Introduction
Preliminarily, the market plan outlined below is for a Skagen Designs, a renowned international design company that is based at Reno, Nevada in the U.S. and specializes in the making of quality and affordable watches, jewelry, sunglasses, clocks and other related products.
Having been humbly founded in 1989 by Henrik and Charlotte Jorst, the company has been able to grow from a small wrist watch shop to a revered multinational company with an international reach and huge profits being realized by the founders.1
Even more importantly, Reno, Nevada has been able to provide a good avenue for Skagen design’s products in terms of its rich history, vibrant trade and economic industry, unique geographical set-up, shifty—but amiable—weather patterns and above all; a well established system of governance that ensures a positive economic progress.
It is these reasons—amongst many others that will be expressively stated later—that the Skagen designs was established in this locale. However, in spite of their unmatched success in the watch-business; there has been an increasingly growing need for expansion based on the fact that they have outgrown their current market jurisdiction as well as the need to set up more branches and become a global outfit.
The fundamental purpose of this marketing plan is, therefore, to help getting investor funds that can be used in spreading the market tentacles of Skagen designs while intermittently laying down a simple, yet exhaustive, plan that can be used in these expansion efforts. For the purposes of this paper, this marketing plan is intended for branching out to South Africa.
Executive Summary
Before making a marketing plan for an organization; it is extremely important that we begin by assessing the current nature of operations, their nature of profitability and the challenges being faced. It is only by having knowledge of such that we will be able to construct a circumspect plan able to deal with past, present and future prospects of the organization.2
Therefore, in the bid to make a fitting plan, there are several marketing dynamics at Skagen designs that need to be assessed. Such factors include productivity, profits, growth, turnover, stability and cohesion.
These measures of effectiveness may vary depending on the company, its mission, environmental context, nature of work, type of product or service and customer demands. It is based on the above viewpoints, among many other issues that this Marketing plan for Skagen designs is proposed.
Company Description (Overview of the Company)
23 years ago when Charlotte and Henrik Jorst made the bold decision of venturing into the unchartered waters of the watch-selling-business, no one would have guessed that the company, which was started in an apartment in New York, would grow to the highly esteemed international design company it is today.
However, after starting the business on a rocky foundation of selling relatively expensive watches, Charlotte and Henrik made a milestone move in 1990 when they found a manufacturer who could design their custom-made watches at a lower price than their previous manufacturer.
By 1992, Charlotte and Henrik had already designed over 30 different models of watches named Skagen Denmark and towards the end of that year; these two entrepreneurs (through a couple of marketers and advertisements) had sold everything they had made and realized a turnover of $800, 000 just from the comfort of the apartment in New York.
Based on the almost-zero tax rate of businesses in Nevada, the couple, Charlotte and Henrik Jorst, decided to move there and continue with their watch business in1993 which was, at this time, gaining more and more reputation.
After another milestone break in 1995 when the couple took their designs for trials and sold everything, all that followed was the periodic change of offices from big to bigger apartments with their sales also growing steadily. This, probably is the reason in 1998 and 1999, the company was named by the Inc. Magazine as one of the 250 fastest growing private companies in America.3
As of 2000, the company began to Branch out in countries like Netherlands and Germany and by 2003, it had expanded greatly, having its outlets in Ukraine, Kuwait, Italy, France, Finland, Norway, Iceland, Belgium and the UAE, just to mention a few.
Currently, the company deservedly enjoys huge success while operating as a subsidiary of Fossil, Inc. which completed making an acquisition of Skagen designs on 12th April 2012 at $231, 7 million.4 In spite of witnessing immense progress, the company still faces stiff competition from many other companies. In addition, the company needs to continue branching out since it has already exhausted the potentials of its current branches.
This, therefore, calls for progress and establishment of a marketing plan that will be able to see them through their plans. It is with this in mind that the plan below, which is targeted for South Africa, is formulated.
In doing so, principal focus is going to be on analyzing goals, aims, objectives of the marketing plan, strategic actions of the plan, situational analysis, risk analysis, feasibility study of the plan, budgetary estimate, stakeholder analysis and potential benefits among many other macroeconomic facets.
