Comments:
Very well said Magnus.
Like I mentioned, I have no issue with the move to partially outsource. I was not impressed with the way they quietly introduced it in a watch labelled Extra Special. And I have yet to see how the movement is finished. I am also a little confused at how for so long Zenith prided themselves as a manufacture, and provided movements for Rolex etc, and gave this status up so quick. I suspect in a few years they might reverse this decision once again and once again Zenith's long history would be convoluted.
And the other issue I have is that Zenith is a one trick pony with no truly iconic watch, but an iconic movement. Zenith is known for the El Primero. These moves will only reinforce that. I do hope they decide to discontinue the robust, but rather unexciting and mundane Elite, but to focus on the El Primero will likely mean we will never see another year like 1969, and a new breakthrough.
Anyway, as you mentioned, perhaps the benefits of a move to make Zenith more mainstream outweigh the responses of watch enthusiasts.
Dean
Controversy on outsourced movements: Zenith explains its move in a Financial Times article
Dear All:
thanks to my fellow moderator Andrew Daley I can now provide you with an article recently published in the renowned UK newspaper Financial Times. Therein Zenith's global marketing director Juliette North very openly explains the reasoning behind this decision.
The text sheds some fascinating insights into the circumstances watch brands have to consider in their strategic plans, and also highlights the role collectors - here even called purists - have.
I am reproducing the text here with a view on initiating a lively and mature debate. Please feel free to share your thoughts: Is this an acceptable move for you? Does it hurt the brand'a appreciation? Do you think this could be beneficial since it promises additional revenues without daring excessively on development resources? Do you think other will follow? Etc. - the floor is yours!
Best,
Magnus
"Zenith sacrifices self-reliance to underpin growth
By Robin Swithinbank
In light of the watch industrys continued obsession with in-house production strategies, Zeniths announcement at Baselworld this year that it was forsaking its pure manufacture status by outsourcing movements came as a surprise.
Over the past decade, established watch companies have sunk vast sums into building a self-reliant future, making Zeniths announcement that it is doing the opposite appear incongruous. But the company says the decision is a pivotal part of an ambitious expansion plan that will take it into the mainstream and transform its fortunes, turning it from an insider brand into one of the industry's bigger names.
There are two reasons behind the decision, says Juliette North, Zenith's global marketing director, who spoke to the Financial Times because the companys chief executive, Jean-Frédérique Dufour, is leaving to become chief executive of Rolex. Its important to us to develop the El Primero calibre, which is the backbone of the company. And we want to recruit new customers.
Watches featuring the new three-hand movement called Zenith Calibre 3000 and produced and assembled by Swiss movement manufacturing company Sellita will cost significantly less than those powered by Zeniths in-house equivalent, the Elite calibre. This, the brand believes, will attract new customers and contribute to a spike in sales currently stifled by a lack of capacity.
In the five years since Mr Dufour took the helm at Zenith and following a SFr20m ($22m) investment in the companys manufacturing base, the brands annual output has increased from 8,000 to 50,000 movements a year. About 10,000 of those movements are passed to fellow LVMH Group brands Bulgari, TAG Heuer, Chaumet and Dior. To increase significantly the number of watches it can bring to market, Zenith says it now needs to look elsewhere.
In addition to appealing to a more price-conscious consumer, Zenith believes watches fuelled by Calibre 3000 will draw in consumers less concerned by traditional watchmaking. It means we can talk to customers who may be less aware of the manufacture aspect and care less about it, says Ms North.
(Zenith Pilot Extra Special with the Cal. 3000 neé Sellita SW300)
Zenith says it is making no attempt to hide the fact the new movement is a rebranded version of Sellitas SW300 calibre, although models carrying Calibre 3000 have solid rather than transparent case backs (another cost-saving measure), and there is no disclaimer on the brands website. Not that Zenith is obliged to declare the genesis of its movements the practice of renaming outsourced calibres is common in the watch industry.
