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PESTEL - a strategic analysis of environmental factors of Rolex

Many dream of one day owning a Rolex watch! Indeed, it is a brand highly appreciated by watch enthusiasts, in particular, due to the high quality of its products.

PESTEL - a strategic analysis of Rolex

Credit Photo : © Rolex

The company was founded in 1905, in London, by Hans Wilsdorf and quickly earned its place in the watch industry. In 1919 due to its performance, the company transferred to Switzerland. Today, Rolex is among the top 50 international brands and remains popular with its customers, as is evident from the business turnover, which amounts to 12 billion dollars.

A) Political Factors

Rolex specialises in the design and manufacture of luxury watches. It generally manufactures its products in Switzerland but distributes them all around the world. Therefore, political factors play a significant role in the smooth running of business activities. Indeed, for the effective functioning of its international activities, the company must inevitably consider the stability of the countries where it is present. When it comes to Switzerland, it is evident that this countries government policies have a significant impact on business processes, ranging from manufacturing to distribution and export.
In addition, you should know that import and export policies differ from one country to another and that this is an essential factor in the devel-opment and success of the brand. However, globalisation makes business operations easier for the firm. However, to avoid cessation or suspension of its commercial activities, the company is obliged to comply with the regulations.

B) Economic factors

By having the status of an international company, Rolex must know the economic system of each country where it distributes and sells its products. The company needs to consider all the factors related to the economy of a country they are trading in. For example, the countries in which the company is present must have a high GDP rate to make a profit and develop its activities. In addition, the growth rate of a country directly affects the growth of the company. As for interest rates, they allow the company to know whether or not it is appropriate to invest in a given country.
The financial market is also an element to be taken into account. In-deed, its state will allow the company to determine its capital, as well as the prices. On the other hand, given the different operations that can be carried out around the world, it is essential to monitor exchange rate fluctuations.
Finally, we can add the price of the metal used by the company. This type of metal being precious, its price varies from one country to an-other. For example, in some countries, specific materials are sold at a high price, which may also affect the cost of watches sold by Rolex.

C) Socio-Cultural Factors

For a company like Rolex, social factors are of great importance. Be it behaviours, trends or financial situation, it is essential for Rolex to study these factors before launching its products in a country. For example, modern society is more likely to be interested in Rolex products. This is generally an audience that is interested in trends and fashion and readily accepts innovations from brands. In some cases, these companies are influenced by social media and new technologies. While in other countries, the company may encounter ethical problems, for example, when it uses blood diamonds when manufacturing its watches. Indeed in some regions it is against the law to wear such materials.
To conclude, we can also mention environmentalists who feel that the products sold by the Rolex brand have a negative impact on the envi-ronment.

D) Technological Factors

The Rolex brand has always been interested in innovation and new technologies. As technology evolves rapidly, brands such as Rolex must carefully follow new developments and trends since technological attributes play a significant role in the development of the company's products.
On the one hand, technology allows the company to disseminate information about its new products. It is true that these people are always ready to buy the latest trends. On the other hand, it is a way for Rolex to attract new customers and retain its old customers. Moreover, with technology, watches no longer work in the same way. They have be-come digital and are not limited to just telling the time but also the date, direction and have other useful functions.

E) Ecological Factors

Environmental factors include all laws relating to respect and protection of the environment. Given its internationalisation, Rolex must comply with the standards established by each host country.
The environment has become a sensitive subject that concerns many people. There are a growing number of initiatives related to the protec-tion of the planet, and the reduction of pollution. In this context, global brands also have a role to play, and must also contribute. This is the case of Rolex, which must respect environmental standards to prove its commitment and support.
Rolex is a company that manufactures more than 1800 watches a day with a turnover of 8 billion euros. It is true that the latter is interested in trends, but its activities must always comply with environmental laws.

F) Legal Factors

For a company as well known as Rolex, it is imperative to respect the regulations and laws of the countries in which it operates. Indeed, to maintain its success curve and avoid legal proceedings, the company must study and respect the legal framework of the host countries. The public has become vigilant when it comes to the legal aspect.


Rolex is a symbol of luxury, and its watches are very popular with con-sumers. However, based on the PESTEL analysis of the company, it can be noted, that many elements, such as the political and economic stability of the host countries or the legal sanctions in the event of non-compliance, can easily affect its performance.

References :
Rolex watchmakers - A taste for perfection and innovation
The PESTEL analysis
The Pestel/ Swot analysis of the reference brand in watchmaking
Projects for the protection of our planet
Why have Rolex watches become so expensive?


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