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SWOT analysis for Swatch Essay

1.The watch market is becoming very fragmented which makes the promotion of the brand difficult.

2.Swatch has been facing a very low turnover of its assets compared to its competitor’s parent company.

3.The productivity per employee is weak hence affecting the financial profits of the parent company. The productivity of Swatch Group is $0.2Million Compared to $0.3 Million of its competitor’s Seiko.

4.The production costs of company headquarters are too high. Swatch’s competitors locate manufacturing activities in low-cost countries t. But Swatch had always committed to its Swiss home base. It is a big disadvantage to make watches in one of the most expensive countries in the world. Opportunity:

1.Improved economic condition in developing countries like China and India is increasing people’s disposable income.

2.As developing countries become more westernized; Swatch could gain a competitive edge in these growing markets with a mixture of its innovative design and artistic approach.

3.The recent economic downturn has changed the spending ability of the con¬sumer. They are switching from luxurious to affordable goods.

4.The innovative change in the e-commerce and retail sector gives a direct exposure to market its product.

Threat:

1.Threats from the counterfeit watch market is growing concern been. This results in loss of brand and its reputation. Recent reports show that, the counterfeit watch industry causes losses of over $1 Billion every year.

2.Swatch customers are urban trendsetters who prefer changes and are unpredictable. So if swatch fails to produce innovate style it can make huge loss on its sales.

3.Europe is currently the biggest market for Swatch watches, however due to the economic recession and price fixation its position is threatened.

4.Plastic and metal is the main raw material for Swatch watches. Recent price increase in crude oil and metal is making the raw material expensive and production cost very high which leaves a very low margin for profit.

5.Technology of smartwatch (The watch has) is becoming more and more mature, its fashion design and hi-tech functionalities would grab the market share from traditional watches. Furthermore, the target market of smartwatch is also young people, it is overlap with Swatch.


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