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Flevy Management Insights Case Study
Global Expansion Strategy for Luxury Watch Brand in Asia


There are countless scenarios that require Business Process Design. Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Business Process Design to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

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Consider this scenario: A prestigious luxury watch brand, renowned for its craftsmanship and heritage, is facing challenges in adapting its business process design to the rapidly evolving luxury market in Asia.

The brand has experienced a 20% decline in sales over the past 2 years, attributed to intense competition from new entrants and changing consumer preferences towards digital and smartwatch features. Additionally, the brand is grappling with internal inefficiencies and a lack of market-specific product offerings, leading to a disconnect with the younger demographic in Asia. The primary strategic objective of the organization is to rejuvenate its brand presence and sales in the Asian market by aligning its product offerings and operations with local consumer preferences and digital trends.



The luxury watch brand in question is at a pivotal juncture, needing to reconcile its storied heritage with the digital expectations of the modern consumer. It appears that the brand's traditionalism and slow pace of digital adoption have left it vulnerable to agile competitors who are quicker to align with the market's shifting preferences.

Market Analysis

The luxury goods industry, despite the economic volatility, continues to show resilience, with Asia-Pacific regions, particularly China, driving much of the growth. This growth is largely fueled by an expanding middle class and a growing appetite for luxury brands among younger consumers.

The competitive landscape is shaped by several forces:

  • Internal Rivalry: Intense, as established luxury brands and new entrants vie for market share.
  • Supplier Power: Moderate, with few companies controlling the high-quality materials required for luxury watch manufacturing.
  • Buyer Power: Increasing, as consumers have more access to information and alternatives.
  • Threat of New Entrants: High, especially from tech companies introducing smart features.
  • Threat of Substitutes: Moderate to high, with smartwatches posing a significant threat.

Emergent trends include the digitalization of consumer experiences, the rising importance of sustainability, and the shift towards personalization and customization. These trends suggest major changes in industry dynamics:

  • Increased consumer demand for digital features and online shopping experiences, presenting both an opportunity to expand digital sales channels and a risk of further decline in physical retail.
  • Greater emphasis on sustainability and ethical sourcing, offering an opportunity to differentiate through responsible luxury but requiring substantial investment in supply chain transparency.
  • The growing importance of personalization, allowing brands to deepen consumer relationships but necessitating advanced data analytics capabilities.

A STEER analysis highlights significant socio-cultural shifts towards digital lifestyles, technological advancements in smartwatch features, economic resilience of the luxury sector, environmental pressures on sustainable practices, and regulatory trends favoring consumer data protection and privacy.

Learn more about Supply Chain Data Analytics Data Protection Market Analysis

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Internal Assessment

The organization showcases unparalleled craftsmanship and a rich heritage, recognized globally. However, it struggles with embracing digital transformation and understanding market-specific consumer preferences in Asia.

Benchmarking against peers reveals the brand lags in digital marketing effectiveness and e-commerce penetration, indicating a need for a more robust online presence and digital engagement strategy.

A Value Chain Analysis highlights inefficiencies in supply chain management and product development processes that slow down the brand's response to market trends and consumer demands.

The Gap Analysis underscores a significant disconnect between the brand's product offerings and the digital features and customization expected by Asian consumers, particularly the younger demographic.

Learn more about Digital Transformation Supply Chain Management Value Chain Analysis

Strategic Initiatives

  • Digital Transformation and Market Alignment: This initiative aims to integrate digital features into product offerings and enhance online customer experiences, driving engagement and sales in the Asian market. The expected value creation lies in increased market share and brand relevance among younger consumers. Resources required include investment in technology and digital marketing expertise.
  • Operational Excellence through Supply Chain Optimization: By streamlining supply chain processes and adopting lean manufacturing principles, the brand aims to improve operational efficiency and responsiveness to market changes. This will not only reduce costs but also enable faster product development cycles, creating financial value through efficiency gains. Resources needed encompass supply chain technology and process reengineering expertise.
  • Business Process Redesign for Customer-Centricity: Reimagining business processes to be more agile and customer-focused will allow the brand to quickly adapt to changing consumer preferences and market dynamics. The initiative is expected to enhance customer satisfaction and loyalty, driving long-term revenue growth. This will require cross-functional collaboration and a shift in organizational culture towards customer-centricity.

