Embracing Change Timely entry into Asia by Dan Reeves Sales and marketing functions as vital as sourcing, quality control and logistics You would be forgiven for thinking that Hong Kong and Asia doesn't need another watch company in an already saturated market but you would also be wrong. Skagen, a Danish design company with in excess of US$100 million in US and European market sales, is poised to take Asia by storm. It has already posted sales of close to 100,000 watches in its inaugural foray into the Japanese market. Based on Danish minimalist design, the company is set to begin sales and marketing operations in January 2008 and has placed its area headquarters in Hong Kong. "We are one of the biggest watch companies in the US, Scandinavia and Germany in terms of volume and we produce watches primarily for the upper mainstream segment — meaning in the US$130 to US$300 range," says Steen Albrechtslund, managing director, Asia Pacific, Skagen Designs Ltd. New directions In the next eight months Mr Albrechtslund will engineer the start-up of the Asian Pacific commercial operation and oversee the hiring of 10 to 20 additional staff. "Originally the function of the Hong Kong office was to support sourcing in China, product development, design and logistics and provide liaison between the design directions and the production people," Mr Albrechtslund says. He points out that prior to the opening of the Hong Kong office, product went from China back to Denmark and was then redirected to Japan. It made sense from a strategic point of view to establish a revenue stream into Hong Kong. "We have a big job before us but in a company like Skagen you can really make a difference and actually see the results of your work. My approach is not to micromanage the staff. A manager's job is to make people feel comfortable so they can do their job, and also to set directions and follow up on targets," he says. "Accordingly, we are going to need people who can take responsibility and solve challenges and do so in a culture of friendly accountability. We must support each other to get the job done and at the same time have fun too." Business engineering requires the establishment of sourcing, quality control and logistics as well as an initial build-up of a sales and marketing branch with which to service customers. "In fact the first step is sourcing because you must be able to deliver the right number of watches with the right quality at the right place and be sequenced to rotate the product to your customers," Mr Albrechtslund explains. "It's all about establishing the platform we need to manage the growth we expect. Our strategy is to partner with a small number of quality sources and vendors, and concentrate on relationships in terms of building competencies. Our watches are affordable and yet challenging to make because the designs are slim and minimalist. The trend towards big and bulky watches, which we have not followed, makes for easier manufacturing while the unique and timeless designs that we specialise in require unique skills and know-how to achieve functionality." Strategic moves Mr Albrechtslund says that, at least initially, the company will market similar US and European programmes in Asia and because the Danish design is a brand in itself and as such has an identifiable look and feel they will not be tinkering with this heritage. "Our main strategy for advertising is for in-store promotions and activities to build up brand recognition. We will partner with distributors who have connections with department stores and develop a promotion plan designed and executed at the point of sale. Promotions could include such things as Father's Day and Christmas," he notes. So far, Skagen is impressed with the company's success in the Japan market and is confident that this can be replicated throughout Asia. "There is a growing number of people who want and can now afford more than one watch. Watches express individuality and mood and are driven to some extent by situations and occasions such as work, sports and leisure," Mr Albrechtslund says. Skagen watches have striking "curb appeal" for consumers and are both minimalist and sophisticated, while exuding quality and an understatedness that is unique to Danish design. "People buy our watches because they like our designs and quality and it's not strictly about money," he continues. "Once targets for sales have been established next year, management will identify five or six opportunities and then make strategic programmes for the region to follow. It's then up to Hong Kong to convert this direction into a business plan for its particular market," he adds. Then and Now Before Danish design company with over US$100 million in US and European market sales Produced watches primarily for the upper mainstream segment After Expanded into Asia with sales of about 100,000 watches in the Japanese market Placed area headquarters in Hong Kong Set to begin sales and marketing operations early next year Partner with quality sources and vendors, and concentrate on relationship building Taken from Career Times 20 July 2007 Your comments are welcome at [email protected]