2. 2
Acknowledgement
This term paper would not be accomplished without the generous contributions of any
individuals and organizations. We are very much grateful to them for their unlimited
help and support.
Above all, we express our gratitude to ALLAH the almighty, who aided us with his
strength, gave us wisdom and patience to complete this term paper.
Additionally, we thank our course instructor “Mr. Afdalin Bin Haque”, who believed that
we could. His moral guidelines, endless effort, and joyful encouragement made us
successful in this paper.
Moreover, we are also thankful to our classmates, group members, and friends for their
helps and supports.
At last, we thank to our parents and other family members for their helps, supports and
sacrifices during the study period.
Special thanks go to www.google.com the best search engine what really helped us to
reach and gather all our necessary information and accomplish this report.
Team Xenon
3. 3
Table of Content
EXECUTIVE SUMMARY .........................................................................................................................................................4
INTRODUCTION.........................................................................................................................................................................5
TAG HUERE TIME CHANGES(KEY DQATE)…… ……………………………..……………………….….6
TAG HEUER : A CHRONOLOGY(2000-2014)……………………………………….………………………………………….…..7
PRODUCT………………………….……………………………………………………………………………………………………………..8
ORGANOGRAM…………….…………………………………………………………………………………………………………………9
LITRETURE REVIEW……………………………………………………………………………………………………………………….…..10
FINDING ANALYSIS ................................................................................................................................................................14
SWOT ANALYSIS…..…………………………………………………………………………………………………………………………15
BCG Matrix……………..………………………………………………………………………………………………………………17
PORTER'S FIVE COMPETITIVE FORCES………………..….………………………………………18
TAG HEUER MARKETING STRATEGY.........................................................................................................................18
ORGANIZATIONALSTUCTURE…………………………………………………………………………………………………………19
RECOMANDATION...………………………………………………………………………….………………………………………………20
CONCLUSION......………………………………………………………………………………………………………………………………21
REFERENCES .............................................................................................................................................................................22
4. 4
Executive Summary
TAG Heuer S.A is a Swiss manufacturing company that designs, manufactures and markets watches
and fashion accessories as wellas eyewear and mobile phones manufactured under license by other
companies and carrying the Tag Heuer brand name.
TAG Heuer began as Uhrenmanufaktur Heuer AG, founded in 1860 by Edouard Heuer in St-Imier,
Switzerland. The company was purchased by Techniques d'Avant Garde in 1985, when the Heuer brand
became TAGHeuer. In 1999, TAG Group sold TAG Heuer to french luxury goods conglomerate LVMH.
The name TAG Heuer combines an abbreviation for Techniques d'Avant Garde and the surname Heuer.
TAG Heuer is based in La Chaux-de-Fonds, Switzerland and is led by President and CEO Jean-Claude
Biver. Jack Heuer,the great grandson of the founder, is the Honorary Chairman. TAGHeuer maintains a
watchmaking workshop in Cornol, Switzerland and a watchmaking factory in La Chaux-de-Fonds,
Switzerland. The TAG Heuer slogan is "Swiss Avant-Garde Since 1860"
Till now they are on top 5 band list and giving their competitor a tough competition. As the time is
passing they are progressing. Their new innovation and their quality have still attracted their customers.
In this report we have tried to show their little brief history as well as their present status. Also we have
tried to shown their strength, weakness,threat,opportunities with also their organization structure. We
have also show the BCG Matrix of their product and their five competitive forces. Beside all we tried to
give so suggestion for their organization better improvement
5. 5
Introduction
TAG Heuer began as Uhrenmanufaktur Heuer AG, founded in 1860 by Edouard Heuer in St-Imier,
Switzerland. The company was purchased by Techniques d'Avant Garde in 1985, when the Heuer brand
became TAGHeuer. In 1999, TAG Group sold TAG Heuer to French luxury goods
conglomerate LVMH.
TAG Heuer is based in La Chaux-de-Fonds, Switzerland and is led by President and CEO Jean-Claude
Biver. Jack Heuer,the great grandson of the founder, is the Honorary Chairman. TAGHeuer maintains a
watchmaking workshop in Cornol, Switzerland and a watchmaking factory in La Chaux-de-Fonds,
Switzerland. The TAG Heuer slogan is "Swiss Avant-Garde Since 1860".
