Swatch global strategy

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AND ITS SUCCESS STRATEGIESPRESENTED BY:MEGHA NIMRANRAJATSUNIRAUN

AMITY GLOBAL BUSINESS SCHOOL CHANDIGARH


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• Industry- Sector: Consumer Goods

-Industry: Luxury Goods and Accessories

• Revenue: CHF 5.142 billion (2009)

• Employees: 23,560 (2009)

• Key people: Nayla Hayek (Chairman), Nick Hayek, Jr. (CEO)

• Top Competitors • Citizen Holdings Co., Ltd. • Compagnie Financi re Richemont SA � • Seiko Holdings Corporation

COMPANY PROFILECOMPANY PROFILE


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• The Swatch Group Limited is the world’s largest maker of

finished watches

• It operates 156 production centres in seven countries and has

it’s brand presence in over 50 countries

• Swatch is a diversified multinational company which is active

in the manufacture and sale of finished watches, jewellery,

watch movements and components

• The swatch group is headquartered in Biel, Switzerland


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• Its production companies supply

movements and components to

third-party watchmakers in

Switzerland and around the world

• A key player in the manufacture

and sale of electronic systems used

in watch making and other

industries

• Also a leader in the field of sports

event timing


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HISTORY

• It was formed from two of the largest watch concerns in

Switzerland - SSIH and ASUAG

• SSIH and ASUAG were reorganised and merged into ASUAG-

SSIH Holding Company by Hayek Engineering in 1983, the

majority taken over by Nicolas Hayek

• Renamed SMH in 1986, and ultimately The Swatch Group in

1998


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• Critical steps included:

– The merger of ASUAG and SSIH into SMH and

– The launching of a low-cost, high-tech, artistic and

emotional «second watch» – the swatch.

– The nomination of Nicolas G. Hayek as CEO, successfully

created new opportunities and established a new culture


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PRODUCT PORTFOLIO

• Swatch products are sold under it’s 19 watch brands

• Breguet, Blancpain, Glashutte – Original, Leon Hatot, Jaquet –

Droz, Omega and Tiffany In The Prestige and Luxury Range

• Longines, Rado and Union Glashutte constitute the high range

• Tissot, Calvin Klein (CK), Certina, Mido, Hamilton and Balmain

are the products in the middle range

• Swatch and Flik Flak are in the basic range segment


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• Swatch watch brand includes product lines such as:– Swatch originals– Swatch Irony – Swatch Skin – Swatch beat– Swatch bijoux


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• The Swatch Group owns several companies which do research

(Asulab, EM Microelectronic-Marin, Oscilloquartz SA),

produce movements (ETA SA, Valjoux, F. Piguet),

• produce pieces of watches (Comadur).

COMPANIES


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Prestige/ luxury

HIGH

MEDIUM

BASIC

BREGUET

BLANCPAIN

LONGINES

OMEGA

RADO

TISSOT

CK

MIDO

FLIK FLAK

SWATCH

PERCEPTUAL MAPPING


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RETAILING

• Tourbillon is the multi – brand retail label

• The Tourbillon brand boutiques offer all Swatch Group luxury

brands products – watches and jewellery collections –

highlighting each brand’s appeal in specially designed

environment


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GLOBALIZATION

• The global watch market is dominated by Swiss

manufacturers.

• The three leading Swiss companies are Swatch Group,

Richemont and Rolex, representing the largest share in the

global watch market.


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• Swatch emphasizes that its watches to be distributed worldwide:– must have style– must be cheap to make– must be priced competitively– be durable, and– establish a technological lead.


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STRATEGIES

• The strategies followed by swatch to sustain it’s competitive

advantage are:

Blue Ocean Strategy

Backward Integration

Multi Segment Strategy

Market Penetration

CompanyMarketing Mix

Segment 1Segment 2Segment 3


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BLUE OCEAN STRATEGY• In blue oceans, demand is created

rather than fought over. • There is ample opportunity for growth

that is both profitable and rapid.• In blue oceans, The corner-stone of

Blue Ocean Strategy is 'Value Innovation'.

• A blue ocean is created when a company achieves value innovation that creates value simultaneously for both the buyer and the company.

•Blue Ocean Strategy aims to capture the mass and core of the reconstructed and expanded market.


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BACKWARD INTEGRATION• ETA sells so-called ‘ébauches’ or

incomplete watch movements to

third parties.

