F.P. Journe: Continuing the Tradition of Haute Horology Excellence SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of F.P. Journe: Continuing the Tradition of Haute Horology Excellence
In the summer of 2014, the founder and sole owner of F.P. Journe, a maker of luxury watches, sat in his Geneva headquarters and wondered about the future. Founded in 1999, the private company had 125 employees and a strictly limited production of 850 to 900 watches per year. It was a well-respected brand that was distributed globally through a network of company-owned boutiques and third-party jewellery stores. Its exclusively designed and individually manufactured products were prized by collectors and had won many awards and distinctions. However, the "haute horology" market had become increasingly competitive. Was producing 95 per cent of all watch components in-house a good idea? Should he scale up his business through mergers and acquisitions or by increasing the company's online presence? Or should he rest on his laurels and preserve the status quo? Ken Kwong-Kay Wong is affiliated with Ryerson University.
Swot Analysis of "F.P. Journe: Continuing the Tradition of Haute Horology Excellence" written by Ken Kwong-Kay Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that F.p Horology facing as an external strategic factors. Some of the topics covered in F.P. Journe: Continuing the Tradition of Haute Horology Excellence case study are - Strategic Management Strategies, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the F.P. Journe: Continuing the Tradition of Haute Horology Excellence casestudy better are - – cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
technology disruption, increasing commodity prices, etc
Introduction to SWOT Analysis of F.P. Journe: Continuing the Tradition of Haute Horology Excellence
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in F.P. Journe: Continuing the Tradition of Haute Horology Excellence case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the F.p Horology, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which F.p Horology operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of F.P. Journe: Continuing the Tradition of Haute Horology Excellence can be done for the following purposes –
1. Strategic planning using facts provided in F.P. Journe: Continuing the Tradition of Haute Horology Excellence case study
2. Improving business portfolio management of F.p Horology
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of F.p Horology
Strengths F.P. Journe: Continuing the Tradition of Haute Horology Excellence | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of F.p Horology in F.P. Journe: Continuing the Tradition of Haute Horology Excellence Harvard Business Review case study are -
Analytics focus
– F.p Horology is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ken Kwong-Kay Wong can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Innovation driven organization
– F.p Horology is one of the most innovative firm in sector. Manager in F.P. Journe: Continuing the Tradition of Haute Horology Excellence Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Sales & Marketing field
– F.p Horology is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled F.p Horology in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For F.p Horology digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. F.p Horology has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– F.p Horology has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. F.p Horology has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that F.p Horology has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the F.P. Journe: Continuing the Tradition of Haute Horology Excellence Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of F.p Horology in the sector have low bargaining power. F.P. Journe: Continuing the Tradition of Haute Horology Excellence has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps F.p Horology to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Sales & Marketing industry
– F.P. Journe: Continuing the Tradition of Haute Horology Excellence firm has clearly differentiated products in the market place. This has enabled F.p Horology to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped F.p Horology to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– F.p Horology has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study F.P. Journe: Continuing the Tradition of Haute Horology Excellence - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- F.p Horology is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at F.p Horology is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in F.P. Journe: Continuing the Tradition of Haute Horology Excellence Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– F.p Horology is present in almost all the verticals within the industry. This has provided firm in F.P. Journe: Continuing the Tradition of Haute Horology Excellence case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses F.P. Journe: Continuing the Tradition of Haute Horology Excellence | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of F.P. Journe: Continuing the Tradition of Haute Horology Excellence are -
High cash cycle compare to competitors
F.p Horology has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study F.P. Journe: Continuing the Tradition of Haute Horology Excellence, is just above the industry average. F.p Horology needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the F.P. Journe: Continuing the Tradition of Haute Horology Excellence HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though F.p Horology has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of F.p Horology supply chain. Even after few cautionary changes mentioned in the HBR case study - F.P. Journe: Continuing the Tradition of Haute Horology Excellence, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left F.p Horology vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at F.p Horology has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow decision making process
– As mentioned earlier in the report, F.p Horology has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. F.p Horology even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High bargaining power of channel partners
– Because of the regulatory requirements, Ken Kwong-Kay Wong suggests that, F.p Horology is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Products dominated business model
– Even though F.p Horology has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - F.P. Journe: Continuing the Tradition of Haute Horology Excellence should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study F.P. Journe: Continuing the Tradition of Haute Horology Excellence, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of F.p Horology products
– To increase the profitability and margins on the products, F.p Horology needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, F.p Horology has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities F.P. Journe: Continuing the Tradition of Haute Horology Excellence | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study F.P. Journe: Continuing the Tradition of Haute Horology Excellence are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, F.p Horology can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, F.P. Journe: Continuing the Tradition of Haute Horology Excellence, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– F.p Horology can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects F.p Horology can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. F.p Horology can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at F.p Horology can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, F.p Horology is facing challenges because of the dominance of functional experts in the organization. F.P. Journe: Continuing the Tradition of Haute Horology Excellence case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– F.p Horology has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– F.p Horology has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study F.P. Journe: Continuing the Tradition of Haute Horology Excellence - to build a competitive advantage using analytics. The analytics driven competitive advantage can help F.p Horology to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for F.p Horology in the consumer business. Now F.p Horology can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, F.p Horology can use these opportunities to build new business models that can help the communities that F.p Horology operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help F.p Horology to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of F.p Horology has opened avenues for new revenue streams for the organization in the industry. This can help F.p Horology to build a more holistic ecosystem as suggested in the F.P. Journe: Continuing the Tradition of Haute Horology Excellence case study. F.p Horology can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. F.p Horology can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. F.p Horology can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats F.P. Journe: Continuing the Tradition of Haute Horology Excellence External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study F.P. Journe: Continuing the Tradition of Haute Horology Excellence are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, F.p Horology can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study F.P. Journe: Continuing the Tradition of Haute Horology Excellence .
High dependence on third party suppliers
– F.p Horology high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on F.p Horology demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– F.p Horology can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for F.p Horology in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Shortening product life cycle
– it is one of the major threat that F.p Horology is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. F.p Horology can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. F.p Horology will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of F.p Horology.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of F.p Horology business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for F.p Horology in the Sales & Marketing sector and impact the bottomline of the organization.
Environmental challenges
– F.p Horology needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. F.p Horology can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of F.P. Journe: Continuing the Tradition of Haute Horology Excellence Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study F.P. Journe: Continuing the Tradition of Haute Horology Excellence needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study F.P. Journe: Continuing the Tradition of Haute Horology Excellence is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study F.P. Journe: Continuing the Tradition of Haute Horology Excellence is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of F.P. Journe: Continuing the Tradition of Haute Horology Excellence is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that F.p Horology needs to make to build a sustainable competitive advantage.
