Gronefeld is one of the most extraordinary and interesting representatives of the timepiece industry. Even though Gronefeld is a part of the strategic timepieces group that consists of such huge luxury organizations like Rolex, Swatch Group, and Richemont, all these companies can hardly be called as competitors (Hill and Jones 56) because the quality of production and even the ways watches are created and sold differ considerably. In 2015, the industry structure remains to be relatively stable. The profitability of the chosen industry depends on four main factors (Hargroves and Smith 104): the threats of substitutes (electronic gadgets) or new entrants (new watchmakers with unique approaches to their customers) and the bargaining power of suppliers (price rise or delivery failures) or customers (quality improvement and service variety).
In the case study under analysis, the successful economic performance of Gronefeld may be explained by two approaches chosen by its developers. First, the company chooses an unusual approach to communication with customers. Second, Gronefeld does not try to be a huge organization: it is enough to hire a team of 12 people (Ellery par. 7). Besides, more concepts can be evaluated to explain the success of Gronefeld and understand the demand this company has today. For example, the internal resources and capabilities of the company such as the possibility to observe the details of watchmaking (tangible resources), the delivery methods, and even the financial aspects that make it possible for the company’s representatives to delivery timepieces individually and organize a dinner or small event for a customer (Ellery par. 4). Though the company can hire a lot of people and promote a huge production, the brothers (the owners of the company) do not find it necessary. It is enough to hire 10-12 people and be sure they are dedicated, skilled, and passionate with everything they have to be involved in (Davies par. 16).
The VRIO framework is another chance to explain the success of the company: the value of the company, as well as its rarity and the abilities to organize and imitate, is defined by the decisions of the developers to introduce their products. The brothers do not find it necessary to spend huge money on marketing and advertising. They neither make impressive announcements nor offer discounts. Their success is their attention to the traditions. It even seems that the company does not care about its competitors or even customers. What they want to underline is the worth of their products, timepieces. Even a dinner that is offered to a customer may be symbolic as a chance to understand who actually owns a watch.
Using the information offered by the case study, it is hard to understand the peculiarities of economic value creation because it is only possible to find out that the price of one product is about $188,000. The price is impressive indeed. Still, it is necessary to consider that the quality of services and the worth of the product can be priceless for true judges of the timepieces industry.
As for the working details and the relations between the employees, Gronefeld may become one of the best examples of how the partnership can be important. Gronefeld is not only a company developed by two brothers. It is a team of people, who love their work and appreciate their abilities to create luxury for people.
In fact, the effects of the watch industry and Gronefeld, as a separate company, differ a lot. On the one hand, the industry presupposes the necessity to compete and introduce more diverse products to be interesting to customers. The company under analysis does not care about the level of their competitiveness but focuses on the creation of a powerful and interesting mechanism that can understand the true worth of the chosen art. On the other hand, the industry and the company take care of customers and try to put their importance first. However, the industry tries to consider the customers’ demands and expectations, and the company makes everything possible to amaze its consumers and prove the correctness of their choices using unique additional services offered.
The positioning of Gronefeld is quite stable. The five generic business strategies focus on the necessity to promote low costs and high-quality products. The company does not set low prices. Therefore, it is possible to admit that a focused strategy based on differentiation according to which a narrow buyer segment is offered regarding customers’ tastes is the best explanation of how the company works (Thompson, Peteraf, Gamble and Strickland 135).
With a properly chosen business strategy, Gronefeld has all the chances to enter a foreign market successfully. Still, it is very important to pay attention to such economic factors as per capita income or political stability in a country (Bradley 226). There are many countries the citizens of which can hardly comprehend the politics offered by Gronefeld. Still, it is possible to find five, or even more, European countries and several countries from different continents to offer Gronefeld’s production.
In general, the main strength of the company is its delivery methods, and the weakness is poor partnerships with suppliers or retailers. Its opportunity is customer’s global increase, and the threat is the presence of strong brand names like Rolex or Rado.
Works Cited
Bradley, Frank. International Marketing Strategy. New York, NY: Pearson Education, 2005. Print.
Davies, Angus. “Visiting Gronefeld, the Horological Brothers.” Escapement. 2015. Web.
Ellery, Ian. “The Watchmaker that Hand Delivers Its Timepieces around the World.” BBC . 2015. Web.
Hargroves, Karlson and Michael H. Smith. The Natural Advantage of Nations: Business Opportunities, Innovation and Governance in the 21st Century. Sterling, VA: Earthscan, 2013. Print.
Hill, Charles and Gareth Jones. Strategic Management Theory: An Integrated Approach. Mason, OH: South-Western Cengage Learning, 2008. Print.
Thompson, Arthur, Peteraf, Margaret, Gamble John, and AJ Strichland. Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. New York, NY: McGraw Hill Education, 2013. Print.