Swatch Case Study

SWATCH

A plateau in sales coupled with increasing competition in the watch industry has forced Swatch’s hand to restructure the company’s current business strategy in order for its future success. This new perspective of the current and future global markets has led to the conclusion that a plan in necessary to break stagnate growth and increase profit. Swatch are not trying to cut manufacturing costs. Swatch are not attempting to emerge in new market; they are not globalising but are focusing on very competitive markets with plateaued growth. To solve this Swatch must use a two stage plan. First, Swatch must cut cost of production via global sourcing to India. Second, Swatch must enter a Joint venture with Titan and expand their trade through

For manufacturing purposes but also distribution. Titan has built one of the largest watch factories in India and is looking for a partner to add value to their products for export to America. A joint venture with Titian allows Swatch to use their existing production facilities, methods and knowledge of working in India to learn how to further keep our costs down. Not having to construct our own plant from the ground up allows us to benefit from greater global sourcing activities. A successful production line that already produces watches is a priceless asset that also promotes higher quality because the line workers are familiar with the product. An immediate sourcing strategy would incorporate the already existing manufacturing facilities of Titian for the purpose of Swatch’s production. Second, we can use Titians infrastructure to advance our sales in India by opening more channels of distribution. Titian acts as an import trader for swatch, as they have market connections and a knowledge of their domestic market. Following in the footsteps of other industry powerhouses that have entered the market in India. It is essential for Swatch to have cooperation with key local partners in India for their high-quality product to make it into the hands of Indians easier and faster than our

Swatch needs to identify that there are new emerging markets available with short-term and long-term benefits to a first mover with a high-quality product. India, with its vast population and emerging watch market is the perfect place to target. While cutting manufacturing costs, they are still able to sell in a high price bracket. This is a pushing factor for Swatch as there are no innovations in competitors products that could ever compete with Swatch’s Swiss quality, thus swatch must bring their product to the consumers. Swatch’s entry strategy uses Titians infrastructure in a localised market that allows quick and effected market connections for Swatch. Titians channels of distribution not only can allow for our product to get into the hands of the consumer but it also allows us to get readily information about our consumers purchasing habits. Swatch also gains timely hands on experience by entering the Indian market with a joint venture instead of trying to compete with Timex in their domestic market without the aid of Titian. It is important for Swatch to maintain its standard product across borders. Based on the market’s belief that our product is of a higher quality then any competitors in the Indian market, our product must be of consistent quality. Our main selling point is that we are of the highest watch quality of watch where ever you