👉 Background: Rolex is the Swiss luxury watchmaker that was founded back in 1905 by two brothers in law, Alfred and Hans. Rolex has partnered with celebrities like Roger Federer, Daniel Craig and all mates who make sure to flash it at every opportunity.

👉 What happened: Now, Rolex will acquire luxury watch and jewellery retailer, Bucherer, who sell a whole range of luxury watch brands (Think: IWC Schaffhausen, Piaget, and Rolex). While it's hard to know the exact value, the acquisition is rumoured to be worth around $7 billion.

👉 What else: This acquisition could see Rolex stepping into the consumer sales space and creating new opportunities for themselves via vertical integration.

What's the key learning?

💡Vertical integration is a business strategy where a company takes ownership of multiple stages in the supply chain.

💡Rolex currently manufactures their watches and relies on external distributors to help them sell. But with their new-found control of over 100 Bucherer stores, they have the opportunity to own the distribution process to themselves.

💡Controlling both the making and the selling can help Rolex gain more control over their product offerings and most excitingly capture additional profit margin. In fact, it's estimated to be worth an additional 35%-40% of profit margin. So, Rolex is tightening both the screws on their watches and the grip on their profits.

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