Business policy makes Rolex successful

Who does not want to own and wear a Rolex watch? Let it be Submariner, Sea-Dweller, Oyster, Daytona, Explorer and many other collections are so popular in several countries as the ones to be chosen and exhibited as a piece of classy wear that never fades. Behind this great phenomenon stands Rolex Business Policy:

Founded by Hans Wilsdorf a German-British businessman in1905, Rolex Company is of perennial nature. As there was no heir for this legendary watchmaker, the business was converted to a private charity trust after his demise, where the employees of the company are beneficiaries.  This charity goes as Hans Wilsdorf Foundation whose revenue is not taxable. Rolex business policy runs hereunder:

 

• Every Rolex piece that comes into the market, is tested and certified for its, precision, performance and permanence.
• Scarcity underpins Rolex business policy. There is no flooding of Rolex in the market. Not more than 2 million pieces of watches a year are made to ensure demand stays at its peak forever.
• Design features take into count of modern technology in fusion with timeless style, unparalleled prestige and contemporary innovation and the finished products are classified into collections, few of these I have mentioned in the prelim.
• The company does not engage in direct marketing; there are authorised dealers worldwide who sell Rolex watches to buyers. While the company itself does not give sales discount to dealers, it suggests a maximum retail price taking into count of the dealer margin. The company business policy is to take a 25% wholesale margin, whereas dealers are allowed to add their retail margin covering their holding cost and the target profit they desire, before effecting a sale.
• The business policy ensures there is a secondary market value throughout the life of the product. For this purpose every watch produced is tagged with unique number such that fake can be detected at any time by authorised dealers. Hence. only genuine watches have the re-sale value. The driving force is the prestige of Rolex which is part & parcel of any sale transaction.
• The company does not sell any spares to individual users but make these available only when the affected watch is handed over to the authorised dealers to undertake ostensible repairs. However where the repair needs overhaul on the mechanism it need to be sent to Rolex Headquarters. 
• The company does not accept the “Right to Repair” condition imposed in USA, where user has inalienable right to repair or re-fit items he buys and uses. Nevertheless, dealers in America generally accept watches for major repair if it is evident there is accidental damages caused by circumstances beyond the control of such users.

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

Three secondary areas that influence business policy

Settling business policy is not an easy task. Globally business finds this work daunting to such extent, that in addition to in-house deliberations it contracts out externally, professionals in the field of business strategy to have a look at business policy. There are two sets of areas that influence business policy. One primary and other secondary. Read for more:

The primary area consists of politics, economics and military known by its acronym PEM. I have in an earlier blog “Three primary areas that influence business policy” given a bird’s eye view on this subject. In this blog I am mapping how secondary areas, that is, society, technology and geography (STG) impact the formulation of business policy in corporates and even in state owned enterprises. 

Society

At the outset, it must be clearly and loudly pointed out that society matters in everything done in this world. It is the cohesive institution that passes judgement in politics, economies and military affairs, the underpinning areas in primary policy as well. If something is not acceptable to the society at large, then any policy in these areas have to be over turned. 

When General Douglas McArthur requested permission to use nukes against China in the Korean War 1950-53, President Harry S Truman mindful of the devastation caused in Hiroshima and Nagasaki by previous use of atomic weapon, flatly rejected it and later  removed the General for insubordination in 1951. Here President Truman listened to the society rather than military, which was a minuscule part of the society itself. 

Technology

As an enabler technology plays larger than life role in shaping up events, providing necessary platforms for humans to conduct their daily affairs. In business particularly, technology drives growth & change, the latter resulting in improvement and innovation of products, procedure and in a way, market acceptance of the change as such. In fact, technology is the ultimate instrument in change management that has brought up fresh demand for more techy products and enlarged the scope and activity for these. Today mobile technology has no bounds as it is the most ubiquitous product in the hands of every member of the society.

Geography

Both as a limitation factor and growth element geography has a vital role for countries, entities and also citizens. Limitation acts in two ways: one that it motivates entities to surmount the difficulties arising out of geography to find new ways of running a business. Farms in Siberia have perfected the art of surviving in the ice and growing grains. Other way, it makes business to get over it by finding out alternatives. Northern Route in Arctic is envisaged to be the next miracle like Suez Canal in 1859.

