1. Introduction
Rolex is a Swiss luxury watch brand. In 2022, Rolex was recognized as the #1 brand with strongest reputation at global stage.
In this article, we present SWOT analysis of Rolex. The analysis highlights internal and external environmental factors that positively or negatively contribute to the company success.
2. Company Overview
| Company name | Montres Rolex SA |
| Year founded | 1905 |
| Rolex headquarters | Geneva, Switzerland |
| Rolex industry | Luxury watchmaking |
| Rolex CEO | Jean-Frederic DuFour |
| Rolex number of employees | 35,700 |
| Rolex number of countries | 100 |
| Rolex authorized dealers | 1,816 |
| Rolex watchmakers | 4,000 |
| Rolex products | Luxury watches for men and women |
| Rolex competitors | Tag Heuer, Omega, Patek Philippe, Cartler, Richard Mille, Longines |
| Rolex revenue 2022 | $10.579B |
| Rolex profit 2022 | $2.021B |
| Rolex brand worth | $8.35B |
Here we present the Rolex SWOT analysis:
3. SWOT analysis of Rolex
3.1. Rolex Strengths
3.1.1. Growing brand worth
In 2022, Rolex brand worth was $8.35B. It is the highest value during 2016-2022 time period, showing rise of $400 million compared to 2021.
Following graph shows the rising Rolex brand worth:
Source: Statista
3.1.2. Highest turnover in industry
Rolex has highest turnover in the industry, and leads the market with huge margin:
Source: Statista
3.1.3. Strong brand reputation
Rolex was ranked #1 as most reputable brand from 2016 to 2019, and then again in 2022. It attained 59th position as Europe’s most valuable brands in 2022, and 33rd position in BrandZ’s top 75 global retail brand list.
Following image shows the reputation score of top global players. Rolex holds the top position:
Source: Statista
To know more about Rolex rankings, click here.
3.1.4. First mover advantage
Rolex has been first mover in introducing waterproof watch, automatic dating watch, and diving watch.
Rolex is the market leader with highest share in global watchmaking industry. In 2022, Rolex secured 28.8% market share, followed by Omega (7.5%) and Cartier Watches (6.9%):
Rolex market share 2022
Source: Müller
Rolex has successfully maintained its leadership position over years. Following table shows how Rolex has consistently maintained the top position based on market share from 2017 to 2020:
Source: Watch-Pro
3.1.6. High product quality
Rolex offers extremely high product quality.
3.1.7. Strong branding
A previous industry study (as reported by Forbes) revealed that Rolex has been successful due to its ability to retain the core element of ‘ownership experience’, i-e- considering Rolex as a sign of accomplishment and success.
To know more about Rolex product strategy, click here
3.1.8. Innovative marketing
Rolex sponsors global sports (like Motor sports, tennis, golf etc.) and other major international events. Rolex influencer marketing and celebrity endorsement strategy has successfully maintained the exclusive brand image over years.
Click here to know more about Rolex marketing strategy
3.1.9. Brand exclusivity
Despite long waiting times, customers still purchase Rolex timepieces. The most expensive watch that Rolex sold up till now is Daytona. Following table shows the list of top 7 most expensive watches that Rolex was able to sell due to its exclusive image:
| Date | Brand | Price sold |
| 2017 | Paul Newman’s Rolex Daytona | $17.8 million |
| 2018 | Rolex Daytona Reference 626 Unicorn | $5.9 million |
| 2017 | Rolex Bao Dai | $5.1 million |
| 2016 | Antimagnetique Reference 4113 | $2.5 million |
| 2019 | Marlon Brando’s Rolex GMT-Master | $1.9 million |
| 2015 | Oyster Albino | $1.4 million |
| 2019 | Jack Nicklaus Rolex Day-Date | $1.2 million |
Source: Data extracted from LUXE
3.1.10. Strong cash flow
Rolex has strong cash flow, due to which it is able to invest on product innovation. A hard-to-imitate strength is Rolex’s track record of successfully launching new products. As more cash is available, Rolex can invest more on innovation, new product development and branding.
