...uneasy. Fully confident that the product that changed the watch industry forever, the Swatch watch, would enjoy continued success, Imgruth nonetheless left the need to change gears, The competition, which was at first slow to react, had begun to implement strategies that stood to erode Swatch’s position. Gazing from his privileged plane on the dais, Imgruth saw an audience that was content to rehash past successes for a night, which was nice, but no at all his style. Imgruth had recently guided his company through a fast paced and, some would say, controversial diversification program. Having already achieved spectacular success with the Swatch watch, Imgruth spearheaded a plan to establish Swatch as a total fashion enterprise. This move was accompanied by a good deal of skepticism from colleague and competitor alike. His next objective was to make sure that this year’s # 1 marketing executive did not become one of the decade’s more memorable disappointments.1 BACKGROUND-THE SWISS WATCH INDUSTRY 1985 was a good year for the Swiss watch industry. The number of finished watches shipped abroad rose 41 percent to 25.1 million and the value of watch exports increased by 12.2 percent. Luxury watches still comprised the backbone of the Swiss watch trade, accounting for only 2.1 percent of total shipments but 41.8 percent of total earnings. In 1985, the Swiss raised their share of the world market to 10 percent by volume (number of units sold) and 45 percent by value (Exhibits 1-3)...
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...this positioned Omega, inside and outside, totally. — Nick Hayek, CEO, Swatch Group On the afternoon of March 15, 2011, the only day closed for visitors during Baselworld, the major global watch and jewelry trade show held in Basel, Switzerland, Nick Hayek, the CEO of the leading Swiss watch manufacturer Swatch Group, completed a series of informal meetings with his watchmaking counterparts. After all that had been said behind the glamorously showcased watch collections, Hayek lit a cigar to reflect on the discussions’ impact on his watchmaking empire. The late Nicolas G. Hayek (hereafter Hayek Sr.), the charismatic founder of the Swatch Group (and Nick Hayek’s father) who passed away nine months ago, would have applauded the group’s exceptional 2010 results which encouraged the company to set a sales goal of 10 billion Swiss Francs (CHF) within the next four to five years (see Exhibit 1 for the group’s key financials).1 Given how well the Swatch Group had weathered the recent difficult years for the industry, Hayek was not surprised by the 2010 numbers. He attributed this success partly to the group’s vast range of 19 watch brands serving all consumer segments, and to its solid Swiss industrial base which allowed the group to feed the latest technology into its timepieces. The company’s results had...
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...Submitted By Group 2: Arunava Maity, Firoj Kumar Meher, Parvez Izhar, Pooja Sharma 1940’s- The Swiss dominated the watch industry because of their centuries-long history of jewelry-making expertise. Prior to the 1950s, watchmaking was a craft that required the skills of a master jewelry maker combined with the expertise of a micromechanical engineer. 1945’s-By 1945, The Swiss accounted for 80% of the world’s total watch production and 99% of all U.S. imports. 1951-Emergence of Low Cost Competition. U.S. Time introduced a line of disposable watches bearing the Timex brand name. Timex was selling its watches through a variety of low-priced outlets such as drugstores and discount houses. By the end of the 1950s, one out of every three watches bought in the United States was a Timex, 1970 –By 1970’sTimex was selling more watches than any other manufacturer in the world. 1970’s- During the same time, several Japanese companies like Hattori-Seiko and Citizen—had taken over the Asian market and were trying to cover up Europe and North America. As a result, the Swiss share of the global market declined, from 80% in 1946 to just 42% in 1970. The Introduction of Quartz Technology * Made use of quartz and integrated circuits * Provided Accuracy, more sophisticated functionality, more features like day & time·, Digital display, Analog watches. * Cheaper in cost of manufacturing. * A wide Price range, starting from $8 to $20, today even below $5. * Introduction of analog...
