What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you hope to be able to play in this sector or industry in the medium term?

1. What do you believe are the greatest
challenges facing the sector or industry you
would like to specialize in at IE ? What role do
you hope to be able to play in this sector or
industry in the medium term ?
Cyril Charles – November 2014
IE Admission – Master in Management
Question H.

2. Plan
 Introduction
 Key figures of the Swiss watchmaking industry
 Current situation and trends
 Major challenges the top watchmaking brands are
facing
 My future role in the industry
 Conclusion

3. Introduction
 Switzerland is a very small country located at the heart of
Europe. Switzerland’s population slightly exceeds eight million
which is the population living in Paris or London. However, the
country remains highly competitive on a global scale, especially
because of it’s watch industry.

4. Key figures of the Swiss
watchmaking industry
 In 2013, Swiss watch exports totalled 21,8 billion francs. In 2010, it
totalled 16,158 billion francs.
 Asia is the main market with a market share of 53% followed by Europe
with 31%. Hong Kong is the leading market for direct export.
 The watchmaking industry currently employs almost 56’000 people in
Switzerland. Since 2010, the number of people working in the Swiss
watch industry has increased by 15%.
 Swatch Group (Blancpain, Omega, Breguet…), Richemont (Cartier, IWC,
Panerai…) and Rolex account for 45,8% of the global watch market.

5. Current situation and trends
 During the past years, the Swiss watchmaking industry has
rapidly grown mainly because of the high demand in Asia
for Swiss watches. However, in 2013 and especially for the
Chinese market, demand dropped due to the new
governement policy from Xi Jinping. He declared that
luxury goods gifts were considered as bribes and
illegitimate. Despite this fact, the Swiss watchmaking
industry is doing well. Experts claim that Swiss watch
exports will rise again in 2014 after advancing at a slow
pace during the last 3 years.

6. Major challenges the top watchmaking brands are
facing
 There are several challenges for the Swiss
watchmaking brands :
 The export market risks
 The bad forecast for economic growth for some
countries
 Smartwatches.

7. Smartwatches are a threat
 Smartwatches are by far the most important
challenge for the future of Swiss watchmaking. It is a
threat and also an opportunity.
 It is a threat because some brand like Apple for example
have designed a luxury smartwatch with an 18 karat
gold case. The price of this watch is still being calculated
but some have estimated that the gold smartwatch
could have a price tag of $10’000. This watch will directly
enter the luxury market as a good competitor against
Swiss mechanical watches.

8. Smartwatches are also an
opportunity
 Smartwatches are also an opportunity and several
Swiss brands have started to think about creating
smartwatches.
 TAG Heuer is one of them and Jean Claude Biver, head
of watchmaking for TAG Heuer parent company LVMH,
said in an interview : “We want to launch a smartwatch
at TAG Heuer, but it must not copy the Apple Watch”.

9. My future role in the industry
 I plan to work in the Swiss watch industry in the
marketing section after my master at IE and I hope to
be able to participate in this new era of watchmaking.
I think this is one of the biggest challenge in the
history of the Swiss watchmaking industry since the
quartz revolution in the 1970s.

10. Conclusion
 Forty years ago, the Swiss watch industry nearly died
because of the quartz movement appearance. Today,
there is an other revolution which is the smartwatch.
How will the Swiss watch industry answer ? Are they
going to use this revolution as an opportunity or will
they feel threatened ?