Patek phillipe final

strategic plan for Patek Philippe exclusive luxury brand

1. GROUP B

2. PORTER’S FIVE FORCES Counterfeits Jewelry Luxury mobile phones Other luxury products Exclusive brand image Patented technology High capital Access to distribution Retailers influences customers decision Brands control distribution Swatch dominates components High cost vertical integration Innovation M&A Luxury Brands Attractive Industry

3. ACCESSIBLE LUXURY EXCLUSIVE LUXURY AESTHETICS CONNOISSEURS TECHNICAL SPORT LIFESTYLE JEWELRY FASHION DIRECT COMPETITORS PATEK PHILIPPE

4. the World LUXURY W atch Industry at a glance Continued strong Growth until 2008 The crisis of 2009 mainly involved the accessible luxury segment Recovery in 2010 and expected record sales in 2011 Asia fastest growing market China grew 47% in 2009, 57% in 2010 Continued Growth expected in China and India Total value (CHF bb ) Countries Value 2010 increase % Share % Hong Kong 3185,5 46,90% 19,70% USA 1674,4 13,80% 10,40% France 1167 20,50% 7,20% China 1099,5 57,00% 6,80% Italy 923,3 2,60% 5,70% O. Countries 8108,4 15,50% 50,20% Total 16158,1 22,10% 100,00%

5. LAST TRENDS IN THE LUXURY WATCH INDUSTRY Trends in taste and design Moving away from extravagance and excess Move towards nostalgia and the past Highlighting original Swiss savoir - faire Understated Luxury/ Neoclassic Other trends Attempt to vertical integration from other players Consolidation ( Richemont , LVMH) New entrants from fashion world Diversification Higher attention to Asian tastes (automatic watches) Modern technology to attract younger targets (touch screen) Increasing counterfeit market

6. 1839 1844 1851 1932 2009 2 Polish immigrants, AntoniPatek (Businessman) and FranciszekCzapek (Watchmaker) found “ Patek , Czapek & Cie ” Geneve Mr. Patek met French watchmaker, Mr. Adrien Philippe. Pioneering stem winding and setting system by the crown Mr. Philippe officially associated with the company, “ Patek Philippe & Cie ” Company was purchased by Charles and Jean Stern. “ Patek Philippe S.A.” Presidency transmitted from the 3rd to the 4th generation: Mr. Thierry Stern became president

7. Family owned company Flexibility & creativity Completely integrated Total quality control Tradition Aspirational brand / Lifetime value Brand museum Controlled distribution: Salons in Paris, Geneva and London 500 carefully selected retailers Independence, Tradition, Innovation, Quality and Workmanship, Rarity, Value, Aesthetics, Service, Emotion, Heritage PATEK PHILIPPE

8. 10 STRATEGY COMPETITIVE ADVANTAGE

9. HERITAGE MANAGEMENT BENEFITS ESSENCE, NATURE, MEANS Functional Time keeping Precision High technology Essence Means Nature Client Business Company Emotional Piece of art / Exclusive Family Values /Heritage Brand r recognition BENEFITS Quality Trust High techonoligy Respect of traditions Aligns with values of customers “Lasting value is both material and emotional” HERITAGE Highly populated Competition on technology High negotial power of supplier New trends Vertical integration Innovation effort Understand Industry & Customers Management Supply & Retailers Family business/independence MANAGEMENT

10. SWOT

11. PRODUCT MARKET SAME NEW SAME NEW CAPABILITIES ? POSSIBLE BRAND DILUTION PEOPLE WILLINGNESS TO PAY MORE (Crisis) EXPAND TO ASIA Prod. capacity Knowledge of the market Right target ? APPEAL TO A YOUNGER TARGET Acquisition of new technology Move away from tradition ( microcomponents ) Brand dilution PATEK PHILIPPE ALTERNATIVES POSSIBLE BRAND DILUTION CONQUER THE WOMEN Risk to alienate men Brand dilution

12. RECOMMENDATIONS

13. MAINTAIN EXCLUSIVE POSITIONING 1

14. RAISE ONLINE BRAND AWARENESS 2

15. RAISE ONLINE BRAND AWARENESS 2

16. ENHANCE WOMEN’S BUSINESS 3

17. MEASURED APPROACH TOWARDS CHINA 4

18. “You never actually own a Patek Philippe. You merely look after it for the next generation”

19. Q&A GROUP B LIA BUDIMAN LUCIA CALDERON ADRIAN CHAN CHUN DEBORA CURBI HOWARD CUSHING VALERIA DESERTO CARLOS FERRIS SURYANATA HATTA