Success of Swatch

1. What changes in the production and marketing of watches led to Swatch?l Before 1950s ­ “home­made” effectStarting from 1950s watches were considered as very precious goods that only fewpeople could afford. The production of watches was a craft that requiredaccurate skills and mastery of jewels making techniques. Watches were consideredas a luxury good as well as a “financial investment”. People spent a lot onthem, had great care of them and used to hand them down from generation togeneration.In this period the watch industry was dominated by Swiss producer, watchcraftsmanship was developed especially in Switzerland; the country had a great“home­made” effect on consumers: people looked at Swiss watches as the best onthe market and trusted the quality and value of such products. Although afterthe World War II many Swiss watch firms were forced to close because of therecession, almost the 80% of the world’s total production was Swiss: Switzerlandwas watch’s home country.l From 1950s to 1970s ­ low­price and new technologyAfter 1950s the overall industry landscape changed, after­war time companiesevolved into the development of low­cost watches. Such watches still usedmechanical movements but were made by metals in place of jewels, so they wereless expensive but still very precise. In this period Timex was introduced; itis a U.S. company that produces simply designed watches with cheap exterior, butdurable and precise. Later, other Japanese companies entered this arena, sellinglow­price watches with good quality and they started to compete directly withSwiss manufacturers.Swiss watch producers started to fear competition coming from low­costproducers, and they felt this competition becoming stronger when Quartztechnology was introduced. This new technologies created space in the market forJapanese and Hong Kong firms; such firms provided modern, precise andmultifunctional...