1 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

Rolex Market Analysis

Presented by:

Mr. Maniyar Siddharth

Mr. Natoo Mandar

Mr. Phadke Sumit

2 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

Contents :

Sr. No. Content Page No. 1. Introduction 03

2. The Market 04

3. Portfolio 05

4. Revenue & Tendency of Market Growth 06

5. Target group 07

6. SWOT Analysis 09

7. Conclusion 11

8. Reference 12

3 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

Introduction:

Rolex is one of the leading global wrist watch manufacturing brand. It has long history of

inventions in the field of watch manufacturing. This company manufactures watches mostly

using precious metal like gold, silver and platinum to extreme precision and accuracy. Rolex

has 2800 employees. It produces maximum COSC certified watches than any other competitor.

Rolex has their presence in almost 116 countries all over the globe having 28 affiliates. Rolex

is very closely associated with sports like golf and tennis making their brand image much

bigger than other competitors.

This case study basically analyses current market of Rolex considering their market share,

product basket, technology and existing customers. Based on this analysis the case study

recommends few strategies that will further improve Rolex Sales and Business. During case

study we have used basic concepts of market analysis like SWOT analysis, sinus milieus.

4 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

The Market:

Rolex has chosen market segment based on buyer’s income. This is premium watch

manufacturing company having presence in retail consumer market. Their watches are

affordable to only limited part of society. It has strong presence in 116 countries which not

only includes developed countries like USA, Germany, England but also developing countries

like India, China, Brazil making them global brand in true sense. Rolex manufactures

traditional watches in limited models those are classic & elegant. In this sense they believe

more in seller’s market philosophy.

Rolex is benchmark in their segment of watches considering technology; but due to

globalization they have got few competitors in markets like Omega, Tag Heuer, Louis

Cartier and Breitling mainly because of price. This price competition basically arises due

to markets in developing countries where buyer is concerned not only about technology

but prices also.

http://www.wthejournal.com/images/pages/EN_Graph8_1.jpg http://www.wthejournal.com/images/pages/EN_Graph4_1.jpg

(pie chart- 1) (pie chart-2)

According to histogram rolex has highest number of COSC certified movements compare to

other compititors . Hence it is evident that they are far better in term of quality and technology

than competitors . On the other hand the pie chart shows that they have only 11.8% Market

share assuming that all manufactured Watches are sold. This share is not significant in global

market . This is due to the fact that their competitors have better product range which covers

watches with low prices to high prices . Hence they are able to serve more customers than

rolex.

Rolex is expanding their market. They have Revenue of $8.3B as of May 2015. They are

marketing their product with the help of their quality & avant garde technology. Also they are

official timekeepers of very popular tournaments of tennis & golf. With this tournaments &

brand ambessodors like Roger Fedrer they are attracting more customers to buy their product.

5 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

Portfolio-

Sr.

No. Model

1 Air-King

2 Air-King-Date available for 1988

3 Date

4 Oyster Perpetual

5 Date just

6 Date just II

7 Date just Turn-O-Graph

8 Lady Date just Pearl master

9 Daytona

10 Day-Date

11 Day-Date II

12 Day-Date Oyster Perpetual

13 Explorer

14 Explorer II

15 GMT Master II

16 Masterpiece

17 Milgauss

18 Oyster quartz

19 Sea Dweller

20 Sea Dweller Deep Sea

21 Sky-Dweller

22 Submariner

23 Turn-O-Graph

24 Yacht-Master

25 Yacht-Master II

6 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

Revenue & Tendency of Market Growth:

From the graph it is evident that there is continuous increase in the business of Rolex. In 4

years their business has almost increased by 124%. The tendency of market growth of Rolex

is always in upward direction.

http://www.forbes.com/companies/rolex/

Sr. No. Year % increase in Revenue

1 2012-2013 27.02%

2 2013-2014 57.44%

3 2014-2015 12.6%

From year 2012-13 the revenue has increased by 27%, then in 2014 it is further increased by

57% this is mainly because of high demand for their products in Asian market. From 2014-15

may be due to global economic recession the growth of revenue was only 12.6%.They suffered

major loss in Asian market. Despite of this fact Rolex is able to generate revenue more than

previous year.

Demand:

Rolex is most popular wrist watch brand all over the world. Their market in developed

countries is well established. Additionally the buying power of consumer in developing

countries is increasing nowadays. Hence Rolex products have got high demand in developing

countries like China and India. The resalable value of these watches is also high. Manufactured

quantity of these watches is not adequate to cater for increased demand. Hence demand is

further increasing.

3.7

4.7

7.4

8.3

0

1

2

3

4

5

6

7

8

9

2012 2013 2014 2015

Rev

enue

in B

illio

n $

Year

7 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

Target group:

Rolex targeted consumers based on income and product application. Their watches are mainly

for people with high income who look for traditional aesthetics. Also they manufactures

watches for critical applications like for using them in deepest oceans and highest mountains.

