English revised

old marketing assignment
●●●Contents●●●
Introduction P. 3
The company’s businesses P. 4-5
The performance of the company
from 2005-2009 P. 6
Segmentation, targeting and
positioning P. 7
Market entry modes P. 8-9
Product strategy P. 10
Promotion and Pricing strategy P. 11-12
Corporate Social Responsibility p. 13
Conclusion P. 14
References P. 15
Appendix P. 16-18
●●●Introduction●●●
In this report we have focused on the international marketing strategy of Swatch, a multinational company. The report will start with an overview of the firms activities, which will voobe followed by a description of the company’s performances in the last 5 years. After that there will follow a description of the company’s international marketing strategies and the report will end with a short conclusion.
General introduction company.
The swatch group is a Swiss company who manufacturers watches and jewelry. However the emphasis lies on the manufacturing of watches. The swatch group was established in 1983 out of a merger between ASUAG and SSIH witch. These were two Swiss watchmakers who were established in the beginning of the 1930s. The companies both had several brands, but where facing high competition during the 1970s of the Japanese watchmakers. For this reason the companies started to think of a way to become profitable again and this resulted in the establishment off SMH (Swiss Corporation for Microelectronics and Watch making Industries Ltd.), which name was later on changed into the Swatch Group. After the merger, it only took the company 5 years to become the biggest watch manufacturer in the world, which it still is today.
Today Swatch is also active in the jewelry market, but is still upcoming. Swatch has 19 different watch brands, which are sold in different segments of the market. The brands are:
Breguet, Blancpain, Glashütte-Original, Léon Hatot, Jaquet-Droz, Omega, Longines, Rado, Union Glashütte, Tissot, ck Calvin Klein, Certina, Mido, Hamilton, Balmain, Swatch, Flik Flak, Endura and Tourbillon.
At the moment Swatch is also focusing on Research and Development, in order to attain their market position. And at the moment they are also active in the automobile sector, telecommunications and sports timing measurement equipment (which they already provided at several big events e.g. Olympic games.)
http://www.swatchgroup.com/en/group_profile/history/yesterday
http://www.swatchgroup.com/en/group_profile/history/today
March 15
●●●The company’s businesses●●●
This part of the report will provide an overview of the company’s activities.
Swatch its main products are watches and all their other activities are related to this in some way.
The products which Swatch delivers (according to their annual report website 1, footnote ) are watches in different market segments, jewelry, electronic systems and different parts of watches.
Their most important products are the watches, because that is their core business. They are the biggest watch manufacturer in the world and a market leader. The market share of Swatch lies probably around 20%, because the number we found was 18%, but that was in the year of 2005 and there are several sources (websites 2,3 and 4, footnote) that say it has increased in the year of 2009, so it lies probably around 20%.
The jewelry market is small for Swatch, because their main focus is on watches. The jewelry they sell is matching with their watches and therefore the amount of jewelry they sell is high enough to be profitable.
Electronic systems, this activity of the Swatch group consists out of 7 companies in different parts of the world who are all interrelated. The 7 companies are: EM Microelectronic, Micro Crystal, Renata, Microcomponents, Oscilloquartz, Lasag and Swiss timing. These companies all work together and, because of their geographical disparity and their technical expertise they are not only able to gain market share in their own market, but also supplementary market shares in other markets, e.g. the automotive industry. The Swiss timing company is active at sport events for doing the timing of the athletes, they even have a contract with the IOC (International Olympic Comittee) that they will do the time measurements until 2020 on the upcoming Olympics. This company has a leading position on his market.
The last market they are active on is actually still the watch market, only are they now selling parts of watches instead of complete ones. In the market of producing, supplying and selling components of watches, Swatch is also a market leader, with 156 production centers around the world. They are the suppliers for the whole industry. So even if you buy a brand that does not belong too Swatch, there is a good chance that some parts of the watch actually are from Swatch.
The market on which Swatch sell its products is globally, they have subsidiaries all over the world and when they do not have a subsidiary in a certain country, then you can still buy a Swatch product via a local distributor. To give an indication, these are the countries that they have subsidiaries in, according to their annual report of 2009 (website 1, footnote)
Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxemburg, The Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, United Kingdom and Ireland
Americas: Brazil, Canada, Mexico, Panama, USA
Oceania: Australia
Asia: China, Hong Kong, India, Japan, Macao, Malaysia, Singapore,
South Korea, Taiwan, Thailand
Middle East: United Arab Emirates
Africa: South Africa
http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009
http://www.marketing-online.nl/nieuws/index2005-43.html
http://www.tijd.be/nieuws/ondernemingen_consumptie/Horlogemaker_Swatch_klopt_verwachtingen.8294680-430.art
http://genevalunch.com/blog/2010/02/09/swatch-upbeat-for-2010-as-2009-losses-show-market-share-gained/
http://www.swatchgroup.com/en/brands_and_companies/electronic_systems
march 15
●●●The performances of the company from 2005-2009 ●●●
When we look at appendix 1 we can say that the company has grown in the last 5 years, because when you look at the gross sales, you can see that at in 2005 they were 4497 million CHF and that in 2009 this was 5421 million CHF so that is an increase in sales of 20.55% in only 5 years time, but this had probably been even more if the financial crises had not arisen. Because in 2009 the gross sales were 9.1% less than in 2008.
Until 2008 the company was only growing, sales were up, the net income was up, there assets were rising, when you look in appendix 1 you can read all those facts. But when the financial crisis arrived every account dropped, except for equity. When we look at appendix 2 we can see that sales dropped, net income dropped and that the net profits from 2008-2009 dropped with 24.9%, this is also very clear when you look at appendix 3, because both blue bars have shrunk. Something that you cannot read in appendix 1 2 or 3, but that was mentioned in the annual report of Swatch, is that the export had dropped with 22% in 2009, but that they did gain some market share. Although in appendix 3 you can already see signs of recovery, because the cash flows from operating activities has already increased again, in comparison to 2008 and this means that the company is doing business again and therefore sales and profits will be going up again in the future.
