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 - – technology disruption, increasing energy prices, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, 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 -
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.
Diverse revenue streams
– Heuer Tag is present in almost all the verticals within the industry. This has provided firm in The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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.
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.
Ability to recruit top talent
– Heuer Tag is one of the leading recruiters in the industry. Managers in the The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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 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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Heuer Tag in the sector have low bargaining power. The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Heuer Tag to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Heuer Tag 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 Heuer Tag is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age 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.
High switching costs
– The high switching costs that Heuer Tag 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.
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 -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Heuer Tag is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Heuer Tag 's lucrative customers.
Interest costs
– Compare to the competition, Heuer Tag 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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Heuer Tag 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Heuer Tag 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.
High cash cycle compare to competitors
Heuer Tag 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.
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 -
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.
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.
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.
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.
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. Heuer Tag can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Heuer Tag in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
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.
Loyalty marketing
– Heuer Tag 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.
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.
Creating value in data economy
– The success of analytics program of Heuer Tag has opened avenues for new revenue streams for the organization in the industry. This can help Heuer Tag to build a more holistic ecosystem as suggested in the The TAG Heuer Carrera Connected Watch (B): Swiss Avant-Garde in the Digital Age case study. Heuer Tag can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
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.
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.
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 Heuer Tag 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.
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.
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.
Regulatory challenges
– Heuer Tag 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 Strategy & Execution industry regulations.
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 .
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.
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.
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.
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.
High dependence on third party suppliers
– Heuer Tag 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.
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.