For more than 150 years, TAG Heuer has faced down every challenge, and then pushed past it. By
defying the time-honored conventions of Swiss watchmaking, it has led it to ever higher levels of
precision and performance.
It makes its own rules, chooses its own path, never quits moving forward, never compromises, never
cracks under pressure.
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TAG Heuer: Time Changes
Key Dates
1860: The first pioneer in TAG Heuer history, Edouard Heuer
1887: Invention of the oscillating pinion
1911: The Time of Trip patent
1916: The first stopwatch accurate to 1/100th of a second
1962: TAGHeuer becomes the first Swiss watchmaker in space
1963: Launch of the TAG Heuer Carrera,the first chronograph specifically designed for professional
drivers.
1971: In the classic race film, Le Mans, Steve McQueen wears a Monaco
1985: TAGHeuer teams up with McLaren
2004: The Monaco V4,the world’s first belt-driven watch.
2012: TAGHeuer wins the Geneva Watchmaking Grand Prix «Aiguille d’Or» with the “Mikrogirder”
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TAG HEUER: A CHRONOLOGY (2000-2014)
2000- Launch of the first ever polished watch with a special alloy of titanimum (Ti5) coming from
McLaren F1 factories: the Kirium Ti5.
2001- Jack Heuerbecomes Honorary Chairman of TAG Heuer.
Crafted for the avant-garde,the TAG Heuer 'Kirium Formula 1' is a feast of technical
achievements
Presentation of the Classics chronograph Monza Calibre 36
2002- TAGHeuer launches the '2002 Sport Vision’
TAG Heuer reinvents the 'Mikrograph', the world's first sports stopwatch
TAG Heuer sponsors Chris Dickson, Peter Holmberg and the Oracle BMW Racing team,the
Americas Cup challenger, during the Louis Vuitton Cup
The What are you made of? campaign becomes a symbol of the brand's prestigious avant-garde
stance and the TAG Heuer spirit
2003- Launch of the 'Monaco Sixty Nine'
TAG Heuer is the Official Timekeeper of the 2003 FIS Alpine Ski World Championships in St
Moritz.
Launch of the 'Mikrotimer': the first Swiss Wrist Timekeeping Instrument
2004- TAGHeuer launches the '2000 Aquaracer',the high-tech and design professional water sports
watch for dress-up or dive-deep.
2005- Laun Launch of the first ever professional golf watchching its Calibre 360, the very first
mechanical wrist chronograph
Diamond Time: an illuminating idea.Imagine a gorgeous bracelet
2006- Produced in a limited edition, the Carrera Calibre 360 Rose Gold wins the Sports Watch prize at
the Geneva Grand Prix d'Horlogerie.
Introduction of the Monaco Calibre 360 LS (Linear Second) Concept Chronograph at Baselworld.
2007- To mark the 20th anniversary of the LINK series
TAG Heuer introduced the new Grand CARRERA
2008- TAGHeuer unveils his new exhibition area,the TAG Heuer 360 museum
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2009- For its 150th anniversary, TAG Heuer brings to commercial reality its boldest breakthrough
innovation
2010- The TAGHeuer Pendulum Concept is the first-ever magnetic oscillator without hairspring
TAG Heuer unveils its new 21st century integrated column-wheel automatic chronograph
2011- TAGHeuer introduces the first ever column wheelintegrated mechanical chronograph
2012- The TAGHeuer Carrera Mikrotimer Flying 1000, the world’s first mechanical wrist chronograph
This new range is dedicated to beautiful and rebellious women and instinctively feels at home on
the wrist of Cameron Diaz
2013- The first high-frequency chronograph moved by magnets
Product
In terms of their all product item they sell
Wrist Watches
1. Novelties
2. Men
3. Women
4. Pairing Watch
5. Boutique Only
6. Haute Horlogerie
Eyewear
1. Optics
2. Sunglasses
3. Experts
Leather Goods
1. Wallets
2. Bets
3. Jackets
4. Bags
Electronics &
Accessories
1. Mobile
2. Cufflinks
3. Bracelets
4. Rings
9. 9
In term of their main product item of TAG Heuer
Organogram of TAG Heuer
Chairman of the Board
Jean-Christophe Babin
Chairman Emeritus
Jack Heuer
Unit Board Member
Patrick Houël
General Manager
Giorgio Sarne
Executive Vice President
Phillippe Champion
President of Lvmh Watch
& Jewellery Southeast Asia
Marcus Stadelmann
Interim Chief Executive
Officer
Jean-Claude Biver
Vice president Sales &
Retail
Patrick Pruniaux
Vice president
Human Resources
Denise Garrigan
Watch collection
1. Tag heuer carrera
2. Aquaracer
3. Tag heuer formula 1
4. Monaco
5. Link
6. Tag heuer grand carrera
Executive Officer
Jean-Marie Combarieu
CEO
Jean- Claude Biver
10. 10
Literature Review
1. What is SWOT? Why SWOT analysis is important, and How it affects strategic
decision making.
