Swatch Corporate Diagnosis

Corporate Diagnosis | |
| Diana Lucia PERDOMO Mauricio BARAHONA Salvador MARTINEZ
Louise NICOLAS Katarzyna FLUDRA |
The Swiss watches company is present all over the world. It has
successfully managed environment changes, as well as it resources and
competences. This document seeks to analyze the external and internal
forces that have influence on the company, in order to determine strengths,
weaknesses, threats and opportunities. Nevertheless, the core of this work
it to diagnose the interaction between the above, and the Marketing and
Communication strategies that Swatch implements nowadays
The Swiss watches company is present all over the world. It has
successfully managed environment changes, as well as it resources and
competences. This document seeks to analyze the external and internal
forces that have influence on the company, in order to determine strengths,
weaknesses, threats and opportunities. Nevertheless, the core of this work
it to diagnose the interaction between the above, and the Marketing and
Communication strategies that Swatch implements nowadays

Swatch
Swatch is a company that belongs to Swatch Group. Swatch is a
manufacturer and distributor of watches; they have a vertical integration
with the suppliers of watches and other products as jewelry.
When it comes to innovation, and how a single idea can change an existing
market, it is difficult not to mention Swatch. Business Idea that at the time
not only modifies but also saved an industry that was on the verge of
collapse.
In the mid-seventies, the whole Swiss watch industry was in the midst of its
worst crisis ever. For one side, the Japanese watch industry outdone to
the Swiss swatch companies with the launch of the "Delirium," watch that
became the thinnest watch in the globe.
Looking for a strategy that could help them to come back to the
market, Swatch group first founded the Swiss Corporation for Microelectronics,
and created a slim plastic watch with modified machinery, being able to
offer to the market a watch with top quality, but with a highly affordable
price. Swatch appeared as company on 1982 by Nicolas G. Hayek. The
first swatch product was launched in 1983 having a really good acceptance
from the public, because of design and quality. Since this time, Swatch has
become the most successful watch company ever.
During the past decades, and thanks not only to the outstanding technical
capabilities and advances in the Swatch technologies, but also to
marketing strategy that Swatch has adopted to position itself in the watch
world market, this company is today the top leader quartz swatch seller in
the world.
Watches Industry
In order to give a wider panorama of Swatch, it is necessary to show how
the watches industry is arranged.
Figure 1: Watches Company Shares 2009.
Source: Trade associations, trade press, company research, trade
interviews, Euromonitor estimates.
Swatch has been the leader during the past years in the French market:
they were responsible for approximately 1/3 of the total watch sales in 2009
and also had the largest increase in market share in year 2009. Swatch has
created products for different segments from high, mid and low priced
watches with the aim of reducing risks, and to better adapt itself to external
economic factors, such as the recent crisis. To sum up, the watchmaking
industry is led by Swiss and Asian manufacturers.
In 2009, the size of the watch market in France was around 1.2 billion.
Before 2009 the watch industry had four continuous years of growth; but it
is important to take into account that the watch industry is really sensitive to
the shifts in the world economy, therefore with respect to 2008 there was a
decline of sales of 49.6 million due to the downturn of the economic
environment. As French citizens became aware of the financial crisis,
customers started spending less money on fashion products such as
watches.
Figure 2: Sales of Watches by Type: Category in 2009.
Source: Official statistics, trade associations, trade press, company
research, trade interviews, Euromonitor estimates.
As its possible to observe in the above graph, the category of watches
most sold is Quartz analogue, followed by mechanical and lastly by quartz
digital. This leads us to the conclusion that in the French market consumers
prefer quartz analogue rather than other categories.
Figure 3: Sales of Watches by Type: Value 2009.
If you take into account the sales of sport watches from 2004-2009 there
has been an increase of sales of watches passing from 26.5% in 2004 to
27.6% in 2009. The casual category has also had an increase in sales from
28.9% in 2004 to 30.1% in 2009. However the sale of formal watches has
decreased from 44.6% to 42.3% in 2009. So the sports category has had
the strongest increase in sales in the last six years.
Figure 4: Sales of Watches by Distribution Format: % Analysis 2004-
2009.
% Retail value | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
Store-Based Retailing | 94.3 | 94.3 | 94.2 | 94.1 | 94 | 93.9 |
Grocery Retailers | 1 | 0.9 | 0.9 | 0.9 | 0.9 | 0.9 |
Non-Grocery Retailers | 88.7 | 88.6 | 88.5 | 88.4 | 88.3 | 88.2 |
Leisure and personal goods retailers | 82.8 | 82.7 | 82.6 | 82.5 | 82.4 | 82.3
|
Mixed Retailers | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 |
Other store-based retailing | 4.7 | 4.8 | 4.8 | 4.8 | 4.9 | 4.9 |
Non-Store Retailing | 5.7 | 5.7 | 5.8 | 5.9 | 6 | 6.1 |
Homeshopping | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
Internet Retailing | 5.1 | 5.2 | 5.3 | 5.4 | 5.5 | 5.6 |
Total | 100 | 100 | 100 | 100 | 100 | 100 |
In relation to the above table we consider that the best distribution channel
for Swatch is the Store-based retailing with a 93.9% followed by non-
grocery retailers (88.2) and leisure and personal goods retailers with
88.2%. Something that is very important to mention is that Internet retailing
is growing considerably fast. While the three main distribution channels
have been decreasing in the past years, Internet retailing is growing, with a
positive trend in the 2004-2009 period.
Figure 5: Forecast Sales of Watches by Category: %Value 2009-2014.
This table shows us the compound annual growth rate for the three
different categories. The category mechanical watches where the ones that
suffered the most with a 4.1% decline of sales. The average sale price of
watches has risen in the last six years to reach in 2009 93.70. In the
2009-2014 period the quartz digital market will be the category that will get
the majority share and will become according to the sales forecasts the
most important with 13.8% followed by the quartz analogue (12.9%), and
the mechanical watches market (12.1%).
% Constant value growth | 2009-14 CAGR | 2009/14 Total |
Mechanical | 2.3 | 12.1 |
Quartz Analogue | 2.5 | 12.9 |
Quartz Digital | 2.6 | 13.8 |
Watches | 2.4 | 12.8 |


