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Analysis and Assessment of the Environment and Target Market

Home Free essays Analysis Analysis and Assessment of the Environment and Target Market

Nixon Inc. is an American-based accessories, watches, and audio brand that focuses on the youth lifestyle segment of the market. According to Thornton (2008), this company was founded by Chad DiNenna and Andy Laats after DiNenna had unsuccessfully tried to find a watch that portrayed his personal taste and style. This firm is co-owned by Trilantic Capital Partners and Billabong International which controls 48.5% and 48.5% of Nixon Inc. (Board, 2013). The remaining 3% is controlled by Nixon management. This paper provides the analysis and assessment of Nixons environment and target market.

Overview of Company, Product, and Target Market

Nixon Inc. was founded in 1997 in California as American-based accessories, watches, and audio brand that focuses on the youth lifestyle target market. This company and its brand name come in a range of custom-built and team-designed products retailed via autonomous board sport vendors like skate, snow, and surf shops. Nixons brand range of products and their popularity has quickly grown to cover distribution in fashion stores and specialty boutiques like Fred Segal, Beams Japan, Barneys New York, and Colette among other better watch retailers (Thornton, 2008). Presently, the Nixon brand is sold in over seventy nations in the globe. Nixon is a product of Chad DiNenna and Andy Laats after DiNenna failed to find a watch that suited his style. These two gentlemen raised about US$1 million from joint ventures and started Nixon to provide customized watches and other products to reflect their target markets lifestyles. Presently, Nixon has over 90 models being distributed all over the world with sales growing by 55% every year (Thornton, 2008).

The major stakeholders in Nixon include Billabong International and Trilantic Capital Partners whom each own 48.5% of Nixon brand and company. Nixon management together with the founders owns the remaining 3%. Other stakeholders include the action sports niche, which also doubles up as Nixons major target market. According to McMahon (2005), action sports like skateboarding, surfing and snowboarding, need reliable pieces of equipment that will enable enthusiasts tell the world that they skate, snowboard, or surf and Nixon enable this personal expression. In this respect, Nixon often sponsors athletes of each category as a strategy of positioning their product in this action sport market. For example, Nixons most inventive watch the key totally fits the surfers personality in that the key or mini-wrench for turning the clocks gear is interchangeable with the key applied in removing fins on the surfboard (McMahon, 2005).

Presently, Nixon is valued at US$464 million and has a 9.2x LTM EBITDA (Board, 2013). Nixons major products are the variety of digital and analog watches for both women and men that it avails. These watches have Swiss and Japanese movements in automatic and quartz. Nixons targeted markets are the fashion and action sports niches. Nixon watches carry along a sense of adventure, risk, and independence which is a major reason why they have a strong following among the surf and snowboarding crowds. Nixon watches also possess a profound and unique designs combined with tough current mechanics and movements that enable them to withstand tough sporting atmospheres where they are worn. From the figure 1 and 2 below, Nixon watches and their variety of models have a strong following in the action sports niche as compared to the fashion niche. Their loyalty preference rankings are high among the three action sports categories.

image1.pngFigure 1: Nixon watches model analysis in fashion and action sports market segments (McMahon, 2005).


Figure 2: Nixon watches customer loyalty, preference, and reliability index in the action sports niche (McMahon, 2005).

Nixon has four major competitors in the action sport market niche which are Quicksilver, Freestyle, Vestal, and Roxy (McMahon, 2005). Despite their stiff competition, Nixon is still popular among the consumers as reflected in the figure 3 below.


Figure 3: Chart of consumer preference in the action sports market niche (McMahon, 2005).

Environmental Analysis of Nixon Company


The major variables that affect Nixons macro-environment include demographic forces, technological forces, cultural forces, and economic variables.

1. Demographic Environment

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The emerging increase in young adult and youthful population has worked for the benefit of Nixon. Most of its watches are a preference to the young and sporty generation who has a sense of class and customization. The company has taken advantage of this trend and often makes customized watches to suit their consumers lifestyles. Nixons products come in a variety of colors to satisfy the need of the detail-oriented female customer.

2. Technological Environment

Nixon has taken advantage of technology to design watches that can withstand extreme sporting environments. Most of the watches are constructed with a combination of polycarbonate, silicone, stainless steel, and mineral crystals to make theme resist ocean, snow, and high altitude environments. Nixon watches come in three forms of technology including quartz, mechanical or automatic and digital for all types of consumers. The digital watches have custom digital movements and do not have hands but MLCD or LCD display for easy readability. The quartz watches make use of MIYOTA quartz movements and the automatic ones are spring/gear driven.

3. Cultural Environment

There has been a continuous shift in culture towards the digital platform. Apparently, preference for watches has gone down after the advent of the mobile phone. The use of watches in business and social cycles has been declining as more advanced phones than the initial once are being made. What has helped Nixon is its ability to make watches that can withstand extreme sporting environments, a mystery which the mobile phone revolution has not unraveled. In trying to ensure the watch culture is maintained, Nixon has shifted to sponsoring athletes in a bid to remain relevant in the fast changing world.

4. Economic Environment

The economic environment is not much of a threat as such, but the emergence of competitors such as Roxy, Quicksilver, Vestal and Freestyle is a matter of concern as they are eating into Nixons market share as the days go by. Nixon entered the market when a watch company that catered for action sports did not exist. Now, most of the watch companies are coming up with products to suit the action sports client.


The major micro-environment issues include major competitors, key intermediaries, key customers, and internal company operations.

1. Major Competitors

Nixons major competitors are Roxy, Quicksilver, Vestal and Freestyle. These brands are also eying the action sports niche in which Nixon is a major player. Though Nixon is the major darling in this segment, the presence of these competitors should not be undermined as they are eating about 30% of the market

2. Key Intermediaries and Suppliers

Much of Nixons products are sold worldwide through its subsidiaries in the United States and France. Much of the manufacturing of these products is done in China but the design, marketing, and distribution is done by Nixon. Presently, Nixon watches and accessories are distributed in over 65 countries using a well-organized network of distributors.

3. Key Customers

Nixons key customers are the action sport enthusiasts. The desire for a watch to suit the personality and the lifestyle of DiNenna, one of the founders and an action sport enthusiast is what led to the birth of Nixon. The action sport clients prefer Nixon as they are stuffs of personal expression that enables them to tell the world that they are either surfing, skating, or snowboarding.

4. Internal Company Analysis

This section provides a SWOT analysis of Nixon

i. Strengths

Focus on action sports

Utilize technology in products

Customized products

ii. Weaknesses

More male dominated or male-focused products

iii. Opportunities

Other forms of sports

Multi-functional watches

iv. Threats

Mobile phones technology

In conclusion, Nixon is a stable brand and company. Most of the action sports enthusiasts prefer Nixon given that it was established when the watch industry needed fresh blood to help in shaking things up. Nixon has the best penetration of wrist watches among vendors and retailers. The major threat to this company is the mobile phone technology, which has led to a decline in the purchase of watches.

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