This chapter will heavily rely on this theory in order to make an analysis of the Swiss luxury watch industry. The choice of Porter's model is particularly pertinent for the Swiss luxury watchmaking industry because it enables to specify conceptually the nature of the competition with the replica watches amount of information available, which makes this methodology very flexible. In fact, one of the most important difficulties in the studied industry is related to the gathering of information: companies are still very secretive and not transparent, especially regarding financial information. On one hand, many companies are still family owned and do not have to publish information. On the other hand, the big groups publish consolidated figures and it is difficult to assess the contribution of each brand to the results. What is more, there are very few academic studies available on the Swiss luxury watchmaking industry. The main disadvantage of the method is that the government's power is not taken into account. Nevertheless, it is does not penalize this study but could be an important limitation for industries that are heavily regulated.
The paragraphs 3.1 to 3.5 will analyze each of the Replica Panerai watches five forces in the luxury watchmaking industry. Threat of new entrants The first force that is examined is the threat of new entrants. In fact, not only incumbent competitors represent a thread but potential new entrants are also a threat for actual players on a market. The presence of profits in an industry will attract new firms willing to take advantage of these profits. Over time, too many new entrants will drive down these profits, decreasing at the same time the attractiveness of the industry. The presence of various barriers to entry can minimize this threat. The Replica Jacob & Co watches world of luxury watchmaking possesses numerous barriers that cannot be overcome very easily. The main barriers have been identified as the need of important financial capabilities, the difficulty to build a brand capital and finally the complicatedness to be distributed in top retail stores. Each of these barriers is thoroughly explained thereafter.
Capital requirement In order to be considered as luxury, a watch needs a brand that is recognized and considered by everybody as belonging to the world of luxury. Therefore, a new brand entering the market is compelled to invest in huge advertising campaigns in order to get fame and identification from the public. What is more, at first, a campaign to penetrate the luxury market should target a very large audience: an object possesses the Replica Seiko watches title of exceptional and luxury only if everybody knows the brand and accepts it as a luxury object. Finally, recognition can also be a guarantee for quality. In fact, very few people would pay thousands of francs for an unknown brand. The dramatic and particularly dangerous point is that those costs are unrecoverable. If a new entrant fails in its attempt to conquer the market, he will face an unrecoverable loss. Brand recognition This barrier is tightly tied to the first one ¼ basically it is where the money goes.
Luxury watchmaking relies heavily on differentiation strategies which require lots of investments in advertising and public relation (PR) events. Objectively, the Replica Corum watches product is, from a design point of view, very similar from one brand to another even though most companies claim their product is unique. It would be more correct to say that the brand and its communication bring life to the product, give it its identity and maybe has the potential to make it unique. "A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated, a successful brand is timeless." (Stephen King from WPP Group).
A good statement of this evolution is Mr. Nicolas Hayek mentioning "We are selling emotion". It is no longer an utilitarian product that shows the time but a piece of time that incarnates a lifestyle. Therefore, the brand is an inestimable intangible asset in this industry; it is very costly and it takes time to be established. Marketing and communication is undoubtedly the main differentiator between brands, while the role of design as a differentiator is gradually losing its importance. Every year, new trends are launched, like colorful straps, huge cases, diamonds married to diving watch,cartier love bangle gold replica, etc, and never cancel each other out. What is more, the unisex trend, born in the fashion world, has been slowly imported in the watchmaking territory. Male and female products are less and less differentiated. Chanel incarnates this idea perfectly with the Replica Tissot watches launch in spring 2000 of their black J12 and later,cartier love bangle bracelet, in spring 2003 of the white J12, a unisex watch. This move is a clear proof of a strong evolution, because it is accomplished by a brand that has always represented feminine elegance.
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