Although the numbers that are given do not give the right image (except for appendix 3 the flows from operating activities) , because not the entire year of 2009 was bad, because in the second half of 2009 sales were already improving again. So the numbers or more a consequence of what happened in 2008.
The conclusion is that over the last 5 years the company has done a job well done, because although there has been a financial crisis the company still did grow over the last 5 years.
●●●Segmentation, Targeting, Positioning ●●●
Segmentation is based on identifying the different consumer needs in the market. Since Swatch produces and sells watches and jewellery, the focus will be on the needs in this market. There are several reasons to buy a watch; some of these are because it’s a handy tool to be aware of the time in regular daily life but also in sports. Besides this, it can be used as jewellery and therefore provide you with a certain status.
The benefit of watches is that this product can be sold to all age groups, but these groups are looking for different benefits. Youngsters are in general looking for a trendy and watch, which in most cases is used as jewellery, since they use their cell phones to check the time. This is in contrast to the elderly; this group is interested in usefulness and quality of a watch.
In the 1980’s Swatch experienced foreign competition as realised that to stay successful they had to choose for a certain target market instead of trying to sell their products to all consumers in this market. Before deciding on a target market it is necessary to do some research on these markets, how large are they? How well are they served already? What segment fits our product best? Swatch realised that their strengths were their innovative, their ability to be artistic and create new designs and most importantly they were able to produce a low-cost, high quality watch. This was a large market, which wasn’t well served yet because most competitors were still selling mass-produced watches.
Nowadays they are familiar with the fact that specialization in a chosen market is more profitable that trying to reach all consumers on the market, they had a careful chosen target market. Their main goal was to produce an artistic, low-cost and high-tech watch. This turned out to be a very successful concept and they became world’s largest watch producer. This position made it possible to extend their range of products and to use a differentiated strategy.
Lately they are focusing on all market segments again. They are very important players in all segments they operate in (prestige and luxury range – high range- middle range- basic range – private label segment). Swatch understands the different needs in each of these segments and therefore they offer different brands with different benefits in each market segment.
Today a day Swatch differentiate themselves from their competitors because they sell mass-production items which are customizable. Besides this, because of all the brands offered their products offer many different benefits and therefore there are products for every budget and taste.
●●●Market Entry Modes●●●
The worldwide known Swiss corporation Swatch has earned its reputation under the management of Nicolas G. Hayek, in the early ‘80s. Created by merging the two Swiss watch leader firms (SSIH and ASUAG), Swatch was SMH’s (Societe Suisse de Microelectronique et d'Horlogerie) most important brand name, an outcome of the Swiss watch industry crisis. The launching of the Swatch watch in 1983 only lead to many more brands under the same name, which have always been under continuous development and improvement processes. The Swatch group later began taking over smaller businesses that specialized in producing watches and under the highly innovative management of Mr. Hayek, it was able to expand quickly and build a strong position in the watch manufacturing industry.
Our research shows a general view of the company’s entry modes identified based on the firm’s historical information. By founding joint ventures with numerous less and more worldwide famous firms in time, the Swatch corporation entered new markets through intermediate modes, creating retail chains. Some of the most relevant joint ventures between the Swiss watch producer and other companies have been with:
• German Daimler AG in 1994. The aim was to create the “Smart Car”, project which never got finalized due to withdrawal.
• Guiness Tourneau watch retailer in 2006. The purpose of this venture was to launch watch stores in luxury outlet malls.
• Chinese Jing Jiang Group in 2007. The Swiss holds 90 percent of the venture, focusing on the development of one of China’s most important monuments, the Peace Hotel.
• Tiffany.Co in 2007. The agreement is to design and manufacture Tiffany brand watches. Specialists argue that Tiffany has lost money and properties in Swatch’s favor, therefore predicting a most likely unsuccessful venture.
However, apart from these, Swatch has also ownership of the luxurious watch brands Breguet, Jaquet Droz, Omega and some of Calvin Klein.
It is noticeable that the expansion of the company took place under the hierarchical entry mode, when Swatch set up subsidiaries under which it brought together several different watch manufacturers (GWC General Watch Co.Ltd.).
However, the forces beyond this global expansion of now the largest watch manufacturer in the world have also been strongly related with the internal and external factors. For one instance, the increasingly growing size of the Swatch group has played a major role in its international involvement over time, which helped later to overcome the sociocultural distances between the Swiss home country and host countries. This aspect remains highly questionable though, due to the fact that surprisingly, Swatch has shown stubbornness in considering the new markets it had entered. The company kept producing the same type of luxury watches, sold at exclusive stores, but it remained in its current position due to the affordability and customer value it delivers to its customers.
●●●Product Strategies●●●
During its long run activity, Swatch has been constantly focusing on creating new designs and improving its watches. It all started with the original plastic watches and later moved to a multitude of different kinds of watches.
The Swatch product line is quite impressive. It contains five “families” under one brand:
• Swatch Originals – Plastic cased watches
• Swatch Irony – Metal cased watches
• Swatch Skin – The Original Skin and The Skin Chronograph watches
• Swatch Beat – Digital watches that integrate “Internet Time”
• Swatch Bijoux
However, that is not everything that Swatch has to offer. In the long run, the Swiss watchmaker came up with various colored watches and features (removable watch faces, etc.).
As we may clearly notice in the Swatch case, being competitive on any market involves, amongst others, product positioning. This aspect is highly important for managing successfully. The product, here the watch, must own a clear position in the customers’ minds, which makes them believe that that product is different or more special than others. Swatch differentiate themselves from their competitors because they sell mass-production items which are customizable.
Another crucial aspect in delivering delighting products is the country-of-origin effect. Switzerland has been baring its status of the world’s greatest watchmaker since the 16th century and since Swatch became the most famous producer, the product will have an even greater influence on the buyer’s perception. Therefore, the Swatch brand is known as a high quality product.