Learn more about Customer Experience Agile Organizational Culture

Business Process Design Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


Measurement is the first step that leads to control and eventually to improvement.
     – H. James Harrington

  • Online Sales Growth: Measures the effectiveness of digital marketing strategies and e-commerce platform enhancements.
  • Product Development Cycle Time: Tracks improvements in operational efficiency and market responsiveness.
  • Customer Satisfaction Scores: Provides insight into how well the brand meets consumer expectations in the Asian market.

Tracking these KPIs will offer valuable insights into the effectiveness of the strategic initiatives, highlighting areas of success and identifying potential adjustments needed to ensure alignment with the strategic objectives and market demands.

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Business Process Design Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Business Process Design. These resources below were developed by management consulting firms and Business Process Design subject matter experts.

Business Process Design Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • Digital Marketing Strategy Plan (PPT)
  • Supply Chain Optimization Roadmap (PPT)
  • Customer-Centric Business Process Redesign Framework (PPT)
  • Market Entry and Expansion Model (Excel)

Explore more Business Process Design deliverables

Digital Transformation and Market Alignment

The team adopted the Digital Maturity Model (DMM) to guide the digital transformation and market alignment initiative. The Digital Maturity Model provides a framework for assessing an organization's digital capabilities and identifying areas for improvement. It proved invaluable for understanding the current state of digital integration within the brand's operations and for benchmarking against industry standards. The process involved:

  • Assessing the current digital capabilities across all departments and comparing them with best practices in the luxury watch industry.
  • Identifying gaps in digital marketing, e-commerce, and customer relationship management systems that required enhancement to meet the digital expectations of the Asian market.
  • Developing a phased roadmap for digital transformation, prioritizing initiatives that would have the most immediate impact on market alignment and customer engagement.

Additionally, the Consumer Decision Journey (CDJ) framework was utilized to better understand and align with the customer's path to purchase in the digital age. This framework helped in mapping out all the touchpoints where digital integration could enhance the customer experience. The team implemented the framework by:

  • Mapping the typical consumer decision journey for luxury watch buyers in Asia, identifying key digital touchpoints for engagement.
  • Designing targeted digital marketing campaigns and enhancing the e-commerce platform to effectively engage customers at each stage of their decision journey.
  • Integrating customer feedback mechanisms across digital platforms to gather insights for continuous improvement in customer engagement strategies.

The results of implementing these frameworks were transformative. The brand saw a 30% increase in online sales within the first year and a significant improvement in customer engagement metrics. Moreover, the alignment of digital touchpoints with the consumer decision journey led to higher customer satisfaction scores, indicating a successful alignment of the brand's market offerings with the digital expectations of consumers in Asia.

Learn more about Maturity Model Continuous Improvement Customer Satisfaction

Operational Excellence through Supply Chain Optimization

In pursuit of operational excellence, the organization adopted the Lean Six Sigma framework to streamline its supply chain processes. Lean Six Sigma is renowned for its ability to improve efficiency by eliminating waste and reducing variability in business processes. Its application was critical in addressing the inefficiencies and delays in the brand's product development and distribution channels. The team executed the framework through:

  • Conducting a comprehensive analysis of the supply chain to identify processes that added no value or caused delays in product delivery.
  • Implementing process improvements and quality control measures to eliminate defects and reduce variability in supply chain operations.
  • Training staff in Lean Six Sigma principles to foster a culture of continuous improvement and operational excellence.

The Theory of Constraints (TOC) was also applied to identify and address the bottlenecks that were limiting the brand's ability to respond quickly to market demands. The implementation steps included:

  • Identifying the most critical constraint (bottleneck) in the supply chain that was hindering operational efficiency.
  • Restructuring operations to focus resources on alleviating this bottleneck, thereby increasing throughput.
  • Reevaluating the supply chain to identify and address the next constraint, in a continuous process of improvement.

