(Topic) ROLEX watch manufacturer

Running head: STRATEGIC APPRAISAL OF ROLEX
STRATEGIC APPRAISAL OF ROLEX
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STRATEGIC APPRAISAL OF ROLEX1
Introduction
Strategic corporate appraisal is considered to be a vital function of many organisations.
Marketing strategists usually analyze the factors and the aspects of an organisation which has
a direct effect or impact on the corporate-wide strategy (Camilleri 2018). The corporate
appraisal is mainly concerned with the state of an organisation and how the culture of the
organisation can be changed for their survival. This paper will focus on analyzing the
company, Rolex SA and provide a detailed internal and external analysis and also identify
issues the company is facing with suitable recommendations.
Company profile
Rolex SA is Swiss luxury watch manufacturer and currently headquartered in Geneva,
Switzerland. The company was founded by Hans Wilsdorf in the year, 1905 in London,
England. In the year, 1908, the company registered the brand name, Rolex as the founder
wanted a short and simple name which would be easy to pronounce in any language (Rolex
2020). Currently, the CEO of the company is Jean-Frederic Dufour.
Rolex watches are highly expensive as they are crafted with the finest materials and then
assembled with attention to detail which gives people a sense of royalty. The components of
the watches are designed, produced and then developed in-house complying with the
standards.
External environment analysis
PESTEL
Political factors- Laws introduced in the country are often not favorable which can curb the
freedom of Rolex to operate according to their mission. High tax rates can restrict Rolex to

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expand their business and maximize their profits. Corruption is a huge issue and can have
negative impacts on the business however; low wage can help Rolex survive in the market.
Economic factors- The interest rates are becoming high day by day which can affect the
buyer behavior of the customers (Ries, Glock and Schwindl 2017). The currency in which the
company usually operates is highly stable which has positive effects on Rolex especially in
their expansion.
Social factors- Poverty and low income is becoming a huge issue almost all across the globe.
Thus, Rolex cannot market their watches to the general citizens and thus have to rely on
niche marketing. In recent times, climate change has become a huge issue where people these
days want to purchase products that operate in an ethical manner and thus, Rolex needs to
maintain and comply with the rules and regulations while manufacturing the watches.
Technological factors- Everyday there are new technological inventions and thus Rolex
needs to be updated and innovate their products to gain a competitive advantage.
Environmental factors- Global warming has become a concern and thus people have been
focusing on companies that do not add to the increase in global warming. Thus, Rolex needs
to operate maintaining the ethical standards. Governments have come up with laws where
large amount of fine needs to be paid if companies do not comply with the laws set by a
country which can put a financial strain on the company.
Legal factors- Countries these days have set up many laws like health and safety, no gender
discrimination laws which if not followed can affect a business in a negative way. Rolex
needs to follow all the laws and operate efficiently to avoid legal issues.

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PORTER’S FIVE FORCES
Threats of new entrants- The capital requirements that are needed are very high thus it will
become difficult for new entrants to establish their business. People these days look for
differentiation in products and there are very few innovations which can draw the attention of
the people when it comes to luxurious watches thus very few companies would try to
establish a business like Rolex. The government policies and regulations that have been
introduced are highly strict and thus getting a permission to establish a high business like this
will become difficult which shows the threat of new entrants for Rolex is relatively low.
Bargaining power of suppliers- There are many suppliers of Rolex because of the various
materials used in making the watch. The bargaining power of the suppliers are very strong as
the company uses unique and fine products which is not available in abundance which makes
it expensive for the company.
Bargaining power of the buyers- Rolex is a famous and luxurious brand and there are very
few companies like Rolex that offer the same type of watches. The watches by the company
are unique and are different. This differentiation of the product makes the bargaining power
of the buyers weak as they do not have many alternatives to choose from.
Threat of substitute products- There are very few companies who make luxurious watches
like Rolex and as the initial requirements of creating a business like this is very expensive
businesses do not invest on creating a company like Rolex. Thus, very few companies operate
in this market.
Industry rivalry- There are very few companies in this industry and thus the rivalry or
competition of the company is relatively low. There are few luxurious watch brands which
are more expensive than Rolex. The main rivalry in this industry is among the few companies