Under the deal, Sellita will supply Zenith with fully assembled movements, which are encased and passed through quality control in Zeniths workshops. Zenith declined to comment on the quantity of movements it has committed to buy, or on how much it is investing in the strategy. Prices for watches with the Calibre 3000 will start from £2,200, some £1,600 less than entry-level Elite models.
As Zenith looks to pour resources into developing the El Primero, one casualty of the move may be the Elite movement itself. Mr Dufour has been quoted announcing the demise of the calibre introduced in 1994, one of the first in the industry to be designed using CAD technology, but sources have been unable to confirm whether the strategy would be retained by Mr Dufours successor, Aldo Magada, former chief executive of Gucci Group Watches.
Zeniths volte-face may have an impact on its brand positioning and perceptions. Currently, Zenith markets itself as a traditional movement manufacturer that has made more than 600 calibres during its history and been awarded 2,333 prizes for chronometry. At the moment, Zenith is the industrys best-kept secret, says Ms North. Its time for it to grow into a big business.
Her point is not lost on industry observers. Timothy Barber, editor of specialist watch magazine QP, says: Insiders value Zenith as a historic manufacture brand famous for precision and particularly for its El Primero movement. But Zenith has struggled to get that message out more broadly, because it doesnt have the impact of say Omega or TAG Heuer. Its a respectable Swiss brand that is a classy alternative to the big boys, but relatively anonymous.
So, while watch-educated people may mourn its true manufacture status, they arguably aren't its future core audience. To grow, Zenith needs to reach an audience for whom manufacture status is less of a concern. Much of that growth is expected to come in emerging markets, where accessibly priced, time-only luxury watches are considerably more popular than chronographs. Zeniths Swiss heritage has already won fans in economies where the watch market has experienced rapid recent growth, particularly China, around which the brand has based its pricing strategy.
Mr Dufour saw that Chinas buying power wouldnt last for ever, so he kept prices at a reasonable level, says Ms North. By contrast, some of our competitors are suffering because they put all their eggs in one basket. Going in-house and positioning your brand at double the price point doesn't necessarily succeed. Some have done it and its worked; for other brands, it hasn't, and they're having to bring their prices down.
Zeniths new direction suggests the influence of Jean-Claude Biver, LVMH Groups head of watches and former Hublot chairman, is already kicking in. LVMH hopes Mr Biver can propel Zenith to global recognition as he did Hublot while serving as its chief executive during the 2000s.
Ms North says: Mr Dufour has done a huge job with repositioning the collection, telling people that Zenith exists and taking it back to its true values. Mr Biver is going to add to this, allowing the company to expand. Zeniths status as a traditional or purist brand seems likely to change, but it is confident that in doing so it will become a more successful business. It also believes it wont be the last to adopt the strategy.
Unless brands can produce in-house movements at an affordable price that makes commercial sense to the end consumer, they will have to [follow us], says Ms North."
The last sentence is very telling...
Very interesting read; thank you for sharing!
I think the last line is particularly interesting; the suggestion that we may begin to see more brands stepping 'down' to sourced movements, in order to evolve to face the new economic realities of the industry. I think this will be a very interesting period in the industry to watch, and has probably been some time in the making.
Personally, I find it sad that so many enthusiasts and collectors place such an emphasis on in-house production, almost as if this is a pass/fail test of being a quality watch, when the industry itself was literally built on the ebauche system. If we look back at how Switzerland was able to achieve its position as the leader in watch production, we see that England stuck with job-shop type supply chain, while America adopted the less-flexible mass production method. Switzerland's advantage was its ability to utilize suppliers to capture value and quality while still being able to meet the changing needs of consumers.
Unfortunately, the beautiful mystery of the watch movement lends itself to being oversimplified when communicating with people who are just learning about watches, and in-house vs sourced is one distinction that even a layperson can understand. He can then 'feel' like he knows a great deal about how to discern a quality watch from a poor quality watch.