It is only by viably assessing these salient facets that the marketing plan will be able to lay down a concrete foundation on which future implementations can be made by Skagen designs.
Strategic Focus and Plan
Vision
Skagen designs has the vision of being an influential force in the world of watches, jewelry and other related products—especially with regards to reaching its uniquely designed and high quality products to its highly esteemed clients.5
In doing this; the company prospects to transform open up new branches that will enable it to serve thousands of people in different regions all at the same time with ease. Additionally, the company needs to cooperate with other like-minded companies and individuals so as to tap into the richly flowing market potentiality offered by this multicultural society.
Mission
Essentially, Skagen designs’ main mission is to achieve a multifaceted success in various regions by designing impressive and unique, yet affordable products, while ensuring that the customers are given outstanding customer service.6 Essentially, this calls for delivery of quality products and service to its highly esteemed customers.
Moreover, the management is also charged with the responsibility of ensuring that the staffs are, deservedly, treated. Of course this policy, just like respect, is a two-way traffic. Consequently, the staffs in the company are compelled to ensure that the management, as well as each customer, is individually treated with utmost professionalism and respect.
By observing these salient statutes, the company’s mission not only ensures that the primary role of financial success is achieved; but it also makes certain that everyone associated to the company has a sense of purpose towards the well-being of the company and to one another.7
Goals, Aims and Objectives
- To propose a plan which will be able to help the company expand its business tentacles to South Africa in an easy way
- To establish the importance or value of marketing the company in a better way
- To assess the risks that may be faced while marketing the company
- To source additional resources that can be used to further the marketing plans while also creating a budget for the same
- To delineate problems being faced in the organization (with regards to its marketing endeavors and grope for ways of forging ahead while intermittently outsmarting these problems/challenges.
Strategies and Action Plan to Achieve the Objectives and Avoid Risks
In order to ensure more financial profits, we plan to introduce more quality products together with other relevant services which will, eventually, total into better profits. As for the aspect of getting more clients and accommodating them; the plan of going into South Africa, and many other countries that will duly follow, will take care of this challenge.
Finally, to siphon the strength of our competitors, we plan to market Skagen designs in a more robust way. This will, undoubtedly, give Skagen designs substantial leverage—on top of the fact that the good performance of the company will give us dominance and a more respected name in the international market.
Marketing Analysis
Financial Analysis
Despite enjoying good financial success over the recent past; Skagen designs still requires some hefty amount of investment to be injected so as to make it possible for the effectuation of its marketing plans.
In order to satiate this need, the company’s management recently got into a business partnership with Fossil, Inc thus creating better prospects for the company in terms of better goods and services thus more profits (Citybizlist, 2012).8
This will greatly help in raising more funds for the extra costs needed for more branch out to South Africa and the marketing funds that will be needed thereof.
On top of that, the good relationship between the management and other financially empowered people promises good tidings in terms of financial prospects for the company. However, Skagen is not entirely banking on this as its ultimate source of funding. It is for this reason that other viable money-getting schemes are being sourced.
Human Resource (HR) analysis
As was glimpsed earlier, the company’s management got into a partnership with Fossils, Inc. This, therefore, necessitates for changes and plans to be made be made on areas such as the human resource department and how the company will function bureaucratically in its leadership endeavors.
According to Citybizlist, (2012), Charlotte and Henrik Jorst still enjoy the mandate of overseeing the productions in the company while Fossils, Inc mostly handles the financial aspects of the organization.9
In the branch prospected in South Africa, this chain of command balanced between the management at Skagen designs and Fossils, Inc. will be maintained. However, a branch manager will be appointed in South Africa to oversee the operations of the new branch, just like it has been the company’s tradition in other branches.
Moreover, the operations of the human resource department in the new branch will, essentially, be in the same format like that of the current parent branch—with a few positions and provisions being created for joint meetings with the management, stakeholders and other concerned parties.