●●●Promotion and Pricing strategy ●●●
Concerning the promotion strategy, Swatch engages in a multi-domestic approach, which can be taken from the Annual Report 2009. There, a detailed description about the activities of each brand of the Swatch Group can be reviewed in categorization of countries. One example is that in Greece the Swatch-MTV playground event took place in 2009, which draws the attention of young people to the brand. It already shows the most important segment of the promotion strategy, the age. Most of the watches and jewelry designed by Swatch are colorful, modern and sporty. This lets us conclude, that the target group consists of young people and people who feel young. That is also reflected by the website, which is characterized by sophisticated technology, various colors, and snowboarders taken as advertising mediums. Even the chairman is displayed with a pose that makes him look like a person who stayed young. Furthermore, Swatch has a unique promotion activity with the introduction of its Snowpass watch, with which the access to skiing slopes is eased.
As indicated before, one of the promotion strategies is sponsorship. The joint event with MTV is only one of various events that Swatch organizes or sponsors in order to reach young people. There is the opportunity to join the Swatch club online of which members get informed about events taking place. Another example would be the partnership of Swatch with several snow- and bike parks where the firm offers to shoot videos from the stunts made by visitors and post them online. Visitors who want to review their performances can do so on the Swatch website. Swatch benefits from the positive association people make with the brand when they visit the events. Furthermore, a lot of the activities offered by Swatch do not only include the taking place of a single event but require to staying in touch with the company, as the videos reviewable online , for instance, do.
Another important factor of promotion for Swatch is its country of origin. Being a watch manufacturer from Switzerland, the company benefits from the good reputation the country has worldwide in manufacturing watches. Swatch is known to be one of the best quality serving watch manufacturers in the world.
The intense investment in advertisement made by Swatch suggests that it focuses on the pull strategy. This means, that the firm tries to reach its customers directly through strong advertisement by means of which demand is created.
The pricing strategy of Swatch is to offer goods at affordable price levels. It is stated in the Annual Report of 2009 that Switch aims to be accessible to customers. The prices given for watches on the official homepage reach from about 40 Euros up to about 200 Euros. The jewelry line falls into the same range of prices. Given the price range and the fact that Swatch is a high quality brand, one can say that its pricing strategy is set on a medium level. Regarding the fact that Swatch addresses young people with its promotion strategy, the price level appears to be accurate. A brand targeting young people would not be successful if the prices of its goods were not affordable for those.
Keeping the young target group in mind, one could consider the upper section of the price range to be set high. Swatch can therefore also be seen as a prestige brand. However, since the prices are relatively low in comparison to the prices of other high quality brands, we decided to stick to determining the prices as medium. Furthermore, it can be argued that Swatch follows a cost-leadership strategy. This means that the firm manages to produce its goods at a lower price than its competitors, while maintaining a high quality of the product. Swatch has established a routine in manufacturing watches, while investing intensively in R&D and the training of employees. This creates a good basis for a cost leadership position. Furthermore, the reputation and promotion strategy of the brand help to maintain such a position. All factors together compose a competitive advantage.
●●●Corporate Social Responsibility●●●
Swatch Group understands the importance of Corporate Social Responsibility (CSR). Their aim is to use ecological practises and protect the environment. They try to limit the use of raw materials and energy sources and introduced waste management, to reduce unnecessary waste. Besides the CSR, Swatch is still searching for cost reductions based on the best and most sustainable ways to protect the environment. An example of one of these practises is the recycling of batteries.
●●●Conclusion●●●
Swatch’s international market strategy has been very successful, their products are sold all over the world and nowadays they are worlds largest watch manufacturer. Their main strategy was to acquire joint ventures and they set up several subsidiaries to bring together watch manufacturers. By analyzing swatch’s international market strategy we noticed that they use a multi-domestic approach, which means that their product is customizable and they try to satisfy the different needs and conditions. They extended their range of products and offer several brands to satisfy the different needs in all segments of the watch-industry. They realize that consumers in all various segments are searching for different benefits, therefore differentiated market mixes for each segment are used. Each segment has his own pricing, promotion and product strategy, but there is also a similarity between all swatch brands; they offer high quality mass-production items which are customizable and have various designs.
●●●References●●●
Introduction:
www.swatch.com
http://www.swatchgroup.com/en/group_profile/history/yesterday
http://www.swatchgroup.com/en/group_profile/history/today
The company’s businesses: http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009
http://www.marketing-online.nl/nieuws/index2005-43.html http://www.tijd.be/nieuws/ondernemingen_consumptie/Horlogemaker_Swatch_klopt_verwachtingen.8294680-430.art
http://genevalunch.com/blog/2010/02/09/swatch-upbeat-for-2010-as-2009-losses-show-market-share-gained/
http://www.swatchgroup.com/en/brands_and_companies/electronic_systems
The performance of the company from 2005-2009:
http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009
http://www.tijd.be/nieuws/ondernemingen_consumptie/Horlogemaker_Swatch_klopt_verwachtingen.8294680-430.art
Segmentation, targeting and positioning:
www.swatch.com
www.swatchgroup.com
Market entry modes and Product strategies:
The Swatch Group Ltd – History of the Swatch Group
Book: Essentials of Global Marketing (Svend Hollensen)
Swatch and Global Brand Management – Temple University/Fox School of Business
Promotion and Pricing strategy:
www.swatch.com
Annual Report 2009 of Swatch Group: http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports
http://www.businessplans.org/Market.html
Corporate social responsibility:
www.swatchgroup.com
●●●Appendix●●●
1
(Source: Swatch Group annual report, http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009)
2) (Source: Swatch Group, annual report finance, http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009)
(Source: Swatch Group, annual report finance, http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009)


