Swatch Case Study

Proper time management is an ingredient for business success. Much of what a person can achieve depends on how well available opportunity is utilized. Planning involves allocating duties or tasks in the limited time available. The desire to achieve a lot under constraints of time has been a driving force in the entire human race. In fact, time management has found its way into school literature as a teaching subject which further underscores its importance. Yet one cannot plan what they do not know. A watch has become an important gadget in informing people how much time they have left to finish up their tasks. It also informs people how much time is available so that tasks can be assigned portions of that time for optimally.      A lack of proper time management would lead to huge losses as resources go to waste.

Different people at different levels of development have used different methods of measuring time.  The current watches have taken many years to develop.  The earliest man used shadows to know how time slipped away during the day.  Watches are not only used to measure time but to convey much more information including a person’s position on the globe.

Before the advent of current day watches analogue watches were used.  These watches had minute and hour hands which moved on a scaled background.  These watches were mechanical they used power to operate.  Some of the watches used batteries that were very tiny but could continue generating power for a long time even beyond one year.  These watches required specialized skills of assembling the many components together so accurately for them to work.  Watches during this time were wealth indicators and thus jewels were added in the designs.  Most of these watches could not be repaired upon damage because opening them required expertise which could only be the artists who made the watches.  The Timex watches were an improvement of the earlier watches.  They were low cost portable watches but they were still very mechanical.  They, however, used less jewelry than the previous generation watches.  The quartz watch which was electronic was invented in the 1970’s, an invention surprisingly by Swatch.  This watch used an integrated circuit which was much cheaper than the very many components used by the mechanical watches.

In the 1970s, however, Swatch, a watch manufacturing company, faced stiff competition from other watch manufacturers that saw them loose their hold on the market.  Despite inventing quartz technology, other competitors had picked on this idea to invade the major Swatch’s strongholds in the Europeans market.  The deterioration of Swatch had reached an extent of opting to sell out to Japanese.  The coming of a new CEO saw many changes which made a turnaround from a losing company to great profitability.

The management of Swatch Company was overhauled which saw the creation of nine smaller management teams that were totally in control of all their affairs.  The independence of these teams expanded their capacity to work.  The teams engaged in some kind of healthy competition where each team aimed at doing their best.  This led to great inventions because every employee felt a part of the company.  The management style used earlier had only a few make decisions which were communicated downwards killing the employees’ morale.  With these teams having all authority over individual departments the company became more sensitive to customers needs.

The reorganization of the management led to great inventions being made.  High quality watches were being produced.  The taking up again of the quartz technology put Swatch at level playing field with the competitors.  These high quality watches led to a drastic reduction in production costs which had put Swatch watches at high prices.  The entrance into the market of cheaper watches was the major contributor to Swatch’s downfall.  This again helped the company complete on the same platform with others.

Swatch embarked on mass production of watches and they streamlined their distribution channels to take their products to the customers’ doorsteps.  This production strategy kept production costs low and enabled the company to widen their reach to customers.  The distribution channels were expanded to the extent of having outlets at market places.  Customers were well supplied with all Swatch products at every turn.

The competitors had adopted similar strategy of supplying their products to customers and Swatch resorted to the same with greater aggressiveness.  The Swatch teams took cognizance of the skills of their employees and resulted to build and use them.  They cast their attention wider and recruited many famous artists to add artistry to their products.  This move helped the company maintain top quality watches but with striking designs.  This drew a greater share of the customers to them because they did not only buy the watches but they delighted in the designs of these watches.  The watches were made to appear more valuable then they actually were and this led to customers buying more than one Swatch watch just because of their attractiveness.  Other products in the market were just watches and Swatch’s were fashionable watches at the same cost.

The diversification of products kept Swatch a step ahead of their competitors.  New model watches were made and packaging was done differently.  This gave customers the sense that Swatch had something different to offer, a strategy that attracted more customers.  Different models of watches were designed for different groups of customers.  The Swatch Company grouped the customers into three sectors: the low price, the mini price and the high prize sectors.  For each sector, there were varieties of tailor made watches to fit them.  The Swatch products were also sensitive to age as more designs were made to fit the youth.  Swatch became more sensitive to consumer tastes than other competitors.

The strategy that best worked for the Swatch Company was the marketing one.  It was not enough for Swatch to produce good products in large quantities and taking them to all customer joints.  Marketing had to be done to inform the customers that the top most quality, low cost and fashionable products were with them.  They just needed to but them.  Different modes of marketing were used in each country depending on the consumers the advert could reach.  Using artists in the production process was one marketing strategy. Since the artists were popular in their countries, they could easily attract their fans to use the Swatch watches and most did.  The management teams were enabled to do thorough marketing in their respective areas since they understood their customers better.

The Swatch Company has to consider diversifying their production line beyond watches.  They should try other commodities that are more in demand in the market and because of their hold on customers, they will easily penetrate.  Watches are not in as high demand because of advancement in technology.  More people use their phones and therefore Swatch should explore new markets by venturing into other commodities.  Good marketing of commodities will ensure they have hold of the market.

Reference

Moon, Y. (2004). The Birth of the Swatch, Harvard Business School. Available on http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/viewFileNavBean.jhtml?_requestid=865 [cited on 3 August 2007].

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