Marketing Within Time Industry

INTRODUCTION

By 1998 the Swatch Group can be counted as one of the world's largest watch company. Including their own brand name watches, they control other brands such as Rado, Longines, Calvin Klein, Omega, and Hamilton. Swatch, by itself, controls a 20-25% of the worldwide sales with much of their sales occurring in Europe and Asia.

The success of the business, within the U.S. watch market, is significant. Its production contributes an innovative look to the watch industry. Moreover, it holds its own creativity and promotes its products as a fashionable lifestyle statement. The company is founded on technological innovations, such as with its SIT (Swatch Internet Time). It focuses on delivering this foundation to its consumer. However, the recent use of its SIT is a questionable factor towards the successful marketing of its products and line of reputation. The objective of this plan is to resolve the SIT issue while providing a continuing growth in sales and loyalty.

SITUATIONAL ANALYSIS

Company

Swatch group, formerly SMH short for Swiss Corporation for Microelectronics and Watchmaking Industries Ltd. was formulated in 1983 with the merger of two Swiss watch making companies ASUG and SSIH. It was in 1998 that it was renamed to Swatch group. ASUG and SSIH have its roots all the way back to 1930's where they fought against the high unemployment and weak economy by putting much of its resources into research and design. This worked till the 1970's where it began to struggle against the post war industry of Japan. By the 1980's both of these groups were failing and many competitors and other interests were requesting that ASUG and SSIH begin liquidation of brands such as Tissot, Omega, and Longines. At this point in time, the Swiss government and banks led by Nicolas G. Hayek who was the CEO of Hayek Engineering developed a plan that would allow both companies to survive. The result of that plan, called the Hayek Study had several critical measures that enabled the survival of the Swiss watch making business. The plans included such as combing ASUG and SSIH and launching a new brand of affordable watches that are defined by its artistic look call the Swatch. The implementation of that plan, as well as the companies being absorbed by Hayek engineering, established a new company that is known worldwide today as the Swatch Group.

Strengths

The strongest point that the Swatch group has is that it has control over large brand names in the watch industry. These brands control at least 25% of the market with their transactions. With 25% of the market share in their pocket, Swatch group is allowed to use their research and development team to branch out into other industries such as motorized, cellular, and internets. Interesting enough, much of their products are sold as fashion items. As long as they are able to keep it relevant and popular, people will continue to collect the watches. In the case of the SIT they were able to promote it very cheap since it is given out for free on their website; while brand names such as Sony just voluntarily put it into their system. Media, such as CNN was perhaps the only one paid for, yet compensation for commercial time had already commenced. Such incentive was an opportunity cost to either interest parties.

Weaknesses

Although, as mentioned earlier how having brand names under a unified banner of Swatch Group, yet still maintaining their independence from the main company and each other forces, it weakens each brand to stay within their own small dedicated group. If they branch out, the company as a whole will not lose, but the brand will. Perhaps that is the biggest weakness of the whole brand. The next weakness that should be addressed is the SIT, or Swatch Internet Time. Consumers have pointed out problems such as there not being any calibration between the onboard computer clock thus confusing customers. Also the introduction of a "new" time Zone seems revolutionary, but in the end it is a problem that must be addressed. Another problem that occurs is that in the United States, the watches are seen as a fad and fails to produce some form of utility. The utility one is just a plastic watch compared to other watches that may be a bit more expensive; however, it comes with shock and water proofing as well as other options that give it more practicality.

Opportunities

Swatch group has many attributes going for in its favor that it could capitalize. First and foremost they have the Smart Car. This new decade of the '90s is a turbulent time. Operation Desert Storm has showed how vulnerable oil fields were in the Middle East as well as the growing dissention against Western rule. This are also held the fall of the Soviet Union. In some countries, there was chaos since there was a vacuum of power from the fall. Many of these countries needed oil, but due to home grown terrorist activates sometimes production was halted or slowed. This would cause prices to rise and increase demand. China, India, and Vietnam were beginning to show some form of industrial strength and begin taking stakes in the amount of oil that is flowing around the whole world. Many of these occurrences all lead to an increase of fuel price. It would be safe to presume that countries will want to have the smart car for its fuel economy and may trust the maker, Mercedes, since it is well known for luxury cars across the world, but offer in colors that are similar to swatch watches and bring fuel economy similar to Toyota and other Asian car manufacturers.

Cell phones are relatively new technology, yet it is constantly advancing. The ability to provide a cheap and perhaps colorful phone will also be another option to take. Complications exist with rising up their own cell phone towers or even perhaps finding a vendor to sell their phones to. As it stands right now, other phone companies such as Nokia and Blackberry control much of the market and so they are going to have to revolutionize how their customers envision their phones or fall behind other companies. A possibility in this avenue is to go overseas and begin importing popular models over here with customizations to make it stand out and be associated to Swatch group.

Brand support is something that could also be looked into. Cooperation between watch companies to produce "unique" watches that appeal to both different markets could help indefinitely. Hard to persuade groups who are loyal to their brands can possibly be transformed into buying your own watches by doing joint ventures with these brands; and putting the Swatch brand on it may persuade

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