.
External Analysis
PESTEL
The watchmaking industry is led by Swiss and Asian manufacturers. The
undisputed leader in France is the Swatch Group, with a market share of
31,7% in 2009.
Political
No political factors in France have an influence on a company like Swatch.
Economical
* 2 years ago the watch industry was hit in France by the consequences of
the financial crisis: the reduction in households purchasing power led to a
decline in demand for fashion products.
* In France, in the coming years (2009-2014), watch sales (in value) are
forecasted to grow by 22%.
Social
* People no longer wear watches for a functional purpose: watches have
become subject to fashion trends, and also indicate social status. Design
and color are important to consumers nowadays.
* A watch is no longer an accessory kept for a lifetime: people wish to
change it according to fashion trends. Casual and sport models have
gained market share, while more formal watches are declining.
* Watches are often given on special occasions such as birthdays (32%)
and Christmas (20%)
Technological
E-commerce development: it has become increasingly popular in France
(thanks to service and home delivery).
Ecological
Ecology is a growing concern for people and governments; in the
watchmaking business, there are two possibilities: mechanical watches
(without batteries) and solar watches.
Legal
In France there are no laws concerning to the watch business.
Key points drawn from the PESTEL
* Importance of e-commerce channels: Going forward in relation to the
tendency, Swatch has created a strategy to penetrate the online market.
This is the reason why Swatch has created a special space inside their
webpage where people can see their most recent models, and marketing
campaigns, the characteristics of the product, offering the buyer to
purchase any model he would like to acquire. Swatch has decided to go
beyond in terms of online distribution, having presence not only in their
official online store, but also using other online stores where other brands
are offered.
* Swatch can use affiliates to increase their sales and have more brand
presence in Internet.
* Watches are less considered as durable products kept all life long; they
have become fashion accessories subject to new trends, which can be
changed every season. A way for Swatch to attract new customers would
be to create different collections on a regular basis.
Porter's 5 Competitive Forces
Analysis of competition and profitability of the sector.
Convention: (-) Unfavorable, (+) Favorable (+/-) Neutral
Five Forces model conclusions:
* Threat of new entrants: favorable: The conditions show that there are high
barriers to entry the industry, due to the high investments in technology and
advertising to get recognition from the public. Moreover the Chinese are
producing low cost watches, but they cannot count with such good
reputation as other brands.
* Bargaining power of buyers: unfavorable: Consumers dont have
bargaining power when buying the watches, but they have a wide diversity
of brands to choose. Moreover the retail industry has a medium power,
when deciding what margin they will get for each product they sell. The
sector is attractive because of the high barriers to entry in the business.
* Threat of substitutes: unfavorable: A high number of substitutes are
present, in the substitutes analyzed they not only show the time but have
other functions and can be also used as a fashion accessory.
* Bargaining power of suppliers: favorable: Watchmakers need to have a lot
of procurement with the aim of integrating themselves with their suppliers,
this leads to a lower dependency of suppliers and a higher quality of raw
material to produce the watches.
* Rivalry within competitors: unfavorable: This is a red ocean market where
there are a high number of competitors that compete with design,
innovation, price and advertising.
Conclusion:
There are high barriers to entry: high initial capital investments, high
technology, important know-how and high brand positioning. In addition the
sales of watches are forecasted to increase by 21,8%. During 2009-2014 to
reach 1,5 billion in 2014, representing a CAGR of 4.0%,therefore the
industry is attractive.
Mc Kinsey matrix
The McKinsey matrix measures the "Industry Attractiveness" with the
"Business Unit Strength". The point is to try to determine with a quantitative
measure the attractiveness a company has in the industry alongside the
performance of the industry where the company has participation.
In order to be able to create the Mc Kinsey Matrix for Swatch, we
discovered that there are two business units where the brand is present:
the quartz analogue and digital watches, and the jewelry market
Concerning the quartz watches business unit where Swatch is present,
nowadays, Swatch is leader in the French market with a 31.7% market
share (15.7 million Euros), followed by Seiko (with a 8.3% market share).
The reason of such success in the market is that Swatch provides top-
quality products with affordable prices and has a well-recognized brand.
In relation to future investments, it seems important that Swatch should
maintain its marketing investment level in order not only to remain leader
on the market, but also to gain market participation in the years to come.
As for the jewelry industry, Swatch is not the sales leader in spite of their
association with Swarovski, having a market participation of only 2.3%. The
leader of this market is Christian Bernard Diffusion (Cacharel, Guy
Laroche) with10.8%.
Swatchs weakness on the jewelry field is linked to the fact that it has a
very young, fresh, and innovative image that fits with young people, but not
with other customers who have more purchasing power; this is because
they are not so well positioned to compete with more luxurious brands in
the market.
We consider that Swatch could increase their investments on the jewelry
market, so as to reinforce its image as quality, original and young jewelry
provider to the French market.
Their products have potential with young people: but they need to think
about Swatch not only as a watch maker but also as a jewel designer. An
increase in advertisement spending, in order to make Swatch jewels more
known, could be a solution.
Internal Analysis
Value chain
Even if the target analysis of this document is in terms of Marketing and
Communication, we need to explore the other related activities that
somehow support Swatchs performance in those two pillars. In this order,
to give accurate conclusions about the diagnosis of the company toward
Marketing and Communication, first it is necessary to evaluate how the
other activities impact on them. This value chain analysis will show the
performance of support and primary activities in order to get a deep
knowledge of Swatch. Furthermore, the approach to each component of
the value chain will allow finding the mix of activities, resources and
competences that deliver the competitive advantage of the company.

