SWOT-Analysis
Cartier is one of the most famous luxury watch and jewelry companies. However, like any company, Cartier has some strengths, weaknesses, opportunities, and threats to its development. Recognition and reputation of the brand, the presence of shops in luxury hotels, and representation in many countries, as well as the connection with the royal families of Europe, are the strengths of Cartier. The first feature allows the company to retain and attract customers only because of the trend and quality of the product.
The second feature demonstrates the thoughtfulness of marketing strategy since expensive hotels are places for gathering the target audience. The prevalence in different countries of the world allows the company to reach more buyers, and the fact that the royal families wear Cartier jewelry gives the company exclusivity and attracts customers (Paton, 2019). In this way, Cartier deserves its reputation and customer loyalty.
However, the weaknesses are the high level of competition in the segment and the relatively small number of buyers. The first aspect manifests itself in the fact that Cartier’s competitors are luxury brands that produce not only jewelry but also watches. Consequently, the company has many competitors such as Tissot, Tiffany & Co., Rollex, and Swarovski Crystal. At the same time, luxury goods have a limited number of buyers due to their high cost. Consequently, Cartier needs to fight for customers and win their loyalty.
However, Cartier can take advantage of opportunities such as expanding the variety of products and using new trends. Rosenbaum and Caminiti (2020) note that the demand for jewelry even increased during the pandemic, allowing Cartier to introduce new products to its customers and diversify its assortment. The company can also expand its online presence by focusing on online stores, which are more in demand during the pandemic. The latter feature is also part of the threat Cartier faces as competition among luxury brands increases online. Firstly, Amazon announced the opening of a niche of luxury items, and sites for the reselling of such goods, for example, The RealReal, Poshmark, or ThredUp, also became popular (Rosenbaum & Caminiti, 2020). Consequently, although Cartier products are bought mainly to show the status of a person, the threat of increased competition is real.
The BCG Matrix
Analysis of a company’s products is an essential part of strategic planning as it saves money by avoiding the production of unprofitable products. The BCG matrix is ​​a tool for this purpose because it subtly divides products into profitable and non-worthy investments, precisely, categories of dog, question marks, stars, and cash cows (Bilton, 2017). In Cartier’s case, the cash cows, or the goods that bring in the most profits and have the most extensive parts in the market, are watches; for example, in 2018, they took 37% of sales (Paton, 2019).
The category of stars includes jewels, for example, the famous Tutti Frutti line, as they are also in demand and famous in the market, although they have a smaller share (Paton, 2019). Simultaneously, the demand for these goods before and after the pandemic did not decrease, so their status has not changed. These products require investment for their development and market leadership; however, they have a significant investment return.
At the same time, the goods from the category of question marks are scarves, belts, and Cartier bags. As noted by Rosenbaum and Caminiti (2020), the demand for luxury clothing has dropped significantly and requires a long recovery, which reduces the profitability of production for the company. In addition, Cartier is famous primarily for watches and jewelry, so before and after the pandemic, it cannot compete in this segment with such brands as Hermes or Gucci. The category of dogs, or low-profit products, in this case, can include such lighters and money clips, since they have less value than other goods; however, they should not be removed because Cartier’s reputation provides them with sales and their cost give the company’s profit. Thus, the main focus of Cartier should be watches and jewelry, which bring the company’s success before the pandemic and at the moment due to high demand.
The Ansoff Matrix
The growth and development strategies of any company must be thoughtfully assessed to gain profit from them. The Ansoff Matrix is ​​an approach for defining a development strategy that offers four options depending on the external and internal factors of the company (Bilton, 2017). The most relevant development strategy for Cartier at the current time is product development since it has low risks during the pandemic of Covid-19.
Risk assessments, consideration of the company’s strengths and weaknesses, and options of the Ansoff Matrix demonstrate that the strategies of market development and diversification are inappropriate for Cartier. Firstly, at the moment, Cartier has over 300 boutiques in hundreds of world countries and successfully conducts its activities there, which is a significant scale (Paton, 2019). In the pre-pandemic period, entering new markets in developing countries could be successful, although this option carries certain risks.
However, after the lockdown, most of the world’s economies suffer losses that affect consumers’ ability to buy. Since the pandemic is still an urgent problem, and, possibly, the next months will become even more critical for the world, expansion into new markets is too risky a prospect. For the same reason, diversification is also a failure as it is even more dangerous due to introducing new products.
However, the demand for luxury jewelry and watches is still high. This fact allows the company to create new products for its loyal customers and attract new ones. The market penetration strategy will also be partially implemented since the launch of new products is impossible without marketing and increasing brand popularity. However, since Cartier already has a high reputation and respect, this strategy should expand the company’s Internet presence, and it is less relevant than product development. Thus, Cartier will be able to develop its brand and resist its competitors by implementing a product development strategy.
Strategy for Post-Pandemic Era
SWOT analysis, product, and market research of Cartier have demonstrated that the most successful strategies for its development in the post-pandemic era are product development and online sales. The first feature is relevant because during the pandemic, the demand for goods that bring Cartier the greatest profit did not fall but even increased, which demonstrates the possibilities for its development. Simultaneously, the pandemic’s consequences on world economies show high risks for the company’s expansion to other markets. Therefore, creating new jewelry and watches is the safest and most profitable development option during and after the pandemic.
Moreover, the pandemic has played a significant role in the growth of e-commerce and online sales, which also creates opportunities and a need for Cartier’s development. According to Achille and Zipser (2020), digitalization and digital engagement are among the most critical changes for luxury companies in sales, marketing, and supply. This aspect is vital due to the decline in shopping tourism and the difficulty of crossing borders, as well as recommendations for avoiding public places during a pandemic. Consequently, despite Cartier’s presence on the Internet, its strengthening is helping to grow the company. Therefore, such strategies of Cartier’s development ensure the loyalty of its clients, which is crucial in the luxury products segment, and prepare the company for global opportunities after recovering the world from the effects of the pandemic.
References
Achille, A., & Zipser, D. (2020). A perspective for the luxury-goods industry during — and after — coronavirus. McKinsey & Company. Web.
Bilton, C. (2017). The disappearing product: Marketing and markets in the creative industries. Edward Elgar.
Paton, E. (2019). Taking stock at Cartier. The New York Times. Web.
Rosenbaum, E., & Caminiti, S. (2020). Coronavirus and luxury retail: Shopping for used Hermes, Cartier in Covid era. CNBC. Web.
Cartier. (n.d.). Web.