Swatch Group Ltd. JMSB Consulting George Emery Jonathan Suprovici Eliane Roy Cinzia Ruberto

Transcription

1 Swatch Group Ltd. JMSB Consulting George Emery Jonathan Suprovici Eliane Roy Cinzia Ruberto

2 Mandate How can SGL compete in the smartwatch market? Power of Apple Drop in activity trackers Technology evolution

3 Merging timelessness and technology Technology Utilize ETA and in-house R&D to create the TISSOT DUAL Manage external partners to enable NFC, phone compatibility Production and design Marketing and branding Key to have fully automated and upgraded production facility Leverage timeliness and, craftsmanship and technology Global focus on high end customer base (existing and new) SGL will be positioned to capture the high end market

4 Analysis

5 Activity trackers market will shrink Timekeeping watches SGL well positioned in high-end segment SGL suffers from currency fluctuations Activity trackers FitBit, Garmin, Nike Market will shrink and focus on cheaper products Smart Touch Zero One Swatch Bellamy (NFC) Smartwatches Growing segment LT watch market TISSOT SMART-TOUCH

6 Activity trackers market will shrink Timekeeping watches SGL well positioned in high-end segment SGL suffers from currency fluctuations Activity trackers FitBit, Garmin, Nike Market will shrink and focus on cheaper products Smart Touch Zero One Swatch Bellamy (NFC) Smartwatches Growing segment LT watch market TISSOT SMART-TOUCH SGL must be a smartwatch player to continue growth

7 SGL movement to high technology Luxury market APPLE EDITION TISSOT SMART TOUCH TAG Low tech APPLE WATCH High tech Mass market FITBIT APPLE SPORT LG G WATCH SAMSUNG

8 SGL movement to high technology Luxury market APPLE EDITION TISSOT SMART TOUCH TAG Low tech APPLE WATCH High tech Mass market FITBIT APPLE SPORT LG G WATCH SAMSUNG

9 SGL movement to high technology TISSOT SMART TOUCH Luxury market APPLE EDITION TISSOT TAG DUAL Low tech APPLE WATCH High tech Mass market FITBIT APPLE SPORT LG G WATCH SAMSUNG

10 SGL movement to high technology TISSOT SMART TOUCH Luxury market APPLE EDITION TISSOT TAG DUAL Low tech Mass market FITBIT APPLE WATCH APPLE SPORT LG G WATCH SGL will be a leader in the luxury smartwatch market SWATCH DUAL SAMSUNG High tech

11 Leverage in-house production and design Production ETA and in-house R&D Smart Touch and Bellamy Fully automated production Design Timeliness, craftsmanship Bridge the gap with technology to create the DUAL Combined production and design will allow SGL to succeed

12 Utilize existing image and customer base Professionals Design Functionality Existing customer base

13 Financials

14 2015 Internal Assessment NET SALES NET SALES At 8,451 M CHF Declining sales growth 2015 decrease due to exchange rate NET INCOME At 1,119 M CHF 41% decline from 2013 NET INCOME CASH FLOW At 1,404 M CHF 7% increase over 2013 ABILITY TO INVEST / NEED TO CHANGE THE TRENDS

15 Market Assessment +32% TOTAL MARKET 18 millions units +66% TARGET 5% = 910 K units HIGHEST GROWTH SECTOR IN SMART / WEARABLES POTENTIAL 1,593 millions in sales Opportunity for 20% growth in sales

16 Alternatives

17 Strategic positioning Strategy Differentiation through craftsmanship & timelessness Core competencies Quality & diversified offer Sensors, chips & batteries ETA Subsidy Technology Market Competing with Apple Decrease demand in activity tracker Increase demand in smart watches

18 Strategic Positioning Assessment Strategy Differentiation through craftsmanship & timelessness Quality & diversified offer Sensors, chips & batteries ETA Subsidy Technology Core competencies Market Competing with Apple Decrease demand in activity tracker Increase demand in smart watches Leverage what you are known for: craftsmanship & timelessness

19 Options for SGL Criteria Watch as jewelry Activity tracker New brand low-end smart watch Tissot highend smart watch Investment required Leverage core competency Risk Long term sustainability

20 Options for SGL Criteria Watch as jewelry Activity tracker New brand low-end smart watch Tissot highend smart watch Investment required Leverage core competency Risk Long term sustainability You can differentiate yourself in the smart watch market though quality

21 Risks of merging timelessness & technology RISKS ACTIONS CONTINGENCIES Apple refines watch Build on Swatch reputation Focus marketing on main customer segment Technologically weak Focus on design, battery life & basic functionalities Partner up for upgraded software Currency fluctuation Minor pricing adjustment Send technology production to Asia

22 Merging timelessness and technology Technology Utilize ETA and in-house R&D to create the TISSOT DUAL Manage external partners to enable NFC, phone compatibility Production and design Marketing and branding Key to have fully automated and upgraded production facility Leverage timeliness and, craftsmanship and technology Global focus on high end customer base (existing and new) SGL will be positioned to capture the high end market

23 Implementation

24 Implementation at a Glance Technology Development Smart Dual Overlay with ETA APP development Dual Watch Production & Design Design dual watch for Tissot Upgrade production facility Design dual watch for Swatch Produce Tissot Dual Produce Swatch Dual Dual Watch Marketing & Branding Tissot Dual Campaign Swatch Dual Campaign

25 Smart Dual Overlay with ETA Subsidy Sensor to switch between traditional watch to smart watch Payment platform with Amex, Visa & MC GPS & weather forecast Activity tracker Message notifications

26 Dual APP Development Connecting via Bluetooth Access to additional information Latest technology

27 Design Dual Watch Inhouse Swatch Design team Timeless Design Digital Overlay Long lasting battery Swiss made Upgrading a Timeless Piece

28 Dual Production Facility Hire additional staff Facility improvements to support new line

29 Tissot Dual Marketing Campaign Brand Tissot Dual Luxury & technology redefined Customer Segment Business professionals located in US & Europe years old Interested in technology Marketing Initiative Famous tennis player as brand ambassador Sponsoring tennis events The Tissot Dual a must in a watch collection

30 Swatch Dual Marketing Campaign Brand Swatch Dual All you need in a watch Customer Segment Young urban professionals years old Marketing Initiative Social media campaigns on Facebook, Twitter, Snapchat, Instagram #Myswatchdual Free product giveaways for posting images of product being used Swatch Dual part of your everyday life

31 Marketing Timeline End Tissot campaign to capture holiday market Social media campaigns for Swatch Dual

32 Financials

33 Cost Analysis R&D FACILITY IMPROVFEMENT MARKETING TOTAL 200 million over 12 months 100 million over 12 months 200 million over 24 months 500 million over 24 months 500 million financed by over 1,000 million in free cash flow

34 Projections UNITS - 230, , ,000 SALES ,210 1,600 MARGIN R&D FACILITY MARKETING INCOME SALES UP BY 19% / NET INCOME UP BY 21%

35 Merging timelessness and technology Technology Utilize ETA and in-house R&D to create the TISSOT DUAL Manage external partners to enable NFC, phone compatibility Production and design Marketing and branding Key to have fully automated and upgraded production facility Leverage timeliness and, craftsmanship and technology Global focus on high end customer base (existing and new) SGL will be positioned to capture the high end market

36 Questions?