Support Activities
Infrastructure
Regarding the infrastructure, it is precise to highlight the wide global
network that this enterprise has built through its history. Swatch watches
are sold in approximately 15,000 retailers all around the world, 500
specialized Swatch stores, more than 1000 shops-in shops and some 140
kiosks. This gives to the enterprise a global reach of its products and also
wider brand recognition. On the other hand, the main office is placed in
Switzerland.
Human resource management
Swatch has around 23,577 employees in the different areas, from
production and research, to commercialization and administration. The
current leader (CEO) is Nicolas G. Hayek. Talking about human resource
management, Swatch has recorded weak revenue per employee in 2007
compared to other watchs companies. The revenue per employee index is
calculated by dividing the total revenue into the number of employees. This
revenue per employee of $0.2 million in FY2007 was considerably lower
than its competitors including Seiko Corporation and Rhythm Watch. The
revenue per employee of Seiko Corporation and Rhythm Watch was
recorded at $28 million and $34 million respectively during the same
period. The above gives a worrying panorama about the low productivity of
the employees, which can cause that Swatch spends resources without
seeing the profit. It means that the enterprise should implement strategies
towards the improvement of its employees performance.
Technology development
In 2005, The Swatch group founded the department of Research and
Development. The particularity of this group is that is a legal entity:
ASULAB and CDNP, which are in charge of the R&D for Swatch as a
whole. This does not mean that through the years the company would not
have invested in R&D and new technologies.
For long time, the company has invested a high amount of its resources in
research and innovation. This technology development has been done
towards electronics and design improvements. It is necessary to remember
that the Swatch group also distributes electronic parts. On the other hand
Swatch is well recognized by its colorful products, so it demands constant
research and technological investments to reach accurate combinations
and designs compared to affordable production costs.
ASULAB has the mission to develop technically innovative watch products,
subsystems and components, along with the necessary manufacturing
technologies. This goal is accomplished due to the constant link with
universities and research institutes. Particularly, this laboratory is active in
micro-technology, microelectronics, telecommunications, displays, sensors
and actuators, materials and process engineering, ASULAB comprises all
the technical fields required today for the development of sophisticated
modern timing products.
On the other hand, the New Products Development Centre (CDNP) puts
together all the creative ideas with the technical and financial realities. It is
responsible for putting the finishing touches to the watches created by the
Swatch Groups different brands.

