Switzerland was an industry leader in the watch market up until the 1970’s when the digital watch was introduces to consumers. The digital watch was inexpensive to manufacture and could be produced in mass. It created a whole new market by making watches inexpensive enough for all classes of people. The Swiss did not respond to this new competition and began to lose their market share. The Swiss watchmakers still produced high end watches for the wealthy, but did not compete for the lower end market.

In the 1980’s the Swiss watchmakers began to realize they needed to change their business model to fit in to the new global market place. They needed to not only change their views of the market but the infrastructure of watch manufacturing. In order to compete on a global level they needed to improve their technology, design products that would appeal to new markets and be able to compete with other companies both in quality and cost.

The development of Swatch® allowed one company, the Swiss Corp

Advertising the Swatch® was a creative process designed to attract a certain segment of the population. By using activities that attract the target market, 12 to 24 year olds, Swatch® further tightened its hold on the niche market. Advertising included big bold statements and colors and was put into popular magazines read by the younger generation. Swatch® also sponsored activities like sporting events and used popular music themes in its commercials.

In the 1980’s the merger of two companies helped create a new market for Swiss watches. Asuag and SSIH merged to create Swiss Corporation for Microelectronics and Watchmaking Industries (SMN). This merger was extremely advantages to both companies as it brought together new technology with brand recognition. The new company broke into the watch market by using a number of creative strategies. The new CEO, Ernst Thomke, restructured the managerial section of the company by bringing in new, creative executives who were hired for their creativity and energy rather than their experience in the field.

The Swiss ignored the new market. They continued to produce “luxury” watches that were only sold at exclusive stores. Their management attitude remained fixed. Rather than examining the infrastructure of their companies and looking for ways to improve their competitive advantage, the companies chose to continue to produce the same product they had always produced regardless of what the market was looking for.

By implementing new strategies and continuing to produce quality merchandise at reasonable prices Swatch® will continue to be a frontrunner in the fashion accessory and apparel industry.

Once the Swatch® became a well known brand the company decided to expand its product line. In much the same way as Swatch® was marketed the new products were also assigned a theme and the theme is changed on a regular basis. Instead of placing the new products next to existing popular brands, SMN opened kiosks in major department stores so that they could control the environment their product was sold in. By doing this they simplified the adoption process consumers go through before making a purchase. A consumer will often decide they need a certain product and then they have to decide which brand

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