The combined application of Lean Six Sigma and the Theory of Constraints significantly enhanced the brand's supply chain efficiency. Lead times for product development and delivery were reduced by 40%, while quality control measures resulted in a 50% reduction in defects. These improvements not only contributed to cost savings but also enabled the brand to be more agile and responsive to market changes, thereby enhancing its competitive edge in the Asian luxury watch market.

Learn more about Operational Excellence Process Improvement Six Sigma

Business Process Redesign for Customer-Centricity

To achieve a more customer-centric organization, the team employed the Service Design Thinking framework. This approach focuses on creating value for customers by designing services that meet their needs and expectations. It was particularly useful for reimagining the brand's business processes from a customer's perspective, ensuring that every interaction was designed to enhance customer satisfaction. The process included:

  • Conducting workshops with employees across departments to map out all customer touchpoints and identify pain points in the customer journey.
  • Redesigning business processes to eliminate identified pain points, streamline customer interactions, and enhance the overall customer experience.
  • Implementing new customer service standards and training employees to deliver exceptional service at every touchpoint.

Furthermore, the Customer Lifetime Value (CLV) framework was used to shift the organization's focus towards long-term customer relationships. This involved:

  • Analyzing customer data to understand purchasing behaviors, preferences, and the factors that influence loyalty and repeat purchases.
  • Developing targeted marketing strategies and loyalty programs designed to increase customer retention and maximize lifetime value.
  • Integrating CLV insights into business decision-making processes to ensure a sustained focus on long-term customer value.

The adoption of Service Design Thinking and the Customer Lifetime Value framework led to a profound transformation in the organization's approach to customer engagement. Customer satisfaction scores improved by 25%, and the brand saw a 20% increase in customer retention rates. This shift towards customer-centricity not only enhanced the brand's reputation in the Asian market but also laid a solid foundation for sustainable growth and profitability.

Learn more about Design Thinking Customer Service Service Design

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Online sales increased by 30% within the first year post-implementation, indicating successful digital market alignment.
  • Product development and delivery lead times were reduced by 40%, enhancing market responsiveness.
  • Defects in products reduced by 50% due to improved quality control measures, contributing to cost savings.
  • Customer satisfaction scores improved by 25%, reflecting better alignment with consumer expectations.
  • Customer retention rates increased by 20%, indicating effective long-term relationship management.

The strategic initiatives undertaken by the luxury watch brand have yielded significant positive outcomes, particularly in online sales growth, operational efficiency, and customer satisfaction. The 30% increase in online sales and the improvement in customer engagement metrics underscore the success of the digital transformation and market alignment efforts. The substantial reduction in product development and delivery lead times, alongside a 50% reduction in defects, highlights the effectiveness of the operational excellence initiative through supply chain optimization. Furthermore, the 25% improvement in customer satisfaction scores and a 20% increase in customer retention rates demonstrate the brand's successful pivot towards customer-centricity. However, the report does not explicitly quantify the impact of these initiatives on overall sales in the Asian market or address whether the brand has successfully countered the competition from smartwatches and new entrants. The absence of these details suggests potential areas of underperformance or at least areas where the impact is not yet fully realized. Alternative strategies, such as more aggressive integration of smart features into the brand's product lineup or partnerships with tech companies, could potentially enhance the brand's competitive edge against smartwatch threats.

For next steps, the brand should consider further leveraging data analytics to deepen its understanding of customer preferences and market trends, potentially introducing smartwatch features that align with its luxury positioning. Expanding partnerships with tech companies could accelerate this integration. Additionally, focusing on expanding its digital footprint across emerging e-commerce platforms in Asia could further boost online sales and brand visibility. Continuous investment in customer relationship management and personalized marketing strategies will be crucial to sustaining improvements in customer satisfaction and retention. Finally, exploring sustainable and ethical sourcing practices could address the growing consumer demand for responsible luxury, potentially opening new avenues for market differentiation.

Source: Global Expansion Strategy for Luxury Watch Brand in Asia, Flevy Management Insights, 2024

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