Schofield Watch: External Environment Analysis for US Expansion

This report provides a comprehensive analysis of Schofield Watch's expansion strategy into the US market. It begins with an introduction to the company and its vision, emphasizing its focus on high-quality, niche-market watches. The report then delves into the external environment, utilizing models like the Porter Diamond and PESTLE analysis to assess the market. It examines the watch industry's structure, key success factors, and the application of red versus blue ocean strategies. The socio-cultural, technological, economic, and political-legal environments are also analyzed. The report includes product/service segmentation, a conclusion, and recommendations for Schofield Watch. It also analyzes the competence model and Porter's Five Forces to assess the competitive landscape and strategic positioning. The report concludes with marketing strategies to increase sales and brand awareness.

INDIVIDUAL
REPORT

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
EXTERNAL ENVIRONMENT................................................................................................3
Porter diamond.......................................................................................................................3
Porter five forces....................................................................................................................4
Competence model.................................................................................................................4
Industry structure and nature..................................................................................................4
Key factors to success in the industry....................................................................................5
Red vs. blue ocean strategy....................................................................................................6
Socio-Cultural environment...................................................................................................6
Technological environment....................................................................................................7
Economic environment..........................................................................................................7
Political-legal environment....................................................................................................7
PART TWO...............................................................................................................................8
Product service segmentation.....................................................................................................8
CONCLUSION........................................................................................................................11
RECOMMENDATIONS.........................................................................................................11
REFERENCES.........................................................................................................................12

INTRODUCTION
In the present scenario, the customers have become brand freak and they are focusing
on wearing branded stuff. The fashion industry is changing drastically because of the change
in the perspective of the customers. The report will focus on the Schofield watch which is the
British manufacturer of watches. The organization is known for its high class products which
it renders to its customers. Besides this, the organization makes the watches for its elite class
customers and focuses on the niche market segment. Its vision is to become a leader in the
watch manufacturing industry by providing best quality of watches in variety of ranges and at
varied prices. It owns a larger market share in the industry as it serves majority of the
population in the London. Currently, the firm is planning to expand its market in US which
has strong purchasing power and scope for the development of the company. Due to this
reason, several external environment strategies such as competence model, Pestle, porter
diamond model are adopted by the organization to analyze the market of US. Further,
marketing strategy has been drafted to plan their expansion in the US market. The report will
also make market competitor analysis, trends and
EXTERNAL ENVIRONMENT
Porter diamond
This assumes that business competitiveness is in the context of what our competitors
perform. Coming on to the Factor conditions the human resources and the parts which are
required to produce a single watch is very huge. Around 4,000 man-hours are required to
produce one watch (Morschett, Schramm-Klein and Swoboda, 2010). Besides the resources,
the related and supporting activities includes the suppliers which are there are around 35. But
these are company's suppliers hence there exists no bargaining power. Talking about the
home demand conditions, the market which is there is very limited and mostly restricted to
the high profile people who can spend a pretty well amount on a watch. The market strategy
is producing a limited edition watches and giving their customers the best kind of service
they long for (Kim Kinoshita and Shin,2010). Next factor is the government; here there is no
government interference involved. Here the chance events are targeting even the lower lever
segment and expanding its sales.

Porter five forces
Rivalry among the firms- In the watch making industry the competition exists among
the domestic firms as well as the foreign brands tries to take that position. Only on the basis
of some unique features and functions they can differentiate from the competitors.
Threat of substitutes- As there are many substitutes for the watch making industry
hence the threat of the substitutes are moderate. But these days some rich people use watches
as some kind of fashion accessory (Aziz and Yassin, 2010).
Threat of new entrants- the possibility of new entrants is high as there are very less
restrictions in entering the industry. People consider Schofield not just a watch but as a
complete brand.
Bargaining power of suppliers- As the production facilities are there within hence it
does not have to outsource their work. Supplier's bargaining power was very low (Harvey and
et.al.,2010).
Bargaining power of buyers- As this company works in niche market. Hence the
bargaining power of the buyers is low as mainly the watches which are manufactured are
completely customized.
Competence model-
This model defines the skills set and the knowledge which is required for the job. As
we know the employees working in Schofiel are highly skilled. The entire work of making a
watch is done by the laborers and nothing is done over the machines. So as the entire work is
executed manually (Gibbs, 2012). For that the skill set which is needed is very high. The
employees which are working in the manufacturing units are taking care of every minute
detail. When the thought of expanding in the US market, it will be of great advantage as the
employees there are also very qualified, and possess the unique skill set which is required for
the production of these watches (Goldthau and Sitter, 2014). The idea of expanding to the US
market will turn out to be the best.
Industry structure and nature
In the present era, a wristwatch is considered not only a device to tell us time but also
a status symbol. Previously wrist watches were considered as a necessity as there was no
other source to see the time. But currently, because of the rise in the standard of living of the
people they are very particular for the things they buy (Wang and Ellinger, 2011). Now

