The Swatch group occupies a very special place in the history of Swiss watchmaking. Not only does it enjoy the largest market share, but also it saved the industry – virtually single-handedly – from collapse in the 1970s.
A near-fatal error of judgement
Its longstanding status as the undisputed world leader had lulled the Swiss watchmaking industry into a full sense of security, with over-confident manufacturers failing not only to foresee the impact of new quartz technology but also to stop cheap, accurate watches from the Far East flooding the market. It did not capitalise on the new technology, leaving it instead to others, in particular Japan and the US, to improve on the discovery. This would prove to be a near-fatal mistake: sales plummeted and many companies found themselves on the verge of bankruptcy. It would take the business consultant, Nicolas Hayek, to breathe new life into the dying industry thanks to his clever marketing of watches as a must-have fashion accessory that are a reflection of the wearer’s personality.
Pricing, precision and … marketing
The famous plastic Swatch watch was launched on the Swiss market in 1983, with 12 models priced at between 39 and 50 Swiss francs. It contained 51 components, where traditional watches averaged about 90, and could be welded together by robots on a single assembly line – the first time this had been done in Switzerland.
The Swatch was an instant success, first in Switzerland, then worldwide. It turned the Swiss watchmaking industry around, allowing it once again to become the undisputed world leader.