PART A
STEP 1: The writer’s Self-edit
1.1 Take a break
I found it very useful to take a short break in order to get some distance from the assignment. Especially in situations when I get stuck during the writing process, a short break helps to reorganize the mind so that a mistake or the reason for the problem which occurred before the break becomes obvious. Therefore, taking a break is a useful advise, which can be followed for every kind of assignment.
1.2 Read your paper aloud and role play the audience
To read your paper aloud is very useful for detect drawbacks in the coherence of a text and awkward sentence structures. Due to this exercise, I found a lot of sentences which were too long and therefore hard for other people to understand. As a student, you often combine sentences in order to make a paper sound more academic. Though, during that effort, it can occur that you put too much information in one sentence resulting in a structure that is confusing for others. Therefore, this exercise is useful in order to estimate how others may perceive your paper.
1.3 Examine paragraph content and organization
Considering the fact that the marketing assignment consists of several parts written by different people, I found it hard to improve the paragraph content and structure of parts which were not written by me. In my opinion, attention to these matters should already be paid in the construction of a paragraph, since the structure is an essential part of the text. Once the whole assignment is finished, I find it hard to change the content or the organization of a paragraph. Therefore, I find this exercise rather useless for the editing process afterwards. However, I agree that attention should be paid to this important matter.
1.4 Self-editing worksheet
Although I find the worksheet useful in terms of providing an overview of the important aspects of a text, I do not think that it adds value to editing. In my opinion, the worksheet can be supportive for writing an assignment rather than editing it.
1.5 Track frequent errors
It definitely helps to be aware of one’s own weaknesses when writing a text. However, I have the impression that, once I know about these weaknesses, I am constantly paying attention to improve or avoid these while writing an assignment. But especially in situations where the assignment is very time intensive so that errors can occur due to a lack of concentration, it would be helpful to track these errors during editing.
After following these steps, I created a second draft of my marketing report paying attention to the suggestions provided in 1.1 to 1.5.

