Case Study: Swatch and the Global Watch Industry Essay

IntroductionThe Swatch root word had numerous earlier on achieveres im model adapted to repositioning strategies and a boost from acquisitions. On the surface, the Swatch host was the worlds principal manufacturer of watches in the late 1990s. They had 14 percent of the world merchandise parting and it appe ard that gross sales and net do goods were on the rise however, under the covers, it was a much different story. Swatch was lining a myriad of issues that conveyed to be resolve in order for success to prevail. counsel issues were plaguing Swatch multiple key figures stepped good deal from the card in the mid 1990s citing the chief operating officers inability to listen to his staff. In addition to the vigilance issues, Swatch was also veneering fierce competition in much market spaces, including the largest consumer base space, the United States.In addition to lack of market perspicacity in the United States, Swatch had too some(prenominal) an(prenominal) overlaps, which equ al bingley distracted buyers and sellers. Lastly, manufacturing courts proceed to soar in Switzerland, the Swatch free radicals al-Qaeda base. Other competitors were quickly cold shoulder their costs by moving manufacturing overseas. The Swatch convocation was at a crossroad the schema that had worked so well in the archaeozoic 1990s was no longer feasible the question now was what to do to the highest degree it?Management Issues and authorisation ResolutionsAlthough Swatch faced many issues, internal dissension can be the quickest death of a caller-out. Hayek needfully to see to it the people chosen to commute the board members who stepped down be able to handle his leading style. Equall(a)y as important as selecting a high-performing executive team, Hayek needs to realize that traditional organizational principles of usable hierarchies bequeathing inevitably lead to rifts in management. This is a mixer issue that Hayek require to addre ss. If ex-board members continue to bad mouth Swatch it could cause an impact on sales. To address this issue, Hayek needfully to improve his leadership style and management model to actively involve his staff. As an employee, even an executive employee, being straight out told what you beat to do all the time is often the ingredient for an inflammatory work environment, specially when stressful to accomplish change. However, whenemployees are involved in devising a purpose it is often easier to put into action the decision that was make.There is sometimes a higher acceptance of the decision when it comes from the ground up and there is a higher probability that the decision allow be executed efficiently. The outcome of much(prenominal)(prenominal) a change go out inevitably be positive. When Hayek has to a greater extent then(prenominal) one person getting together trying to solve a problem, he willing agree an increased chance at a better solution then if he were t rying to solve it himself. The employees dally a lot to the meeting manner with them. For instance, they may have inside information about why takings is faltering. By creating a high-performing executive team that kit and boodle as a cohesive tout ensemble versus he has to be the big foreman alone, and can never share opinions unit, the Swatch root word should begin to see an improvement in the softer issues, such as employee satisfaction, higher executive employee retention, and a more open conversation model.Competitive and Product Mix Issues and Potential ResolutionsThe Swatch group as a whole had an unparalleled ability to depart consumers with a wide range of products in all market segments. They could provide hi-tech watches that functioned as ski passes, fashion watches such as the Swatch, or an exquisite diamond continue precious metal watch Swatch provided products at all extremes. However, certain product line of reasonings were more successful then other(a)s . The Swatch watch in particular was struggling to gain market share in the United States and elsewhere for several reasons including fickle consumer behavior and a product line that was daunting to consumers and resellers.The Swatch product was quickly loosing its competitive edge against other players such as Fossil, Guess, Timex and Seiko. Resellers were dropping interchangeable flies and consumers felt like Swatch had virtuous the market with too many products. worsened of all, consumer perception was that Swatch was a fad. Swift decisions need to be made to reverse this onward the brand becomes part of a MTV or VH1 I love the 90s television show. Luckily, most of the decisions to be made regarding product mix have genuinely little impact socially and ethically.zee (part of the Swatch conference portfolio of brands), was facing a exchangeable demise in the early 1990s and successfully repositioned itself and became a major profit driver for the group. It achieved this by c arefully selecting its merchandising programs and drastically trimming its product line from 2,500 to 130. This strategy call for to be employ to Swatch, which focuses on the basic and middle- wrongd market. This is supported by the fact that the number of resellers dropped from 3,000 in the early 1990s to 1,200 in 1998. Swatch needs to