Grutzen Watches, a start-up distributor and producer of watches, is Grutzen Watches. Its strategy is to serve the upscale niche markets of the watch industry. It will benefit from the German engineering and manufacturing that went into the production of the watches. There are many potential markets in this industry that want stylish, high quality goods, but they don’t think they can afford them.

It is the intention of the firm to export its products to America and make Grutzen Watches number one selling European watch in the Western U.S. The company’s long-term goals include a 20% market share in the U.S., brand equity and marketing, a sustainable 55% profit margin, as well as luxury watches.

The Company

Grutzen Watches, an international privately-owned corporation, is located in Germany. Production takes places in Germany. Marketing and sales are focused on the United States, California, and the short-term.

The initial investment is made by three individuals. These include Franz Grutzen’s head of production, Henry Winster’s head of American and sales and market divisions, and Walter Young’s vice president for American division.

German factory is located in Frankfurt, Germany at 210 Autoroute 17. The factory has a 1,000-square-meter area and should be adequate for the company’s initial three years of growth. Henry Winster’s Los Angeles home at 343 Palm Avenue will be the place where the watches will be distributed. The watches will first be sold at upscale watch shops in Los Angeles or San Francisco.

Grutzen&#8217’s sales team will consist of Henry Winster as well as two freelancing sales representatives. The communication between Henry Winster (USA) and Franz Grutzen (Germany) will enable order processing.

The Products

The brand’s initial product line will feature elegant analog watches featuring sporting characteristics that can be used down to 100 meters. The company plans to release two versions, the “sport” watch and the “night” watch.

The pricing strategy for our main competitors will be to first undercut them by 10%. We will then use a market penetration strategy. After that, the pricing will be adjusted so that it is directly competitive with major competitors. The price per watch is expected to be around $100-$200.

The Market

It is a good time to enter the high-end watch business. The U.S. has seen an increase of 50 percent in the purchase of European watches, both high-end and mid-level, over the past two-years. This trend is expected not to slow down.

A recent trend that is important is the fact that potential watch buyers will spend more on watches due to their enhanced image appeal. It is important to have a strong brand image in this business sector. This gives you a significant competitive advantage. Grutzen’s goal is to take advantage of its high quality, reasonable price and pursue the innovative styles required for brand building.

Financial Considerations

The startup costs of the company will amount to $226,000. Owners’ equity will provide $171,000. An additional $30,000 of funding will be made up of short-term borrowing and long-term loans. The majority of the start-up costs will consist of rent, research and development, initial inventory, and a strong cash account. Grutzen Watches’ Break-even Analysis indicates that they will be able make steady profits in the second and third years.

1.1 Objectives

1. Grutzen Watches has been voted the best-selling European watch.
2. In the future, to produce luxury watches as well as the moderately priced line.
3. To achieve a profit margin of 55%
4. To reach a 20% market share within the U.S.

1.2 Mission

Grutzen Watches, a watch manufacturer, makes wrist watches that can be purchased in the United States. Its first production was in California. The company will first establish its image as a quality brand and then begin to sell luxury watches with higher profits.

1.3 Keys for Success

To succeed Grutzen Watches must:

• You can build and sell high quality products.
• Achieve 100% customer satisfaction.
• Marketing can help build brand equity and image.