Swatch Company Analysis

Executive Summary

This report briefly discusses the history of the Swiss watch manufacturer, SMH (Société Suisse de Microélectronique et d’Horlogerie), and the changes in the watch industry during 1970s and 1980s. It also gives a detailed analysis on SMH’s strategy in managing the Swatch, a new brand created to reach consumers in the low-end segment.

In this report, readers will also find a section where the clothing brand, H&M, is discussed. When the Swatch was introduced, it soon took the market by storm and gave people a whole new perspective on watches – cheap, high quality, and fashionable at the same time. Similar to the Swatch, H&M gave people a new way to think of fashion. Consumers could then buy designer’s fashion at an affordable price at H&M, since H&M sometimes worked in collaboration with famous designers like Versace (Versace for H&M, 2011) to produce fashionable clothes at a cheap price.

The last part of the report introduces Stereotypes ®, a sub-category of watch we have come up with to target high school and university students. The 4Ps of the marketing mix for Stereotypes ® will each be discussed in the report.

SMH Background and the Birth of Swatch

When people think of Switzerland, the first thing that usually comes to mind is the watch. Indeed, the Swiss watch industry has had a long history and well-known reputation due to its high quality and sophisticated craftsmanship. Among the Swiss watch companies, SMH (Société Suisse de Microélectronique et d’Horlogerie) is the most well-known. It is the result of a merger of two watch companies named SSIH and ASUAG (Moon, 2004). Both companies used to have a large number of famous brands and subsidiaries such as Rado, Tissot, Longines and Omega (Moon, 2004). During the 1970s and 80s, the two companies faced a continuous decrease in their market shares due to the emergence of strong watch competitors from Japan and the US. Afterwards, these two companies merged together...