Also the age group of customers is mostly above 40. This target group includes business people,

sport persons, astronauts, deep sea divers and alpinists. These watches are meant for men in

most of the cases. They have very limited variety in Women segment.

8 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

From sinus milieu diagram above we can say that typical target group of Rolex is:

1. Established Conservative milieu:

This milieu covers very successful rich people in the field of business, sports etc. these

people tend to use traditional yet elegant watches. Since Rolex’s inception this has been

main focused consumer’s group.

2. Liberal Intellectual milieu:

This milieu includes highly educated individuals who are self-determined & therefore

are concerned more about product quality & technology than price. Rolex stands high

on these aspects.

3. High achiever milieu:

This milieu covers individuals who are techno savvy, Professionals who are at top level

in organization and would prefer to have proven brand. So Rolex exactly fits their bill.

4. New middle class milieu:

These are middle class consumers who are striving to become established professionals

& trying to have a status which is socially well acceptable. This class particularly

represents consumers from developing countries like China & India who are

increasingly concerned about brand of a particular product.

The Marketing:

Looking at the brand Rolex one can predict the biggest company capturing &

influencing entire global market with its wide product range which are benchmark with

their quality & technology.

Considering above expectations Rolex stands tall on its quality & technology. But when

it comes to product range they have very limited variants & less focus on women

watches segment making them bit lagging in global market. Also prices are exorbitantly

high.

9 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

SWOT Analysis:

Strength:

Brand Image: Rolex is most renounced brand in the field of wrist watches over

past few decade.

Quality: Rolex manufactures highest number of COSC certified watches than

any other competitor.

Technology: Rolex has many patented technologies like Oyster Case, Winding

crown, Cyclops Lens etc.

Products for critical application: The manufacture watches for deep sea

applications, high altitude applications with extreme accuracy and durability

Close association with sports like golf & tennis.

Weakness:

Price: These watches have extremely high price which can’t be affordable to

common consumer.

Limited variants: Their product basket is limited with traditional look.

Limited variants for Women: Rolex has manufactured only one series for

women.

Product type: Rolex manufactures only analog watches and not digital ones

therefore losing buyers’ market of digital watches.

Opportunities:

New segment: Manufacturing of digital watches.

New target group: Target young generation and launch suitable products,

watches for women.

Price: Use alternate material and outsourcing of some components could reduce

price of watches.

Demand: Demand for Rolex watches is increasing at higher rate compared to

manufacturing rate.

Threats:

Mobiles: Due to multi functionality of mobiles consumers are giving less

priority to watches.

Competitors: Rolex faces intense competition in various regions from local

competitors.

Recession: Due to Economic crisis people are spending less on secondary

needs.

Grey Market: Imitations at lower price affect the brand image and intern the

sales of product.

10 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

Opportunities Threats

New segment Mobiles

SWOT Analysis : New target group Competitors

Price Recession

Demand Gray Market

Strategies

Strength

Brand Image use alternate

material for low cost products

maintaining the

status throughout

according to

brand image

Quality

Technology

start

manufacturing

digital watches

Periodic R&D to

be at par with the

latest

development so

as to be always a

step ahead with

competitors

Products for critical application

Launch smart

watches

Close association with sports like golf &

tennis

Weakness

Price

Launch low price version in specific

geographical market

efficient buy back policy to

minimize grey market

Limited variants

Limited variants for Women outsource some components to

reduce price

Product type Expand product

basket for women watches

Low manufacturing capacity

Increase manufacturing

capacity to cope up with increased

demands

11 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

Conclusion:

Based on market analysis & subsequently emerged strategies we have come up with

following salient points:

The Rolex has been successful in maintaining their brand image as one of the

leading manufacturing watch makers in the global market throughout these

years.

There is scope for further improvement with application of some strategies. Out

of all immerged strategies we have come up with most prominent strategies as

per following :

a) Introduction of new product segment which would include watches for

women as well as digital sport watches: this strategy will require minimum

investment as they are already equipped with technology.

b) To counter forfeit & grey market introduction of efficient buyback policy:

watches will be available for lower price and would open opportunity for

new target group.

c) To tackle competition in local market Rolex can outsource some

components of watch assembly to reduce final product cost & enter

relatively low price market.

With these strategies Rolex will be able to cover adaptive pragmatist milieu

while maintaining their original target groups.

12 | P a g e SRH Hochschule Heidelberg – International Business & Engineering

Reference:

1. https://en.wikipedia.org/wiki/Rolex

2. http://www.chase-hattan.com/blogs/news/17780980-rolex-watches-demand-and-

supply

3. http://www.forbes.com/companies/rolex/

4. http://www.wthejournal.com/images/pages/EN_Graph8_1.jpg (pie chart -1)

5. http://www.wthejournal.com/images/pages/EN_Graph4_1.jpg (pie chart-2)

6. www.rolex.com