marketing report revised
●●●Contents●●●

Introduction P. 3

The company’s businesses P. 4-5

The performance of the company
from 2005-2009 P. 6

Segmentation, targeting and
positioning P. 7

Market entry modes P. 8-9

Product strategy P. 10

Promotion and Pricing strategy P. 11-12

Corporate Social Responsibility p. 13

Conclusion P. 14

References P. 15

Appendix P. 16-18



●●●Introduction●●●

In this report we have focused on the international marketing strategy of Swatch, a multinational company. The report will start with an overview of the firm’s activities, which will be followed by a description of the company’s performance in the last 5 years. After that, a description of the company’s international marketing strategies will follow before the report will end with a short conclusion.

General introduction.
The Swatch group is a Swiss company which mainly manufactures watches and jewelry. However, the emphasis lies on the manufacturing of watches. The Swatch group was established in 1983 as a result of a merger between ASUAG and SSIH witch. These were two watch makers from Switzerland who were established in the beginning of the 1930s. Both companies had several brands, but they were facing high competition from Japanese watch makers during the 1970s. In order to get a strong market position the two companies merged and therefore established the SMH (Swiss Corporation for Microelectronics and Watch making Industries Ltd.), which later on became the Swatch Group. It only took 5 years for the newly merged company to become the biggest watch manufacturer in the world, which it still is today. Swatch has 19 different watch brands, which are sold in different segments of the market. The brands are:
Breguet, Blancpain, Glashütte-Original, Léon Hatot, Jaquet-Droz, Omega, Longines, Rado, Union Glashütte, Tissot, ck Calvin Klein, Certina, Mido, Hamilton, Balmain, Swatch, Flik Flak, Endura and Tourbillon.
At the moment, Swatch is focusing on Research and Development in order to attain the market position of its brands. Furthermore, the Swatch group is also active in the automobile sector, telecommunications and it provides sports timing measurement equipment (e.g. for the Olympic games.)

http://www.swatchgroup.com/en/group_profile/history/yesterday
http://www.swatchgroup.com/en/group_profile/history/today
March 15

●●●The company’s businesses●●●

This part of the report will provide an overview of the company’s activities.
Swatch mainly produces watches and even all other activities are related to the watch production in some way. The products which Swatch delivers (according to their annual report website 1, footnote) are watches in different market segments, jewelry, electronic systems and several parts of watches.