A SWOT analysis is an integral part of a company's strategic planning process because it
provides a good all-around view of the company's current and forward-looking situation. The
strengths (S) and weaknesses (W) sections provide a look at the company's current position. The
opportunities (O) and threats (T) sections help the company project possibilities and challenges
going forward. Each of these four sections has specific advantages to the overall analysis.
Strengths
The strengths section allows the company to consider its competitive advantages in the
marketplace. These advantages are typically a focal point of the company's operation and
strategic planning. They also often coincide with the way the company markets.
Weaknesses
Generally, companies have two approaches to dealing with weaknesses. They can either seek to
improve them if those weaknesses restrict the company from implementing its strategies to
achieve objectives. Or, they realize that their weaknesses are simply a part of the overall business
approach and company leaders try to downplay those weaknesses in marketing their brand.
Opportunities
The opportunities section is critical to development of company strategies as it helps the
company identify ways to improve and grow. Constantly reviewing market opportunities helps
companies take advantage of emerging markets or changes in the marketplace that the company
has strengths to match
Threats
Again, analyzing threats to your business is not a fun part of a SWOT analysis, but it helps the
company insulate itself as well as possible from external threats. By assessing these risks and
11. 11
challenges, company leaders can better prepare them or decide how to respond from a strategic
standpoint.
2. What is BCG Matrix?
“A company should have a portfolio of products with different growth rates and different
market shares. The portfolio composition is a function of the balance between cash flows.…
Margins and cash generated are a function of market share.”
—Bruce Henderson,
“The Product Portfolio,” 1970
Within the diagram, "stars" go in the upper-left quadrant, and "question marks" are put in the
upper-right square. At the bottom, "cash cows" go on the left, and "dogs" are placed on the right.
The diagram visually shows that stars have high market share and a high growth rate, while
question marks have low market share and a high growth rate. On the bottom, cash cows have a
low growth rate but a high market share, and dogs have a low market share and a low growth
rate.
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Cash cow- It is a product with high market share in a low or no growth industry. This product is
preferred by consumers, as shown by its high market share, and not very interesting to new
entrants due to the flat sales in the industry.
Dog- It is a product with low market share in a flat industry. With the lack of growth in the
industry, the only way to improve sales is to entice customers away from other competitors, and
due to its non-preferred status, that will likely only occur with heavy marketing and price
discounting.
Question- It is a product with low market share in a growing industry. This product needs to be
carefully evaluated to determine if the marketing needed to entice consumers to purchase it will
result in profits.
Star- It is a product with high market share in a growing industry. This product has a high
potential to make money in the near future due to its preferred position and the upcoming growth
in sales as the industry expands.
3. Explain Porter’s competitive five forces model. Analysis your chosen company’s
competitive environment.
The Porter's Five Forces tool is a simple but powerful tool for understanding where power
lies in a business situation. This is useful, because it helps you understand both the strength of
your current competitive position, and the strength of a position you're considering moving into.
Five Forces Analysis assumes that there are five important forces that determine competitive
power in a business situation. These are:
1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is
driven by the number of suppliers of each key input, the uniqueness of their product or
service, their strength and control over you, the cost of switching from one to another, and so
on.
2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down. Again,
this is driven by the number of buyers, the importance of each individual buyer to your
business, the cost to them of switching from your products and services to those of someone
else, and so on.
3. Competitive Rivalry: If you have many competitors, and they offer equally attractive
products and services, then you'll most likely have little power in the situation, because
suppliers and buyers will go elsewhere if they don't get a good deal from you.
