Swatch Analysis
1) Why was the Swatch so successful? In what way was this watch different from others in the industry?
The first main reason why Swatch managed to gained so much popularity in the watch industry is because they managed to cut costs. Heyek had started a low-end product initiative and was fully committed to vertical integration, that is, he intended to build and assemble the low-price quartz watches entirely in Switzerland. This, along with the decision to encase the watch with cheap plastic, helped the company lower costs substantially whilst managing to maintain a high quality opinion from the customers (as it was made in Switzerland). Heyek had an important role in the success of Swatch. Heyek wanted to give a whole new meaning to buying and wearing a watch, create value out of it. He decided that the Swatch would have a unique message, one unlike that of any other watch brand in the market. The fact that the company was not only selling a watch, but an important part of people’s self image, in my opinion, is the main reason for which the Swatch succeeded.
The Swatch was different from the other watches in many ways but the factor that distinguished it the most from the rest is the fact that it could add genuine emotion to the product. It basically changed the consumer’s perspective of the product. Previously, watches were considered to be timekeeping instruments which had no personal meaning. Swatch started to design and sell watches that allowed customers to show their individuality, “they featured witty, sometimes outlandish designs that used brash, intense colors”.
2) Do you agree with the original product strategy? The channel strategy? The promotional strategy? What about the pricing strategy?
I definitely agree with the original product strategy. Before the merger, SMH had no market share whatsoever in the price segment below $100 and had only 3% market share in the segment of watches between $100 and $350. Heyek was of the idea that it was
The first main reason why Swatch managed to gained so much popularity in the watch industry is because they managed to cut costs. Heyek had started a low-end product initiative and was fully committed to vertical integration, that is, he intended to build and assemble the low-price quartz watches entirely in Switzerland. This, along with the decision to encase the watch with cheap plastic, helped the company lower costs substantially whilst managing to maintain a high quality opinion from the customers (as it was made in Switzerland). Heyek had an important role in the success of Swatch. Heyek wanted to give a whole new meaning to buying and wearing a watch, create value out of it. He decided that the Swatch would have a unique message, one unlike that of any other watch brand in the market. The fact that the company was not only selling a watch, but an important part of people’s self image, in my opinion, is the main reason for which the Swatch succeeded.
The Swatch was different from the other watches in many ways but the factor that distinguished it the most from the rest is the fact that it could add genuine emotion to the product. It basically changed the consumer’s perspective of the product. Previously, watches were considered to be timekeeping instruments which had no personal meaning. Swatch started to design and sell watches that allowed customers to show their individuality, “they featured witty, sometimes outlandish designs that used brash, intense colors”.
2) Do you agree with the original product strategy? The channel strategy? The promotional strategy? What about the pricing strategy?
I definitely agree with the original product strategy. Before the merger, SMH had no market share whatsoever in the price segment below $100 and had only 3% market share in the segment of watches between $100 and $350. Heyek was of the idea that it was