3.1.11. Skilled workers
A key strength of Rolex is its highly skilled workforce. This strength is hard to imitate, and provides strong competitive edge to Rolex. Rolex currently has 4,000 extremely skilled watchmakers around the world.
3.1.12. Tax benefits
Rolex is the only player in the industry that donates 90% of its profit to charity to avail the tax benefits.
3.2. Rolex Weaknesses
3.2.1. Limited portfolio
Rolex has been highly successful in selling luxury watches. But the brand has a limited portfolio, which increases the brand’s reliance on sale of timepieces.
3.2.2. Supply chain issues
Rolex is currently facing supply chain issues due to supply-demand misalignment, material shortage, and poor demand forecasting.
3.2.3. Long waiting time
Rolex has unusually long waiting time, which sometimes annoys the customers. On average, customer wait for 2 to 4 years to get their favorite timepiece.
3.2.4. Price discrepancy
High price discrepancy between Rolex retail and market price negatively affect the sales, and paves way for the grey market.
Taking an example of Rolex Daytona, following table highlights the price discrepancy:
Source: Luxury Bazaar
3.2.5. Extreme high pricing
Rolex charges higher prices than its competitors. Although, Rolex charges higher to maintain exclusivity, the higher prices at the same time can push the upper middle segment towards competitors.
Take an example, Omega (luxury watch brand) charges almost half of what Rolex charges. Rolex price range is $6,000 to $20,000. Whereas, Omega price range is $3,000 to $8,000.
3.2.6. Niche segment
Rolex targets a niche segment. Its reliance on rich customer base increases its vulnerability to the demand fluctuations.
3.2.7. Limited production capacity
The company management recently admitted that the product scarcity is not brand strategy, but a result of limited production capacity. The production constraints limited the company’s ability to meet the growing demand- as reported by Business Insider.
3.3. Rolex Opportunities
3.3.1. Digital innovations
The digital innovations are disrupting the luxury watch industry. Rolex should proactively respond to the digital innovations to maintain relevance in quickly changing market.
3.3.2. Emerging economies
The demand for luxury watches is continuously growing in emerging economies. China is among the countries with fastest growing demand for luxury watches:
Source: Statista
Rolex should target the fastest growing countries, and increase its production capacity to fuel the business growth.
3.3.3. Luxury watch market growth
Luxury watch market will grow from 35.6B (from 2018) to 53.5B (by 2028):
Source: KBV Research
Rolex should consider it an opportunity to offer a wide variety of both- mechanical and electronic watches.
3.3.4. Smartwatch market growth
Global smartwatch market will grow with an impressive 20.1% CAGR from 2021 to 2030:
Source: Globenewswire
Rolex should launch more smart watches to strengthen presence in smartwatch market, which is currently dominated by Apple.
3.3.5. Growing middle market
Recent statistics suggest that by 2030, middle class will comprise almost half of the world population. Rolex should consider it an opportunity, and launch more mid-tier products to target this growing segment.
3.3.6. Second hand market
There is continuous growth in the luxury watch second hand market, as depicted in following graph:
Source: Statista
Rolex has already entered in second hand market in 2022, and should penetrate further to capture this opportunity.
As per Wall Street Journal, entry in second hand market can also help Rolex better respond to the needs of Gen Z. Following graph shows Gen Z and Millennials prefer pre-owned watches more than older generations:
Source: Bloomberg
3.4. Threats of Rolex
3.4.1. Growing grey market
There is continuous growth in grey luxury watch market. Around 20% of the luxury brand sales are from grey market, which hurts the luxury brands like Rolex.
3.4.2. Intense competition
The growing competition in luxury watch industry has become a major threat for Rolex. The long waiting times and higher prices are two factors that can push Rolex customers towards competitors.
3.4.3. Economic recession
Prevailing economic recession can negatively influence the sales of luxury watch brands. In response to inflation, people are squeezing spending on luxury items. Impending recession imposes major threat to luxury watch brands including Patek Philippe and Rolex.
3.4.4. Declining trend of wearing wrist watches
Trend of wearing wrist watches is on decline. Particularly Gen Z is showing little interest in buying wrist watches.
