Overview of Swatch Group and Its Competitors

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Swatch Group The Swatch Group and its competitors are competing in a highly oligopolistic competition market environment, as each has been able to paly a consolidator role not only in their distribution channels, but also throughout their entire value chains. The shift from a perfect competition-based industry to oligopolistic competitive market structure began decades ago as brand value overtook the innate value of watches from a feature and functionality perspective (Gabriele, Rosa, 2009). There is also the corresponding factor of brand accumulation that occurred during the last two decades, with Citizen, Timex, Fossil, Rolex and watch acting as brand accumulators as well. The brand, not just the watch, has become the primary differentiator in this oligopolistic market. Another factor driving the balkanization of this market is the demand curve for high-end watches. The highest end watches can and do increase prices in their highly inelastic markets to further underscore the exclusivity of their brands, differentiate between customer groups based on price thresholds, and increase the exclusivity of their brands (Gabriele, Rosa, 2009). All of these factors contribute to the continual flattening of the demand curve for extremely high-end watches, further supporting their exclusivity and focus on prestige. In this way, the highest-end watch manufacturers in this industry perpetuate high relative gross contribution margins on products, keep out low-end competitors who are

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