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Teaching Note Swatch And The Global Watch Industry Term Paper

Swatch and the Global Watch Industry Until the 1970s, Switzerland was the global leader in the watch industry. However, as technology advanced, digital watches were introduced and quickly began replacing the quality analog pieces that had been made for centuries, by the craftsmen of Switzerland. Digital watches were cheaper to manufacture. They also had the added value of mass production, which the handcrafted Swiss pieces simply could not produce. For the first time, the watch industry now included timepieces that anyone could afford.

Swiss watchmakers saw the development of inexpensively produced, mass production digital watches, but failed to take action. Quite rapidly, the Swiss lost valuable market share, in the industry. Their mid-level segments were quickly lost to Japanese watch manufacturers. The only market segment they could still compete in was that of high-end pieces. A decade later, understanding that mass-produced watches were here to stay, Swiss manufacturers decided to take action to compete in the altered marketplace.

Several actions had to be taken, in order to compete in this new market. Entirely new business models had to be employed, including changing their views of the market they operated in. Infrastructure had to be altered to meet the new demands of the industry. Technology and designs had to be updated...

Internal hurdles, such as the management difficulties they faced, including four key Board members resigning, made a complicated situation even more difficult. Several of Swatch's Managing Director had also left the organization. And, Nicolas Hayek, Swatch's CEO, was seen as a dictator, and did not command the respect he needed, from his organizational members, in order to effectively and efficiently run the organization. Add to these challenges the fact that despite many efforts, Swatch had not been able to successfully penetrate the American market. Japanese competition in the form of: Timex, Seiko, Casio, and Citizen still controlled a majority of the market share.
SWOT Analysis:

Despite their failure to penetrate fully the lower end of the United States market, Swatch is still one of the largest watchmakers, in the world.

Strengths:

Swatch has a multitude of strong brands to draw upon. These include: Breguet, Blancpain, Jaquet Droz, Glashutte Original, Leon Hatot, Omega, Longines, Rado, Tissot, Swatch and Flik Flak. Their Omega brand is the third largest brand, globally, preceded only by Rolex and Cartier. These brands have been on the market for decades, and as such are trusted by consumers. The…

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