Macroenvironmental factors within the company Watches of Switzerland

This report discusses the macro-environmental changes that Watches of Switzerland may face in the next 12-24 months. It outlines the key issues of supply and demand, political uncertainty, and technological advancements and their impact on the company's profitability and customer base. The report also provides critical discussion points for the board of directors and lists the sources used to evidence the argument.

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Briefing Note
Globalization & Strategic Planning Directorate
Requested by Brian Duffy, CEO Date requested: 12/11/21 Action required by: TBC
Action required Other attachments for consideration
For approval With correspondence Chief Executive’s
authorisation
Authority to publicise
For meeting For Information letter of advice
BRIEFING NOTE FOR INFORMATION
This briefing note is written to provide information for discussion and use at subsequent meetings by the
management team on the subject matter outlined below.
Covid-19 has presented unique challenges to the Watches of Switzerland company. In order to plan for the
recovery of the global economy the CEO, Brian Duffy, has requested this briefing note for use at the next
board meeting to discuss actions with fellow board members.
Version August 2011
SUBJECT: What macro-environmental changes in the global economy can the
organization expect to face over the next 12-24 months that it needs to factor into long-
term planning?
Proposal
To set contextual background for why the report is required, to outline how the report
was constructed and what tools, models and evaluation were applied, to identify the top
3 major macro-environmental issues that will impact upon the organization, rank the
issues in terms of urgency, provide critical discussion points for the board of directors
and list the sources used to evidence the argument.
Urgency
Rank the key issues as:
Department Rec/Find No: Business
Planning &
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Division/District Global
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 Critical (major or significant organizational risk because of no action)- Technological
Advancements
 Urgent (compelling or requiring immediate action or attention)- Political Uncertainty
 Routine (action required within next 3-6 months)- Supply and Demand
1. Background
The revenue of luxury watch market is 789 m in 2021 which is expected to grow by
3.47% (CAGR 2021-2025). The global pandemic created and impact on consumer off luxury
watches which resulted in decline in demand and slowed growth of the industry. The consumer
preference and trend for high-quality premium luxury watches are a status symbol and such
factors are major driving factors for luxury watch market. The luxury watch market can be
classified on the basis of type, end user, distribution channel and geographical segmentation. The
change in watch industry can be seen as in some regions luxury watches were mostly offered by
males and now females are also preferring luxury watches which has expanded the customer
base for companies offering luxury watches. This report will outline the key issues and macro
environment factors which are faced by the company, Watches of Switzerland.
2. Methodology
3. Key issues
 Supply and demand
 Political uncertainty
 Technological advancements
4. Global Macro-Environmental Factors Critical Discussion Point
Some of the global political factors which can influence the business operations in
context of Watches of Switzerland are discussed below:
 Political uncertainty- This has been a challenge which has been faced by Watches of
Switzerland where the operation of organization has been influenced and such factors are
responsible to create an impact on the profitability of the companies offering luxury

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watches (Castañeda-Ayarza and Godoi, 2021). The incline or decline in corporation tax
can affect the profitability of the companies. The government can bring change to any
laws and acts which can create direct impact on profits and employee rights.
 Socio- cultural factors- The socio-cultural factors such as status, lifestyle standards are
some of the factors which creates an impact on the profitability of the company, Watches
of Switzerland. Symbol of status is a factor which influence the demand of luxury
watches and this has been a factor which has increased the sale of products and services
offered by the companies (Khilji and Pierre, 2021). The living standards and lifestyle
patterns are responsible for creating an impact on the demand of the products whereas,
other factors such as income and other profiles are responsible for decrease the customer
base and creating negative influence on the profitability of the companies offering luxury
watches.
 Technological advancements- In context of Watches of Switzerland, the company has
been going through many technological factors and use of e-commerce mediums, use of
social media platforms with the help of research and development and cost saving
procedures can be followed. The shift in demand of digitalization has been a driving
factor which has been a challenge for many companies to maintain their social media
pages through which they can attract customers and strengthen their brand image within
the industry (Xu, Fu and Liu, 2019). The technological advancements in type of watches
from traditional to smart and other watches has been a factor for driving high competition
which has can create an impact on the revenues and profitability of companies.
 Supply and demand- The supply of all luxury watches is growing whereas the demand
for such product is declining and this has been a challenge for the company, Watches of
Switzerland. The supply of luxury watches has been rapidly increasing as business are
now also offering their products through e-commerce or online platforms through which
they can meet demands of their customers and target customers through larger
geographical target market. Due to incline in supply and decline in demands this can lead
to decline in quality of products to create a balance between supply and demand.
5. Resources & Evidence Used in the Completion of the Briefing Note
Castañeda-Ayarza, J. A. and Godoi, B. A., 2021. Macro-environmental influence on the
development of Brazilian fuel ethanol between 1975 and 2019. Renewable and Sustainable
Energy Reviews. 137. p.110457.

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Khilji, S. E. and Pierre, R., 2021. Global Macro Talent Management: An Interdisciplinary
Approach. In The Routledge Companion to Talent Management (pp. 94-108). Routledge.
Xu, W., Fu, H. and Liu, H., 2019. Evaluating the sustainability of microfinance institutions
considering macro-environmental factors: A cross-country study. Sustainability. 11(21).
p.5947.
Recommendation
None to be made at this stage.
APPROVED/NOT APPROVED NOTED
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Senior Manager
Business Planning & Intelligence
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Author
(STUDENT NAME)
Senior Manager
Business Planning &
Intelligence

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General information to the briefing note
SUBMIT YOUR COMPLETED MODEL(S) HERE IN THIS BOX. Note this should not exceed 1 full page.