Brand Battles of the Luxury Watch Industry

One of the trends impacting the Luxury Watch Industry is the narrowing gap between ROLEX and OMEGA. Let us make a brief comparative analysis of their basic brand strategy to see why these two industry leaders are alternately gaining ground in the market and on each other

Conservatism and tradition are the credos of ROLEX strategy: same product and same communication in the last decades. The strategy of OMEGA, on the other hand, is relevance and innovation. ROLEX’s unique communication strategy and differentiation enabled the company to gain a sustainable competitive advantage over the years. However, OMEGA’s involvement in the Olympic Games, forwarding their sporting spirit as well as their contributions to technological and engineering innovations in watchmaking, have made them the popular choice among timekeeping and sports aficionados.

ROLEX also maintains a part of mystery around its brand in order to cultivate the legend. OMEGA advocates social responsibility by supporting the GoodPlanet Foundation, thus gaining popular public appeal. ROLEX has been considered a long time as a male watch and are attempting to break into the female market. OMEGA is competitive in both markets; securing its “Ladymatic” brand for the female market.

Another theme of ROLEX’s strategy is the backward vertical integration in order to secure future supply and definitely loose dependence on competitor groups. This strategy is the process by which a firm takes ownership or increased control of its supply systems. It serves to streamline the organization, to provide better cost-controls, and to eliminate the middleman. Because of efficiency and lowered costs of production it is possible for the firm to become more competitive in the marketplace.

OMEGA’s strategic theme is the horizontal integration as manifested in its being a subsidiary of the Swatch Group.  It is a strategy that seeks to sell a type of product in numerous markets. Horizontal integration occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm, e.g. a car manufacturer merging with another car manufacturer. In this case both the companies are in the same stage of production and also in the same industry. The goal of horizontal integration is to consolidate like companies and monopolize an industry.