Impact of Global Macro-Environmental Factors on Watches of Switzerland

This article discusses the impact of global macro-environmental factors on Watches of Switzerland, including the shift in consumer demand towards smart watches, increased demand for luxury brands, and the effects of Covid-19 on the watch industry. Key issues such as employee turnover and overstocking are also addressed. A PEST analysis is conducted to examine the political, economic, social, and technological factors affecting the company.

GLOBAL BUSIESS
ENVIRONMENT

Table of Contents
Contextual background....................................................................................................................1
Key issues........................................................................................................................................1
Global Macro- Environmental factors Critical discussion point.....................................................1

Contextual background
In last few years various kinds of changes have occurred in luxurious watch market.
Focus of people have shifted from mechanical watches to smart watches. People readily invest
huge hefty amount for digital or smart watches (Badoux, 2017). Other than this, in recent time
demand of other luxurious brands by people has also increased as disposable income of people
has also increased. This, change in market has directly impacted sales of other type of watches.
But due to this increasing demand of digital or smart watches sales of Watches of Switzerland. In
fact, Watches of Switzerland has recorded their highest sales till now. Demand of brand such as
Rolex has also increased which has further helped Watches of Switzerland to enhance their
overall sales even at the time of Covid-19.
Figure 1 Sales of Watches of Switzerland in £ million
Key issues
 Despite of increased sales performance, employee turnover of Watches of Switzerland has
increased
 Due to increasing sales, overstocking of products has become another key issue for Watches
of Switzerland.
 Covid-19 reduced export of watches by at least 22%
Global Macro- Environmental factors Critical discussion point
There are various kinds of global macro environmental factors that are important for
Watches of Switzerland to be focused upon and important for directors to be aware of. For these
Global Macro- Environmental factors, PEST analysis can be conducted.
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Political factors: due to Covid-19 government had imposed various kinds of regulations,
developed different legislation such as imposed ban on international travelling, export of various
products or goods reduced. Fixed timing for organizations with social distancing norms affected
sales of Watches of Switzerland. Due to Covid-19 restrictions Watches of Switzerland were
forced to work with 50 percent workforce due to which sales pressure upon employees increased
and as a result employee turnover also increased (Donzé, 2018).
Economic factors: Inflation rate during Covid-19 has increased drastically due to this increased
inflation rate prices of products in watch industry have also increased drastically. But in
Switzerland this inflation rate changed remained low as compared to global inflation rate
because of which local sales of Watches of Switzerland were not impacted much. Due to Covid-
19 pandemic global economic growth of various countries were affected drastically. But as
Switzerland has highly developed service sector and is well known for its highly developed and
advance watch market because of which GDP of Switzerland was not affected much as a result
sales performance of Watches of Switzerland increased despite of pandemic (Donzé, 2018). But
despite of this unaffected GDP cash in hand and availability of cash during this time period were
affected as a result, initially both national and international sales performance of Watches of
Switzerland were affected.
Social Factors: Demand of customers for luxurious branded watches has been increasing
constantly because of which demand for products of Watches of Switzerland increased
drastically.
Technological factors: Due to Covid-19 restriction’s most of the people preferred shopping
online as a result, requirement of adopting advance technology so that sales of products of
Watches of Switzerland online can be increased so that supply of products can match demand
(Donzé, 2018). For this, Watches of Switzerland has to adopt advance technology and increase
their presence online.
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REFERECNES
Books and Journals
Badoux, S., 2017. Sales internationalization of Swiss luxury watchmakers in China and Hong
Kong (Doctoral dissertation, Haute école de gestion de Genève).
Donzé, P.Y., 2018. The Swiss Watch Industry. In Oxford Research Encyclopedia of Business
and Management.
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