The result has been two-fold. First, a WONDERFUL increase in variety of available movements and the cultivation of creativity amongst engineers and designers. Second, (probably) unsustainable specialization and supply chain inefficiency.
How this all shakes out will be interesting to witness! And specifically relating to Zenith, I think this transparency is a bold step that will soften the effects of this transition.
Thanks for reading!
Brandon
The 'in-house' trend really is late 20s/early 21st century marketing...
and like you I can understand why brands like to use it to sell their watches and distinguish themselves - its so easy to 'understand'...
However, a watch is much more than a movement, and the other qualities (and those of the brand) are much more difficult to get.
Perhaps decisions like this of Zenith lend to a broader appreciation of a timepiece's qualities?
Best,
Magnus
This is very sad...
As I see it, there are at present only two high end industrial watch companies (Swatch Group and
Rolex). The rest are more or less boutique marketing houses,
especially LMVH. Why Zenith can't sell more than 30'000 watches a
year is a mystery. Do they get no support from LMVH? LMVHs specialty is marketing and Zenith has every
charactoristic that should allow them to tell a good story to grab those
sales.
What Mme North is saying is that Zenith can niether make nor sell high end watches in big quantities. This is very sad. Zenith could become a good competition for Omega and Rolex with a little time, but they have already given up. Diluting their quality image by competiting with Tissot etc. instead of Omega/Rolex is certainly not a healthy long term solution for the brand. Note that both Omega and Rolex have other brands at a lower price point so they can service that market without watering down their own image. This would be a better way for Zenith to go too, IMHO
Don
What Mme North is saying is that Zenith can niether make nor sell high end watches in big quantities. This is very sad. Zenith could become a good competition for Omega and Rolex with a little time, but they have already given up. Diluting their quality image by competiting with Tissot etc. instead of Omega/Rolex is certainly not a healthy long term solution for the brand. Note that both Omega and Rolex have other brands at a lower price point so they can service that market without watering down their own image. This would be a better way for Zenith to go too, IMHO
Don
Don, I understand where you are coming from but...
I think you put a but much emphasis on the movement (as I said fully understandable as an accomplished watchmaker ,-)). Just because Zenith resorts to outsourced movements does not meant that the watches are on the same level as a Tissot (which besides does not use Sellita...).
Having said that, you have a valid point re: volume compared to others. But those other two are special cases themselves!
Best,
Magnus
I understand, but I don't understand...
I entirely understand why, if they want to expand the brand, they need to have a lower entry-price and to achieve that, they must forgo the in-house movements. What I am less clear on is the need to expand the brand. They're not a small company, or even part of a small conglomerate like they once were. LVMH is a massive behemoth. Do they really need every one of their brands to cover every market space on every continent?
As Zenith already has enormous value to the company for movements for the other brands, I'd think they could use that along with the exclusivity of the brand in marketing. Talk about how your TAG or your Dior has a Zenith movement, and then burnish Zenith as the "quiet brand that's too focused on making fantastic movements to sponsor a auto race". Use the brand panache as a value-add for other brands, rather then trying to spread them too thinly and risk the reputation.
In summary, use Zenith like a lower-market Roger Dubuis ( I know that sounds weird)
A
As Zenith already has enormous value to the company for movements for the other brands, I'd think they could use that along with the exclusivity of the brand in marketing. Talk about how your TAG or your Dior has a Zenith movement, and then burnish Zenith as the "quiet brand that's too focused on making fantastic movements to sponsor a auto race". Use the brand panache as a value-add for other brands, rather then trying to spread them too thinly and risk the reputation.
In summary, use Zenith like a lower-market Roger Dubuis ( I know that sounds weird)
A
Where else are RD movements used?
I would risk the statement that RD is not exactly a success story either.
So, if according to Ms North 'purists' (read: collectors) are not the main target audience I guess it would be difficult to market the advantages of a Zenith movement in a Dior, TAG etc..
Except you try hard, and I have the feeling they think they did that with insufficient success.
