Corporate Strategy : a Look at Swatch Essay

1797 Words8 Pages
1. Conduct an industry (five forces) and environmental (PESTEL) analysis of the watch industry
When Swatch emerged in 1983, it was a prime time to enter the watch industry. Existing rivalry and the threat of new entrants were medium, allowing Swatch to thrive.
Not one of the many competitors held more than 15% of the total global market, thereby creating medium concentration. In addition, cost conditions, excess capacity and exit barriers, and product differentiation were also medium. Although there was high diversity among competitors, Swatch’s strategy of differentiation, complemented with the other industry factors, allowed them to enter the industry and profit.
Although there were barriers to entry and a high threat of
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4. What were the strategic threats and opportunities facing swatch? Examine and analyze swatch’s response to these threats and opportunities?
ETA faced many strategic threats and opportunities, Appendix 6, when they conceived the Swatch business unit. However, Thomke asked the basic entry decisions questions and came to the conclusion that competing in the low cost watch category was the most attractive opportunity. Thomke moved forward with a vertical scope corporate strategy through a new market and new product diversification strategy. ETA engineers created a low cost quality watch by using economies of scope. The use of joint R&D and quartz technology combined ETA’s tangible and intangible resources to create operational relatedness. Thomke utilized strategic relatedness by using common management capabilities through manufacturing efficiencies and financial access. These resources allowed ETA to compete in the high and low market watch categories and attain a competitive advantage in the low price watch niche. Thomke brought in New York advertising agent Franz Sprecher who coined the name Swatch. Swatch’s entry modes were exporting, wholly owned subsidiaries and the joint venture model by using shops in shops in classy department stores, jewelry stores, sports stores, and fashion boutiques.

5. Identify the key success factors to survive in the watch industry. Use the resource-based perspectives to describe how Swatch

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