The watch production is the company’s core business. Swatch is the biggest watch manufacturer in the world and therefore a market leader. We estimate market share of Swatch at around 20%. This we derived from the fact that in 2005 the market share was at 18% and it is indicated by several sources (websites 2,3 and 4, footnote) that it increased in the year of 2009.

Since Swatch mainly focuses on the manufacturing of watches, its involvement in the jewelry market is relatively low. The jewelry is created to match with the watches, which aims to attract Swatch watch owners to purchase the complementing jewelry.

Seven companies of the Swatch group are engaging in the production of electronic systems. The 7 companies are: EM Microelectronic, Micro Crystal, Renata, Microcomponents, Oscilloquartz, Lasag and Swiss timing. These companies are located in different parts of the world and they are interrelated. The geographical disparity and the technical expertise of every single company create a pool of collective knowledge. This pool enables all of the companies to gain market share in both geographical and industrial terms.

In the market of producing, supplying and selling components of watches, Swatch is also a market leader, with 156 production centers around the world. Its responsibility in this field reaches the whole watch industry. So even if you buy a brand that does not belong to Swatch, there is a good chance that some parts of the watch are produced by Swatch.

Swatch serves the global market. It has subsidiaries all over the world and in the countries where this is not the case, there is still the possibility to buy a Swatch product via a local distributor. To give an indication, the following countries have Swatch subsidiaries, according to their annual report of 2009 (website 1, footnote)
Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxemburg, The Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, United Kingdom and Ireland
Americas: Brazil, Canada, Mexico, Panama, USA
Oceania: Australia
Asia: China, Hong Kong, India, Japan, Macao, Malaysia, Singapore,
South Korea, Taiwan, Thailand
Middle East: United Arab Emirates
Africa: South Africa

1) http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009
2) http://www.marketing-online.nl/nieuws/index2005-43.html
3) http://www.tijd.be/nieuws/ondernemingen_consumptie/Horlogemaker_Swatch_klopt_verwachtingen.8294680-430.art
4) http://genevalunch.com/blog/2010/02/09/swatch-upbeat-for-2010-as-2009-losses-show-market-share-gained/
5) http://www.swatchgroup.com/en/brands_and_companies/electronic_systems
march 15


●●●The performances of the company from 2005-2009 ●●●

When we look at appendix 1 we can say that the company has grown in the last 5 years. This is indicated by the gross sales, which increased by 20.55% from 4497 million CHF in 2005 to 5421 million in 2009. Furthermore, the fact that in 2009 the gross sales were 9.1% less than in 2008 leads us to conclude that the financial crisis had an impact on sales, which would probably have been much higher if this event would not have taken place.
Until 2008 the company was constantly growing, sales as well as the net income were up, their assets were rising. This is illustrated in appendix 1. But during the financial crisis every account dropped, except for equity. When we look at appendix 2 we can see that sales dropped, net income dropped and that the net profits from 2008-2009 dropped with 24.9%. This can also be derived from appendix 3, where you can see that both blue bars have shrunk. Something that you cannot read in appendix 1, 2 or 3, but that was mentioned in the annual report of Swatch, is that the export had dropped by 22% in 2009 while the company was gaining market share. In appendix 3 you can already see signs of recovery in the cash flows from operating activities in comparison to 2008. This means that the company is doing business again and therefore sales and profits will be going up again in the future.

By looking at the numbers given in the appendix, one could get the wrong impression about Swatch´s performance in 2009. Although it seems that 2009 has been an entirely bad year for Swatch, this is not the case as sales were already improving in the second half of 2009. Therefore the numbers can be interpreted as a consequence of what happened in 2008.

We conclude that over the last 5 years Swatch has done a good job. Although there has been a financial crisis the company still did grow over the last 5 years.


●●●Segmentation, Targeting, Positioning ●●●

Segmentation is based on identifying the different consumer needs in a market. Since Swatch produces and sells watches and jewellery, we will focus on the needs in this market. There are several reasons to buy a watch; some of these are that it is a handy tool used to be aware of the time in regular daily life and in sports. Besides this, it can be used as jewellery and therefore provide you with a certain status.
The benefit of watches for manufacturers is that this product can be sold to all age groups. But these groups are looking for different benefits. Youngsters are in general looking for a trendy watch, which in most cases is used as jewellery, since they use their cell phones to check the time. This is in contrast to the elderly. This group is interested in the usefulness and quality of a watch.