Procurement
Due the long history and the constant present in market of Swatch, the
group has recorded an important financial performance. The revenues of
the group grew until 2007 to approximately $4,710.1 million. Consequently,
the profits of the group showed a similar trend because of the growing
revenues showed above. The operating profit margin increased from 17.1%
in 2005 to 21.9% in 2007. The net profit of the group increased in 2007 to
approximately $843.4 million . This prominent financial muscle allows the
enterprise to invest in R&D, distribution channels and intensive
advertisement. On this way, Swatch is able to consolidate its daily activities
as well as its long term performance.
Primary Activities
To describe and analyze the performance of Swatch in terms of logistics
and general distribution, we are going to refer to the Swatch Group, which
is the group that holds Swatch Company. This group is the in charge of the
logistics items to all its 19 different brands.
Operations
The Swatch Group is placed on a major position in the production and
supply of watches and components. This group counts with 156 production
centers that make it the worlds largest watch producer. As said above,
Swatch group counts with 19 brands, so the group manufactures and
assemblies all the necessary to supply them all. Nevertheless, the group
also supplies other actors of the market. The main strength of the group is
that is able to supply virtually all the components for the Group's
timepieces, from design right through to assembly. This strength also
the vertical manufacturing structure, as well as providing a actual
guarantees the strength and credibility of each of the Group's brands (in
this case Swatch).
Referring to quality, the Swatch Group Quality Management team ensures
the quality, reliability and security of the Groups products. Various working
groups representing the companies concerned develop specific solutions
for product and process optimization, and two homologation centers
monitor mass-produced products.
Swatch Group Quality Management also does a set of documents
regarding the new international legislations and general requirements to
adapt them to the products and vice versa. In this order of ideas, those
specifications are given to the Swatch Groups internal and external
suppliers in order to guarantee the use of appropriate materials and
processes.
The Quality Management team provides direct support for implementation
of changes necessary to conform to international directives, and contribute
to the Swatch Groups training offer.
Outbound logistics
Swatch Group products are distributed through its global network, as said
above into the different kinds of distribution places (specialized stores,
retailers, kiosks and shop-in-shops).
Swatch Group Distribution
Swatch Group Distribution was formed in 2001 with the objective of
providing worldwide support to Swatch Group companies in their efforts to
supply customers with products in a more rapid, reliable and cost-effective
way.
Swatch Group Logistics Unit
The Swatch Group Logistics Unit provides a platform in which agents
placed in every country they sell, in order to give them the current
information of sales, inventories, and open orders.
European Distribution Centre
Twelve brands and thirteen national companies benefit from services
provided by the EDC, which handles several million watches, items of
jewelry, and items of advertising material each year. Thousands of
packages leave the packing lines each day to be delivered directly to over
10,000 retailers across Europe within 24 to 48 hours.
Marketing and sales
To explain the companys performance in this aspect, we are going to show
a further analysis in the section of this document called Swatchs
Marketing and Communication performance.
Service
Swatch Group created a division focused on attend the Customer Service
because of their commitment with clients satisfaction.
This division is a group that works in coordination with Customer Services
of the various Swatch Group Brands. This group has a manual of
instructions and rules concerning the way of facing customers complains
and suggestions in order to keep always pleased their consumers.
We produce beauty, sensuality, emotionality in watches and we also
produce high-tech on your wrists. Both, emotionality or poetry and high-
tech are part of what we feel towards our customers. We love them
genuinely. We want them to be happy we want YOU to be happy
N.Hayek- CEO
Swatch in deep: Marketing Mix
Product
* Swatch aims to appear as a middle-range watchmaker, who aims to
transmit to the consumer a message, and their goal is to offer the client not
only an accessory to observe the time, but also as an element of fashion.
* The packaging plays an important role being really attractive to the
consumer.
* Swatch has being able to penetrate in the market with a strategy of
offering different products towards different segments addressing their
different needs.
* Swatch targets these main three segments:
Generation X: (Born 1965-1984)
Generation Y: (Born 1985-2004)
Generation Z: (Born 2005- Present)
* Quick links products offered by Swatch in its web page:
* Full blooded is targeted to generation X.
* Kid Robot for Swatch is targeted to generation Z.
* New Gent is targeted to generation Y.
* Color codes is targeted to generation Y
Place
* Watches are sold in Swatch own stores.
* The watches are also sold in the retail industry such as: jewelry shops,
department stores, Galleries Lafayette, Histoire dOr, Louis Pion, Marc
Orian (in the case of France).
* Swatch watches can be found almost everywhere in France because of a
wide network of stores provides them in every region.
* Swatch offers online e-commerce.
Price
* Swatch has managed to create an impulse buy due to the low cost of their
products compare with other brands offering the consumer a high design
and a high quality of the product.
Promotion
* Television advertisements campaigns, sponsorships to sport athletics in
sports such as: beach volley, surfing, free ski, snowboard, free ski style,
FMX and BMX.
* Swatch is present in important events such as: TTR World Tour,
Free4Style, Red Bull X fighters, UCI BMX Supercross, Freeride World
Tour, Swatch Girls Pro China, Swatch Girls Pro France, Swatch Skiers Cup
and FIVB Beach Volleyball World Tour
* Swatch takes part in important events such as Biennale di Venezia, MTV
EMAS 2011.
* In the Internet page you can access to products catalogues and
