Swatch Watch - A Case Study

CASE STUDY ON swatch watch

Starting from the birth of swatch. The ups and downs came to it. And about an changing era. And a mighty heart to tackle with this changes.

Biggest watch manufacturer in the world. Formed in 1983 Founded by Nicolas Hayek,led by G.Nicolas Hayek(son of Nicolas Hayek) Gross sales 6.14 billion CHF Swatch Group has around 25000 employees.

HISTORY HISTORY

Swiss dominated the watch industry because of their centuries long history of jewelry making expertise.

“ MADE IN SWITZERLAND ” lable was a global seal of a quality, status and prestige.

During 1945, Swiss accounted for 80% of the worlds total watch production and 99% of US imports.

During 1951, the introduction of TIMEX launched low cost mechanical watches that used hard alloy metals instead of expensive jewels.

TIMEX watches were available with the price ranging between $6.95 and $7.95. And the watches were disposable type.

During 1970s Japanese manufacturers like SEIKO, CITIZENES expanded over the Asia and tried to cover Europe and North America also. Which declined the share of swatch from 80% in 1946 to just 42% in 1970.

INTRODUCTION OF NEW QUARTZ INTRODUCTION OF NEW QUARTZ TECHNOLOGY TECHNOLOGY

Made use of quartz and integrated circuitsProvided Accuracy, more sophisticated

functionality, more features like ‘day & time’, Digital display, Analog watches.

Cheaper in cost of manufacturing.A wide Price range, starting from $8 to $20,

today even below $5.

FREE FALL OF SWATCHFREE FALL OF SWATCH Swatch was only concentrating on production of high end

mechanical watches and was not interested in adopting quartz technology, because swatch was of the view that this technology was unreliable, unsophisticated and not up to Swiss standards.

Japan watchmakers captured whole global market with quartz watches at rock bottom prices and Swiss watches found itself unable to compete.

Year Growth Rate

1983 33%

1984 33%

1985 100%

1986 50%

1987 4%

1988 0%

1989 0%

HAYEK’S STRATAGES Take over of SSIH and ASUAG Concentrated on adopting new technology and to create a

new range of pricing. Focused on the Italian Customers who were crazy for

fashion and looking for something innovative. Appointed artists, architects, designers. Proposed more

than 3000 designs. Introduced different designs for different segments of customers.

First watch to introduce see-through watch and scented watches

Introduced a new range of price in three price segments. Created a swatch collectors club for its fans. Adopted world class distribution strategy. Introduce an

unconventional retail approach that created many non-traditional points of purchase.

ANALYSISANALYSIS

In the Mid-seventies, the Swiss watch industry was in the midst of its worst crisis ever.

Why ?

Major problem with swatch was rise of Quartz technology. Japanese companies like CITIZEN got floded over whole of the market with this technology.

Marketing strategy were not up to the mark with customer’s need and value for the money.

No artistic designs.High range of price.This lead to a big free fall of swatch group.

SUCCESS STORYSUCCESS STORYUnique Adds campaigns.World class designs, explores 140 designs every

year.Aggressive & penetrating strategy.Watches for everyone.Different R & D and Technology.Swiss club.Radical innovations in design, automation and

assembly as well as marketing and communication.

Runs 24 x 7 Efficient designers were adopted.Considered consumers approach .

CONCLUSIONSIN BUSINESS YOU HAVE TO KEEP

ALL OPTIONS OPENTECHNOLOGY ADOPTION FOR

QUALITY AND PRICE IS MUST.BUSINESS STRATEGIES SHOULD BE

REVIEWED EVERY QUARTERCOMPETITIORS HAVE TO BE TAKEN

CARE OFWIDER CUSTOMER BASE IS

IMPORTANT

THE WATCHES NEEDED TO BE ATTRACTIVE, CHEEKY AND GOOD FUN, DARING IN DESIGN AND AGGRESSIVELY PRICED, WITH HIGH QUALITY AND INNOVATIVE FLAIR. THE SWATCH WATCHES WERE HIGH-TECH AND CAME IN A VARIETY OF FASHION AND ART DESIGN.