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...THE WATCH INDUSTRY Even though the watch industry is better known for its Swiss origin, since 2010 major players from different parts of the globe have had an impressive growth in the watch market with very good results. There are several types of watches included in the production and they include, but are not limited to: Automatic watches, Chronograph watches, mechanical watches, fashion watches and luxury watches. Watches are made of different materials, including steel, precious metals, gold-steel and other materials. Steel watches lead the market with 55% units of production giving as a result a growth of 1.6% in the overall watch market. “Other materials” (carbon fiber, silicone rubber, ceramic) come in second place with 28% units of production and which volumes gained more than one million units in 2014. Mechanical and electronic watches have gained value and increased its production in the number of pieces (+8.8%) generating almost 80% of turnover in the exports (Exhibit 1.1 – CHF: Swiss Franc). Watch Types – exhibit 1.1 MAIN MARKETS Asia took more than half of all Swiss exports (53.2%) with a great improvement in the first half of 2014 in Hong Kong. The profile of China was similar to the one in Hong Kong with a wider fluctuation range. Finally, Japan had a very good year in 2014 as well, with a great growth where Swiss exports rose by 15.2%. European market growth was subdued ending with a decline. The European economic situation played a major role. Germany’s...
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...so low despite a sales growth that was the envy of the industry. Particularly problematic was the pressure Mr. Kouchner was receiving from several of his suppliers, whose calls for prompter payment of invoices were becoming all too frequent. Given Marcel’s plans for expansion into Northern Italy and Austria, good supplier relationships seemed essential. Two payment-related problems had recently kept Marcel up late into the night. First, X-treme Sports rarely had the liquidity to take advantage of the early discounts offered for prompt payment. Manufacturers typically offered terms of 2%/10 days, net/30 days. Second, one supplier with wide name-brand recognition had threatened to cancel Kouchner’s strategically important exclusive Swiss distribution rights. Marcel had been banking with Credit Suisse since he started the business in 1987. Ms. Heidi Hingis, a Credit Suisse commercial lending officer in the Lausanne office, seemed to understand Marcel’s potential. Heidi’s two boys had bought some of the first in-line skates sold through X-treme way back in 1987. In addition to checking and savings accounts, Credit Suisse had also provided renewable short-term notes to X-treme. The short-term loans carried interest rates tied to the 3-month LIBOR rate. Marcel asked Heidi to...
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...Swatch Group 1 Professor: Rolf Butz 10/28/2008 International Business BADM 455 Section 2 Swatch Group 2 Table of Contents Executive Summary .............................................................................................................. 1 Introduction ......................................................................................................................... 5 History ................................................................................................................................. 5 Industry Analysis .................................................................................................................. 7 Company & SWOT Analysis ................................................................................................ 11 Current Situation &Global Market ..................................................................................... 17 Competitor Analysis ........................................................................................................... 23 Recommendation............................................................................................................... 26 Conclusion ......................................................................................................................... 29 Methodology ...
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...resulted in a successful initial public stock offering (IPO). He faced the welcome challenge of making effective use of these new funds. FOSSIL’S CREATION AND GROWTH After he dropped out of Texas A&M, Tom set up business outside Texas Stadium in suburban Dallas. He worked as a ticket-broker, or as some would say, scalper, and sold enough hard-to-get tickets to sporting events and concerts to build his savings to over $200,000. In 1984, at the age of 24 and not looking forward to a future as a ticket scalper, he sold out to his partner and began a search for new opportunities. Tom’s older brother, Kosta, 31 at the time, was a merchandise executive at a large Dallas department store chain, Sanger Harris. Kosta had noted the recent success of Swatch fashion watches and was aware that watches and other goods could be imported from the Far East at very low cost. On a visit to Hong Kong, Tom studied a number of potential products for import including toys and stuffed animals before following Kosta’s advice and returned to the U.S. to develop a watch import business. Enlisting the aid of two friends, Lynne Stafford for her sense of design and Alan Moore who had a master’s degree in accounting, he invested his savings of $200,000 to found Fossil as a Texas corporation in 1984. Fossil’s initial purchase of watches from a Hong Kong manufacturer included some retro and jumbo designs that Macy’s thought were “hot,” and...
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...dominated by Timex, Hattori-Seiki, Citizen and Swiss manufacturers before the introduction of Swatch. Each brand had their unique brand positioning in the market because of the different product attributes and value proposition offered and thus were popular among different category of customers. Watches above 350$ SWISS COMPANIES Watches between 50$ - 350$ HATTORI - SEIKO Watches below 50$ TIMEX Market positioning of various watch brands – Early 1980s SWISS WATCHES Prior to 1950s the meticulously crafted Swiss watches with mechanical movement dominated the market. The main value proposition offered to the customers was quality. The watches were high end and attracted rich affluent customers. Swiss watches were considered as financial investments. These were passed from one generation to another in a family and thus created an emotional bond among customers. The target market was global. They accounted for 80% of the global watch production and 99% of all U.S. imports. The competition was primarily among the Swiss manufacturers themselves with no major foreign competitor. Swiss watches enjoyed high positioning because of the various products attributes offered by them. Swiss had century’s long tradition of watch-making and they pioneered the art. Quality was a major point of difference as they were made of jewels such as rubies. Watches were reliable and highly accurate. It was thus a safe investment to buy a Swiss watch as they could withstand years of wear tear...
