, a portentous development for the busi-ness, with a greater number of larger collections that combinetradition and innovation, new interpretations or new applica-tions of manufacturing techniques. But this is always done byrespecting the heritage that allows for new inventions and cre-ations in Haute Horlogerie.

The recent history of the industry has transformed the HauteHorlogerie market into a welldefined and focused internationalcircuit, one in which every brand and its management, retailersand direct distribution channels operate and compete.

On a daily basis, each of the players deals with the differentconditions and challenges that arise in the mature, growing andemerging markets.

With the book Time to Change , the FHH has courageouslychosen to investigate, using a strategic and managerial perspec-tive, the most appropriate policies and tools for operating andcompeting in different regions, be it at the headquarters, coun-try or retail level.

8/14/2019 9788823851054_ABS.PDF

6/10

XVI TIME TO CHANGE

As CEO of IWC Schaffhausen, I instantly supported theproject and the research, since one of the authors ofTime ToChange is a country manager of our brand, as well as a FHHDelegate for Italy and Greece.

Therefore, I asked for the cooperation of our worldwide sub-sidiaries to reveal to Luana Carcano and Carlo Ceppi the realityof each single region visited and researched by them, connectingthem, without prejudice, with the most representative players ofeach specific market. This was in order to obtain the most objec-tive opinions possible. There are over a hundred authoritativeinterviews from which the reader may draw upon.

With the book Time to Change , I believe that the Fondationde la Haute Horlogerie provides an important and relevant start-ing point to analyze and think about key issues on which to graftthe strategic and managerial renewal of the entire watchmakingindustry.

The effects of the global financial crisis of 2008-2010, thedifferent distribution structures in areas not far from each other,the dissimilar speed of implementation of manufacturing strate-gies and marketing activities in different regions, and the newthinking about the use of the internet and the network anoma-lies caused by discounting and parallel imports are just some ofthe commonalities in the environment that manufacturers, whorecognize themselves in the perimeter of FHH brands, confront.Its an environment that, in the common interest, must continueto be solid and roomy.

I am very confident that the FHH knows how to renew itself

and respect its great tradition, which perpetuates the charm thatmakes every mechanical watch an original and valuable witnessfor those who wish to unite it with the more intense and mean-ingful moments of their life.

Managing the market, feeding the passion that must pervadethe whole chain from production to watch retail, using the driv-ers of technology, communication and marketing being sureto respect each brands DNA in the process is our task as man-agers.

Our thanks goes to the Fondation Haute Horlogerie and, inparticular, to its President, Franco Cologni, who has always con-sidered the doing culture a winning strategy.

8/14/2019 9788823851054_ABS.PDF

7/10

PREFACE XVII

Culture and tradition are, in fact, the most effective fuel toperpetuate the human and historical content of our business and

with it the charm of the watchmaking world.

Georges Kern,Chief Executive Officer,IWC

8/14/2019 9788823851054_ABS.PDF

8/10

8/14/2019 9788823851054_ABS.PDF

9/10

PRESENTATION XIX

Presentation

Haute Horlogerie is a fascinating industry. It somehow lives inits own world, with its own industrial schema, infinite specialties,a vast network of highly specialized craftsmen, an impressive ar-ray of skills, and a very rich culture. It is also an industry that is,like its products, not entirely rational and driven by passion.

Until September 2008, the Haute Horlogerie industry wasliving a dream. Every year was, amazingly, better than the last.The growth rate (+15-25% annually) far exceeded the average,and virtually every watch of every design, and at every price lev-el, found a buyer.

Back then, very few people were suggesting something was wrong. Unfortunately something was.

The financial and economic crisis that kicked in during thesecond half of 2008 drew attention to structural issues that hadto be addressed in an industry that lacks visibility compared

with, say, the automotive industry, which is far more structuredand where more indicators exist. In Haute Horlogerie, muchlike in other high-end luxury businesses, many brands andgroups dont publish results and, except in a few countries, thereis no consolidation of statistics and relevant figures. Historically,decisions are based largely on intangible elements, such as thereproduction of patterns observed in the past.

The effects of this unprecedented crisis have therefore beenparticularly tough for the entire industry.

8/14/2019 9788823851054_ABS.PDF

10/10