Best,
Magnus
Cartier
I don't remember if any particular RD movements are used completely unchanged, but they are the basis for several of the recent complications, i.e. the Ballon Bleu Flying Tourbillon
A
A
The Circle of Time
Dear forumners,
What's the problem?
This is the natural cycle of time in the watch industry. By the fact that some people are complaining shows how "young" today's consumer or collector of mechanical watches are. Even our more senior members remember buying quartz watches with first pay check....not counting the children with trust funds who bought their own watches before 1970 
At the dawn of time, every watch was "manufactured" by one watchmaker or assembled in small batches in Geneva through Spring and Summer from components fabricated by farmers working in their spare time in Winter.
Then, industrialisation and consumerism created demand for single site, integrated factories like Zenith, IWC, Longines, Omega etc. Some 'manufactures' like Piaget, JLC, ARSA etc made movements for 3rd parties. Quality was good and consistent due to industrialisation and QC. Costs came down and everyone had a watch for life...maybe a 2nd watch for Sunday-best.
Piaget and JLC made movements for other brands for many decades before putting their own name on the watch dial and becoming watch brands.
The circle moved on and economic depression or war caused some brands to stop making their own movements as outsourcing was cheap and maybe even better consistency than in-house. Some brands continued with a dual-source policy using movements from inside and outside to suit circumstances viz Patek Philippe, Omega, Rolex, Vacheron, Audemars Piguet, Cartier, Breitling etc.
The advent of quartz era killed most of the 'in-house' Manufacture policy. The small movement makers joined forces so we ended up with ETA and SWATCH. Nobody complained about Venus, Lemania and even Zenith El Primero movements in Patek Philippe, Omega and Rolex watches before.
The circle moved on again and mechanical watches become status symbols instead of solely timekeepers. Yuppy (Young Urban Professional), Dinky (Dual Income No Kids), Bob (Bollinger on Breakfast), MOCAAP (My other car also a Porsche) culture since 1980s revived the mechanical watch and in-house became the USP (unique selling point).
Transparent casebacks were invented just to see what you paid for. Its not good chemistry to expose the lubricants to UV light but showing off was more important than basic engineering principles. Cult figures, false gods and idols were created. (Insert brand or watchmaker names here).
The circle moves on and economic boom and crash become usual (Japan, Brazil, India, China, Russia and then the whole world). Brands open and close shops across the world following the money. Entire batches of $200k complicated watches were bought by single dealers in Al Maty and Moscow. China market just crashed for the big ticket items but by sheer numbers (1 Billon is a good number), the mid-range price / high volume market is a robust bet for the future.
Zenith did NOT announce they were abandoning in-house movements. They are just outsourcing a good movement at reasonable cost for some watches.
The Circle of Time moves on....................
Regards,
MTF
This message has been edited by MTF on 2014-06-11 18:59:40very well put!
Sir,
your response reflects a very deep understanding of human psychology and the retail market..I am a Pakistani and have lived in six different countries and currently living in South Korea. your point about new lifestyles and artificial gods' creation in the modern time is very important and true...I see that more than half the world has no idea who Mr. Paul Newman was, nor did he do anything significant for anyone at all in the world, and yet a watch similar to what he wore goes for 100 times the same watch!! the fact is that buyers are influenced by extremely weird things and will complain about smallest weirdest things..its not design or engineering, its just the modern fake artificial world of hollow priorities and choices...but I am not criticising anyone's choice..people like different things, and are willing to pay with their money for it so it is not my problem..it is just that substance is all lost in these times...engineering and purpose and the whole posse of the watch-world, the craftsmanship, is no longer the standard in most cases for buying, which is just saddening to see.
I can appreciate that Zenith is expanding and for that it is relying on good movement makers to participate with them, which is what the watch world has been doing since ever, so nothing new or bad in my opinion...if it performs as any other Zenith, which is known for reliability, I have nothing against them.
warm regards,
Asad
p.s. pardon if I hurt any sentiments. I wrote exactly what I felt when I read discussions like these om issues that should purely be subjects of performance.