In the 1980’s Swatch experienced foreign competition and the company realised that, in order to stay successful, it had to focus on a certain target market instead of trying to sell its products to everyone. Before deciding on a target market it is necessary to do some research on these markets and answer questions like: how large are they? How well are they served already? What segment fits our product best?. Swatch realised that its strengths are being innovative, artistic and being able to create new designs. But one of the most important abilities is Swatch’s ability to produce a low-cost, high quality watch. Since this was a large market, which wasn’t well served yet because most competitors were still selling mass-produced watches, Swatch decided to focus on this consumer segment.

Nowadays, Swatch is familiar with the fact that specialization in a chosen market is more profitable than trying to reach all consumers in the market. Therefore, the choice of its target market was made very carefully. Their main goal was to produce an artistic, low-cost and high-tech watch. This turned out to be a very successful concept and they became the world’s largest watch producer. This position made it possible to extend their range of products and to use a differentiated strategy.

Lately Swatch is focusing on more market segments again. The company became a very important player in all segments it operates in (prestige and luxury range – high range- middle range- basic range – private label segment). Swatch understands the different needs in each of these segments and therefore it offers different brands with different benefits in each market segment.

Today Swatch differentiates itself from its competitors by selling mass-production items which are customizable. Besides this, because of all the brands offered by Swatch, the products provide many different benefits for all kinds of customer. Therefore, Swatch is meeting a wide range of customers with different budgets and tastes.


●●●Market Entry Modes●●●

The worldwide known Swiss corporation Swatch has earned its reputation under the management of Nicolas G. Hayek, in the early ‘80s. Created by merging the two Swiss watch leader firms (SSIH and ASUAG), Swatch was SMH’s (Societe Suisse de Microelectronique et d'Horlogerie) most important brand name, an outcome of the Swiss watch industry crisis. The launching of the Swatch watch in 1983 only lead to many more brands under the same name, which have always been under continuous development and improvement processes. The Swatch group later began taking over smaller businesses that specialized in producing watches and under the highly innovative management of Mr. Hayek, it was able to expand quickly and build a strong position in the watch manufacturing industry.

Our research shows a general view of the company’s entry modes identified based on the firm’s historical information. By founding joint ventures with numerous less and more worldwide famous firms in time, the Swatch group entered new markets through intermediate modes, creating retail chains. Some of the most relevant joint ventures between the Swiss watch producer and other companies have been with:
• German Daimler AG in 1994. The aim was to create the “Smart Car”, project which never got finalized due to withdrawal.
• Guiness Tourneau watch retailer in 2006. The purpose of this venture was to launch watch stores in luxury outlet malls.
• Chinese Jing Jiang Group in 2007. The Swiss holds 90 percent of the venture, focusing on the development of one of China’s most important monuments, the Peace Hotel.
• Tiffany.Co in 2007. The agreement is to design and manufacture Tiffany brand watches. Specialists argue that Tiffany has lost money and properties in Swatch’s favor, therefore predicting a most likely unsuccessful venture.
However, apart from these, Swatch has also ownership of the luxurious watch brands Breguet, Jaquet Droz, Omega and some of Calvin Klein.

It is noticeable that the expansion of the company took place under the hierarchical entry mode, when Swatch set up subsidiaries under which it brought together several different watch manufacturers (GWC General Watch Co.Ltd.).

However, the forces behind this global expansion, which lead Swatch to being the largest watch manufacturer in the world, have also been strongly related with internal and external factors. For instance, the increasing size of the Swatch group has played a major role in its international involvement over time. Later on, this was useful to overcome the sociocultural distances between Swatch’s home country and its host countries. This aspect remains highly questionable though, due to the fact that surprisingly, Swatch has shown stubbornness in considering the new markets it had entered. The company kept producing the same type of luxury watches, sold at exclusive stores, but it remained in its current position due to the affordability and customer value it delivers to its customers.


●●●Product Strategies●●●

During its long run activity, Swatch has been constantly focusing on creating new designs and improving its watches. It all started with the original plastic watches and later moved to a multitude of different kinds of watches.

The Swatch product line is quite impressive. It contains five “families” under one brand:
• Swatch Originals – Plastic cased watches
• Swatch Irony – Metal cased watches
• Swatch Skin – The Original Skin and The Skin Chronograph watches
• Swatch Beat – Digital watches that integrate “Internet Time”
• Swatch Bijoux

However, that is not everything that Swatch has to offer. In the long run, the Swiss watchmaker came up with various colored watches and features (removable watch faces, etc.).