brochures.
* Swatch also has games where the consumers can interact and win a
contest called MTV playground.
* They are present in social networks such as: Facebook, Twitter, YouTube
and Tumblr.
* IPHONE and IPAD applications.
* Swatch club where you can create your community and receive benefits.
* Swatch TV where the consumer can watch videos of sport, art and
fashion.
SWOT Analysis
Strenghts
* The strong financial muscle of Swatch allows it to do constant
investments on R&D, innovation, new services, wider its global network
and differentiate its products. Moreover, Swatch is able to do intense
advertisement to launch new products or to reinforce them. This is a
valuable resource that well managed, can contribute to expand the
company.
* Swatch has a strong infrastructure all around the world. This infrastructure
is represented by specialized Swatchs stores, kiosks and retailers. In other
words, the strong presence in the market allows it to develop an important
level of awareness and also a desirable level of sales.
* The vertical integration of Swatch enables the company to properly
manage their processes and to have a current quality through the rigorous
control within the different stages. The groups of the logistics area created
by Swatch Group offer support as the way to improve the processes and
reflect it on the final produced good as well as to the consumer.
* Swatch has a well-coordinated team that is able to launch trendy products
that become into fashion items. It means that Swatch counts with good
reputation as an important actor (fashion accessory) within the sector.
Weaknesses
* Human Resources management in swatch is a weak point. As said
above, the productivity par employee is very low in comparison to the
competitors. This represents a problem into the short, medium and long
term because of the lack of effectiveness, loss of money and bad HR
incentives.
Opportunities
* Watches have become new fashion accessories. People do not buy one
and keep it for a lifetime anymore; they change it according to trends.
* The development of e-commerce can be considered as an opportunity: it
is an additional distribution channel which has a great potential. Young
people increasingly use the Internet to do their shopping; and it covers all
of France.
* Swatch doesnt have to fear new entrants on the French market, since
barriers to entry are high.
Threats
* If the French economy doesnt recover, it could potentially be dangerous
for the watch industry, since households who see their purchasing power
decline spend less on fashion products.
* Swatch watches are subject to counterfeiting in Europe: this damages the
brand image and has a negative impact on profit and revenue.
* The price increase of raw materials used to make watches is obviously a
threat to the industry, since it raises production costs.
* There are an important number of competitors on the French market;
although all of them do not have the same brand equity as Swatch, they
still represent a threat.
* Asian low cost manufactures.
Competitors Analysis
Festina
1. Festina
Spanish company, whose head office is located in Barcelona. In 2009, its
market share in France was 3%.
Product
* Festina targets mostly men: their range of watches is bigger (10
collections instead of 5 for women).
* Festina aims to appear as a middle-range watchmaker, which succeed to
make more accessible some materials such as titanium (which were
previously used only in luxury watches).
* Although their collections have quite a luxurious design, Festina is not
considered as a high end brand by most of watch collectors; this could be
because of their lower quality, and because the materials used are less
prestigious.
Place
* Watches are not sold in stored exclusively dedicated to Festina products,
but in local jewel stores and in specialized channels such as Galleries
Lafayette, Histoire dOr, Louis Pion, Marc Orian.
* One can buy a Festina watch almost everywhere in France; a wide
network of stores provides them in every region.
* Although customers can browse different products on the catalog, they
cannot buy watches online directly on the Festina website.
Promotion
* Festina sponsors sport events, especially cycle races. It is the official
timekeeper for the Tour de France. This is put forward in their advertising
campaigns and on their website.
* Their print advertisements are well designed and seem to target wealthy
customers; however, Festina is not a brand collected by watch amateurs.
Price
* Watches start at a price of 69 euros, until 299 euros for the most
elaborate products, with special editions up to 459. Most luxury brands
have an opening price of 500 euros. Festina has prices suited to a middle
range.
Casio
Casio Computer Co., Ltd. Settled in Tokyo Japan is a company that was
created in 1946. In 2010 the revenues of the company were 4616 USD
billion and they count with 11336 as worldwide labor force. Casio Computer
Co, Ltd is a company known for manufacturing calculators, audio
equipment, PDAs, watches and musical instruments.
Product.
In relation to watches (main topic of our current analysis) the company has
created a big evolution, passing from black, bad quality, and rudimentary
technology watches to produce watches that compete with the best into its
segment. Offering high technology and very innovative watches.
Nowadays, the watches portfolio Casio has is1:
* G-shock
* Baby-g
* Edifice
* Wave ceptor
* Casio sport
* Casio collection
* Wake up timer
Promotion |
|
Casio makes campaigns worldwide to promote their watches brands. Their
campaigns target teenagers, young women, mature ladies. Casio is
sponsors in important sports events like F1 and Adventure Racing World
Series. Nowadays Casio use Casio embassadors also to promote the
brand. These are mainly famous actors, sport starts, etc.Place.The
distribution channel used by Casio in France is a very complex and efficient
as a result of the reinforcement of its distribution channel. In reference to
this, Casio has presence throughout Jewelry, big retailers, and watches
stores in almost any city. Casio does sell watches throughout its Casio
webpage. By the contrary, they push visitors to see the Casios watches
catalogue, but to look throughout its distribution web the nearest
distributor.Price.As other watches manufactures that are in the segment,
Casio, in order to gain worldwide market, created a combination between
low prices, and electronic technology. |
|