4. Threat of Substitution: This is affected by the ability of your customers to find a different
way of doing what you do.
5. Threat of New Entry: Power is also affected by the ability of people to enter your market. If
it costs little in time or money to enter your market and compete effectively, if there are few
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economies of scale in place, or if you have little protection for your key technologies, then
new competitors can quickly enter your market and weaken your position.
In every business there are competitors; monopoly market is rare cause with now day’s people
always come out with some twist with the old concept. Same as our company ‘TAG Heuer’ they
have their competitors which are
Rolex
Patek philippe
Omega
IWC Schaffhausen
4. What is Organizational Structure?
Organizations are set up in specific ways to accomplishdifferent goals, and the structure
of an organizationcan help or hinder its progress toward accomplishingthese goals.
Organizations large and small can achieve higher sales and other profit byproperlymatching
their needs with the structure theyuse to operate. There are three main types of
organizational structure: functional, divisional and matrix structure
Functional Structure: Functional structureis set upso that each portionof the organization
is grouped accordingto its purpose.
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Divisional Structure: Divisional structure typicallyis usedin larger companies that operate
in a wide geographic areaor that have separate smaller organizations within the umbrella
group to cover different types of products or market areas.
Matrix: The thirdmain type of organizational structure, calledthe matrixstructure, is a
hybrid of divisional and functional structure. Typicallyused in large multinational
companies, the matrix structure allows for the benefits of functional and divisional structures
to exist in one organization.
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Finding analysis
SWOT analysis of TAG Heuer
Strength
High profitability and revenue
Established brand around the world, high international brand
awareness
High brand recall as the official timekeeper of World class sporting
events like the Olympics, Formula One etc
Member of the FHH – the most exclusive club in the Swiss watch-
making Industry
High brand loyalty and brand equity
Brand Ambassadors: Tag Heuer engaged major celebrities like Tiger
Woods (golfer), Leonardo Dicaprio (Actor), Maria Sharapova (Tenis
Player), and Lewis Hamilton (Formula One Racer) as Brand
ambassadors for its products.
Customer service
Weakness
Brand portfolio
Cost structure
High loan rates are possible
Productivity
Heavy brand clutter in the sports and entertainment areas in not just
watches but across the Lifestyle and retail sector reduces the
differentiating factor
Competition from luxury brands means limited market share growth
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Threats
Government regulations
Increasing rates of interest
Rising cost of raw materials
Tax changes
Technological problems
Price changes
Substitute product
Mature market
Threat from cheap and fake imitations
Indian consumers display the double aspect of a strong luxury
culture and a strong sensitivity to prices.
Opportunity
Fragment market
New technology
Innovation
growing economy
High growth in the luxury watches segment in emerging economies
High-End watches are the first luxury pieces that a consumer buys
giving a window of opportunity for the brand to establish itself as
the first luxury piece aspired by a consumer
17. 17
BCG Matrix of Tag Heuer
Cash cow: Carrera Calibre 1887 is cash cow product of TAG Heuer because its growth rate is
slow, but its market share is high.
Question Mark: In question mark we have aquaracer 300m. Question mark product is a mystery
product for a business because that product can get high profit or low which a business cannot
guess.
Star: Star product is company most famous product which is loved by their consumer. In this
product we have Formula 1 Chronograph which is TAG Heuer all time famous product.
Dogs: These are the products which don’t get profit for the company. In this category we have
Link 40mm which is TAG Heuer dogs product.
Formula 1
Chronograph
Aquaracer 300m
Carrera
Calibre 1887
Link
40mm
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Porters five competitive forces model of Tag Heuer
Threats for New Entrants:
New entrants threat is always there for a business but in Tag heuer business its threat is
minimum because any new business can entry in this market but the quality and the famously of
TAG Heuer is high enough to get better response. Also in time new entrant get to the position of
TAG Heuer they would innovate more to attract their consumer.
Threat of Substitutes Products:
TAG Heuer is mainly famous for their wrist-watch. So substitute for their product is very limited
like pocket-watch, mobile etc. So it is not that much of a worry for TAG Heuer cause as much
trend change wrist-watch is always have their appearance in all type of people.
Bargaining Power of Buyers:
As TAG Heuer main business is wrist-watch but they also have other product, so in that case the
bargaining power of the buyer is low to moderate at best.
