The Case of Rolex – Case Study #1 – November 2020 v1
This short piece is an introduction to a comprehensive article applying my model of causation among twenty-two Elements of competitive strategy and firm valuation as a firm moves to its Full Potential. I will apply my model to the Rolex watch company and this longer article will be the first in a new series of case studies on firms. Most will use only publicly available information.
I think Rolex is a vivid example of seeing a firm’s competitive strategy, its longevity for employees, suppliers, and other stakeholders, and its ongoing valuation for owners/shareholders in dynamic play over time. All of this as it reaches its current Full Potential and then continues to morph to a new Full Potential in a never-ending cycle. Rolex is what is called a dominant product company. This means it basically sells only watches and related services. Thus it is not like General Electric and others that have multiple unrelated business units. This further helps Rolex to be an excellent case study.
This article will apply my comprehensive causal model of firm valuation to Rolex. I could have used other premium products like jewels and jewelry, writing pens, automobiles, firearms, and musical instruments. These can all exhibit premium prices and have something that customers find very valuable for such prices. You can add your favorite premium products and services to this list.
I also think the dynamics of my model play out more easily for a premium-priced differentiator than for low cost/low price or commodity type of products. Most adults in the developed world know of the brand of Rolex and can more easily identify with what we will discuss in this article, especially if one owns a Rolex or other premium brand watch.
So I thought I would apply my comprehensive model to Rolex. You can use it to understand my model and if you find it useful can use this case study to do your own case study of your firm. I think key insights will emerge for you that will be new and cannot be had currently by any other framework of which I am aware of. I know this seems boastful, but this is the way I see other useful but in some aspects deficient frameworks. You will be the judge.
This article is part of a series on what causes a firm’s value to increase.
Dr. William Bigler is the founder and CEO of Bill Bigler Associates. He is a former Associate Professor of Strategy and the former MBA Program Director at Louisiana State University at Shreveport. He was the President of the Board of the Association for Strategic Planning in 2012 and served on the Board of Advisors for Nitro Security Inc. from 2003-2005. He is the author of the 2004 book “The New Science of Strategy Execution: How Established Firms Become Fast, Sleek Wealth Creators”. He has worked in the strategy departments of PricewaterhouseCoopers, the Hay Group, Ernst & Young, and the Thomas Group among several others. He can be reached at email@example.com or www.billbigler.com.