The Case Study Of The Swatch Group

Nicolas G. Hayek founded the Swatch Group in 1983 (present name was taken in 1998). It was formed through the merger of two Swiss watch companies SSIH and ASUAG. Over the years, the Swatch group has absorbed several watchmakers, jewelry manufactures and microelectronics companies and nowadays the Swatch group is a huge enterprise with over 20 subsidiaries. It is based in Biel, Switzerland. Nick Hayek, Jr., son of founder Nicolas Hayek, leads company. Today it is the world’s leading supplier of watch movements, components, and finished watches, accounting for 18 percent of total world production in 2014.
The Swatch Group Ltd designs, manufactures and sells finished watches, jewelry, watch movements and components, electronic systems used in

The Swatch Group is the world’s leading watch vendor with more than 18% market share. (see Appendix A) With 156 production centers, it is the world’s largest watch producer. The company has a significant market reach all over the world in nearly all of the markets it operates.
Coverage of all price segments. Since Swatch Group contains 19 separate watch-manufacturing brands, together producing watches of all price categories for all segments (prestige and luxury range, high range, middle range and basic range) in society, the market in which they operate is huge.
Diversified businesses. Swatch group is not only the world’s largest watchmaking group. Except watches, its companies manufacture jewelry and supply movements and components to other watchmakers all around the world. Also Swatch Group is a crucial player in the production and sale of electronic systems used in watchmaking and other industries. In addition, it is a leader in the field of sports event timing. Due to such diverse operations, changes in external environment less affect to Swatch Group than to its competitors.
Official timekeeping services. Swatch group occupies a leading position in sports event timing, and in processing the data produced by time and points measurement in the field of sport, operating especially at the world’s premier sporting

The market of watchmaking possesses numerous barriers that cannot be overcome very easily. The main barriers have been identified as the need of important financial capabilities, the difficulty to build a brand capital, gain customer base and finally the complexity to be distributed in top retail stores. However, if new entrant have innovative idea it can cause high retaliation between competitors, as it happened after introducing smartwatches. Supplier power. For manufacturing watch usually needs, as main components, a movement, hands, a case, a dial, a crystal glass and a bracelet. The Swatch Group is an important movement supplier (thanks to its company ETA) Most of the players are directly or indirectly dependent on the Swatch Group, usually for the most important part of the watch: its movement. Buyer power. In this industry buyer power is high simply due to the presence of so many competitors selling the same products. In addition, switching cost is practically the