The Hour Glass (THG) is a multi-brand luxury watch retailer, founded in 1979 by Henry and Jannie Tay in Singapore. The store was one-of-a-kind when it was founded, positioning luxury watches as upmarket collectors’ items or for investments. This strategy proved to be a resounding success. By 1988, THG was worth US$38 million and was listed on the SESDAQ, the secondary stock exchange of Singapore. Between 1979 and 2004, the company expanded to overseas markets, and also bought various other businesses, such as perfume and jewellery, luxury watchmaking and distribution, and Milano’s Pizza. In 2005, Michael Tay, the son of Henry and Jannie Tay, took over as executive director and played an instrumental role in THG’s launch of a two-pronged approach to educate consumers: promoting the culture and history of watchmaking, as well as attracting new segments of watch buyers through creative and innovative marketing.
With its new patisserie store Ladurée opening in April 2013, Michael Tay ponders THG’s next move to stay ahead of the game. How should the lessons learned over the company’s three-decade history influence its future growth strategy in an ever-evolving economic environment?
This case can be used in undergraduate, graduate and executive education classes to teach corporate strategy concepts, such as vertical integration and diversification. At the end of the session, students should be able to apply the concepts of horizontal diversification and vertical integration to the THG case, and discuss options for the company’s future growth strategy.
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