The similarity in the operations of the HR department simply means continuity to the already existing HR precepts thus increasing efficiency.1011 The only slight variation will be that, overall decisions will be made by the CEOs, Charlotte and Henrik Jorst in conjunction with the relevant personnel at Fossils, Inc.
Target Market
A keen assessment by market analysts indicates that Skagen already has a substantial amount of clients just like its umbrella company, Fossils, Inc.
The partnership between these two companies will therefore be a welcomed idea by most clients who already know the nature of products and services offered by these two revered companies. However, a few managerial changes might have to be made, as has been detailed in the HR management section.
Consequently, the clients may have to get used to the blended leadership between Fossils, Inc and Skagen designs. In the new branch at South Africa, this managerial change will not have a huge impact based on the fact that it will be the first outlet to be established there. In fact, starting the South African branch will be a good opportunity for the management to see a fresh and first-hand impact of their merger with Fossils, Inc.
Yet still, studies on the South African market—specifically in Johannesburg where the new branch will be based—show that the country has a rich blend of middle and high class people. Based on the fact that Skagen’s products usually target middle and highly economically-empowered clients, South Africa thus offers high chances of success and viable economic markets.
Additionally, Johannesburg has always been a great attraction site for both local and international tourists. In their touring endeavors, there are usually high chances of people shopping for products such as watches. The opening of this branch thus offers huge positive marketing prospects for Skagen designs.12
Even more importantly, most African countries look up to South Africa as a trend-setter in the continent based on its highly industrialized nature. Opening a branch in Johannesburg can therefore lead to increased demands for Skagen’s products thus leading to the opening of many other branches in Africa, and beyond.
Moreover, the dynamics and highly sophisticated nature of designer shops in the modern world calls for and the raising of market standards to meet the needs and wants of our clients.13
In relations to this, the prospected branch in South Africa will incorporate state-of-art furnishings, a wide range of watch brands, clocks, sunglasses together with hippy and well-designed jewelry. These products and services will be present in both simple and sophisticated forms so as to accommodate the current diversity of modern shoppers.14
More importantly, the designers will ensure that the buildings and other related designs included in the South African branch are modeled in a classy and trendy way that will, appeal to the aesthetic-loving modern day shoppers.
This is also based on the fact that the South African branch targets classy—yet averagely financially empowered clients. It is for the same reason that there will be price-friendly services at this branch; just in the same way it has always been in the most Skagen outlets.
Stakeholder Analysis
Stakeholders play a very important role in any organization—and in Skagen designs, it is no different. As a matter of fact, expansive consultations have been constantly made with the stakeholders so as to know their take on this marketing plan. So far, they have been in full support. Nonetheless, more consultations are yet to be made since this marketing plan is still at its baby stages thus does not require a lot of input from them.
Sustainable Competitive Advantage Assessment (SWOT analysis)
An assessment of the sustainable competitive advantage of the plan based on the business principle of SWOT analysis is done below.
Strengths
The strengths of our prospected plan include the following. Firstly, Skagen designs Ltd. has been in the watch business long enough to know the red and green lights of its operations. Our firsthand experience gives us much advantage over our competitors.
Secondly, we have a professional strategists and planners who have successfully planned and successfully done other projects. This project is, therefore, bound to be a success story just like the other projects they have planned. Thirdly and lastly, our brand name and that of Fossils, inc. are highly respected in US and the world at large thus laying a firm foundation for the success of this plan.
Weaknesses
Some of the weaknesses, or rather the challenges, of our plan include the following. To begin with, in spite of the market research projections prospecting a good reception for our plan, we are not entirely sure whether they will respond in the same positive way as we hope.
The presence of many watch businesses in South Africa may also provide a tougher competition than we anticipate. Finally, despite raising immense funds for the plan; we are still not utterly sure about getting the remaining funds.
Opportunities
The opportunities here include: the expansion of our customer bases. The expansion may also bring more profits which would then be used for opening even more branches thus actualizing the vision of us having branches all over the world. Finally, the new marketing endeavors will offer employment opportunities to several people.