The watch industry and its customers - what came first, and what follows?
Dear Melvyn
thanks for your very refreshing perspective. Yes, I agree with you on the cycles. Demand comes and goes, tastes and preferences change, and the industry has to cope with it.
I see an industry confronted with immensely expensive overheads due to the vertical integration of the recent years. All was built up/bought lured by a seemingly insatiable Asian / BRICS market that sucked up almost anything that bore a reputable Swiss name. That has ended somehow, and the brands have to react.
Zenith has made its choice and I guess that's a reasonable one. I just wonder if the Biver approach to marketing works a third time...
Best,
Magnus
Sad indeed
Zenith has decided to turn its back on it's loyalists. It would be fine if these moves would be accompanied by moves to make the best possible watch and to innovate. I have no issue with outsourcing so long as this is reflected in the price and they do not make a move to completely outsource. I have more issue that Zenith is becoming Biverised. A marketing circus utilizing cheap (but expensive) tactics to increase sales. Yes, I do expect Zenith to continue to create showpieces that are incredible, but only affordable to the few (Academy/Type 20 Grand Feu). But I worry for the core collections, the use of brand ambassadors/logos/limited editions that offer nothing extra save a partnership. I am not looking forward to all the press releases I expect will follow.
Dean
But I read the statement such that they indeed want to focus on innovating...
at the level of the El Primero (with all its iterations and derivatives, from Minute Repeater to a basic three-handed watch) and forego the level of Elite at an in-house status.
While the Elite is an outstanding movement, its not exactly a star in the appreciation of collectors and other buyers. So, they might have come to the conclusion that (i) the added value of the movement to Zenith as a brand is too low to justify resources (production, service, marketing,...) and (ii) Zenith as a whole would profit more from expanding at where it is strong and keeping a lower profile on where they just can accrue revenues (the Sellita level).
That is a lower price level that Zenith is aiming for, and I am sure that the basic Zenith quality is there. Thus, I think many (if not all) of your cirtiera in the first two sentences are fulfilled.
As for the 'Biverisation' - you have a string point, and seeing the RS edition I think your point is even stronger...
Best,
Magnus
Shaky start
I can't say that Zenith's decision to start using outsourced movements is the wrong direction for the brand as it is still too early to tell. But I must say that the "Pilot Type 20 Extra Special" a bad start. Here's a few classic examples why.
1. Customer walks through the door and likes the Pilot Type 20 EXTRA Special and asks the dealer "Whats so 'special' about this Pilot Type 20?"
The dealer then replies "Its the first watch we outsourced the movement".
2. You wear a Pilot Type 20 "Extra Special" to a gathering with friends and you get asked "Wow!! That's a nice watch" and get asked "Whats so 'special' about this watch?"
You will most likely muddle "It's the first outsourced movement from Zenith".
Definately not the best conversation piece.
If the watch didn't have "Extra Special" written on its dial to start the conversation, I must say it would probably be a great seller due the the size and price compared to its other Pilot Type 20 brothers.
I fully agree with you, and the only explanation I have...
is that the Sellita-thingy is an afterthought where they had to use the just revived Pilot collection exactly because this one is actually attracting new (and younger) customers.
Best,
Magnus
At the end of the day, it is about running a business
While I'm not thrilled about the news, I don't really have an issue with this. IMO, they're taking the same path many other watch manufacturers/companies are on in broadening the appeal to the market, from the purists to the man on the street who's looking to be buying a good watch without having to take out a second mortgage on the home. IWC does this with a mix of their in house movements as well as outsourced, as in the 30110. Same with Franck Muller, Omega, Breitling and many more. Those of us who appreciate an in house movement, there is still the El Primero as that's not going away, but for those who don't really care, and in some cases, I'm like that - someone just looking for a quality movement, accurate, easy to service and source for parts in the future - those would benefit from an outsourced movement.
