At the end of the year the takeover frenzy, Swatch led the coquettish

At the beginning of the year, it is the best time for big companies to plan their corporate strategy and the best time for mergers and acquisitions. Although the 2012 economy continued to slump, the luxury industry seems never winter. Recently, the 13-Year-old leader of the high-end wrist watch group, which has not acquired any brand, has invested heavily in the jewellery and watch business of the American jewellery brand Harry Winston, The purchase price of 750 million U.S. dollars in cash and 250 million of dollars in net debt repayment, becoming the 2013 annual luxury goods in the field of the first single large acquisition deal.

What does swatch lavish buy?

1 high-end brand complement, consolidate and strengthen its brand layout in ultra-high-end watches, enhance competitiveness

Swatch Group's 2012-year performance was encouraging, with sales up 14% to 8.14 billion Swiss francs, and net profit reaching 1.61 billion Swiss francs (about 1.77 billion dollars), a sharp increase of 26% per cent from the year 2011, beyond economists ' expectations. Before the acquisition of Harry Winston, Swatch had a total of 18 watches and jewellery brands, but most of its brand image was more popular and midrange. Luxury jewellery and super high-end watches have always been the Achilles heel of Swatch, and Harry Winston has been hailed as the world's top jewellery brand, and after this acquisition, Swatch can quickly improve its super high-end brand image and access to high-end luxury market. At the same time, the high-end product line complement is also very conducive to enhance its competitiveness, Shanglei and other high-end luxury groups to launch the challenge.

2 horizontal expansion to the jewellery industry, so as to better enlarge the business value of their watch customers

With 18 brands in the global market already has a lot of fixed source, after the acquisition of Harry Winston, Harry Winston will help expand the Swatch's boutique supply, so as to better magnify the business value of their watch customers.

3) Further expansion of the market

In people's minds, Harry Winston is a "woman's best friend" in the sexy voice of Monroe, filled with Hollywood-flavored celebrity jewelers. In 2011, Harrywinston was re-elected as the top luxury jewellery brand in America's upper-class society. Many Hollywood stars are the lucky ones to win an Oscar. Currently。 Harry Winston the world's 17 stores, especially 7 in the US, and Swatch can further expand and deepen the U.S. market with Harry Winston.

Why do top jewellery brands "marry"?

The first is to get a special pet. Earlier, a number of luxury companies, including the French Lu Wei Wei (LVMH), have shown keen interest, but Harry Winston chose the more high-end, luxury, more vacant Swatch Group, it will concentrate on filling its own short board, so that the focus on the development of Harry Winston to enhance their competitiveness. Harry's Winston brand is more conducive to its growth.

The second is the necessity of specialization division of labor. Harry Winston, who sells jewellery and watches, can focus more on the contention and acquisition of diamond resources in the upper reaches of the industrial chain, and divest itself of relatively weak, competitive brand marketing, store retailing and other business to better companies. If you want to pick a buyer, Swatch is definitely the best choice.

Again is the industry chain upstream and downstream seamless links. If Swatch was interested in entering the jewellery industry, it would have formed an upstream and downstream partner in the industry chain, and Harry Winston Diamonds would have been a big appetite downstream buyer to make sure the sales were all right.

When the Watch meets the Jewels

Swatch after the acquisition, in accordance with the general international acquisition practice, will certainly set aside a certain period of time, first to ensure that the business stability, maintain the operation of independent brands, and the original team to continue to operate steadily. Subsequently, in the stable and then gradually restructuring and innovation, the impact of the brand, and the original Swatch of high-end brand brand group to form the camp, mutual support, complementary, go hand in hand with the development. With the addition of Harry Winston, the Swatch Group will be emboldened to contend with three other luxury goods groups.

The core purpose of the acquisition is to optimize the portfolio to form a stronger competitive edge, and this time, Swatch thought clearly.

Mu Chaoxi

China marketing decision expert

Dean of the school of excellent marketing

Visiting Professor of Tsinghua University