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...connectivity, personal contact, and political engagement? A) Singapore B) Denmark C) New Zealand D) United States Answer: A Diff: 1 Page Ref: 8 Chapter: 1 Skill: Concept 4) Most small and medium-sized enterprises (SMEs) are ________. A) competing only on the local level due to technological and financial constraints B) investing heavily in world markets by offshoring their labor activities C) contributing to their national economies through exporting D) attempting to avoid becoming globalized too quickly Answer: C Diff: 3 Page Ref: 10 Chapter: 1 Skill: Concept 5) Gayle Warwick Fine Linen owes its success as a global business primarily to the firm's ________. A) large staff in England B) labor outsourcing in Vietnam C) management by a French retail expert D) marketing message in the United States Answer: B Diff: 2 Page Ref: 10 Chapter: 1 Skill: Application 6) Which of the following are the three dominant currencies in the world today? A) British pound, U.S. dollar, Hong Kong dollar...
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...INDUSTRY OVERVIEW 1.1. WRIST WATCH INDUSTRY Wrist Watches form an integral part of the personality of individuals in the present era. Earlier seen as a luxury item, they are now witnessing a fundamental change in perception, and are now gaining respect as an essential utility item. For the watch industry, time seems in its favour what with the liberalization of the Indian market coupled with the rising purchasing power of the young and consumerist Indians. Indian watches market was for long dominated by public sector organisations like Hindustan Machine Tools Ltd. (HMT) and Allwyn (also famous for its refrigerators once upon a time!), and has now left the pioneers far behind or nowhere in market by private sector enterprises like Titan, Sonata, Ajanta and Timex along with foreign entities jostling for display space in the smallest of shops selling these products. Before the establishment of HMT as the dominant player in the Indian markets initially, the country was solely dependent on imports to meet the internal demand. However, establishment of HMT as the leading player in the wrist watch segment in the 1960’s, changed the scenario. In post liberalization India, the market stood to witness intensive competition between foreign and Indian manufacturers like Timex, Titan, Movado, Longines, Rado, Rolex, Fréderique Constant, Mont Blanc, Swatch, and many others. Many watch makers have made significant inroads in the industry and others are in the process of establishing themselves...
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...program was implemented which deals with creating concepts & systems to optimize productivity, improving supply chain, eliminating overhead & reduce product complexity. Installation of common information systems in order to integrate all information from all business units. c. Knowledge - As part of the thrust to achieve internal growth , the company invested on extensive research and development . Existing products undergo improvement/changes such as changes in shape, packaging or even taste. Other products are being moved to a new promising product segments in order to maximize earning potential. d. Strategic Flexibility – The launching of Global Business Excellence initiative or GLOBE has transformed Nestle to what success it is enjoying at the moment. GLOBE covers a broad range of strategic objectives and also to improve operational efficiency by integrating the company’s businesses on a global scale. e. Quality – Putting into consideration consumers whose primary motivation to purchase a product is the product’s nutritional value, Nestle’created the Corporate Wellness Unit. Its main thrust is to increase the value of its traditional products by adding health and nutritional benefits. These add-ins are referred to as Branded Active Benefits (BAB’s). In addition, Nestle ‘devotes 1/5 of its research & development budget to nutrition research. f. Profit Pool – The company’s 127,000...