Seiko
Seiko is a Japanese watch company created in 1881, and one of the most
important watch manufactories companies in the world.
Among its multiple products portfolio, the company provide jewelry,
precision instruments, machinery for watches, printers, optical material,
sunglasses and watches.
In relation to Seiko France and in the watches segment unit (the business
unit that we are interested in) Seiko has the position number 2 in the
market, with 8.3% of the market niche.1
Product
* The age range of the target is between 25 and 45 year old (for traditional
men and women). Seiko appears in the market as a middle-range
watchmaker.
* Given the innovation policy inside Seiko, the materials used in the
watches varies from: plating with gold color material, stainless steel, and
bracelet made with Titanium, ceramics and engineering plastics3
Place
* Seiko, as many other competitors has many distribution channels.
However, and as a difference with other companies, Seiko sells throughout
jewelry stores, catalog showrooms, e-commerce.
* Seiko does not commercialize its products in discount and drug stores.2
Promotion
* Seikos campaigns focus on a select few watches from the current Seiko
range. Part of the advertising budget goes to fashion and lifestyle magazine
such as GQ, Esquire, Easy Living and Elle, and newspapers weekend
supplements.
* Outdoor and online are mainly used. PR and promotions are other ways
in which Seiko watches are promoted.
* Seiko has presence in many sports. Sometimes as sponsor, sometimes
as organizer.4
In the 2011, Seiko has sponsored:
* icar 2 glider
* The 13th IAAF World Championships held in Daegu, Korea (Daegu,
Korea)
* Main sponsor of the International 29erXX Class since 2009.
* FAI Sailplane Grand Prix Final. As SEIKO sponsors the Solar plane icar
* Helsinki sheltered waters championship
Price
* The Price strategy is a very innovative combination between low Price
policies and top electronic technology5
Rolex
This Geneva-based company was founded 100 years ago by Han Wilsdorf.
It competes in Jewelry & Watch Manufacturing, Consumer Products &
Housewares Manufacturing. This is a brand that is present and recognized
worldwide. Rolex was the first company to create waterproof, airtight, and
dustproof watches. In terms of the target, it is possible to affirm that their
objective public is amateurs of luxury watches, both men & women
professional sportsmans, engineers that appreciate the quality of the used
materials, mechanism, design, and brand notoriety.
Examples: plunger, airline pilots, climbers, alpinists, mountaineers, extreme
sports fans, speleologist, sailors.
Product
* Rolex offers men's and women's collections, stopwatches, pocket
watches & clocks.
* The most known men's collections: Date-just, Daytona, Day-date,
Explorer, Submariner, Yacht-Master. Women's collection comprises for
instance Date-just Lady, Yacht-Master.
* All models proposed by Rolex are inspired by the classic Oyster.
Customization of the watch is also possible for instance dial completely
covered by diamonds.
Promotion
* The message the company seeks to transmit through its communication
is based on the next pillars:
* Perfect tightness of the products.
* Resistance in difficult conditions.
* Cultural & sport events with brand ambassadors.
* In 1953 the alpinist Sir John Hunt reached the summit of Mount Everest
wearing the prototype of Explorer which came up trumps in difficult
conditions. To convince the customers of the tightness and credibility of the
Oyster model, Rolex put aquarium with the watch within in the windows of
their points of sale.
* Now the brand is exclusive to such an extent that doesn't need any more
advertising campaign. The company operates in the niche market, it is well
known, reliable and trustworthy.
Place
* The company only sells its Genuine Rolex Products through authorized
Rolex dealers worldwide. For instance, Rolex does not sell watches directly
from their website.
Price
* Rolex is a high-range product, expensive.
* Rolex watches price changes according to the model and the materials
used; it is possible to find an amount of 200 hundred thousand euros for
special edition of Oyster Perpetual Day-Date.
Stakeholders Analysis
Employees - work quality, productivity, commitment
The Swatch company implements its social policy consisting of providing
trainings, apprenticeships, permanent employment, retirement benefits.
Shareholders/Investors Capital, Decison-Making Process
Shareholders: The Board of Directors of The Swatch Group headed by the
chair N.Hayek assembling in the General Meetings is responsable for the
corporate governance.
Investors : there is a special team dedicated to the relationship between the
company and the investors. The most important for them is the return on
investment.
Cutomers/Prospects Relationship, Satisfaction
Customers create the demand, they can advise or advise against our
products. They can turn into the brand ambasadors, also via internet by
blogging and using forums. The company has to take care of the customers
before buying a products, in the moment of purchase and after the service.
Suppliers lead time, quality of products
The company is also mechanical and quartz movements manufacturer so it
has to cooperate with their suppliers in terms of lead time.
Governmental organisation - environment policy
The company implements the Environment policy which includes the idea
of protecting the natural environment and natural resources by using the
auxiliary materials environmental friendly. Beside they use the raw
materials, energy resources with reasonable limits.
Media, Web Sites, Press reputation
There is a lot of brand ambasadors (for instance Pauline Ado French
surfer, Sebastien Michaud French skier). The company cooperates with
MTV, they are present at the international event for example The Biennal in
Venice where they introduced the new collection Swatch & Art designed by
the artist Jean-Michel Othoniel. WristWatchReview created by John Biggs
is one of the first and most established watch blogs on the Internet.
Competitors companys strategy
Principal competitors in the French market are Seiko, Casio, Rolex,
Festina. Depending on the competitor's strategy Swatch tries to answer
and create the market value added, to mark out. The Swatch France
proposes a wild range of products : Prestige and Luxury Range, High
Range, Middle Range, Basic Range, Private label so it can compete with
different companies in different levels.