• Most smaller watch companies,

both Swiss and worldwide, buy

their movements from ETA.

• Even the Richemont Group, one of

the big three Swiss watch groups

whose luxury brands include

Cartier is heavily dependent on

movements supplied by ETA.


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MULTI SEGMENT STRATEGY• Swatch watches has been positioned to cater to the needs

and desire of the mass market .• its products are offered in basic range segments which go on

till the elite class Company

Marketing Mix

Segment 1Segment 2Segment 3

They have series of watches for every season , every special occasion and every possible event in the world.


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PRODUCT GROWTH MATRIX

Switzerland New tech. always

As in India 7 brands

Blue ocean

Hire artists to design the product


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GENERIC STRATEGYCOST UNIQUENESSCost Leadership Differentiation

Focus

Backward integration

Flik flak


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TECHNOLOGY & DESIGN INNOVATIONS

• Swatch has established world- class recognition for their

expertise in manufacturing movements

• They have continued to focus on refining and further

developing new movements

• For design, the watches need to be attractive, daring in design

and aggressively priced, with high quality and innovative flair

• The swatch watches are high tech and come in A variety of

fashion and art design

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LEADING TIE-UPS

• Tie ups with NASA & ISS • The International Space Station also represents a new era for

the Omega's longstanding involvement with space exploration.

• The Omega Speedmaster Professional X-33 a watch developed to NASA's strict requirements with the help of astronauts and professional pilots once again proves its reliability as the official watch of the ISS



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SPONSORSHIPS

• Sponsorships With Sports

- official timekeeper of every Olympic sport

- promotes two major events in India :sailing & golf.

• Omega’s Olympic Limited

-edition watch released 88 days before the start of the Beijing

Olympics

• Omega & James Bond

- limited edition watches with 007 engraved clasps


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BCG MATRIX

STARS QUESTION MARKS

BLANCPAINBREGUET

-

CASH COWS DOGS

TISSOTRADOCALVIN KLEINMIDOLONGINESOMEGA

NO BRAND AS SUCH

MARKET SHARE

MARKET GROWTH


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CONSIDERATION WHILE ENTERING MARKETS

• While appointing retail stores, swatch concentrates on three

important aspects, namely:

• Location

• Professionalism of the men who would sell products to

customers

• Merchandising to ensure that customer is motivated to buy

• Swatch expands the market in a systematic way without

compromising on merchandising and dealers to sell it’s brands


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SWATCH IN INDIA

• Company : Swatch Group India Private Limited

• Mode Of Presence In India : 100 Per Cent Subsidiary

• Year Of Entry: 1998

• Key Business: Watches

• Country Manager : Gopalratnam Kannan

• It Has Already Introduced Seven Of Its 19 International Brands

In The Country


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• The Swatch Group currently retails through roughly 150 points

of sales across 53 towns in the country.

• It also has a Service Centre in New Delhi to provide after sales

service

• Some Swatch Group brands like Omega, Rado and Longines

have their own flagship stores in key cities of the country

• Competition from Titan, Timex


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KEY SUCCESS FACTORS IN INDIA• Large consumer market

– about US$ 10-11 million in size and is pegged to grow at 20-

25 per cent annually

– Consumers in the high net-worth individuals’ category in

India are growing fast

• Aggressive Marketing

– celebrities from the Indian film industry have been hired to

endorse its brands like Longines, Omega and Rado

– also strategically invested in print advertisements, points of

sale, merchandise and event promotions


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FUTURE PLANS

• Swatch plans to open Watch making school in India: students

from this school are expected to be absorbed by the swatch

group's after sales service.

• 51 per cent foreign direct investment being allowed in single

brand retail ventures


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CORPORATE SOCIAL RESPONSIBILITY

• The corporate responsibility of swatch is categorized into two

parts, namely:

• Swatch Group Environmental Policy

• Swatch Group Social Policy


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Swatch Group Environmental Policy

The policy can be summarized in the following points:

• The conservation of the natural environment and it’s

resources

• The avoidance of unnecessary waste

• The production of ecologically sound products by the most

efficient means


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It includes:

• Fundamental principles

• Employment

• Training

• Working conditions

Swatch Group Social Policy


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KEY SUCCESS FACTORS OF SWATCH

• Unique ad campaigns

• World class designs

• Aggressive and penetrating strategy

• Watches for everyone

• Efficient designers were appointed

• Customer – centric approach


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THANK

YOU

Documents

Swatch global strategy