everything has become their status symbol and watches are no less of it. Now there are a
growing demand of customized watches like the bracelets, cuff watches, bands etc the variety
is huge. Hence now people are ready to spend a huge amount to buy wrist watches which
matches their status symbol (Fereidouni and et.al.,2010). Hence with the developments in the
uniqueness of watches the market of wrist watches in increasing continuously as the
satisfaction which the consumers get is the maximum.
Key factors to success in the industry
The main key factors for the Schofield Watch Company Ltd to effectively expand
their operations in the US watch industry are enumerated underneath:
Technology: It is the main key determinant of company’s success in the watch
industry. With the advancement of technology over the period, it becomes really important
and necessary for the business organizations to introduce updated and advanced technology
in the manufacturing process. Customers demand high quality of watches & highly
sophisticated intricate engineering work to meet their luxury demand.
High-Quality: In the US watch industry, consumers are not very much price-sensitive
and just need high-quality watches with innovative and unique designs to satisfy their luxury
needs and wants (Kubasek, Brennan and Browne, 2016). Thus, it will be the key requisite for
the Schofield Watch Company Ltd to offer excellent and superb quality watches focusing on
the consumer specification so as to achieve success in the industry.
Competent personnel: The business offers goods and services through their
workforce; thus, it is another key requisite for the firm to have highly talented & competent
workforce, so as to exceed the satisfaction level of the consumers by delivering them
exceptional quality offerings. As Schofield Watch Company Ltd has planned to expand its
operation in US, thus, it will have to recruit competent staff. Moreover, firm must organize
trainings to bring Excellencies in their staff and thereby offer services accordingly to the
consumers to gain brand popularity (Besley, Persson and Sturm, 2010).
Marketing: Now-a-days, marketing also gains wider importance wherein firm boost
their sales through the means of various means like advertisement & other promotional
offerings. In the current age of advanced technologies, Schofield Watch Company Ltd must
utilize online marketing and social-media marketing so as to foster the online connectivity
with the users. In this, it can offer its goods and services to the customers using online
channels and attract great customer base, which leads to drive larger sales and great return.
All these factors enable Schofield Watch Company Ltd to drive competitive success

and strengthen its market position; as a result, it can stay in the competitive place and run
operations in an effective way.
Red vs. blue ocean strategy
Red vs. blue ocean strategy has significantly gained importance in the present world.
The reason is that it helps in understanding the strategy of market effectively. Schofieldwatch
is the limited edition watch which is famous for the quality and has been specifically making
the watch for a particular segment. In case of the red ocean strategy, the focus of the
organization is to gain more market share and compete with the rival effectively (Parker,
Bindl and Strauss, 2010). On the other hand, blue ocean strategy always emphasizes on the
untapped market which is not focused by any other organization. In case of the
Schofieldwatch they are expanding their business in the US market. For expansion strategy,
the blue ocean strategy can be adopted by the organization because their main motive is to
provide the limited edition watches to their customers (What characterises Red Ocean
Dwelling vs Blue Ocean Creating Organisations?, 2017). The firm is also focusing on the
limited customers so that they can satisfy them effectively. In case of the US market, as it is
the developed country so it will be profitable for the organization to focus on the high class
customers. As the purchasing power of the individuals are quite high (Baker,2014). In case of
the blue ocean strategy, the firm do not focus on the competition prevailing in the country.
The main emphasis is on the new demand and the new customers. On the other hand, in case
of red ocean strategy, the stress of the organization is on beating the competition. This is not
possible for the Schofieldwatch because they are only focusing on the niche market.
Socio-Cultural environment
Customers are the main key factor behind the business success, because Schofield
Watch Company Ltd will deliver its goods and services to the consumers, therefore, social
environment have a strong impact on the business. US watchmakers deliver services to both
the domestic and foreign tourists at different prices. The consumers demand qualitative,
stylish and the best design watches in desired colour. Moreover, they are not too price
sensitive and demand great quality goods with the authenticate guarantee (Besley, Persson
and Sturm, 2010). Further, in the home country, rising income level & favourable condition
of employment has brought increase in the customer spending; as a result, the demand for
watches goes increase. Thus, it explored the opportunity for the Schofield Watch Company
Ltd to provide innovative & unique quality watches as per the desires of the consumer and
bring success.