Enterprise
Swatch would never have existed without the courage of the creative
people behind its development. Nick Hayek, Jr, President of Swatch,
declares his philosophy as Be curious, bold and open to new things. Make
your life exceptional.

Swatch from a plastic nobody to a global brand name in 18 years.
In the 1970s the Swiss watch making industry, worldrenowned for its
precision, quality watches, was in crisis. In just ten years its export market
had dropped by half, with Hong Kong and Japan now occupying the top
spots. In 1978 the Japanese introduced a watch that was just 2 millimetres
thick. Switzerlands largest watch group, ASUAG, rose to the challenge and
developed a gold watch that was just 0.98 millimetres thick. This
technological masterpiece was a huge success and inspired further
research at ASUAG. Could a watch be made entirely of plastic?

The answer was yes. In 1985 Swatch registered their first trade mark. Up
until then, the Swiss watchmakers had been specialists in precision,
exclusive and expensive watches. Now, not only had ASUAG produced a
watch that was made totally from synthetic material, a completely new
phenomenon, but they were pioneers in the world of mass production,
producing a watch that was inexpensive and available in a range of
colours. This was something completely new in the watch industry and an
enterprise with a difference was launched.

Behind the success of Swatch were the masterminds who believed in
their vision. Everything about the watch was innovative, from the
technology to the way it was launched onto the market. This dedication to
creativity and enterprise has resulted in Swatch developing over 2000
registered designs.


The idea
The Fun Scuba Watch was launched in September 2004. Swatch had
previously marketed a scuba watch a waterproof watch for underwater
swimming but had felt it was too childish and wasnt making the right
design statement for the company. They decided they needed a scuba
watch in their product portfolio that would appeal to older teenagers and
adults. They also wanted the watch to be stylish so people would want to
wear it in cities, not just underwater.

Issues
There was still a challenge.
Swatch had developed a watch whose smooth, striking curves gave it
characteristics which clearly distinguished it from any other watch. They
had used artists, designers and fashion designers to make it look
exceptional. The marketing had to be right to establish its unmistakable
profile. It needed the right perception in peoples minds. It should be
portrayed as fresh and upbeat. It was high-tech, innovative and exciting.
The marketing must position it as a must have accessory. The difference
was that whereas most products that fit those criteria are expensive, the
Swatch was cheap and available to the mass market. This demanded
unusual strategies.
Swatch werent just groundbreakers in the world of watch design. The
way the Swatch was marketed was original and exciting for the world of
watches and the protection they had once they registered their designs
enabled them to develop a strong intellectual property portfolio and become
the successful enterprise they are today.

