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Case Study: Swatch And The Global Watch Industry International Business, Repositioning Strategies, Marketing, Management Issues, And Recommendations For Growth

1734 words - 7 pages

IntroductionThe Swatch Group had many early on successes due to repositioning strategies and a boost from acquisitions. On the surface, the Swatch Group was the world's leading manufacturer of watches in the late 1990's. They had 14 percent of the world market share and it appeared that gross sales and net profits were on the rise; however, under the covers, it was a much different story. Swatch was facing a myriad of issues that needed to be resolved in order for success to prevail. Management issues were plaguing Swatch; multiple key figures stepped down from the board in the mid 1990's citing the CEO's inability to listen to his staff. In addition to the management issues, Swatch was also ...view middle of the document...

As an employee, even an executive employee, being flat out told what you have to do all the time is often the ingredient for an unhealthy work environment, especially when trying to implement change. However, when employees are involved in making a decision it is often easier to put into action the decision that was made. There is sometimes a higher acceptance of the decision when it comes from the ground up and there is a higher probability that the decision will be executed efficiently. The outcome of such a change will inevitably be positive. When Hayek has more then one person getting together trying to solve a problem, he will have an increased chance at a better solution then if he were trying to solve it himself. The employees bring a lot to the meeting room with them. For instance, they may have "inside information" about why production is faltering. By creating a high-performing executive team that works as a cohesive unit versus "he has to be the big boss alone, and can never share opinions" unit, the Swatch Group should begin to see an improvement in the softer issues, such as employee satisfaction, higher executive employee retention, and a more open communication model.Competitive and Product Mix Issues and Potential ResolutionsThe Swatch group as a whole had an unparalleled ability to provide consumers with a wide range of products in all market segments. They could provide hi-tech watches that functioned as ski passes, fashion watches such as the Swatch, or an exquisite diamond studded precious metal watch - Swatch provided products at all extremes. However, certain product lines were more successful then others. The Swatch watch in particular was struggling to gain market share in the United States and elsewhere for several reasons including fickle consumer behavior and a product line that was daunting to consumers and resellers.The Swatch product was quickly loosing its competitive edge against other players such as Fossil, Guess, Timex and Seiko. Resellers were dropping like flies and consumers felt like Swatch had saturated the market with too many products. Worse of all, consumer perception was that Swatch was a fad. Swift decisions need to be made to reverse this before the brand becomes part of a MTV or VH1 "I love the 90's" television show. Luckily, most of the decisions to be made regarding product mix have very little impact socially and ethically.Omega (part of the Swatch Group portfolio of brands), was facing a similar demise in the early 1990's and successfully repositioned itself and became a major profit driver for the group. It achieved this by carefully selecting its marketing programs and drastically trimming its product line from 2,500 to 130. This strategy needs to be applied to Swatch, which focuses on the basic and middle-priced market. This is supported by the fact that the number of resellers dropped from 3,000 in the early 1990's to 1,200 in 1998. Swatch needs to apply a SWOT analysis and determine which...

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