Threats/ Risks
The most basic threat of this plan is the incapability to raise funds which might thwart everything that many people have tirelessly toiled for. On top of that, the current rigid and bureaucratic regulations regarding marketing and advertisements in South Africa may drag the implementation of our plans.
Also, the rather dynamic and unpredictable nature of our targeted clients may additionally inhibit the company from achieving its full potentiality.
As a rejoinder for the various points that come up in the SWOT analysis, it is noteworthy to state that the management of Skagen designs Ltd, and Fossils Inc. by extension, have several contingencies in place to mitigate the abovementioned weaknesses and threats while augment the strengths and opportunities. We can, therefore, boldly say that the plan is bound to offer sustainable competitive advantage.
Marketing Plan Budget
Much of what is entailed in the budget to be used in achieving the objectives of this project are yet to be representatively disclosed by the finance experts to the relevant parties. Nonetheless a rough estimate of $4 Million (for the entire year’s expenditure)—as is given in the table below.
Remarkably, the budget is highly confidential for obvious reasons such like the need to protect our investment ideas.
This high confidentiality is, essentially, the reason it will only be sent to the relevant leadership in the company—as well as to those people who have affirmed their interest in participating in soliciting funds for this project. A highly detailed and informative budget will be sent or hand-delivered by our financial personnel to such people.
PESTEL Analysis
The PESTEL is an analytic business tool that is normally used to assess the viability of a project. In essence, it is an acronym that stands for Political, Economic, Social, Technological, Environmental and Legal factors that should considered when engaging in any business venture. In our current situation, the PESTEL analysis would be applicable as follows.
Politically, South Africa is known for its relatively calm and stable political environment. This would be very amiable for the institutionalization of new branches. Much of what is entailed economically has been analyzed in the previous parts and the same applies to the environmental and legal factors.
Nonetheless, it is worth noting that South Africa is rated as the most industrialized country in the African continent. This, therefore, projects a good market for Skagen.
In terms of the social aspect, South Africa is famed for their great hospitality for both indigenous people as well as those touring from other place. This, combined with their love for fashion and accessories like jewelry and watches, prospects a good market for the purposed branch in Johannesburg.
Finally, in terms of technology, the South Africa is said to be among the top contenders of the most technologically advanced areas in Africa which offers a good basis for the new business. Nonetheless, there is still much more that needs to be done in order for the related technology in South Africa to the match the global standards.
Porter’s Five Forces
The use of Porter’s five forces in analyzing the business plans is something that is today almost synonymous to the process of strategic marketing planning.
These five forces, advanced by the renowned macroeconomist and Harvard scholar; Michael E. Porter in 1979, essentially help in guiding business planners on what to expect in their new business ventures and how they should handle their challenges as well as opportunities. A brief, yet representatively inclusive, analysis of these forces, in relations to Skagen designs Ltd’s marketing plan, is done below.
The first force here is the entry of new competitors. In relations to this, Skagen plans to widen the scope of its businesses such that the entry of new competitors will not have much effect to them. Pilot programs of these new diversifications are already underway in the current branch. Second in Porter’s forces is the threat of substitutes. Essentially, the diversification plan mentioned above takes care of this force too.
Thirdly, we have the bargaining power of buyers. With the rise in the number of outlets similar to Skagen, customers will have a wide range of options to choose from thus resulting into price war and ultimately favouring customers.15
In regard to our case, Skagen is known for having good prices for its buyers, and the same principle will be replicated in the new branch so no difficulty is expected. Fourthly, there is the forceful threat of the bargaining powers of suppliers. If the Skagen’s products perform well as anticipated, then more suppliers will be required.
Skagen will, therefore, have to increase the number of suppliers so as not to be affected by any market fluctuations.16 Fifthly and finally, we have the threat posed by the rivalry of existing players. Reports from various quarters indicate that Skagen is reputed for having good relations with other market players so very minimal challenges are expected.
