Swatch Group Ltd. - mbacasecomp.com · Swatch Group Ltd. JMSB Consulting ... High tech. Mass...

Swatch Group Ltd.JMSB ConsultingGeorge EmeryJonathan SuproviciEliane RoyCinzia Ruberto

Recommendation Analysis Financials Alternatives Implementation

Mandate

How can SGL compete in the smartwatch market?

Power of Apple

Drop in activity trackers

Technology evolution


Merging timelessness and technology

SGL will be positioned to capture the high end market

• Utilize ETA and in-house R&D to create the TISSOT DUAL• Manage external partners to enable NFC, phone compatibilityTechnology

• Key to have fully automated and upgraded production facility• Leverage timeliness and, craftsmanship and technology

Production and design

• Global focus on high end customer base (existing and new)Marketing and branding

Analysis


Activity trackers market will shrink

Timekeeping watches

• SGL well positioned in high-end segment

• SGL suffers from currency fluctuations

Activity trackers

• FitBit, Garmin, Nike…• Market will shrink and

focus on cheaper products

• Smart Touch Zero One• Swatch Bellamy (NFC)

Smartwatches

• Growing segment• LT watch market• TISSOT SMART-TOUCH


Activity trackers market will shrink

Timekeeping watches

• SGL well positioned in high-end segment

• SGL suffers from currency fluctuations

Activity trackers

• FitBit, Garmin, Nike…• Market will shrink and

focus on cheaper products

• Smart Touch Zero One• Swatch Bellamy (NFC)

Smartwatches

• Growing segment• LT watch market• TISSOT SMART-TOUCH

SGL must be a smartwatch player to continue growth


SGL movement to high technology

TAGTISSOT SMART TOUCH

APPLEEDITION

LG G WATCH

FITBIT

APPLE WATCH

SAMSUNG

APPLESPORT

Low tech High tech

Mass market

Luxury market




APPLEEDITION

LG G WATCH

FITBIT

APPLE WATCH

SAMSUNG

APPLESPORT

TISSOT DUAL

Low tech High tech

Mass market

Luxury market




APPLEEDITION

LG G WATCH

FITBIT

APPLE WATCH

SAMSUNG

APPLESPORT

TISSOT DUAL

SWATCH DUAL

Low tech High tech

Mass market

Luxury market

SGL will be a leader in the luxury smartwatch market


Leverage in-house production and design

Combined production and design will allow SGL to succeed

• ETA and in-house R&D• Smart Touch and Bellamy• Fully automated production

Production

• Timeliness, craftsmanship• Bridge the gap with technology to

create the DUALDesign


Utilize existing image and customer base

Existing customer base

Professionals

Design

Functionality

Financials


2015 Internal Assessment

ABILITY TO INVEST / NEED TO CHANGE THE TRENDS

NET SALES

NET INCOME

NET SALESAt 8,451 M CHFDeclining sales growth2015 decrease due to exchange rate

NET INCOME

At 1,119 M CHF41% decline from 2013

CASH FLOW

At 1,404 M CHF7% increase over 2013


Market Assessment

Opportunity for 20% growth in sales

+66%

+32%

HIGHEST GROWTH SECTOR IN SMART / WEARABLES

TOTAL MARKET 18 millions units

TARGET 5% = 910 K units

POTENTIAL 1,593 millions in sales

Alternatives


Strategic positioning

Market

• Competing with Apple• Decrease demand in activity tracker• Increase demand in smart watches

Core competencies

• Quality & diversified offer• Sensors, chips & batteries• ETA Subsidy Technology

Strategy

• Differentiation through craftsmanship & timelessness


Strategic Positioning Assessment

Market

• Competing with Apple• Decrease demand in activity tracker• Increase demand in smart watches

Core competencies

• Quality & diversified offer• Sensors, chips & batteries• ETA Subsidy Technology

Strategy

• Differentiation through craftsmanship & timelessness

Leverage what you are known for: craftsmanship & timelessness


Options for SGL

Criteria

Investment required

Leverage core competency

Risk

Long term sustainability

Watch as jewelry

Activity tracker

New brand low-end

smart watch

Tissot high-end smart

watch


Options for SGL

Criteria

Investment required

Leverage core competency

Risk

Long term sustainability

Watch as jewelry

Activity tracker

New brand low-end

smart watch

Tissot high-end smart

watch

You can differentiate yourself in the smart watch market though quality


Risks of merging timelessness & technology

Apple refines watch Build on Swatch reputation

Focus marketing on main customer

segment

Technologically weakFocus on design,

battery life & basic functionalities

Partner up for upgraded software

Currency fluctuation

Minor pricing adjustment

Send technology production to

Asia

RISKS ACTIONS CONTINGENCIES

Implementation


Implementation at a Glance2016 2017 2018

Technology Development

Dual Watch Production & Design

Smart Dual Overlay with ETA

APP development

Design dual watch for Tissot

Upgrade production facility

Produce Tissot Dual

Dual Watch Marketing & Branding

Tissot Dual Campaign

Swatch Dual Campaign

Produce Swatch Dual

Design dual watch for Swatch


Smart Dual Overlay with ETA Subsidy

Sensor to switch between

traditional watch to smart watch

Payment platform with

Amex, Visa & MC

GPS & weather forecast Activity tracker Message

notifications


Dual APP Development

Connecting via Bluetooth

Access to additional information

Latest technology


Design Dual Watch

Inhouse Swatch Design team

Timeless Design

Digital Overlay

Long lasting battery

Swiss made

Upgrading a Timeless Piece


Dual Production Facility

Hire additional staff

Facility improvements to support new line


Tissot Dual Marketing Campaign•Tissot Dual• “Luxury & technology redefined”Brand

•Business professionals located in US & Europe•35-55 years old• Interested in technologyCustomer Segment

• Famous tennis player as brand ambassador• Sponsoring tennis eventsMarketing Initiative

The Tissot Dual a must in a watch collection


Swatch Dual Marketing Campaign• Swatch Dual• “All you need in a watch”Brand

•Young urban professionals•25-35 years oldCustomer Segment

• Social media campaigns on Facebook, Twitter, Snapchat, Instagram•#Myswatchdual• Free product giveaways for posting images of product being used

Marketing Initiative

Swatch Dual part of your everyday life


Marketing Timeline

End 2017

Tissot campaign to capture

holiday market

2018

Social media campaigns for Swatch Dual

Financials


Cost Analysis

500 million financed by over 1,000 million in free cash flow

R&D 200 million over 12 monthsFACILITY

IMPROVFEMENT 100 million over 12 months

MARKETING 200 million over 24 months

TOTAL 500 million over 24 months


Projections

SALES UP BY 19% / NET INCOME UP BY 21%

2016 2017 2018 2019UNITS - 230,000 690,000 910,000 SALES - 402 1,210 1,600

MARGIN - 81 242 320

R&D 100 100 FACILITY 50 50

MARKETING 100 100

INCOME 150- 169- 142 240

Questions?

Swatch Group Ltd. - mbacasecomp.com · Swatch Group Ltd. JMSB Consulting ... High tech. Mass...

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