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Swatch Group”, the Swiss watch manufacturer and watch trust.
The history of the Swatch
The foundation stone for the company Swatch was laid on March 1, 1983. At that time was the peak of the quartz crisis and the two largest Swiss watch manufacturers, the ASUAG and the SSIH, stood near bankruptcy. The situation at that time was dramatic: 1977 to 1983 watch exports from Switzerland fell by half in terms of value, the world market share fell from 43 to 15 percent, within a few years in the Swiss watch industry over 50,000 jobs were eliminated and the staff numbers fell by over 90,000 to less than 40,000. 1) And this despite the fact that the technology of the quartz watch had just been developed in Switzerland and had been constanly perfected in a creative race between the competing firms. At this point ASUAG and SSIH had to realize that only drastic measures could prevent the sale of such prestigious watch manufacturers such as Longines, Omega and Tissot to foreign firms.
Together, ASUAG and SSIH invited Nicolas Hayek, the managing director of the management consulting company Hayek Engineering, to take their businesses under the microscope. Among various protests Hayek suggested some basic reforms and merged ASUAG and SSIH to a company called SMH. (1998, the SMH was renamed to Swatch Group.) Hayek and his partners from different Swiss companies took over the majority of the shares, Hayek himself was managing director of SMH, and the production and marketing of the new watches could start. 2)
To stand up against the Japanese cheap quartz watch, a well-priced, but colorful, rebellious, trendy plastic watch was created and its production largely automated: the Swatch Watch. The name “Swatch” stands for “Swiss Watch” and was contracted to “S'watch”. With this watch the movement was mounted directly on the caseback; the case was waterproof and could not be opened. But the real key to the success of the Swatch was not the technology, but the marketing propagated by Hayek. The message of the watch was, according to Hayek: “First, the highest quality. Second, a low price. And third, provocation of society.”3)
The Swatch, which was simple, but produced in many striking variants, attracted predominantly the youthful audience and became a trend, which spread internationally very fast. In the first 21 months 3.5 million Swatches were sold, and at its 20th birthday already 2,500 models were launched and 300 million pieces sold. 4)
The success of the Swatch brought a scarcely hoped-for comeback for the Swiss watch industry; but it also allowed the SMH (or Swatch Group), to by and by take over a series of long-established traditional companies from the area of the mechanical watch, for example, Blancpain, Breguet or the Ebauche movement manufacturers Frederic Piguet and Nouvelle Lemania, and to, for the long term, ensure them stability and security.
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