"The Birth of Swatch" Case Analysis Essay

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Today we will present you the analysis of the case «The birth of swatch». First we willl give you the information about the background of the problem, then we will define the problem of the case and finally we will present you our recommendations. So, let’s start with the background. In the 1940s the Swiss dominated the watch industry in large part because of their centuries-long history of jewelry-making expertise. Watchmaking was a source of national pride, and the “Made in Switzerland” label was a global seal of quality, status, and prestige. Around the world, the general public consensus was that the only “good” watches were Swiss watches. , the Swiss accounted for 80% of the world’s total watch production and 99% of all U.S. …show more content…
The watch industry still consisted of three primary sectors. At 26 million units a year, Swatch was the undisputed market share leader in the highly fragmented low-price sector, but its market share was still very low, in the single digits.
The midprice sector ($100 to $350) remained more traditional, that is, less fashion oriented. This was SMH’s weakest segment; the company offered its Tissot, Certina, and Hamilton brands in this price range.
In the upper-price segment ($350 and above), SMH competed primarily against other Swiss manufacturers. SMH offered its Longines and Rado brands in this segment, but its flagship high-end brand was Omega, whose 130 models sold for anywhere between $700 and $20,000.
All nine of SMH’s global brands had their own organizations and their own management teams; these teams had total authority over product designs, marketing, and communications for their brands.
Companies cost structure today is completely different from when SMH was created,” Hayek said:. “It is not merely because we are more productive. It is because we have totally changed the logic of our business system. We have radically decentralized marketing and thoroughly centralized manufacturing.”
In 1993, the Swatch brand was still growing strong, although many wondered whether the success of the brand had reached its apex, particularly in the United States, where growth appeared to be tapering off in recent years. Of course, the end of the Swatch
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