What I will have an issue with is not so much the movements, but the marketing that goes about endorsing just about every private club and sports star out there and passing those costs down to the consumer, which will then negate any potential price effect on the watch regardless of the movement. It looks to have started with Zenith, and I hope it's not the direction they're going with.
Richard
Right on !
+1
"What I will have an issue with is not so much the movements, but the marketing that goes about endorsing just about every private club and sports star out there and passing those costs down to the consumer, which will then negate any potential price effect on the watch regardless of the movement."
Don
"What I will have an issue with is not so much the movements, but the marketing that goes about endorsing just about every private club and sports star out there and passing those costs down to the consumer, which will then negate any potential price effect on the watch regardless of the movement."
Don
Thanks for your opinion, indeed, it could be beneficial even for us purists...
if - and this is a big IF - they play it well. I am inclined to give the incoming CEO a carte blanche on this.
Magnus
Zenith has done it, others have/will do it, and its a reasonable decision!
Dear all:
I took the liberty of taking a few days to ponder about this decision. Initially, I was taken aback by it, but the more I think about it and the more I read the contributions here (THANKS SO MUCH!) the more I am confident that (partially) resorting to outsourced movements is a reasonable strategy for Zenith.
Zenith is as Ms North correctly states still a brand for the 'in-the-know' - despite the famous movement, despite the head-start they had at the dawn of the watch revival, despite much efforts by Mr Nataf and by Mr Dufour to bring the watch back into the center of the watchmaking universe.
The Zenith case clearly shows that being the true and tried manufacture might not suffice to survive. Zenith's management recognised this fact and acted accordingly. We might not like the decision, but I think it is a very professional decision being taken. They knew they would likely offend the enthusiasts, considered the odds and decided to risk it - brave!
Are they alone with that?
Definitely not: Just look at the recent offerings from Montblanc: the new heritage collection is powered almost entirely by ETA/Dubios-Depraz movement despite their considerable in-house capacities. Nevertheless, the collection was received very positively. The argument for the use of ETAs is exactly the same as for Zenith: being able to attract more customers at lower price points. IWC is (traditionally) following a similar strategy.
Essentially, if you look at it as a whole Swatch Group does also something similar, however they pulled the marketing trick of having the distinguishing line coinciding with brand levels: everything including and above OMEGA is in-house (or at least manufacture), everything below (such as Longines or Tissot) is ETA. Cleverly avoids a split within a brand!
Still, Swatch Group manages to sell huge quantities of in-house Omegas, but that brand is a staple name just like Rolex, known to even non-watch enthusiasts, therefore barely comparable to Zenith.
Directly comparable is the fact the Jaquet-Droz uses long-term Piguet movement, and I have no idea about the status of their rumoured in-house movement (which is rumoured since 10 bears already...). Same situation at a higher market range?
Others will follow, but who? I am not sure whether Baume & Mercier will be successful with their manufacture movement. Even AHCI watchmakers like Peter Speake-Marin are increasingly using off-the-shelf movements.
Let's face it: the times where you could attract someone with offering an in-house movement alone are gone. Too many brands did it, so where is the news, where is the added benefit? That is exactly what brands have to answer, for themselves individually but ultimately also to the customer. If you cannot and you just want to be different - a (costly) failure is likely.
Zenith learned the lesson that they need to broaden their audience in order to be sustainable in the future, and they recognised that the key is a two-pronged strategy: the 'stars' with the El Primero, the bread-and-butter with high-quality but bread-and-butter powered watches.
I think however that there should be a clear distinction between in-house and Sellita-powered timepieces. A mix within a given collect could confuse customers and this severely and negatively impact on the brand.
Let's see how this will turn out!
Best,
Magnus
Extremely well put
Very well said Magnus.
Like I mentioned, I have no issue with the move to partially outsource. I was not impressed with the way they quietly introduced it in a watch labelled Extra Special. And I have yet to see how the movement is finished. I am also a little confused at how for so long Zenith prided themselves as a manufacture, and provided movements for Rolex etc, and gave this status up so quick. I suspect in a few years they might reverse this decision once again and once again Zenith's long history would be convoluted.
