Rolex Group After the COVID-19 Pandemic Impact

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Introduction

Rolex Group is a Switzerland-based company that manufactures wristwatches recognized worldwide as durable, accurate, and expensive. Most of its products are usually imitated due to their high quality and demand. It is a luxury goods company founded in 1905 by Hans Wilsdorf, who made the wristwatch a widespread luxury good. Rolex was the first wristwatch that was both dust- and waterproof to be created in the industry. The company manufactures both women’s and men’s watches, including pocket watches, stopwatches, and clocks. Its leading brands include Day-Date, Explorer, GMT Master II, Yacht-Master, Submariner, and Milgaus. Its other brands include Rolex stainless, silver, and bronze watches which can be bought with diamonds and other precious stones (Rolex, 2022). However, the company only sells its products through its authorized dealers.

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During the Covid-19 pandemic, the company has faced rapid losses due to reduced sales volumes caused by a contracting economic recession triggered by shutdowns. The pandemic was known to have led to the near-collapse of globalization, the demise of the retail sector, and disruptive changes to the business environment. Like any other company, Rolex Group was heavily affected by the pandemic that led to the shutdown of many of its plants in Europe for a specified period. The company was also forced to reduce the prices of its goods by as much as 50% to improve its sales volumes which were experiencing a rapid decrease due to the pandemic. Moreover, the organization was also forced to reduce the working hours of most of its staff to reduce its losses. Rolex Group watch exports experienced a massive fall during the pandemic, with shipments to major markets such as Hong Kong and China slumping by over 50%. However, the company is engaged in an initiative to inject additional capital to fund research, sales networks, production capacities, and the introduction of new products (Ryan, 2021). Therefore, the company needs to adopt short-term and long-term survival strategies further to develop its business in the face of pandemics.

Solutions

The adverse effects caused by the pandemic can be mitigated if the company adopts effective measures. The first significant intervention measure that the firm can adopt is by reorganizing and restructuring the organization to adapt to the situation at hand. The company should maintain a strict regime by isolating and rostering its staff to reduce costs. In this manner, it can make good use of its human resources by an alternate shift system that continuously encourages customer service and the delivery of after-sales services. Such a system will help focus on aesthetics and design and not on pricing. Most clients in the luxury industry are more concerned with quality than pricing. A close engagement with clients at a deeper level will help increase sales volumes because most of them are bound to become good brand ambassadors. Personalization of services will help improve brand awareness, consequently improving sales volumes.

The second strategy that the company can adapt further to develop its business in the face of the pandemic is the introduction of new luxury products in the market. The pandemic brought new demands that the company can leverage to increase its profitability and further develop its business. The luxury watch industry can engage in more research to innovate new products that the health industry can use in attending to its patients. Rolex Group should invest more funds for research to innovate new watches that deal with luxury goods and touch on other spheres of life, such as health, physical training, and exercise. Such an initiative will help increase the range of products that the company can offer, which will consequently help to improve its sales volumes. The introduction of new products should be coupled with an effective advertising strategy relevant to the pandemic situation. Such strategies might include social media, trade shows, and online sites to reach a large number of potential consumers. The adoption of such a strategy aims to bring normality back to the lives of existing and prospective customers.

Thirdly, the company can respond to the losses occasioned by the pandemic by engaging in gestures of support for communities in need and health care workers. Among the most important efforts that the company can engage in include transforming its facilities into factories for producing equipment such as PPEs to hospitals. Additionally, Rolex Group can also help victims of the pandemic by donating funds to research institutions such as the Centre for Disease Control Foundation to support health workers to cope with the effects of the pandemic. The firm can also support organizations such as the World Health Organization and the Red Cross, introducing a Covid-19 Solidarity Response Fund. Such initiatives and donations are essential in improving the company’s brand and how people view it (Gomelsky, 2020). The philanthropic activities by the company will improve its profile among customers, which will help enhance its sales volumes and profitability. The good feeling of the brand by people will help the company recover from the impact of the pandemic and enhance the development of its business.

Finally, Rolex Group can engage in effective retail tactics, which will help leverage the consumers’ psychology rather than the use of technology. It is a fact that the luxury watch industry has been experiencing more demand than supply. Therefore, it calls for the company to continue with their traditional product lines because they are bound to have enough clients, and their business will remain unaffected by the pandemic. This strategy is based on the assumption that the pandemic will not significantly affect the luxury watch industry in a significant manner. Moreover, the luxury watch industry is not seasonal and, therefore, still viable irrespective of the pandemic. However, to maintain its central functions, the company needs to reduce its business activities while at the same time cutting its variable costs. It should take advantage of the customer psychology by maintaining its traditional trading practices.

Summary

Rolex Group is a Swedish luxury watch-making company whose business was adversely affected by the impact of the Covid-19 pandemic. The pandemic forced the company to shut down most of its plants in Europe, including reducing its staffing capacity and reducing sales volumes. However, the company can use effective strategies that can help it further the development of its business and reduce the effects of the pandemic. The firm can do this by having a deeper engagement with its clients, investing more funds in research to develop new innovative products, improving its brand image by engaging in community service, and maintaining its traditional business practice. All these interventions can go a long way in helping the company improve its business and stay afloat in the pandemic era.

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References

Gomelsky, V. (2020). Swiss Watches Amid the Crisis. New York Times. Web.

Rolex. (2022). History and Watch Making. Web.

Ryan, C. (2021). Luxury Watches Are Badly Set for Investors. Wall Street Journal. Web.

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BusinessEssay. (2022, November 22). Rolex Group After the COVID-19 Pandemic Impact. Retrieved from https://business-essay.com/rolex-group-after-the-covid-19-pandemic-impact/

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BusinessEssay. (2022, November 22). Rolex Group After the COVID-19 Pandemic Impact. https://business-essay.com/rolex-group-after-the-covid-19-pandemic-impact/

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"Rolex Group After the COVID-19 Pandemic Impact." BusinessEssay, 22 Nov. 2022, business-essay.com/rolex-group-after-the-covid-19-pandemic-impact/.

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BusinessEssay. (2022) 'Rolex Group After the COVID-19 Pandemic Impact'. 22 November.

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BusinessEssay. 2022. "Rolex Group After the COVID-19 Pandemic Impact." November 22, 2022. https://business-essay.com/rolex-group-after-the-covid-19-pandemic-impact/.

1. BusinessEssay. "Rolex Group After the COVID-19 Pandemic Impact." November 22, 2022. https://business-essay.com/rolex-group-after-the-covid-19-pandemic-impact/.


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BusinessEssay. "Rolex Group After the COVID-19 Pandemic Impact." November 22, 2022. https://business-essay.com/rolex-group-after-the-covid-19-pandemic-impact/.