Pequignet: The Face of the Renaissance of French Haute Horlogerie SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Pequignet: The Face of the Renaissance of French Haute Horlogerie
For French watchmaker Pequignet, its return to the annual luxury watch and jewelry show, Baselworld, signaled a new page in the company's 40-year history. As the only "haute horlogerie" manufacturer in France since the quartz crisis in the 1970s, Pequignet had caught the attention of both the media and the watch collector community, despite going through receivership and a change of ownership. In addition to showcasing its Calibre Royal collection, Pequignet presented a new line of entry-level watches. Should the company invest further in its manufacturing processes to make high-end mechanical watches, as it had in the past? Or should it focus on producing more affordable, accessible products, as with its most recent collection? As an independent atelier, Pequignet had to address these questions in order to succeed in the highly competitive global watch market. Ken Kwong-Kay Wong is affiliated with Ryerson University.
Swot Analysis of "Pequignet: The Face of the Renaissance of French Haute Horlogerie" written by Ken Kwong-Kay Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pequignet Horlogerie facing as an external strategic factors. Some of the topics covered in Pequignet: The Face of the Renaissance of French Haute Horlogerie case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Pequignet: The Face of the Renaissance of French Haute Horlogerie casestudy better are - – increasing commodity prices, wage bills are increasing, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Pequignet: The Face of the Renaissance of French Haute Horlogerie
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pequignet: The Face of the Renaissance of French Haute Horlogerie case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pequignet Horlogerie, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pequignet Horlogerie 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 Pequignet: The Face of the Renaissance of French Haute Horlogerie can be done for the following purposes –
1. Strategic planning using facts provided in Pequignet: The Face of the Renaissance of French Haute Horlogerie case study
2. Improving business portfolio management of Pequignet Horlogerie
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 Pequignet Horlogerie
Strengths Pequignet: The Face of the Renaissance of French Haute Horlogerie | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pequignet Horlogerie in Pequignet: The Face of the Renaissance of French Haute Horlogerie Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Pequignet Horlogerie in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Pequignet Horlogerie digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pequignet Horlogerie 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.
Ability to recruit top talent
– Pequignet Horlogerie is one of the leading recruiters in the industry. Managers in the Pequignet: The Face of the Renaissance of French Haute Horlogerie are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Pequignet Horlogerie 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.
Analytics focus
– Pequignet Horlogerie 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.
Diverse revenue streams
– Pequignet Horlogerie is present in almost all the verticals within the industry. This has provided firm in Pequignet: The Face of the Renaissance of French Haute Horlogerie 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.
Ability to lead change in Sales & Marketing field
– Pequignet Horlogerie 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 Pequignet Horlogerie in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Pequignet Horlogerie are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Pequignet Horlogerie has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pequignet Horlogerie to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Pequignet Horlogerie
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pequignet Horlogerie does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Pequignet Horlogerie 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 Pequignet: The Face of the Renaissance of French Haute Horlogerie - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Pequignet Horlogerie is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Pequignet: The Face of the Renaissance of French Haute Horlogerie | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pequignet: The Face of the Renaissance of French Haute Horlogerie are -
Skills based hiring
– The stress on hiring functional specialists at Pequignet Horlogerie 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.
Low market penetration in new markets
– Outside its home market of Pequignet Horlogerie, firm in the HBR case study Pequignet: The Face of the Renaissance of French Haute Horlogerie needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Pequignet: The Face of the Renaissance of French Haute Horlogerie that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Pequignet: The Face of the Renaissance of French Haute Horlogerie can leverage the sales team experience to cultivate customer relationships as Pequignet Horlogerie is planning to shift buying processes online.
Interest costs
– Compare to the competition, Pequignet Horlogerie 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.
Capital Spending Reduction
– Even during the low interest decade, Pequignet Horlogerie has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Pequignet Horlogerie 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. Pequignet Horlogerie 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.
Lack of clear differentiation of Pequignet Horlogerie products
– To increase the profitability and margins on the products, Pequignet Horlogerie needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Pequignet Horlogerie has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 Pequignet Horlogerie supply chain. Even after few cautionary changes mentioned in the HBR case study - Pequignet: The Face of the Renaissance of French Haute Horlogerie, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pequignet Horlogerie vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pequignet Horlogerie is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Pequignet: The Face of the Renaissance of French Haute Horlogerie can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Pequignet Horlogerie needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Pequignet: The Face of the Renaissance of French Haute Horlogerie | 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 Pequignet: The Face of the Renaissance of French Haute Horlogerie are -
Better consumer reach
– The expansion of the 5G network will help Pequignet Horlogerie to increase its market reach. Pequignet Horlogerie will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pequignet Horlogerie can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pequignet Horlogerie is facing challenges because of the dominance of functional experts in the organization. Pequignet: The Face of the Renaissance of French Haute Horlogerie 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.
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 Pequignet Horlogerie 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.
Developing new processes and practices
– Pequignet Horlogerie 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 Pequignet Horlogerie can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Pequignet Horlogerie 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.
Learning at scale
– Online learning technologies has now opened space for Pequignet Horlogerie to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Pequignet Horlogerie 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 Pequignet: The Face of the Renaissance of French Haute Horlogerie - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pequignet Horlogerie to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Pequignet Horlogerie 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. Pequignet Horlogerie 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.
Creating value in data economy
– The success of analytics program of Pequignet Horlogerie has opened avenues for new revenue streams for the organization in the industry. This can help Pequignet Horlogerie to build a more holistic ecosystem as suggested in the Pequignet: The Face of the Renaissance of French Haute Horlogerie case study. Pequignet Horlogerie can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pequignet Horlogerie 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, Pequignet: The Face of the Renaissance of French Haute Horlogerie, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Pequignet Horlogerie can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Pequignet: The Face of the Renaissance of French Haute Horlogerie suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Pequignet: The Face of the Renaissance of French Haute Horlogerie External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pequignet: The Face of the Renaissance of French Haute Horlogerie are -
Stagnating economy with rate increase
– Pequignet Horlogerie 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.
Consumer confidence and its impact on Pequignet Horlogerie 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.
Regulatory challenges
– Pequignet Horlogerie needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Technology acceleration in Forth Industrial Revolution
– Pequignet Horlogerie has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Pequignet Horlogerie needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pequignet Horlogerie 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 Pequignet: The Face of the Renaissance of French Haute Horlogerie .
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. Pequignet Horlogerie 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.
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 Pequignet Horlogerie business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Pequignet Horlogerie is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Pequignet Horlogerie
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Pequignet Horlogerie.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pequignet Horlogerie with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Pequignet Horlogerie can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Pequignet Horlogerie.
Weighted SWOT Analysis of Pequignet: The Face of the Renaissance of French Haute Horlogerie 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 Pequignet: The Face of the Renaissance of French Haute Horlogerie 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 Pequignet: The Face of the Renaissance of French Haute Horlogerie 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 Pequignet: The Face of the Renaissance of French Haute Horlogerie 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 Pequignet: The Face of the Renaissance of French Haute Horlogerie 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 Pequignet Horlogerie needs to make to build a sustainable competitive advantage.