Technological environment
Everyone knows that technology reduces the workload & accomplish the work faster
& cheaper. Looking back over the years human did manual labour for completing the task
which took too much time to complete the task, until we came with the engines & motors,
then Computer. The impact of technology on Schofield Watch Company Ltd can't be
underestimated- these environment
Help to do work effectively & helps to reduce the work load. To sustain long run in
competitive world you have to adopt new & innovative technology to satisfy customer needs
(Lai and et.al.,2007). The Scholfield Watch Company Ltd provides new technological
training for the resistance to change to those people who are working in the organisation so
that they work more effectively & efficiently.
Economic environment
In US watch industry, considering the last two years, it is projected that the prices of
watch will be grow at a compound annual growth rate of 1%. However, on the contrary side,
the currency dollar hampered the market demand of watches among outbound visitors. Thus,
such weakening customer demand might have an adverse impact on the watch distributor
retailers (Commander and Svejnar, 2011). In order to overcome such challenges prevailing in
the sector, Schofield Watch Company Ltd must have to focus on their mass-media
advertisement wherein company will have to invest heavily in the mass media to raise
awareness and thereby maximize the demand.
Political-legal environment
Different countries have different political-legal conditions, Scholfield Watch
Company Ltd is the highly regulated company, & there are many legal regulation, standards,
guidelines that may affect the sale of their products or services. These environments provide
protection against various business practices. Various protection act get indulge to protect the
interest of employees working in the organisation. Political environment refers to public
institution, government etc. Scolfield Watch Company Ltd encourages people to work
together as a team who come from different ethnic or cultural background. They give
freedom of democracy i.e. free to give opinion, freedom of taking part in decision making
activities. There should be fair & equitable rights against people who are related with the
organisation

PART TWO
Product service segmentation
Marketing strategy is one of the greatest tool which helps in increasing sales of the
organization and achieving competitive advantage. These strategies are made to make the
customers aware about the product so that they can attract the users towards them. But this is
not in case of Schofieldwatch as it focuses on the niche market segment and its customers do
not require promotion for buying the watch (Atama and et.al.,2010). The marketing strategy
which will be adopted will be different for expanding the US market. By analyzing the
external environment of US it has been witnessed that it is the lucrative market for the
Schofieldwatch. Now for this, it is required to develop the effective marketing strategy which
can help the organization to sustain in the market. As it is famous for its product, so it will
not be difficult for the organization to grab the customers. For developing the marketing
strategy, it is required by the Schofieldwatch to develop the targeting strategy which can
assist the firm in targeting the customers (Slater, Hult and Olson, 2010).
Targeting
For entering the US, they will be focusing on the niche market strategy; the reason is
already discussed above. They will be targeted the small market segment of the country. But
in case of US, there are many customers who are capable of buying the watch because of the
huge purchasing power (Morgan, Katsikeas and Vorhies, 2012). They will be focusing on the
differentiated marketing strategy in which the firm can effectively achieve the competitive
advantage. This strategy is not common in the market because it targets only few customers.
Besides this, in case of targeting strategy the Schofieldwatch will focus on expanding the
product through the quality and the price.
According to the organization, it uses the specific material for developing the watch
and it has its own suppliers who provide the consistent quality of watch to the customers. In
expanding the Schofieldwatch in US, focus and concentrated strategy will be adopted by the
organization (Douglas and Craig, 2011). The firm will target the single market segment by
using one of the marketing mixes in the organization. This is because by focusing on one
segment, the organization can effectively increase the profit of the firm.Further, it is
beneficial to the Schofieldwatch because the organization is not required to make the
products and services according to the customers’ needs. Further, the R&D will be not
expense because the product will manufactured according to the company’s demand.

