Swatch and the Global Watch Industry

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i.Definition of Industry:

ii. Significant Financial Ratios (use the IO business model to look for above average returns) iii. Growth:
iv. Porters 5 Forces:

v. External Forces:
Demographic Segment:
Economic segment: The credit crunch might decrease the purchasing power of consumers and though they will still buy the essentials they may be more cautious. They may also spend less on luxury items, something that has a greater profit margin for Swatch. Sociocultural Segment: High impact of fashion trends, Swatch repositioned itself into the fashion market. Global Segment:

Technological Segment: E-commerce becoming prevalent, The Swatch has given special interest to the areas of technology such as microelectronics and micromechanics. Political/ Legal Segment: The policy of price fixing amongst the big watch groups within the UK has some negative impact to the industry in general and Swatch in particular, as it is at the forefront of this allegation.

3. Company Analysis
i. Business Model (How they make money)
ii. Strategic Competencies (Use the resource model)

iii. SWOT: SWOT analysis is the overall evaluation of a company’s strengths, weaknesses, opportunities and threats, and is a way of monitoring the external and internal marketing environment. Strengths

• Strong brand and customer loyalty
• Repositioning into in the fashion market
• A wide range of products with different designs across all price points Weaknesses
• Low asset turnover ratio
• Weak employee productivity --- The number of employees in Swatch in 2005 is only 199 Opportunities
• E-commerce offers trading opportunities
• The credit crunch switches customers from buying luxury items to low-priced items Threats
• Counterfeit products
• Intense competition between different companies within a crowed market Current economic recession and policy of price fixing decrease the sales...
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