Re-capturing the market The SWATCH case Re-capturing the market

The firm Company name : SWATCH SA Head Office : Jackob-Stämpflistrasse 94 CH – Biel 4 Switzerland Product : watches, jewellery Website : www.swatchgroup.com Mission : to reveal to others who we are and why we are doing what we are doing through a watch

Watch market : the crisis during the 70’s CAUSES : wrong production and selling choices the Swiss decide not to adopt quartz technology that themselves had invented  Japan and Hong Kong produce great quantities of quartz low cost watches SOLUTION : the merger between the two main watch swiss companies Ssih (Omega) and Asuag (Rado, Longines and Ebauches )  SMH - Swiss Corporation for Microelectronics and Watchmaking Industries Ltd renamed in 1998  The Swatch Group

Watch market : sales volumes at merger time Total sales volume : about 500 million units Segments of the market (million units) :

SMH : mission and strategies Corporate VISION to bring the swiss watch industry back to a leadership position in the market Firm MISSION to go back to produce profits through increasing sales STRATEGIES : rearrangement of organization creation of a specific product for the market’s low section replacement of already existing brands TARGET to have a leading brand for each sector

The SWATCH watch history - 1 At the BIRTH : an injection molding plastic watch with a quartz movement, destined to a low level market’s segment an ugly and boring collection with dull and dark colours a FLOP !!! The EVOLUTION : the watch as a new visual message revealing “who you are and why you do what you do”

The SWATCH watch history - 2 The elements that built up the “Swatch message “ high quality, low price, provocation, lust for life a success ! Launch in Italy : 1986 Present production : around 140 different models a year a great part designed in Swatch design lab in Milan Models : classical, scubas, chronos, automatic models, metal case watches

Production and strategic choices The choice of verticalization in order to preserve strategic independence and freedom . The Swatch Group centralizes its production in Switzerland produces components required to manufacture a watch is the world’s biggest finished watch producer Research of electronic movements, their production and assembly are exclusively carried out by ETA - Manufacture Horologère Suisse ETA SA entirely owned by The Swatch Group The business organization is otherwise the more decentralized as possible : each brand has its own organization , its own management and holds total control of design, marketing and communication

Organizational choices Top management : CEO - Chief Executive Officer who fits straight and openly in the whole firm group Organization of work : is based on PROJECT TEAM Enlarged Group Management Board Formed by 16 members Executives directly responsible for all Business Units Restricted Group Management Board the highest management authority of Swatch Group

The marketing mix Packaging a simple transparent plastic box Promotion campaign on television and on printed matter, creation of events , presentation of peculiar models in places destined to different use, sponsoring highly technological and ecological matter initiatives Distribution through one brand shops and usual sale channels (jeweller’s shops, department stores) Market segmentation traditional clients (including metal case watches and chronographs) and greater attention to female public creating smaller models (the Lady Lady collection), diversifying packaging according to models

The market share Low cost high quality product Considering the product life cycle the Swatch watch is going through a maturity phase To the Swatch Group swatch watch represents a real cash cow

Trends The most characterizing feature of Swatch watch is its evolution:  born as a simple coloured plastic quartz watch made out of 51 pieces, it acquired more functions with time: chronograph and alarm including, underwater and wall watches, up to models that have nothing to do with the initial technologies but refer to the most famous swiss watch-making traditions.  Swatch Group is now showing a greater attention to different world cultures. Artists from all over the world were asked to work for its collection dedicated to art: Australia, Africa, China, United States, Europe and Russia. This lead Swatch to become an expression of messages coming from different and far away cultures. These market’s trends will probably lead the swatch evolution in the upcoming years.

Navigating the internet http://www.swatchgroup.com http://www.swissworld.org/