And the other issue I have is that Zenith is a one trick pony with no truly iconic watch, but an iconic movement. Zenith is known for the El Primero. These moves will only reinforce that. I do hope they decide to discontinue the robust, but rather unexciting and mundane Elite, but to focus on the El Primero will likely mean we will never see another year like 1969, and a new breakthrough.
Anyway, as you mentioned, perhaps the benefits of a move to make Zenith more mainstream outweigh the responses of watch enthusiasts.
Dean
But this is Zenith. I guess I can be a romantic when it comes...
to these things. Also the reason why I don't make a ton of money.
But then again, I never really needed to
Thanks for sharing this article.
I'm Not Convinced
All this proves is that LVMH doesn't understand the brand.
This move will alienate the current clientele without drawing a new set of loyalists. Already, it's difficult to see how a high-volume Zenith is anything but duplicative of TAG Heuer, a brand that already serves the market for mid-level sport watches and does so with outsourced content. TAG is established as precisely what this article proposes Zenith should become. If I'm Joe Everyday looking for an entry-level premium watch and I see a TAG I've heard of and comparably-priced a watch named after a TV brand, I'm buying the TAG unless the Zenith comes with a huge discount. Why fight that battle when each brand already serves a purpose?
It's one thing to shuffle parts within the same family of brands; that's the Lexus/Toyota relationship, and it works as long as each product meets expectations and serves a different market. It's another thing entirely to have redundant brands selling undifferentiated product to the same target customer. That's bankruptcy-era GM.
Swatch and Richemon't success comes from offering different brands with different identities, different levels of spec and finish, and different clienteles. It's all well and good to say that Zenith is missing the "meat of the market," but I don't see comparable brands like JLC and AP rushing to eviscerate themselves for the sake of higher volume. Between Tissot, Longines, TAG, Hamilton, Tudor, Seiko, and many, many more, Bubba's already got plenty of options to keep him busy. Richemont isn't commanding VC and Lange to go after Breitling even though we know Breitling outsells them both. Blancpain executives don't lose sleep over what SevenFriday is doing.
Oddly, I don't see this as Biver's doing. He's a showman, certainly, but he invested pretty heavily in exclusive content with Blancpain, Omega, and Hublot. He practically bought BNB Concept lock, stock, and barrel when it went under so Hublot could have the tooling, personnel, and patents to build its complications. And he appointed Dufour to Zenith in 2009. While I have no doubt that Biver's fingerprints are all over the regrettable Rolling Stones sponsorship, I'm not so sure that decontenting Zenith products is his project. More likely, there's an LVMH careerist in the mix, one who may not be a watch industry life.
Best,
Tim
This move will alienate the current clientele without drawing a new set of loyalists. Already, it's difficult to see how a high-volume Zenith is anything but duplicative of TAG Heuer, a brand that already serves the market for mid-level sport watches and does so with outsourced content. TAG is established as precisely what this article proposes Zenith should become. If I'm Joe Everyday looking for an entry-level premium watch and I see a TAG I've heard of and comparably-priced a watch named after a TV brand, I'm buying the TAG unless the Zenith comes with a huge discount. Why fight that battle when each brand already serves a purpose?
It's one thing to shuffle parts within the same family of brands; that's the Lexus/Toyota relationship, and it works as long as each product meets expectations and serves a different market. It's another thing entirely to have redundant brands selling undifferentiated product to the same target customer. That's bankruptcy-era GM.
Swatch and Richemon't success comes from offering different brands with different identities, different levels of spec and finish, and different clienteles. It's all well and good to say that Zenith is missing the "meat of the market," but I don't see comparable brands like JLC and AP rushing to eviscerate themselves for the sake of higher volume. Between Tissot, Longines, TAG, Hamilton, Tudor, Seiko, and many, many more, Bubba's already got plenty of options to keep him busy. Richemont isn't commanding VC and Lange to go after Breitling even though we know Breitling outsells them both. Blancpain executives don't lose sleep over what SevenFriday is doing.