Bargaining power of supplier:
As TAG Heuer have different product. Some countries such as China, USA, Italy, Argentina etc
control a large segment of supply. So for raw material of their different product they need to get
from other export countries. Such countries can manipulate the price of the raw materials.
Current rivalry:
There is much intense competitor in this business. Many famous brands are already there to give
them a tough competition. As come from the CEO himself of TAG Heuer, his said Apple watch
is a great threat for them.
TAG Heuer Marketing Strategy
Business level strategy:
TAG Heuer uses all the latest technology not only for manufactory but also to reach their customer.
Which cover their cost leadership and differentiation strategy which helps them to stay put with
their other competitor. TSG Heuer mainly targeted for sports player and glamorous people so they also
have their focused consumer.
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Corporate Level Strategy:
TAG Heuer used unrelated diversification strategy in their business, as their main business is
manufacturing wrist-watch they also have other item such as Eyewear,Leather goods, Electronics &
Accessories which not related to each other. In an interview CEO of TAG Heuer said ‘Contrary to other
Swiss Watch brands, TAG Heuer has never been very much dependent on the Chinese market. That’s the
reason why the Chinese slowdown has not had any important impact on our sales’.
ORGANIZATIONAL STRUCTURE IN TAG HEUER
TAG Heuer organizing structure is maintained very properly. They have the entire department divided
according to their work. All are specialized in their work. By decentralization their work is resolve.
TAG Heuer has paid numerous notable celebrities to endorse its products, including: Ayrton
Senna, Kevin Richardson, Cristiano Ronaldo, Jessica Michibata, Tiger Woods, Leonardo DiCaprio, Brad
Pitt, Chen Daoming, G.E.M. Tang, Jeff Gordon, Maria Sharapova, Jeremy Lin, Juan Pablo
Montoya, Kimi Räikkönen, Uma Thurman, Fernando Alonso, Lewis Hamilton, Therese Johaug, Shah
Rukh Khan, Priyanka Chopra,Cameron Diaz, Steve McQueen and Walter White. They are also thinking
of takeing new face to capture more attention of consumer.
Jean-Claude Biver the CEO of TAG Heuer said in a interview ‘We will follow and pursue this politic and
positioning of the brand. We will try to attract even more than before the young generation and young
customers.’ by this he already let everyone know that they are planning on young tend which is their new
stratergy.
The upscale watch market in Hong Kong is in a growth period, so now is an ideal time for establishing a
clear positioning. After successfully establish a clear positioning, TAG Heuer will enter the China market.
Upon successfully building the Hong Kong market and entering the China market, TAG Heuer will
realize its initial investment and allocation of resources to the maximum potential.
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Recommendations
Organizational Strengths to Environmental Opportunities
TAG Heuer is very old organizations they have rule their market since 1860. From that time they have
give the market many different option with their innovation of wrist-watch. Their journey begins from
pocket watch to wrist watch. With their different innovative idea and marketing strategy they are still one
of the top five wrist-watch brand. They are giving their competitor a tough competition but they are also
surviving from their competition. They are also developing their technology by the time to reach their
consumer.
Corrections and Protection ofWeaknesses & Threats
The biggest weakness of TAGHeuer is their focus market of sport man & celebrities. They need to
expand their focus of reaching people globally of all type. Also they need to work on their innovation to
compete their other competitor such as Rolex, Omega. They need to decrease their price so that other
people can get also they need to market their product globally.
Strategies
The strategy that can improve TAG Heuer revenue can be:
Expand their market more globally
Change their focus market
Increase their productivity
More online marketing
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Conclusion
Since 1860 till now TAG Heuer is going strong, from pocket watch to wrist-watch they are
always innovating new trend. They have accept and worked through all the challenges in the
market and still they are in top5 list. Their continuous new face to market for their advertisement
has also helped them a lot. Their ambassadors are through around the world actors, tennis player,
sports man, racer, and surfer many famous faces which attract their customer. They have sponsor
different races, surfing completion for their marketing. They also they win many award which is
their achievement of their work. As the time pass the market is getter tougher to survive so they
need to focus on solving their weakness and watch out for all the threats in future. There is no
perfection; there is always a room for improvement so they need to work on it. Their innovation
should be more convincing and powerful to reach the spot light of market.