In 1970s the Swiss industry produced around 75 million units per year as compared to 25 million units in 1940s. Since 1966, when the Swiss Government’s restriction on sale and acquisition of watch companies lapsed, the industry experienced a crescendo of mergers, bringing down the number of firms to around 1000. In 1971, ‘ASUAG’, the "super-trust" combined the assembling firms selling seven different brands into the General Watch Holding Company. This move forged important new financial and managerial links between the component manufacturing and assembling sectors of the watch industry. By 1971 almost three-quarters of all Swiss watch exports were accounted for by eight watch-making groups. But the industry structure was still lopsided. Several hundred small firms contributed the other quarter of Swiss exports. In the second half of the 1960s Some of Swiss companies, started investing in US watchmaking firms. Eg. Iseca SA, acquired 100% of the Waltham Watch Company. Sopinter SA acquired a 16% interest in Elgin and Chronos Holding SA, purchased 20% of Gruen. In 1971, A Swiss Company, ‘ Bush Universal, Inc.’, bought 50.2% of one of the most famous names in American watchmaking, the Hamilton Watch Company. Though the Swiss manufacturers were barely able to meet the mounting competition within the industry, they all possessed one valuable asset; established trade names. Swiss watchmakers also invested in Research and Development. Obviously they wanted to avoid dependence in US Watch manufacturers. In 1971, Swiss introduced first quartz watches.
JAPANESE WATCH MARKET
Starting from 1880s, Japanese watchmakers concentrated exclusively on manufacturing Jewel-lever Watches. They stressed Jeweled Lever production as they wanted to emulate the best in western watchmaking. By the late 1930s Japanese production of watches had reached the level of around 5 million units per year. For the next 20 years the figure remained below 5 million due to the World War II and its aftermath. In 1960 the production of watches hit the 7 million unit level In 1970 the industry produced almost 24 million units i.e. about 14% of the total world’s watch output. Unlike Switzerland, the Japanese Watch industry has always been highly concentrated. Over the years, four firms have accounted for almost all Japanese watch production. More strikingly, two firms (K. Hattori & Co. Citizen Watch) and have accounted for almost 90% of the production. K. Hattori was only the sales arm of a cluster of firms known as the Seiko Group. In the late 1950s the Japanese watchmakers, especially Seiko and Citizen, became major suppliers of watch movements and components to the U.S. industry. Some American jeweled-lever manufacturers imported inexpensive movements from Japan, put the movements into their own cases, and marketed the watches at prices comparable to those for the Timex line of watches. By the mid-1960s the Seiko group had become the world's largest producer of jeweled-lever watches. Just because the Japanese have not made pin-lever watches does not mean that they have not competed in the low price end of the market. They have matched their competitors, mainly the Swiss, in terms of quality and features of watches but have undercut them in terms of price. In 1968 about 5% of the watches imported directly into the United States come from Japan and about half of all the components imported into the Virgin Islands in that year also come from Japan. Adding together direct and indirect imports, the Japanese supplied about 8% of the U.S. market at that time. The rapid growth of Japanese economy induced Japanese watchmakers to take investment risks that competitors elsewhere shied away from. In 1970 Seiko became the first watchmaker in the world to introduce a watch employing the quartz crystal technology.
US WATCH MARKET
in 1970 the United States was both the World's largest watch market and the...