Swatch and The Global Watch IndustryIssues Facing the Swatch Company:The Swatch Watch Company recovered from near bankruptcy in the early 1980s

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Swatch and The Global Watch Industry

Issues Facing the Swatch Company:

The Swatch Watch Company recovered from near bankruptcy in the early 1980s and transformed themselves into a world leader in terms of value by late 1990s. Swatch is once again facing a new set of challenging issues that will affect the company in a changing global economy. The following are the current issues that Swatch needs to deal with:

(1) Swatch sales have been flat between 18-20 million units a year.

(2) Sales and profit margins levels have been below those levels achieved in 1990.

(3) Swatch is facing increased competition from existing markets and new markets.

Analysis of the Issues

Historically, the watch industry had been fragmented and protected by the national governments of many countries. In the 1980s and 1990s, however, the competitive environment began to change. Newly formed companies began to mass-produce low-cost, technologically advanced watches. The emergence of these products dramatically changed the way people bought and sold watches. Consolidation was another dominant factor in this change. As companies merged, they improved their competitive positions through improved distribution, research & development, marketing, and economies of scale. These conglomerates