Development
The research
Most companies carry out extensive market research in the field before
starting to develop a new product, but Swatch does not generally carry
out research. The company ethos is that if they have a good product idea
and the right advertising then it will be successful. It is unusual these days
for companies to be product-driven in this way and not market-driven, but
Swatchs extensive experience and success in marketing original
products makes them feel that the risk is worthwhile.

Product testing
The product is water-resistant to 200 metres so testing was crucial and was
done under laboratory conditions to ensure the watch would function
correctly. Once it had passed the lab tests it was tested underwater in
different weather conditions, including Lake Bienne in Switzerland and the
Pacific Ocean.

Examples of Swatchs innovative marketing
In 1983, if you had been going through a tunnel on a train in the USA,
you would have seen colourful images flashing up and a television
commercial on the tunnel wall advertising the Swatch.
The Swatch Irony Scuba 2000 was launched in the Death Valley desert,
a barren valley ringed by unearthly rock formations. 200 members of the
media were invited.
Swatch sponsors extreme sportsmen/women such as snowboarders
and surfers and organises its own events.
Swatch sponsors pop groups and unusual art exhibitions.
Swatch mega stores have gleaming mosaics, interactive games and
exhibitions.

Protection
Protecting the new ideas
Whenever a new product is being worked on and tested, everything has to
be kept secret. Swatch uses code names for new products and no one
involved is allowed to discuss them outside the working environment. Many
companies expect employees, suppliers and other people involved in a
development project to sign a Non-disclosure Agreement, which is a legal
contract binding them to secrecy. Swatchs reputation and market are
dependent on their original designs. In order to maintain their market
position and reap the rewards of their research and development, they
need to be very careful to maintain the security of those designs while they
are being developed.

Acquiring patents, and registering designs and trade marks
A new range of watches may involve new developments in technology so
Swatch will apply for a patent. Companies like Swatch invest sums of
money in these developments. Filing for a patent prevents other people
from using that technology, giving Swatch time and the opportunity to
work on it and benefit from their investment before other people start to
imitate it.

Swatch uses artists and fashion designers to design the new watches.
Their aim is to create a look and feel for a new watch the colours, the
shape, the lines and contours which are appealing and new, and which fit
in with Swatchs unique brand image. In the same way as a patent
protects their technological innovations, Swatch can protect their
investment in design through registering their designs to prevent
competitors using them.

Swatch is a registered trade mark and the company can use this for
brand recognition. A brand enables consumers to understand the standard
and quality that they should expect from a particular product.
Supermarkets, for example, carry products with wellknown brand names
such as Heinz or Coca Cola and they will also carry their own brand
products. These all have their own trade marks and this identifies for the
shopper the standard of the product that they are buying into.

In the same way, Swatch protects its image through the use of its trade
mark, whether it is on its watches, in its megastores or the type of sports
activities it sponsors. Through ownership of the trade mark, Swatch have
control over that image and quality standard.

Outcome
Swatch are ground breakers
Alongside the development of their innovative product they quickly gained
themselves a reputation for creative and imaginative marketing,
establishing Swatch as a brand that was different and young, conjuring up
visions of exciting lifestyles. Each of the watches was given its own name.
Dont be too late, Chrono-Tech, Black Magic. But Swatch didnt stop
there. In 1986 there came the Maxi Swatch a big watch followed by
other models, including The Scuba, Chrono, Loomi, Solar, Beat, each
having its own distinctive features. They regularly bring out at least two new
collections a year.

They have established themselves a unique position in watch production
and marketing with a unique brand. Many of their lines have become
collectors items.
Swatch its unique selling points
Quartz watch with analogue display at a low price
A high-tech watch with minimum parts
Level of quality usually only available in expensive watches (e.g. shock-
resistant, accurate, water-resistant)
Brand that stands for an exciting lifestyle
Fashion accessory

Swatch is a company that protects its portfolio of trade marks, designs
and patents. The protection afforded by ownership of this intellectual
property has been a significant factor in its successful quest to establish
itself as an enterprise renowned for innovative products and an icon of
exciting lifestyle.

Swatch Launches Line of Fun Scuba Watches
Swatch has launched a new range of watches targeting scuba divers,
called the Fun Scuba Collection. The watches are designed for lovers of
scuba diving rather than professional divers, but they are water-resistant up
to 200 metres and do measure the length and the depth of each dive.
There are eight colourful and fun designs from Moray's Bite to Squid
Bubbles!

In a similar way to more professional dive watches, the watch will self-
activate once the swimmer reaches a depth of one metre. From here a dive
profile is recorded for up to 90 minutes and a depth of 40 metres.

The watches have a logbook function which automatically records the
swimmers last dive and a favourite setting stores memorable dives.
Though not a replacement for your dive watch, this is a fun alternative for
the non-diver in your family or for a water sports enthusiast. To learn more
visit http//www.swatch.com Dive News - September 2004.