Positioning strategy
A company Schofield watch is planning to expand its business all across the world and
initially it is expanding its business in United States ofAmerica. So the company has to go
through many strategies and many processes to expand its business in US and company has
to gone through the factors that affect the company and about their competitors about the
internal and external forces that affect the business of company (Aziz and Yassin, 2010).
Firstly company has to do advertisement about the product and has gone through many
strategies, like positioning strategy. Positioning strategy means branding our product in best
possible way so that our product will be different from other product. And our product can
compete in the market (Goldthau and Sitter, 2014).
As the Schofield Company is expanding business it has to brand its product in US so
that the company can minimize the risk of competitors and can gain same goodwill in United
States of America as has gain in other countries.
Schofield watches is known for its uniqueness and quality. As Schofield watches as best
known for its goodwill in the market. Schofield is known to be watch worn for luxurious
appeal, as this watches come very costly and company emphasized on the quality of product
rather than price of the product (Kim, Kinoshita and Shin, 2010). As best quality material is
used in making these watches and special experts are appointed from various countries to
design the outlay of watch, So that the product will be the best. As the glass of these watches
is unbreakable and the leather material which is used for belt is of very best and of very fine
quality and these watches is water proof.
All this makes watches very precious and different from other products (Wang and
Ellinger, 2011). As design of these watches is also unique hence uniqueness makes watches
more beautiful and elegant. In this case, the positioning of Schofield watches will be based on
these factors.
7 Ps of marketing
Marketing mix is a tool which helps in carrying out the promotion of the organization.
In case of Schofieldwatch, it is required by the firm to effectively focus on the promotion
criteria so that the company can enter the US market effectively. There are basically 7Ps of
marketing mix which assist the organization to plan the marketing activities accordingly
(Wang and Ellinger, 2011). For expanding Schofieldwatch in the US market promotion as
well as place strategy will be discussed this will aid the firm to carry out the promotion
effectively.

 Product: Schofieldwatch which is the British manufacturer of watches. The
organization is known for its high class products which it renders to its customers.
Standard quality product in variety of ranges is the main strength of the company.
Besides this, the organization makes the watches for its elite class customers and
focuses on the niche market segment.
 Price: Company targets mainly high economic class people who are able to afford
high prices and ready to pay it willingly. Thus, it follows premium pricing policy by
rendering high quality products. Still, company serves all the consumers therefore, it
makes watches in different variety to deliver product to all the customers and satisfy
their expectations.
 Place- This focus on the place of distribution through which the product will be
distributed to the customers. There are basically four types of distribution strategy one
is the intensive, exclusive, selective and franchising. In case of Schofieldwatch, the
exclusive distribution strategy will be adopted by the organization.The reason is that it
is serving the fewer customers so only few of the retailers can access to the products.
The expense which will be incurred will be less and the target customers can get the
access to the products (Parker, Bindl and Strauss, 2010). It is easy way to enter the US
market because through the retail chain the firm can effectively make the watch
available to the customers.
 Promotional mix- Promotion is one of the effective tools which can be used by the
organization to develop competitive advantage. For entering the US market,
Schofieldwatch can develop an effective marketing campaign and advertisement
which can attract the customers towards them (Morgan, Katsikeas and Vorhies, 2012).
Online promotion will make significant contribution and helps to attract larger
consumer base. Besides this, social media sites can be used as a platform to promote
their watch. But in case of Schofieldwatch, less promotion is needed and those tools
are required to be adopted which are used by the elite class customers.
 People: It employs talented & competent personnel to serve all the consumers
appropriately. Recruiting highly able, skilled and experienced employees will assist
Schofield watch to render best quality of services and satisfy their expectations.
 Process: It performs various functions such as product manufacturing, supply chain,
promotional strategies and others. Business strategic planning will assist the
managerial team to carry on all the processes smoothly.

 Physical environment: In this, proper arrangement of watches with proper safety will
enable company to deliver goods on the demand of the consumer. Consistent branding
through various communication channel also maintain physical environment.
CONCLUSION
From the report it can be concluded that Schofieldwatch is one of the rare brand
watch which is known for the quality. By expanding their market in US, the organization can
gain effective market share. After analyzing the external environment through the Porter five
forces model, it will be beneficial for the Schofieldwatch to expand in the developed country.
It is good market because the firm can easily make profit because of the huge target market
and the purchasing power of the customers. On the other hand, through the pestle analysis, it
has been witnessed that the political stability of the US market is quite strong which can help
the organization in effectively developing its competitive advantage. The firm has targeting
the niche market segment, so focus and concentrated strategy are adopted that can effectively
make a huge markin the watch industry.
RECOMMENDATIONS
It is recommended to the business firms that they must use marketing related tools and
techniques in the business. Marketers can make use of segmentation, targeting and position
methods to pitch their product in better way in front of customers. By doing so, they can
increase their market share. Marketing mix must be developed in proper manner because by
doing so customers can be treated in systematic manner. It can be said that there is huge
importance of these techniques for the business firms.

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