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The Labor and birth Of Swatch Marketing Essay

Although the Swiss watch industry produced high quality watches formulated with jewels and hard rocks, so that it is like any other well-crafted watch to certainly be a financial investment. But due to this standard Swiss swatch creators had occur well-crafted wristwatches at an expensive price, the Swiss cannot adjust to their new opponents who had been more cheap Also the Swiss were too tenacious to modify to the release of new technology

Situation Analysis

Internal Factors

One of SMH's power was that that they had of many years of experience in the build of watch making, SMH produced watches that were unique in value, saturated in quality, reliable, important, and complex. Each watch was considered a build that had about 100 independent components that was carefully put together by a high skilled micromechanical engineer and a get good at jewellery machine. A weakness for the Swiss watch designers was its cost range, especially during World War II. 97% of its market share is at products of $350 or higher, 3% in watches between $100 and $350, and 0% in designer watches below $100. A good example is one of Swiss's brands, Omega, that got 130 types of watches priced from $700 to $20, 000. This sort of price is not affordable by many. Furthermore, because of its pricing Swiss wrist watches were only sold primarily in jewellery stores and upscale departments stores. Most Swiss brands sold their products by stamping classy full webpage advertisements in periodicals that targeted the slim upscale demographic. Although having good improvements in technology, and research and development, and also being the pioneers of the quartz technology; the Swiss however refused to adopt advantage of this due to the mentality that quartz designer watches were unreliable, unsophisticated and below Swiss standard and that the quartz technology was a novelty.

External Factors

Competitors: Low-Cost competition started out rising in the 1950s which soon became a weakness for the SMH. During World Conflict II, an American company known as Timex, developed a type of watches that were created at low costs due to use of hard alloy metals to create the mechanical motions of the watch. These metals were much cheaper than the jewels used in a Swiss watch, needless to say that Timex pieces went under intense testing to confirm that the watch was very durable. Timex was advertising more units of their watches than any manufacturer on earth by 1970. Other rivals were japan manufacturers of Citizen and Hattori -Seiko who produced designer watches that were integrated with the new discovery of the quartz technology that revolutionized the watch industry. Casio also followed the Quartz technology and particular in low-cost, plastic-made, multifunctional digital wrist watches. The vast use of Quartz technology dropped the Swiss watch industry that triggered Switzerland to be unable to compete with the reduced cost that the saturated Japanese watchmakers had. By 1983 and the machine share of Switzerland's watch market dropped to less than 15%.


To address the issue of the slim marketplace, Swiss has three key alternatives.

Develop something that addresses the needs of consumers in every three price sections.

Pros - They will target more consumers (higher demographic market).

- An increased demand and increased consumers will finally result in higher profits

- They will meet the needs and desires of consumers they haven't delighted before.

Cons - They could lose their reputation concerning being a company that sold top quality homemade watches

- Could lose some dedicated customers who bought the brand due to its original goal, since it would be less unique and more common.

-There was a probability that if they broaden their market there is absolutely no guarantee it will pay off and they might just incur additional costs in changing things.

2) Collaborate with japan and Chinese language companies with making "disposable" watches and have the new quartz technology designed in their new brand, while still keeping quality and the Swiss name.

Pros - This can help them enter the marketplace that they currently acquired 0% of stocks (wrist watches below $100).

- Individuals are already buying from them so we realize that consumers will buy our brand as well and perhaps enough more because of the Swiss name.

- Lower costs and increase earnings.

Cons - If SMH collaborates with the Asian companies to make wristwatches, they will lose their "ultimate watch maker" status because that they had to get help from other companies.

- Since it won't be made in Switzerland anymore, this might harm Swiss image.

- SMH will have less authority over the way the watches are made because they have to consider the opinions and suggestions with their Japanese/Chinese language counterparts.

- They will have to invest money initially to change just how things are.

3) Leave things the way they were

Pros - The Company will still have its reputation of being one of the esteemed watch making companies.

- They will not need to get their time and money into something that has a chance of no longer working out.

- SMH would stay as a definite high class maker of wrist watches.

Cons - They might walk out business scheduled to loss.

- Will not have access to an extremely large society of consumers that are willing to buy new and affordable watches.

- They will be forced to market company shares in order to keep their business going.


The best substitute is always to collaborate with Japanese and Chinese language companies to make watches that integrate the quartz technology while still maintaining their brand image. If SMH works together with the Japanese and Chinese companies in producing there parts they will be able to dramatically reduce costs, and ultimately create watches that target the two lower sections of the market. They need to make certain they continue steadily to maintain their image, they can do this by approving the merchandise before they may be released into the market to ensure they meet the SMH quality standard. If indeed they can do that, the problem of concentrating on the narrow top quality market will be eliminated and SMH will have a leading product in each cost range.

Since the Japanese and Chinese have already made their symbol with their poor watch sales, the Swiss brand can benefit from simply merging with them for that one market. The Swiss brands still need to produce high quality designer watches because of their name to stay reputable, but also have to get in the marketplace as it pertains to low quality watch sales.

The first plan of action for the Swiss brand to do is to come in contact with the leading making of the disposable watch companies. Once in contact, the Swiss brand can start to learn the intensions of japan and Chinese language companies and vice versa. The Swiss have one thing that japan and Chinese language companies don't which is reputation. When consumers hear about Swiss wrist watches they think about quality and luxury and japan and Chinese language companies would want to use that tool in their marketing. Both companies should comprehend their benefits from working together on this type of task. The Swiss companies being involved in the throw-away watch market and the Japanese and Chinese language companies get the thought of borrowing the Swiss brand name to provide consumers the idea of better quality designer watches.

The next stage is always to develop a contract between your two companies to declare what each company is entitled to as well as restricted to. This contract can either go on for a certain period of time (ex. 2 yrs) or certain variety of watches produced. This is actually the principal step for both companies to begin their business ideas.

SHC then needs to meet with the Japanese and Chinese companies to undergo the techniques within the contract. The Swiss brand would like to take a look at the produces before they dispatch them out to the consumers. If SHC want to put their name on the product they need to be sure the disposable watched wouldn't cause the consumer problems (faulty parts). Despite the fact that these watches are considered removal, the Swiss would still want a great product to do out in public areas. After SHC evaluates that the wrist watches are practical, they can venture out to the consumers. JAPAN and Chinese companies can advertise that their designer watches are "Swiss Approved" which can give consumers the impression they are getting Swiss disposable wrist watches for cheap. SHC doesn't invariably need to ship any wristwatches out themselves. JAPAN and Chinese can continue with the previous syndication strategy however now have an improved marketing tool, the Swiss name behind their product.

The work that SHC should do is quite reduce and the quantity of change in development for the throw-away watches by japan and China is also little. In the end, it all boils down to the way the Japanese and Chinese want to advertise their product. The product itself wouldn't go through much change because the watches are selling in high amounts, but the advertising and marketing strategy should be revised to incorporate the Swiss brand.

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