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Case study of Swatch (Case Study Sample)

Instructions:

1. Investigate and Analyze the Company’s History and Growth. A company’s past can greatly affect the present and future state of the organization. To begin your case study analysis, investigate the company’s founding, critical incidents, structure, and growth. 2. Identify Strengths and Weaknesses Within the Company. Using the information you gathered in step one, continue your case study analysis by examining and making a list of the value creation functions of the company. For example, the company may be weak in product development, but strong in marketing. 3. Gather Information on the External Environment. The third step in a case study analysis involves identifying opportunities and threats within the company’s external environment. Special items to note include competition within the industry, bargaining powers, and the threat of substitute products. 4. Analyze Your Findings. Using the information in steps two and three, you will need to create an evaluation for this portion of your case study analysis. Compare the strengths and weaknesses within the company to the external threats and opportunities. Determine if the company is in a strong competitive position and decide if it can continue at its current pace successfully. 5. Identify Corporate Level Strategy. To identify a company’s corporate level strategy for your case study analysis, you will need to identify and evaluate the company’s mission, goals, and corporate strategy. Analyze the company’s line of business and its subsidiaries and acquisitions. You will also want to debate the pros and cons of the company strategy. 6. Identify Business Level Strategy. Thus far, your case study analysis has identified the company’s corporate level strategy. To perform a complete analysis, you will need to identify the company’s business level strategy. (Note: if it is a single business, the corporate strategy and the business level strategy will be the same.) For this part of the case study analysis, you should identify and analyze each company’s competitive strategy, marketing strategy, costs, and general focus. 7. Analyze Implementations. This portion of the case study analysis requires that you identify and analyze the structure and control systems that the company is using to implement its business strategies. Evaluate organizational change, levels of hierarchy, employee rewards, conflicts, and other issues that are important to the company you are analyzing. 8. Make Recommendations. The final part of your case study analysis should include your recommendations for the company. Every recommendation you make should be based on and supported by the context of your case study analysis.

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Case study of Swatch
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Introduction
The watch industry has undergone tremendous changes over the years. Traditionally, the value of a watch was determined by the number of precious stones it contained. Furthermore, it was highly mechanical. Today, however, watches have been digitalized and the importance that was attributed to precious stones has declined considerably. The cost of these watches consequently went down as a result of reduced emphasis on the incorporation of precious stones. It is worthwhile noting that the invention and distribution of watches was initially monopolized by Swiss industries. While this has changed over the years, the Swiss industry has been working towards regaining its long lost glory.
The Swatch (A combination of “Swiss” and “Watch”) was a low cost watch introduced by Nicolas Hayek. This was after the merger of two leading Swiss watching making companies ASUAG and SSIH. ASUAG was a holding company which had over one hundred separate companies within it while SSIH was a watch making company started in the 1980s. The merger of the two was as a result of the low performance of their watches, an issue which was attributed to the emergence of low cost digital watches by its American and Japanese competitors. This low performance led to insolvency and thus the need to do away with some of its priced brands. Hayek however intervened and suggested that the two companies merge instead. He was made the CEO of the merged entities.
In order to fight competition and remain relevant in the market, Hayek was tasked with coming up with a low cost brand. The Swatch was thus invented. This brand faced numerous challenges such as the use of plastic casing which was highly controversial. Swiss watches were known to be encased in the most expensive metals and therefore the use of plastic suggested that the long standing reputation for Swiss watch making industry would be compromised. Secondly, Hayek was keen on embracing vertical integration where building and assembly of the watches was to be done in Switzerland. The effect that this would have would be the reduction of production costs associated with Swiss watches. This would prove to be a challenging task considering the high quality of materials that was used during building and assembly of the watches together with the cost of the manpower involved. Nevertheless, Hayek was able to overcome all these challenges and in its first year of sales, while anticipating at least 50,000 sales, the company made over 200,000 sales in the United Kingdom alone.
Strengths and Weaknesses
Swatch faces quite a number of strengths and weaknesses, all of which have defined its growth and development over the years. Notably, its strengths have overweighed its weaknesses and that is why it is one of the leading watch brands in the world. To begin with, the swatch has a cost advantage over its competitors and also over its differentiated brands. Being a low cost product, it has been able to maintain a grip in the watch industry while targeting middle class individuals. Furthermore, it has been able to consolidate the attention of the upper-middle class youth who make up the majority of its consumers. Its cost advantage has been further enhanced by its brand. Swiss firms have been known all over the world to be the best watch producers. Being based in Switzerland and all aspects of its production also based in Switzerland, it has been able to take advantage of this market aspect. Some of its competitors come from Japan and America which are not essentially known for watch making as compared to Switzerland.
Innovation is also one of its strengths. Before low cost watches were invented, it is important to note that it was in Switzerland that the Quartz, which was later adopted by Japanese firms, was invented. The Swatch is based on the Quartz framework which suggested advancement in technology. As mentioned earlier, Swiss watches were mainly mechanical. The quartz however makes use of integrated circuits whose functionality could be advanced. This advancement could be in form of incorporation of stop watches, calculators, ability to show dates and days of the week among others. Also, the fact that the swatch could be worn on a wrist marked a new beginning in watch technology. This kind of innovation made the swatch stand out and gain competitive advantage over its competitors. Other innovations attributed the swatch include scented watches and see-through watches. Apart from the above mentioned strengths, others include its leadership in market shares, customer loyalty and i...
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