The Swatch Group Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

Swatch Group is involved in the production and supply of watches. They have 156 production centers all around the world and they are the world’s largest producer. They did not restrict themselves only in the manufacturing and assembling of watches to brand retailer companies but they also supply various parts and components to the whole watch making industry in the world. Nick Hayek, the CEO of the leading Swiss manufacturer Group, planned to lead the group efficiently and effective especially in the watch industry. Swatch Group had a lot of dependence on the “Omega” product and they consider it as a cash cow unit of SBU’s for the Group. The biggest challenge for Nick Hayek in becoming a leading luxury watch manufacturer was to compete with Rolex, which had already proved itself as one of the top in the watch industry.

Apart from watches, Swatch Group also launched a variety of new products in the industry; one of them was the jewelry product for customers. This was done to increase the sales and market share as well as to strengthen its brand image in the market. They targeted markets at the global level including: China, U.S, Japan, India, Switzerland and Brazil etc. Nick Hayek was a firm believer of innovation and creative thinking, that’s why he was always interested to use technology effects in the product strategy in order to provide customers with the facilities of enjoying advance level technology based products. Implementation of “Co-Axial Technology” and “T-Touch Technology” was one of the examples of it. Nick Hayek was very concerned about the performance of Omega in the U.S and always made efforts in order to promote the product in the region due to strong potential customer base as per their needs and priorities. Nick Hayek also considered Swiss watch by making and focusing on the restructuring plan.

Problem identification

Nick Hayek, the CEO of the leading Swiss watch manufacturer of Swatch Group, was considered more about the repositioning of its product Omega. The question is that what will be the marketing strategy for Swatch Group in order to compete with one of the top competitors, Rolex? How the 4 Ps of marketing i.e. product, price, place and promotion will be organized in the best interest for the Swatch Group to compete in the industry?

Analysis

Internal Analysis

Strengths

Swatch Group launched the first non-quartz mechanical watch in order to generate demand for SMH’s subsidiary producing serious mechanical watch components.
Swatch Group had 160 production sites in Switzerland and was listed on the Swiss stock exchange as well.
They achieved the largest sales in 2010 in Europe and Great China and they were recognized as the highest and larges sales destinations for the Swatch Group.
Only in China, the Swatch Group had achieved billion of revenues in 2010.
Research and Development facilities were up to the mark and contributed a lot in the growth of the Swatch Group efficiently and effectively.
Production and Electronic systems divisions proved to the company’s assets according to the management.

Weaknesses

Marketing team was unable to promote the brand’s name efficiently and effectively; that’s the reason why few customer knew about the Omega product in the United States and in other regions.
Management also needs to be more effective for decision making process.
Pricing strategy caused various problems for the customers as there were already lots of competitors in the market and this was creating a negative impact. The response of Omega in terms of market share was to increase the revenues and profits while keeping other factors aside. That is one of the weak links of the Swatch Group need to be considered.
Advertising and promotion activities were not up to the mark in order to gain competitive advantage in the industry as there was big competitor as well with the name of “Rolex” that was available as a manufacturer of watches in the market.
In order the cut down the marker share of Rolex, Swatch Group totally failed to promote their Omega brand efficiently and effectively in the industry.

External Analysis

Opportunities

With the increasing sales in the boutique market, Omega had an opportunity to increase the distribution network to around 30% to 40% and capture the market share as much as they can in order to gain competitive advantage in that market.
Swatch Group had its own multi brand chain and had a very good and positive relationship with the retailer partners.

Nick Hayek firmly believed in the implementation of technology, as they had invested massively in technological innovation in order to promote his group’s watch brands. This was one of the very good opportunities for the group to increase their market share and to gain competitive advantage in the market..............................

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In March 2011, Nicolas Hayek, CEO of leading Swiss watch manufacturer Swatch Group, is reflected in the location of Omega, to revive its flagship brand. What marketing strategies are best to let him confront his main rival Rolex? And as if the possible adjustments Omega product, pricing, distribution and promotion strategies to influence the sale of 18 other brands Swatch Group watch?
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by Rohit Deshpande, Karol Misztal, Daniela Beyersdorfer Source: Harvard Business School 24 pages. Publication Date: January 25, 2012. Prod. #: 512052-PDF-ENG