Hans Wilsdorf and Rolex SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Hans Wilsdorf and Rolex

Explores the creation of the Rolex watch by Hans Wilsdorf. Provides a case study of how one of the world's leading luxury brands was created and, more generally, provides a vehicle for exploring the competitive advantage of Switzerland in watchmaking (and other industries). Although Switzerland was a traditional watchmaking center, Wilsdorf-who was neither a watchmaker nor Swiss-created this successful brand through his emphasis on quality and reliability, combined with celebrity marketing.

Authors :: Geoffrey G. Jones, Alexander Atzberger

Topics :: Innovation & Entrepreneurship

Tags :: Business history, Competitive strategy, Entrepreneurship, International business, Product development, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Hans Wilsdorf and Rolex" written by Geoffrey G. Jones, Alexander Atzberger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wilsdorf Watchmaking facing as an external strategic factors. Some of the topics covered in Hans Wilsdorf and Rolex case study are - Strategic Management Strategies, Business history, Competitive strategy, Entrepreneurship, International business, Product development and Innovation & Entrepreneurship.

Some of the macro environment factors that can be used to understand the Hans Wilsdorf and Rolex casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, technology disruption, increasing energy prices, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, etc

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Introduction to SWOT Analysis of Hans Wilsdorf and Rolex

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hans Wilsdorf and Rolex case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wilsdorf Watchmaking, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wilsdorf Watchmaking 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Hans Wilsdorf and Rolex can be done for the following purposes –
1. Strategic planning using facts provided in Hans Wilsdorf and Rolex case study
2. Improving business portfolio management of Wilsdorf Watchmaking
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wilsdorf Watchmaking

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Strengths Hans Wilsdorf and Rolex | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Wilsdorf Watchmaking in Hans Wilsdorf and Rolex Harvard Business Review case study are -

Training and development

– Wilsdorf Watchmaking has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hans Wilsdorf and Rolex 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.

Superior customer experience

– The customer experience strategy of Wilsdorf Watchmaking in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Analytics focus

– Wilsdorf Watchmaking 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 Geoffrey G. Jones, Alexander Atzberger 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.

Digital Transformation in Innovation & Entrepreneurship segment

- digital transformation varies from industry to industry. For Wilsdorf Watchmaking digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wilsdorf Watchmaking 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.

Innovation driven organization

– Wilsdorf Watchmaking is one of the most innovative firm in sector. Manager in Hans Wilsdorf and Rolex Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Low bargaining power of suppliers

– Suppliers of Wilsdorf Watchmaking in the sector have low bargaining power. Hans Wilsdorf and Rolex has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wilsdorf Watchmaking to manage not only supply disruptions but also source products at highly competitive prices.

Cross disciplinary teams

– Horizontal connected teams at the Wilsdorf Watchmaking 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 switching costs

– The high switching costs that Wilsdorf Watchmaking 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.

Sustainable margins compare to other players in Innovation & Entrepreneurship industry

– Hans Wilsdorf and Rolex firm has clearly differentiated products in the market place. This has enabled Wilsdorf Watchmaking to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Wilsdorf Watchmaking to invest into research and development (R&D) and innovation.

Successful track record of launching new products

– Wilsdorf Watchmaking has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wilsdorf Watchmaking 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 Wilsdorf Watchmaking

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wilsdorf Watchmaking does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Ability to recruit top talent

– Wilsdorf Watchmaking is one of the leading recruiters in the industry. Managers in the Hans Wilsdorf and Rolex are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

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Weaknesses Hans Wilsdorf and Rolex | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Hans Wilsdorf and Rolex are -

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Wilsdorf Watchmaking is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hans Wilsdorf and Rolex can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

High operating costs

– Compare to the competitors, firm in the HBR case study Hans Wilsdorf and Rolex 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 Wilsdorf Watchmaking 's lucrative customers.

Interest costs

– Compare to the competition, Wilsdorf Watchmaking 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 Wilsdorf Watchmaking 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 - Hans Wilsdorf and Rolex should strive to include more intangible value offerings along with its core products and services.

Low market penetration in new markets

– Outside its home market of Wilsdorf Watchmaking, firm in the HBR case study Hans Wilsdorf and Rolex needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow decision making process

– As mentioned earlier in the report, Wilsdorf Watchmaking 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. Wilsdorf Watchmaking 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.

Need for greater diversity

– Wilsdorf Watchmaking 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.

Skills based hiring

– The stress on hiring functional specialists at Wilsdorf Watchmaking 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 to strategic competitive environment developments

– As Hans Wilsdorf and Rolex HBR case study mentions - Wilsdorf Watchmaking 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.

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 Wilsdorf Watchmaking supply chain. Even after few cautionary changes mentioned in the HBR case study - Hans Wilsdorf and Rolex, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wilsdorf Watchmaking vulnerable to further global disruptions in South East Asia.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Hans Wilsdorf and Rolex, is just above the industry average. Wilsdorf Watchmaking 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.

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Opportunities Hans Wilsdorf and Rolex | 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 Hans Wilsdorf and Rolex are -

Buying journey improvements

– Wilsdorf Watchmaking can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hans Wilsdorf and Rolex 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Wilsdorf Watchmaking can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Low interest rates

– Even though inflation is raising its head in most developed economies, Wilsdorf Watchmaking 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.

Creating value in data economy

– The success of analytics program of Wilsdorf Watchmaking has opened avenues for new revenue streams for the organization in the industry. This can help Wilsdorf Watchmaking to build a more holistic ecosystem as suggested in the Hans Wilsdorf and Rolex case study. Wilsdorf Watchmaking can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Better consumer reach

– The expansion of the 5G network will help Wilsdorf Watchmaking to increase its market reach. Wilsdorf Watchmaking 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.

Leveraging digital technologies

– Wilsdorf Watchmaking 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.

Using analytics as competitive advantage

– Wilsdorf Watchmaking 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 Hans Wilsdorf and Rolex - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wilsdorf Watchmaking 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 Wilsdorf Watchmaking 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 Wilsdorf Watchmaking to hire the very best people irrespective of their geographical location.

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 Wilsdorf Watchmaking 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

– Wilsdorf Watchmaking can develop new processes and procedures in Innovation & Entrepreneurship 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Wilsdorf Watchmaking can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Loyalty marketing

– Wilsdorf Watchmaking 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.

Manufacturing automation

– Wilsdorf Watchmaking can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

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Threats Hans Wilsdorf and Rolex External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Hans Wilsdorf and Rolex are -

Environmental challenges

– Wilsdorf Watchmaking 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. Wilsdorf Watchmaking can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hans Wilsdorf and Rolex, Wilsdorf Watchmaking may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .

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 Wilsdorf Watchmaking in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.

Shortening product life cycle

– it is one of the major threat that Wilsdorf Watchmaking is facing in Innovation & Entrepreneurship 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 Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Wilsdorf Watchmaking can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Wilsdorf Watchmaking needs to understand the core reasons impacting the Innovation & Entrepreneurship 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 Wilsdorf Watchmaking business can come under increasing regulations regarding data privacy, data security, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Wilsdorf Watchmaking 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 Hans Wilsdorf and Rolex .

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. Wilsdorf Watchmaking 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.

High dependence on third party suppliers

– Wilsdorf Watchmaking 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Wilsdorf Watchmaking in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.

Technology acceleration in Forth Industrial Revolution

– Wilsdorf Watchmaking has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Wilsdorf Watchmaking needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.

Stagnating economy with rate increase

– Wilsdorf Watchmaking 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.

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Weighted SWOT Analysis of Hans Wilsdorf and Rolex 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 Hans Wilsdorf and Rolex 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 Hans Wilsdorf and Rolex 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 Hans Wilsdorf and Rolex 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 Hans Wilsdorf and Rolex 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 Wilsdorf Watchmaking needs to make to build a sustainable competitive advantage.

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