Oddly, I don't see this as Biver's doing. He's a showman, certainly, but he invested pretty heavily in exclusive content with Blancpain, Omega, and Hublot. He practically bought BNB Concept lock, stock, and barrel when it went under so Hublot could have the tooling, personnel, and patents to build its complications. And he appointed Dufour to Zenith in 2009. While I have no doubt that Biver's fingerprints are all over the regrettable Rolling Stones sponsorship, I'm not so sure that decontenting Zenith products is his project. More likely, there's an LVMH careerist in the mix, one who may not be a watch industry life.
Best,
Tim
You bring up a very valid point comparing to the other watch conglomerates...
Swatch certainly did a wise thing in that the split their customers into various levels served by different brands, not trying a one-brand-fits-it-all approach.
I am not saying that Zenith is trying to do that, its to early and in addition - next week we'll see a new CEO taking office.
Cheers,
Magnus
They just presented a new watch with the Elite movement - does anybody understand this? [nt]
No message body
Obviously
they read PPro's Zenith forum
I think that apart from the fact that all manufacturers use
different online resources to
feel the pulse of customers our CEO MTF
already said it in this thread
"Zenith did NOT announce they were abandoning in-house movements.
They are just outsourcing a good movement at reasonable cost for some watches."
Sincerely
Damjan
a 'but' that causes a second 'but'...
'but 1': In the FT article it was stated that previous CEO Mr Dufour announced the demise of the Elite movement.
Which immediately raises...
'but 2': the announcement of the new ladies' timepieces with the Elite movement came on 2 July - the 2nd day in office of current CEO Mr Magada...
So we will have to wait...
Cheers,
Magnus
Without any false pretention
that I'm God given or knowledgeable or of any merit
but I feel and see that life is full of ifs and buts (pun not intended)
so world of horology is not exception
Life is one big compromise ...some learn it sooner some later
some too late...some hard way others easy way but each and every one in the end
Zenith is good proof in this issues IMO
Sincerely yours
Damjan
Outsourced movements
If Rolex could use El Primero movements, and Patek Philippe could use Lemania movements, it is understandable that Zenith uses Sellita movements.
My 2 cents
The reality is that Zenith is only known to the cognoscenti. Ask your non WIS friends, family, and colleagues to name an example of a "good" watch and inevitably Rolex will be mentioned. If you had a couple of grand to blow on your first good watch the chances are very good that it won't be a Zenith, but instead one of the big names out there. Selling lower price point Zeniths might help get more of them out there but what Zenith needs is greater brand awareness which is tough to do. zenith wants to be one of the big guys out there but it's just not a sexy brand to your average Joe buyer. Zenith is as another poster indicated here is a "one trick poney". Although the El Primero is an excellent movement how are you going to market it???....what are you going to say..." Yes, it was the movement once used in the most desired chronograph on the planet...the Rolex Daytona".., As an off the wall analogy would you rather meet the lingerie designer or the lingerie model?...
The watch business is very competitive and every one can make a couple of bucks, but the reality is that mid level brands, while they can be profitable and thriving, will never topple the great white sharks of the industry. They got deeper pockets than yours, and can survive economic downturns, and possibly emerge even stronger. I've always thought Zenith made good products, but was turned off during the Nataf era. I thought the watches ugly and overpriced. After getting rid of Nataf, the brand was going in the right direction again, but the same problems remained...poor brand recognition. I had actually contemplated getting one of there stratos chronoswiss but was turned off but the overlapping sundials....an example of a trend catering to the masses, who may not give a crap about functionalty...When I mentioned the overlapping sundials to the salesman you know hat he said?..."most people don't use the Chrono alot".
Although economically Zenith is doing the right thing in outsourcing their lower level movement, I find it sad that a once true "manufacture" no longer isn't.