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Swatch Case

Essay by   •  March 27, 2012  •  Research Paper  •  340 Words (2 Pages)  •  1,807 Views

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Introduction

From the early 1600s where watch making was considered to be one of the most

wondrous art forms to present times where a watch is a utility accessory, a fashion

statement or a status symbol, the watch industry has certainly come a long way over

time. One of the players, Swatch, has created an image and a brand which is respected

and appreciated as it plays in several different markets at the same time and is credited

with bringing the watch industry back to Switzerland after it had almost been snatched

away by Japan (Blaszczyk, 2004). The case analysis of Swatch has some interesting

positions for the company and is useful for understanding the watch industry as it is in

present times.

Case Analysis

Porter's five forces framework shows us that there are different strategies adopted by

the players in the global watch industry. It seems that the first barrier is the market entry

mechanism is the cost which is incurred to make a name become accepted and

appreciated in the watch world (FHS, 2007). For example, an established design house

can certainly launch their own watch brand under the name of the designer (TATA,

2004). Clearly, Giorgio Armani and Versace would have no problems in getting their

watches accepted as fashion accessories but to break into the market as a completely

new company would be a significant undertaking in terms of marketing costs and in

creating brand recognition (St. John, 2002).

In fact, this is the only barrier which prevents the entry of new companies and allows the

current players to dominate the market with the power of supply and innovation in the

field. Clearly, as increasing sales show the trends, there is no real substitute for a watch

and even though individuals may choose not to wear a watch and use a phone to tell

time there will be those who consider a watch to be essential (Ramirez, 2006).

Marketing certainly helps in selling watches especially when a watch needs to be given

a particular image even if replicas can be made the quality and the manufacturing

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