Global Factors Affecting Watches of Switzerland - BM461 Global Business Environment

This report discusses the impact of global macro factors on Watches of Switzerland, including political uncertainty, economic instability, and competition from smart watches. The report highlights key issues such as low demand for luxury watches and high competition from smart watches. The methodology used is secondary sources. The subject is BM461 Global Business Environment.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
BACKGROUND.........................................................................................................................3
METHODOLOGY......................................................................................................................3
KEY ISSUES...............................................................................................................................3
GLOBAL FACTORS AFFECTING THE WATCHES OF SWITZERLAND..........................3
REFERENCES................................................................................................................................1

BACKGROUND
Watches of Switzerland is a British swiss watch retailer. Its headquarters are located in
Braunstone, UK. It has over 16 stores across the UK which also includes Jaeger- LeCoultre and
Rolex boutiques.. It was founded in 1924 by Ludgate hill. It is a FTSE and London stock
exchange listed company.
METHODOLOGY
Secondary sources have been used in finding out the key issues and impacts of global
macro factors on the company.
KEY ISSUES
● Low demand for luxury watches due to economic instability.
● High competition from smart watches.
● Exports are high but demand is still low due the political uncertainty.
GLOBAL FACTORS AFFECTING THE WATCHES OF SWITZERLAND
There are global macro factors that are affecting the company. One of the major factors
that is affecting the company globally is the political uncertainty (Radović-Markovića nd
Vujičić, 2019). That is with the exit of Uk from the European Union it has hindered the free flow
movement of goods and services across the nation which has affected the growth of the
company. That is with the restriction on the free movement it has reduced the demand for
watches in the foriegn markets which has led to a decrease in the sales of the company. Thus,
affecting the profitability and growth of the company. However, with the effect of Brexit, it has
made the exports very high but the demand for luxury watches have not been increased.
Another factor that is affecting the watches of switzerland is the economic instability.
That is in times of the pandemic and the crisis of Covid-19, it has resulted in decline of the
demand for luxury watches that is due to low disposable income in hands of people, it has
decreased the demand for luxury watches (Kokodey and Lomachenko, 2018). On the other hand,
it has led to high inflation in the economy that has led to increase in the prices of the watches,
which has also affected the sales of the company in a negative way. Also, it has affected the
demand and supply of watches in the economy due to the fall in the GDP because of the crisis
prevailing in the nation and globally. With the low GDP it has reduced the demand of luxury
watches in the economy. Thus, leading to decrease in the supply directly.

Another major factor that has affected the Watches of Switzerland is the technological
advancement in the watch industry that is the innovation of smart watches. It is one of the most
important factors that has affected the profitability of the company (Damarwulan and Farida,
2018). That is with the innovation of smart watches, it has led to high competition in the watch
industry that has lowered the demand for luxury watches. This has directly led to a negative
effect on the share price of the company as with high competition the market share of the
company is declining. That has led to fall in the sales of the company thus, leading to fall in the
share prices of the company.

REFERENCES
Books and journals
Damarwulan, L.M. and Farida, N., 2018. The Role of Quality of Entrepreneurial Networking and
Responsiveness to Global Business Environment in improving the Marketing
Performance of Indonesian Exporting SMEs. Quality-Access to Success, 19(165).
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Radović-Marković, M., Salamzadeh, A. and Vujičić, S., 2019. Selection of organization models
and creation of competences of the employed people for the sake of competitiveness
growth in global business environment. International Review, (1-2), pp.64-71.
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