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...International Consumer Behaviour ROBOLOVE Théo LAMARE By Robolove, we do not mean a feeling of love towards robots like it is depicted in Spike Jonze’s disturbing movie “her”, even if humanity could be soon exposed to this unexpected situation. Here, we rather mean the phenomenon characterized by the fact that there are more and more robots presents in our daily lives, which is also true in the business world. People will be more frequently in contact with robots in circumstances that they are rather used to communicate with humans so far. If this trend can be qualified as worldwide, I have decided to focus on a specific market: Switzerland. This country, whose capital city is Bern, is located in Western and Central Europe. From a political point of view, Switzerland is one of the most stable in the world, it remains a high performer according to the World Bank’s global governance indicators that rank between 91 and 99,5 in all parameters. Switzerland’s government is a team composed of seven members with equal rights. Thus, President and Vice President are elected by the Federal Assembly. The executive power is exercised by the government and the federal administration so it is not concentrated in any one person. Concerning its economic landscape, Switzerland ranks as one of the world’s most competitive economies, with a GDP of around $685bn in 2013. With prudent monetary and fiscal policies in place, the country has resisted to the economic recession much better...
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...watch and build it in Switzerland? The bankers were skeptical. A few suppliers refused to sell us parts. They said we would ruin the industry with this crazy product. But the team overcame the resistance and got the job done. — Nicolas Hayek1 In 1993, Swatch was the best-selling watch in the history of the watch industry. In 1992 alone, it sold 27 million units, while cumulative sales surpassed 100 million units (see Exhibit 1). In addition, it was widely acknowledged that the entire Swiss watch industry had been on the brink of disaster when the Swatch had been introduced 10 years ago; the phenomenal success of the Swatch was considered by many to have been a key factor in its resurgence. At the management level, much of the credit for the turnaround had been directed toward Nicolas Hayek, CEO of the Societe Suisse de Microelectronique et d’Horlogerie (SMH), which controlled nine global Swiss brands including Swatch. Over the past 10 years, Hayek had led the way for the success of the Swatch by committing SMH to a business strategy that in many ways defied industry wisdom about how global watch companies should be run. This strategy was based on a strict commitment to vertical integration (the company assembled all of the watches it sold and built most of the components for the watches it assembled), decentralized marketing (each of SMH’s nine brands had total authority over product designs and marketing), and portfolio management (SMH’s goal was to have a competitive...
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...Montreaux is an overall distinguished brand of chocolates that’s been successful in putting its name up in the Swiss market. Recently it has been attempting to enter the USA chocolate market. To achieve this objective, its partnership with Apollo Food’s operation section CFG (Consumer Food Groups) to fit the results of this European mark in the US advertise. Having a $17.64 billion in total revenue reported in the US Chocolate segment of the confectionary market, the idea of Montreaux to introduce dark healthy chocolate candy sounds like very beneficial. U.S. chocolate is expected to grow almost 2% annually through 2015, a decision to further product testing, launch in special markets, stage or regional rollout or nationally; depends on the new product development director Andrea Torres. In order to position this product the team needed to identify a few things such as; marketing between healthy chocolate or distinguishing it from other chocolate taste. Another decision was packaging; 3.5-ounce bar or a 10 square 5-ounce stand up pouch, all done through focus groups. After completing all BASES testing and focus groups we see that Montreaux will have success in achieving the $30 million threshold within its first year with a maximum retail sales of $60 million. Calculating all 27 scenarios only 6 options indicated success after the first year. Attributing to the highest success rate was High support and High ACV in the excellent product category at 39%. Focus groups were very...
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...Defining customers as those people and organizations for whom R&R creates value, R&R serves the following customers: 1. TV Guide; 2. American board game players, i.e. adults and children; 3. Retail outlets, which can be classified as mass merchandisers and department/gift stores; 4. The game developer, i.e. ‘a professional inventor’; 5. TV guide employees who develop the questions; 6. Sam Kaplan; 7. Sales representatives; 8. Kaplan’s supplier; 9. Swiss Colony; 10. Heller Factoring. Arguably, TV guide is a supplier/ marketing channel/ licensor, yet R&R creates value for TV Guide in the sense of creating a business opportunity. A similar argument holds for the other customers of R&R as well. If we look at the final consumers of the product, then according to the definition of Osterwalder and Pigneur, R&R serves a mass market. Taking into consideration the remarks of Mr. Reiss, who mentions that his customers are the manufacturers representatives and the buyers of major chains, we can argue that he distinguishes between input and output in his firm. Thus making the business model multi sided, the suppliers need many retail outlets to have their products for sale; and vice versa: the retail outlets require large production. The value proposition describes what value is delivered to the customer. Or, to be more precise, what are the bundles of products and services that create value for R&Rs customers. Given the limited space of 1 page, I will stick to the customers defined by Mr...
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