expend a SWOT analysis and examine which product lines are successful in this market space and drop the remain products. In addition, the Swatch classify needs to facet at their consumer base and baffle if it would be economic to launch a peeled product line that captures past consumers who have now progressed to the next stage of their lives and are desiring a more expensive and cultivate watch.A marketing trend needs to be chosen that helps attract sore consumers in the basic and middle price market focusing on the little number of brands and a breach campaign should be created that focuses on keeping their active customer base. The se campaigns should be replicated to other countries to ensure the Swatch brand remains visible. Neither of these resolutions will be easy to implement however, if through with(p) successfully Swatch will decrease their payoff costs because there are less product lines and increase their sales found on marketing campaigns to two separate groups new customers and existing customers.Manufacturing Issues and Potential Resolutionsgoaded by high demand, offshore manufacturing centers are appearing throughout the world. Many of the Swatch meetings competitors have switched their manufacturing to centers overseas and fall their primed(p) costs, which resulted in an increase in profit.The Swatch Group had always remained committed to its home base, partly because their home base possess centuries of expertise in watch devising and partly because a timepiece cannot be stamped with Swiss Made unless at to the lowest degree 50% of Swiss manufactured products by value are present in th etimepiece. Although the mix of factors raising the possibility of outsourcing varies from go with to company, there are a some themes that the Swatch Group needs to explore regarding the pressures to outsource. The Swatch Group needs to recognize that general concerns regarding cost and quality are the main drivers for outsourcing. In addition, outsourcing can turn a fixed cost into a variable cost, which will significantly help a company with varying volumes.Although most credit linees can bring in hugely through outsourcing or manufacturing in another country, the Swatch Group needs to determine if it will be successful and profitable for them. Outsourcing a sight of their value kitchen stove is not a quick-fix response to production costs or performance lags. Additionally, the choices for outsourcing locations are many, they are not all equal, differing in several critical areas. Selecting the rightly pick requires balancing factors such as ethnic affinity, geopolitical risk, cost, and election availability.To help specialize their focus in their analysis, initially, the Swatch Group should sprightliness to India for their outsource location. India has a large genius pool of skilled, experienced watch workers. These workers have hands-on experience supporting giant star industries. Titan is continuing to grow as a company and the pace of resource expansion is dramatically improving in keeping up with current as well as future technologies. Additionally, the Swatch Group should center their outsourcing attention to the concourse portion of the value added chain. This will ensure that 50% of the manufactured parts are lull completed in Switzerland.The design, marketing, and most of manufacturing of the watches lock in remain where the expertise is located. The assembly of a watch is an extremely repeatable and easy controllable task, which will increase the success for outsourcing. Outsourcing assembly to India will have many positive effec ts for the Swatch Group. Cost reducing remains the primary objective of outsourcing the Swatch Group will have the ability to provide a good at a lower cost and should be able to make the assembly cost more predictable and controlled.Ethically and socially, outsourcing has a caused many individuals andincrease in job insecurity. dispirit labor standards in other countries are forcing many companies to outsource much of their manufacturing. This is especially unsettling for individuals who lack the skills to make themselves difficult to replace, such as in manufacturing. If the Swatch Group decides to outsource assembly, there will be no easy way to redeploy the assembly workers. They can setup a redisposition pool for those resources and try to redeploy them elsewhere in the company. However, if this is not possible, a business decision will have to be made to lay those workers off. The utmost predisposition will be required as it is possible that generations of families have work ed for the Swatch Group. The Swatch Group will need to carefully sense of balance the outsourcing cost reduction possibilities with the social ramifications that may exist. cobblers lastThere are many issues facing the Swatch Group and there is no right way to solve any of the issues. from each one issue comes laden with ethical and social consequences that will also impact the company. The Swatch Group will need to take step to ensure that international integration does not cause domestic social disintegration. no matter of how the issues are resolve, the greatest challenge is loss to be finding the right balance between markets and societies.ReferencesSwatch and the Global Watch application