But even more importantly, the existing players only act as a motivation for the company to work extra hard—something which is bound to ensure that continuous progress ensues while it stays ahead of the competitors just like it has always done.17
Competitive Analysis
In today’s fast growing and highly competitive market of watch sales, there is need for organizations to adopt an effective strategy for marketing in order to gain revenues and gain competitive advantage as well as meet its operational goals (Porter, 1985).18 This is driven by the presence of competition among companies, for the limited market of the companies’ similar products.
However, a company that has a strategy that is ineffective rarely attains success, or survives in the market (Waltsz, 1979; and Chatergee, 1972).1920 This occurs since those companies that have effective marketing strategies win a large pool of customers in comparison to those companies that have weak marketing strategies.
In a competitive environment like watch sales, success is normally measured in terms of gains (market share, revenues), and meeting operational goals. Whereas positive competition is encouraged and recommended among market players; some companies resort into unethical acts such as blackmail, copycatting of products and corruption just to stay above the rest.2122
Over time, Skagen has witnessed such issues in the roll out of new branches. However, in one way or another, it has always found a way of travailing so few difficulties are expected to this regard.
Conclusion
Just like most business ventures, our project may result in success or failure. It is for this reason that this plan calls for everyone involved to ardently play his/her part. It is only by doing this that we can have some assurance that our plans will be foolproof of the usual market hiccups and the never-ending economic challenges.
Additionally, as seen in many other companies who have followed the formula we are currently using to institute the new branch in South Africa; we expect some copycat competition from our numerous competitors after we launch our branch. So in order to stay a step ahead of such competitors, we are planning to positively revolutionize our operations one year after the commencement in operations of the South African branch.
As an exit plan; after expanding into as many branches as possible (while continually diversifying our operations to stay relevant to our market at all times) over the next 10 years; we will take into consideration the thought of a buy-out by a bigger watch company or sell our enterprises to a new owner.
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Footnotes
1 Skagen Design Limited’s Official Website.
2 Roger, Kerin A., and Robert, Peterson A., Strategic Marketing Problems: Cases and Comments (Upper Saddle River, New Jersey: Prentice Hall, 2009).
3 Skagen Designs: Becoming An International Player in Designed Watches.’, Extracasestudy deel II.
4 ‘Fossil Completes acquisition of Skagen designs.’, Citybizlist.
5 Skagen Design Limited’s Official Website.
6 Skagen Design Limited’s Official Website.
7 Campbell, R., Martin, Christopher, R., and Fabos, Bettina. Media and Culture; An introduction to Mass communication. (Boston: Bedford/St. Martin’s, 2011).
8 Fossil Completes acquisition of Skagen designs.’, Citybizlist.
9 Fossil Completes acquisition of Skagen designs.’, Citybizlist.
10 Arlene, Delmendo., ‘The Successful Business Development Manager.’, Ezinemark.
11 John, Castledine., ‘Ulrich model of HR.’, Learning consultant.
12 Paul, Streeten., ‘Globalization: Threat or Opportunity?’TheFreeLibrary.
13 Skagen Design Limited’s Official Website.
14 Jon, Anshutz., How to Successfully Manage People (Hong Kong: Perfect bound paperback, 2006).
15 Brian. Ward, ‘Planning as doing: Accelerating the business planning process.’, Manager Wise.
16 Dave, Ulrich., ‘Human Resource Roles: Creating Value, Not Rhetoric.’, Human Resource Planning.
17 Abraham. Maslow. H., & Robert. Frager, Motivation and Personality (New York: Harper & Row, 1987).
18 Porter, Michael., Competitive Advantage (New York: Free Press, 1985).
19 Kenneth, Waltz.,Theory of International Politics, (Reading, MA: Addison–Wesley Pub. Co., 1979).
20 Patricia, Chatergee., ‘The Classical Balance of Power Theory.’, Journal of Peace Research, 9 (1972), 51.
21 John, Bratton., & Jeffrey. Gold, Human Resource Management: Theory and Practice (Basingstoke: Palgrave Macmillan, 2007).
22 Roger, Kerin A., and Robert, Peterson, A., Strategic Marketing Problems: Cases and Comments (Upper Saddle River, New Jersey: Prentice Hall, 2009).