Report on Global Business Environment Factors: Watches of Switzerland

This report examines the global business environment impacting Watches of Switzerland, a luxury watch company, focusing on key issues and macro-environmental factors. It identifies critical issues such as the diminishing luxury watch market due to technologically advanced digital watches, urgent issues like increased product prices due to Brexit and COVID-19 related supply chain disruptions, and routine issues such as declining market share due to ineffective marketing. The report further discusses how technological advancements, political factors like Brexit, and social trends influence the company's operations. It emphasizes the need for Watches of Switzerland to incorporate digital technology, diversify raw material sources, and enhance marketing strategies to remain competitive. The analysis utilizes secondary data sources, including online books, journals, and statistical data, to provide a comprehensive overview of the challenges and opportunities facing the company in the global market.

Global Business Environment
Table of Contents

INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Methodology...........................................................................................................................3
Key Issues...............................................................................................................................3
Discussing Global Macro-environment factors......................................................................4
REFERENCES................................................................................................................................5
INTRODUCTION
The luxury watch industry has been valued at approximately USD 23.623 billion in the
year 2020. there has been a high impact of the COVID-19 pandemic situation on countries such
as America, Europe and Asia which are some of the largest consumers of luxury watch brands.

The market has seen a decline in the overall demand which has diminished luxury watch markets
growth. This has been due to various restriction of COVID-19 such as movement of goods and
services. The Watches of Switzerland have reported revenues of £297.5 million in its financial
quarter with strong growth in UK and US (Luxury Watch Market – Growth, Trend, COVID-19,
Impact and Forecasts, 2021). The report will consist of key critical issues of the organization
relative to its global macro-environment factors.
Source: (KERING – 2020 Financial Document)
MAIN BODY
Methodology
For the following report several secondary data sources were utilized such as online
books and journals which provided vital information that is necessary for this report. Various
statistical charts and tables are also included which are online sourced for better understanding of
the report.
Key Issues
Given below are some of the key issues based on the level of urgency relative to Watches of
Switzerland:
Critical:
Diminishing luxury watch market due to increase in new technologically advance digital
watches in the market.

Urgent:
Increase in overall price of product due to disturbed supply chain relative to Brexit and
COVID-19 situation.
Routine:
Reduction in the overall market share due to lack of interest form customers and lack of
effective marketing.
Discussing Global Macro-environment factors.
The macro-environment refers to the overall set of circumstances that are established
within an economy as a whole, rather than a specific subdivision or region (Zhuplev, . ed., 2018).
The macro-environment includes elements such as GDP, employment and fiscal policies. Given
below are factors affecting The Watches of Switzerland relative to their key issues:
Technological:
The advancement in technology has assisted the luxury watch making industry and
company's such as The Watches of Switzerland in optimizing their production and reducing time
and resources used to manufacturer high-end watches. On the contrary, technological
advancement has also introduced new and effective digital watches which have been well
received by customers (Bowen and Bowen ., 2018). These digital watches cost a fraction of what
is offered by luxury watch makers such as The Watches of Switzerland and offer variety of
features which attract modern customers. In order to counter the negative effect of technology
luxury watch makers need to incorporate some form of digital technology in their current
products to meed customers demand.

Source: (Cisco Systems)
Political:
The luxury watch industry and companies such as The Watches of Switzerland have
enjoyed various policies set by the government form imports and exports which has greatly
benefited their revenues and enhanced brand recognition. On the contrary, the recent situation of
Brexit has impacted the business operations of The Watches of Switzerland as the government
has new rules and regulation relative to importing of goods which are essential for the luxury
watch making company. This has forced them to increase their cost due to restrictions in their
supply chain. To counter the political macro-environment factor the company has to identify new
sources of their raw good in order to bring down product prices.
Social:
The social macro-environment factor has been favourable to luxury watch manufacturer
as owning an expensive luxury watch develops a statement in the society. This has allowed
luxury watch makes to generate large amount of revenues form increase in sale. Although in the
recent years the trend has shifted due to the introduction of new technologically advance digital
watches which hold significantly the same amount of social status when compared to luxury
watches. Moreover, the ineffective marketing by luxury watch companies such as The Watches
of Switzerland along with their high prices also play a role in declined customer base. In ordetr
to negate negative aspect of social macro-environment factor company need to enhance its
marketing and compete with digital watch manufacturers.

Source: (Mordon Intelligence)

REFERENCES
Books & Journals:
Bowen, G. and Bowen, D., 2018. Luxury Product Decision-Making Strategy: Leveraging Social
Media to Create the Emotional Component of the Strategy. In Digital Marketing
Strategies for Fashion and Luxury Brands (pp. 289-308). IGI Global.
Zhuplev, A. V. ed., 2018. Disruptive technologies for business development and strategic
advantage. IGI Global.
Online
Luxury Watch Market – Growth, Trend, COVID-19, Impact and Forecasts, 2021. [Online].
Available through:<https://www.mordorintelligence.com/industry-reports/luxury-watch-
market>.