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

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

3. 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  The Swatch Group

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

5. 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

6. 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”

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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.

13. Navigating the internet