Swatch

In the 1970's electronic watches were introduced to the market. Inexpensive and easy to mass produce the new digital watches made watches available to a much larger section of the population. Although the Swiss still held on to the high-end watch market they were no longer the dominant competitor in the market. .
             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. .
             Although their expertise and knowledge of the creation of top quality watches did not change, their refusal to conduct market research, change their technology and move into the newly created markets caused them to loose their advantage. There was now substantial competition and this new competition was very aware of what the market was looking for and strove to fulfill those needs.
             SWATCH ® ANALYSIS.
             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 first step to gaining entry into the new market was the creation of a redesigned product. The Swatch ® watch was the product that did that. It was easy to produce, had simpler components than typical watches and was able to be produced in mass quantities and is manufactured by robots rather than employees.