Positive side is the biggest boon offered by geography. Right from the beginning, Danube River which runs through ten countries namely, Ukraine, Moldova, Romania, Serbia, Croatia, Hungary, Bulgaria, Slovakia, Austria, and Germany provides them a basket of goodies in the form of transport, electricity generation, water supply, sustainable ecology and top of it all, a sense of belonging to the countries so that bonhomie pervades!

 

Cheers!

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

  

Stay ahead of industry curve

One of the famous statements by Michael Franzese, Ex Capo regime is so pithy and so relevant today that every business scripts it as a motto in its business competition so as to stay ahead of the industry curve in the following three broad areas: 

In business policy 

1. “Know your business well”, implores Michael Franzese. Get the hang of how to promote business in places where you are known as well as places where you are relatively unknown

2. Adopting new trends, technology and novel production & marketing systems is the big push you can give to business, along with building trust in the eyes of staff inside and customers outside

3. “Have plenty of cash reserves“, to tide over any eventuality that might come up as purchase of new business or investing additional capital in an existing product that is up for innovation. 

In workplace

1. The shared culture in business must seek to pass the benefit of your efforts to customers on one side. For example, a new product could be priced comparatively low at the introductory stage.

2. On the other side you share the cake with the staff for their contribution in making the product do well in business competition. This takes place in recruiting, rewarding and retaining quality workers with you. Put differently it is “loyalty pays” 

3.  Most importantly, everyone in the organization must be fastened to the concept of team play. The entire staff works as a team sans seeking personal glory. The undercurrent that runs is “swim or sink together”. 

In marketplace

1. At any time you give a word it is sacrosanct on you that you must keep to it. This is not casual remark to be dismissed in the course of time, but a bond which you gave to the customers & the market that you would honour it at any cost

2. “Collaborate with likeminded people” counsels Michael Franzese. You do not see customer as an opponent always. Instances arise when you have to work with him to achieve common purposes that are vital for both of you as well as preserving & promoting the industry you are in. Setting Industry regulations /standards is one such area of collaboration

3. At parallel, pragmatism dictates that you sup with the competitor as pals and compete with him for market share as opponents!

 

Cheers! 

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

Seven mafia rules that every business must follow

It takes a long time to develop and enshrine coordinates of an effective business policy. Surprisingly the mafia can teach seven such business policy parameters to every company that competes for its share in the market. Here we go, catch the seven mafia rules:

1. Maintain dignity of your business and the shared culture of your company that made you to grow from humble beginning to the present heights which you have scaled so far without any blemish on your part

2. In all activities of your company, purchase of raw materials, manufacturing, finally marketing finished goods to your ultimate customers you must follow a code of conduct as if it is the gospel from the God. What we call as manual, this code of conduct gives you the moral strength to compete with your opponents in the market, because in the dog eat dog competition the first failure is the moral turpitude

3. Never lie. Speak the truth even if that hurts your chance of making the big deal you are working at present. You can take one customer for a ride. But the news spread like bushfire and you would be dismissed as a liar and looked down as a leper

4. Keep your appointment at any cost. For example you have agreed to meet up with a potential customer at a given place. Both time and place were confirmed and re-confirmed. Suddenly you wife develops labour pains. What you should do? Express regret and skip the appointment and take her to hospital or go to the meeting along with your next in command, discuss pertinent points and let him handle the nitty gritty and seek permission from the opposite side stating the situation you are in. Here you gain both the deal and respect from your opposites

5. Never promise what you cannot deliver. In business negotiation the key variable is the linear relationship between “talk the talk and walk the walk.” You talked high but failed to walk with it means you have literally destroyed the trust you and your company built over time. Whatever you promised must be reduced into writing and the notes compared between you and the counterpart so that it can be acted upon ASAP.

6. Use your resources, not abuse. One thing certain in life is all resources including time, talent and finance are limited in scope and quantity. A successful business policy mandates strict adherence to effective as well as efficient use of resources by all line managers. One abuse leads to another and so on, until most resources are depleted and you are still on the square one. This is the worst nightmare anyone can have in his career

7. No Excuses. Either you kill or get killed is the motto Western movies broad cast. The adage “failures are pillars of success”, is true only in limited circumstances. You have only one chance to say “Excuse me.’’ Put it differently, if you fail once it is your learning curve and if you fail again it is your trending curve.

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist