Rochat & Schmid Case Study, Essays (high school) of Business Management and Analysis

Download Rochat & Schmid Case Study and more Essays (high school) Business Management and Analysis in PDF only on Docsity!

Individual Case Study 2: Rochat & Schmid Individual Case Study 2: BUSI4013 Business Organization Analysis Bachelor of Business Administration Student ID: Professor: December 18, 2022

Introduction As an external consultant hired by Rochat & Schmid company in China, this research paper conducts a deep analysis to evaluate the company’s current strategies as well as the current challenges that they have been facing by using Porter’s Five Forces and Ansoff Matrix tools. A new strategy will be developed to help Rochat & Schmid resolve the issue of its marketing campaign to compete with other luxury brands in the Chinese market. Background of Rochat & Schmid company Rochat & Schmid has been existing for about 100 years as a luxury watches brand which was based in Switzerland. The company is expanding its brand to the Chinese market by using its globalization standardization strategy with the marketing campaign idea of having a young famous singer become its brand ambassador. The company believes that its target market in China is young and they would be attracted to things that are flashier and sponsored by a young famous idol. Same to what their competitors have been doing, they are also vying for China’s luxury consumers who are a little different from the traditional customer base. Analysis of Rochat & Schmid and the Industry Porter’s Five Forces Competition in the Industry China is considered to have potential growth for luxury watches brands. One of the highlights of this industry is its revenue reported to be around over USD 10 billion by the end of this year with an expected CAGR of 2.64% annual growth (Statista, 2022). Compared to the global, China has contributed the most to total global sales. Within this country, the two main competitors that

always prefer looking for well-known brands with higher prices rather than using products with average values. It is proven by the growth of sales in luxury brands in China with the increase to 21% of market share in 2021 while there was close to 20% in 2020 (Sheila, 2022). Even though this period was during the pandemic, the market share was still increasing which directly reflected the power of premium buyers. The Threat of Substitute Products Even though Rochat & Schmid is a premium watches brand, it is still struggling to keep up its position in this competitive industry. There could be a threat to the company that buyers can easily find alternative premium watches brands for their purchases. Creativity and unique products play the main role in this aspect; whether Rochat & Schmid can be different from its competitors in terms of creating the watches and how easily its watches can be substituted with others. In general, for all luxury brands, businesses are required to be inspired by the models and the quality of the watches. Ansoff Matrix Market Penetration This option is the lowest risk for Rochat & Schmid where the company simply continues with its existing products in the existing market while trying to expand its sales. This is also what the firm is doing where they are focusing on the marketing campaign to increase the awareness of its products to more and more consumers. Using domestic and international celebrities is the common strategy that many luxury brands apply. Understanding what would impact customers’ buying decisions is important. For example, the Zenith watch brand used Xiao Zhan singer as its

ambassador and within a day, the number of watches sold was more than the sale of a whole month (The New York Times, 2021). Product Development This section would require the firm to create a new product and introduce it in its existing market. When it comes to this, it requires Rochat & Schmid to invest in the research and development of the products. The new products need to be different from others that already exist in the market, including the competitors. It could be the look of watches or the functions. Sometimes, it could be the materials of what the watch is made of. Rolex is an example that the majority of its products are made from expensive materials such as gold or platinum and they also focus on the luxury look of the watches to make them unique. Market Development This section would require Rochat & Schmid to continue with its existing products and have them introduced in an entirely new market. The firm would need to determine a new group of the target market that consumers are willing to purchase its luxury watches and are interested in them. A study found that those who are between 25 to 40 years old are considered the main target customers of all the luxury brands in China (Daxue Consulting, 2020). Depending on the consumers’ preferences in terms of styles and prices, Rochat & Schmid can consider which new group of consumers would be their next target market. Diversification In this section, Rochat & Schmid would have to combine creating a new product and finding a new market. This would require more time and cost for the company and it is also the highest risk compared to the other three options above. The firm needs to determine which group of

References Daxue Consulting. (2020). The luxury watch market in China: Status, sophistication and counterfeiting. Retrieved from https://daxueconsulting.com/luxury-watches-in-china/ Evelyn, C. (2022). China’s consumers spent $73.6 billion on luxury goods at home last year, up 36% from 2020. Retrieved from CNBC: https://www.cnbc.com/2022/01/24/chinas- consumers-spent-73point6-billion-on-luxury-goods-at-home-in-2021.html The New York Times. (2021). Despite risks, watch brands are fixated on China. Retrieved from https://www.nytimes.com/2021/12/10/fashion/watches-china-sales.html Statista. (2022). Luxury Watches – China. Retrieved from https://www.statista.com/outlook/cmo/luxury-goods/luxury-watches-jewelry/luxury- watches/china