The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age
The Swiss company TAG Heuer, maker of luxury watches, is part of the LVMH group (Moet Hennessy Louis Vuitton). In 2015, CEO Jean-Claude Biver is deciding whether to launch its first-ever fully connected Swiss watch, manufactured in partnership with Google and Intel. Entering this new market presents an unprecedented challenge: making a watch based on a technology (microprocessors) that the Swiss have not mastered. Is TAG Heuer ready to compete in the digital space - and potentially without the traditional 'Swiss Made' label? Case B takes up the story following the successful launch of the TAG Heuer connected watch. Sales are beyond all expectations for the luxury Swiss watchmaker and its partners Intel and Google. There are a few surprises too - the consumers are older than they expected and the watches sell out far quicker than anticipated - hence the company runs into some supply chain issues. Please visit the https://cases.insead.edu/tag-heuer dedicated case website to access supplementary material.
Swot Analysis of "The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age" written by Felipe L Monteiro, Anne-Marie Carrick includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Heuer Tag facing as an external strategic factors. Some of the topics covered in The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age case study are - Strategic Management Strategies, Competition, Disruptive innovation and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age casestudy better are - – talent flight as more people leaving formal jobs, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Heuer Tag, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Heuer Tag 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age can be done for the following purposes –
1. Strategic planning using facts provided in The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age case study
2. Improving business portfolio management of Heuer Tag
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Heuer Tag
Strengths The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Heuer Tag in The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age Harvard Business Review case study are -
High brand equity
– Heuer Tag has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Heuer Tag to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Heuer Tag has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Heuer Tag 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 Felipe L Monteiro, Anne-Marie Carrick 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.
Effective Research and Development (R&D)
– Heuer Tag 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Heuer Tag in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Heuer Tag has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Heuer Tag 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.
Organizational Resilience of Heuer Tag
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Heuer Tag does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Heuer Tag 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 Heuer Tag in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age firm has clearly differentiated products in the market place. This has enabled Heuer Tag to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Heuer Tag to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Heuer Tag has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Heuer Tag is one of the most innovative firm in sector. Manager in The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Heuer Tag 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age, in the dynamic environment Heuer Tag has struggled to respond to the nimble upstart competition. Heuer Tag has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age HBR case study mentions - Heuer Tag takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Increasing silos among functional specialists
– The organizational structure of Heuer Tag is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Heuer Tag needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Heuer Tag to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Heuer Tag products
– To increase the profitability and margins on the products, Heuer Tag needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Heuer Tag 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. Heuer Tag 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.
Products dominated business model
– Even though Heuer Tag 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 - The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Heuer Tag 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age, it seems that the employees of Heuer Tag don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Need for greater diversity
– Heuer Tag 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.
Aligning sales with marketing
– It come across in the case study The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age can leverage the sales team experience to cultivate customer relationships as Heuer Tag is planning to shift buying processes online.
Opportunities The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age | 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age are -
Learning at scale
– Online learning technologies has now opened space for Heuer Tag 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.
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 Heuer Tag 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Heuer Tag can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Heuer Tag can develop new processes and procedures in Strategy & Execution 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.
Better consumer reach
– The expansion of the 5G network will help Heuer Tag to increase its market reach. Heuer Tag 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.
Building a culture of innovation
– managers at Heuer Tag 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 Strategy & Execution segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Heuer Tag to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Heuer Tag to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Heuer Tag is facing challenges because of the dominance of functional experts in the organization. The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Heuer Tag 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, The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Heuer Tag 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Heuer Tag to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Heuer Tag can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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.
Leveraging digital technologies
– Heuer Tag can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Heuer Tag 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.
Threats The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Heuer Tag 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age .
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Heuer Tag needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Heuer Tag business can come under increasing regulations regarding data privacy, data security, etc.
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 Heuer Tag.
Technology acceleration in Forth Industrial Revolution
– Heuer Tag has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Heuer Tag needs to keep up with the evolution of technology in the Strategy & Execution 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.
Environmental challenges
– Heuer Tag 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. Heuer Tag can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Heuer Tag with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Heuer Tag 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.
Shortening product life cycle
– it is one of the major threat that Heuer Tag is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Heuer Tag in the Strategy & Execution industry. The Strategy & Execution 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.
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. Heuer Tag 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.
Weighted SWOT Analysis of The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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 The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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 Heuer Tag needs to make to build a sustainable competitive advantage.