3.4.5. Negative attitude towards luxury consumption
There is a gradual increase in the negative sentiments towards luxury brand consumption. A recent study by INSEAD showed luxury brand consumption can evoke both- positive and negative emotions. As per South China Morning Post, many luxury brands may not survive generation Z.
4. SWOT Rolex Summary
| Rolex Strengths • Strong brand worth, highest turnover and strong reputation • First mover advantage • Strong market share and branding • High product quality • Innovative marketing • Brand exclusivity • Strong cash flow • Skilled workers • Tax benefits | Rolex Weaknesses • Limited portfolio • Supply chain issues • Long waiting time • Price discrepancy • High pricing • Niche segment • Limited production capacity |
| Rolex Opportunities • Digital innovations • Emerging economies • Luxury and smart watch market growth • Growing middle market • Second hand market | Rolex Threats • Growing grey market • Intense competition • Economic recession • Declining trend of wearing wrist watches • Negative attitude towards luxury consumption |
5. Recommendations
Diversify portfolio to decrease dependence on extremely niche segment
• Introduce more mid-tiered products to target growing middle market
• Reduce waiting time and expand production capacity to meet growing demand
• Adjust pricing according to prevailing economic situation
• Increase investment on smart watches and related technologies
• Pay more attention towards secondhand market, and integrate reselling option into the business model
6. Conclusion
To conclude, Rolex holds strong brand reputation in the global luxury watch market. However, its limited portfolio, supply chain issues, long waiting time and production constraints are some major weaknesses that increase its vulnerability to external threats.
Rolex can overcome these weaknesses, and address the external threats through innovative marketing strategy. Click here to read our detailed article on Rolex marketing strategy.
7. References
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Luxury watches: leading brand turnover worldwide 2021 | Statista. (2022b, December 20). Statista.
Loesche, D. (2017, March 20). The Most Reputable Companies Worldwide. Statista Infographics.
Rolex Brand Ranking | All Brand Rankings where Rolex is listed! (n.d.).
Müller, O. R. (n.d.). State of the Industry – Swiss Watchmaking in 2022 | SJX Watches.
Corder, R. (2021, March 8). Rolex gains market share despite production loss of 140,000 watches last year. WATCHPRO USA.
Adams, A. (2014, April 14). Why Rolex Watches Are The Most Reputable Consumer Products In The World According To Industry Study. Forbes.
Luxe Digital. (2023, March 10). The 17 Most Expensive Rolex Watches Of All Time.
Bazaar, L. (2023, January 9). Breaking Down Rolex Prices: Retail vs. Actual Market for Top Models. Grey Market Magazine.
Reuter, D. (2021, September 23). Rolex breaks its silence with a rare comment about the shortage of its watches: “The scarcity of our products is not a strategy on our part.” Business Insider.
Statista. (2022m, December 14). Revenue of the luxury watch market worldwide by country 2022.
Luxury Watch Market Size, Share & Industry Growth to 2028. (2022, November 30). KBV Research.
Acumen Research and Consulting. (2022, August 29). Smartwatch Market Size Will Achieve USD 156.3 Billion by 2030 growing at 20.1% CAGR – Exclusive Report by Acumen Research and Consulting. GlobeNewswire News Room.
Wallach, O. (2022, April 28). The World’s Growing Middle Class (2020–2030). Elements by Visual Capitalist.
Statista. (2022d, August 11). Second-hand luxury watches market revenue worldwide 2017-2027.
Lukpat, A. (2023, March 12). Used Rolexes Are Beating the Stock Market. WSJ.
Redirect Notice. (2022, October 13).
Trecul, E. (2022, September 29). The gray market watch industry: what you need to know. Red Points.
Why do people still wear wristwatches? (n.d.). Beckett Simonon.
Dubois, D. (2020, November 16). The Tension-Filled World of Luxury Consumption. INSEAD Knowledge.
Langer, D., & Langer, D. (2022, August 23). Why today’s luxury brands may not survive Gen Z: while Louis Vuitton and Dior are better at reinventing. . . South China Morning Post.
