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The Birth of Swatch Essay

The Swatch was well-known watch in the history of the watch industry. When it came out at first, it was quite sensational, resulting in more sales than it expected. Since the Swatch had grown strong in the watch industry, it could maintain its reputation and there were more opportunities to success in this industry.

In order to find out its success strategies or factors, the following shows its Strengths and opportunities. In addition, its weaknesses and threats could reflect considerations on this future forward.

SWOT analysis

Strengths| Weaknesses|
* High Consumer loyalty * A clean price * Unique designs * Innovations in automation and assembly * Promising designers were adopted * Good reputation * High quality | * Late entry in a quartz watch market *

* More rooms for growth in markets * Still has a name value * Has unique messages and ads| * Numerous numbers of competitors in low-price sector in the watch industry * In the mid-price sector, consumer price sensitive is higher and compete against a number of Hong Kong companies

For several reasons, the Swatch was successfully entered the new watch industry with its effective strategies and unique products. Firstly, it committed to vertical integration, building and assembling the low-priced quartz watch in Switzerland. The designing proprietary production techniques helped to reduce the production cost. On top of that, the Swatch tried to deliver the unique message to the consumers, making Swatch more than a commodity and adding genuine emotion to the products. One of the main strengths of the Swatch is its unique design. The various designs of watches were created by the artists, architects, and industrial designers. It introduced new products or lines every time with no repetitions. It led loyal consumers to purchase several Swatch products in different lines.

Moreover, the Swatch had a reputation for special innovation. For instance, it introduced the scented, youthful, and unpredictable watches at the reasonable prices so that it could keep high customer loyalty. Swatch spent approximately 30% of the retail price of its watches on advertising as its marketing plan. This was about two times high compared with the industry average. They also were able to use unique marketing events and advertising schemes to promote Swatch, emphasizing on below-the line activities. It also had decentralized marketing and centralized manufacturing systems. Additionally, the company created the Swatch collectors Club for its loyal consumers. The Swatch street journal, a magazine that included all information about Swatch in trends, was produced. It also chose a nontraditional retail approach, creating unexpected points of purchase.

For example, it launched the Veggie Swatch line in fruit and vegetable market. SMH pursued shop-in-shop systems or miniboutiques so that consumers could only focus on the Swatch products, not displaying its products with other watches. Those strategies helped Swatch lead this market in the watch industry, selling 26 million swatches in 1992 and reversing SMH’s fortunes. Despite its success, there are some concerns whether the success of the Swatch would continue. Still, the world watch market was highly fragmented except Citizen, Seiko, and SMH.

There were numerous watch competitors in Switzerland, Asia, and Unite states. The market share of Swatch was still relatively low in the single digits due to highly-fragmented low price sector. It competed with a growing number of watches manufactured in Asia. Besides, the weakest segment of SMH was the mid-price sector. The consumers in this price range were so sensitive at the prices of watches that it was pretty difficult to compete with the Hong Kong manufacturers.

Although there were several limits of SMH, there were so many strengths of its strategy that could lead this market. The Swatch had grown continuously by offering radical innovations in design, durability of the products, and unique marketing plans. SMH had its own technology to manufacture the best quality of watches. In addition, its unique designs created by various designers in different areas were quite competitive and appealing to consumers. If it tried to keep tracking the trends in the watch industry, and reflect what consumers want and changes, there would be more opportunities to continue its success.


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