As we may notice in the Swatch case, being competitive in any market involves, among other things, product positioning. This aspect is highly important for managing successfully. The product, in Swatch’s case the watch, must own a clear position in the customer’s mind, which makes him/her believe that that product is different or more special than others. Swatch differentiates itself from competitors by selling mass-production items which are customizable.

Another crucial aspect in delivering delighting products is the country-of-origin effect. Switzerland has been baring its status of being the world’s greatest watchmaker since the 16th century and since Swatch became the most famous producer, the product will have an even greater influence on the buyer’s perception. Therefore, Swatch is known as a high quality brand.

●●●Promotion and Pricing strategy ●●●

Concerning the promotion strategy, Swatch engages in a multi-domestic approach, which can be taken from the Annual Report 2009. There, a detailed description about the activities of each brand of the Swatch Group can be reviewed in categorization of countries. One example is that in Greece the Swatch-MTV playground event took place in 2009, which draws the attention of young people to the brand. It already shows the most important segment of the promotion strategy, the age. Most of the watches and jewelry designed by Swatch are colorful, modern and sporty. This lets us conclude, that the target group consists of young people and people who feel young. That is also reflected by the website, which is characterized by sophisticated technology, various colors, and snowboarders taken as advertising mediums. Even the chairman is displayed with a pose that makes him look like a person who stayed young. Furthermore, Swatch has a unique promotion activity with the introduction of its Snowpass watch, with which the access to skiing slopes is eased.
As indicated before, one of the promotion strategies is sponsorship. The joint event with MTV is only one of various events that Swatch organizes or sponsors in order to reach young people. There is the opportunity to join the Swatch club online of which members get informed about events taking place. Another example would be the partnership of Swatch with several snow- and bike parks where the firm offers to shoot videos from the stunts made by visitors and post them online. Visitors who want to review their performances can do so on the Swatch website. Swatch benefits from the positive association people make with the brand when they visit the events. Furthermore, a lot of the activities offered by Swatch do not only include the taking place of a single event but require to staying in touch with the company, as the videos reviewable online , for instance, do.
Another important factor of promotion for Swatch is its country of origin. Being a watch manufacturer from Switzerland, the company benefits from the good reputation the country has worldwide in manufacturing watches. Swatch is known to be one of the best quality serving watch manufacturers in the world.
The intense investment in advertisement made by Swatch suggests that it focuses on the pull strategy. This means, that the firm tries to reach its customers directly through strong advertisement by means of which demand is created.

The pricing strategy of Swatch is to offer goods at affordable price levels. It is stated in the Annual Report of 2009 that Switch aims to be accessible to customers. The prices given for watches on the official homepage reach from about 40 Euros up to about 200 Euros. The jewelry line falls into the same range of prices. Given the price range and the fact that Swatch is a high quality brand, one can say that its pricing strategy is set on a medium level. Regarding the fact that Swatch addresses young people with its promotion strategy, the price level appears to be accurate. A brand targeting young people would not be successful if the prices of its goods were not affordable for those.
Keeping the young target group in mind, one could consider the upper section of the price range to be set high. Swatch can therefore also be seen as a prestige brand. However, since the prices are relatively low in comparison to the prices of other high quality brands, we decided to stick to determining the prices as medium. Furthermore, it can be argued that Swatch follows a cost-leadership strategy. This means that the firm manages to produce its goods at a lower price than its competitors, while maintaining a high quality of the product. Swatch has established a routine in manufacturing watches, while investing intensively in R&D and the training of employees. This creates a good basis for a cost leadership position. Furthermore, the reputation and promotion strategy of the brand help to maintain such a position. All factors together compose a competitive advantage.


●●●Corporate Social Responsibility●●●

The Swatch Group understands the importance of Corporate Social Responsibility (CSR). Therefore, it aims to use ecological practices and protect the environment. Swatch tries to limit the use of raw materials and energy sources. Furthermore, it introduced waste management in order to reduce unnecessary waste. Besides the CSR, Swatch is still searching for cost reductions based on the best and most sustainable ways to protect the environment. An example of one of these practices is the recycling of batteries.


●●●Conclusion●●●

Swatch’s international market strategy has been very successful. Its products are sold all over the world and nowadays Swatch is the world’s largest watch manufacturer. Its main strategy was to acquire joint ventures and set up several subsidiaries to bring together watch manufacturers. By analyzing Swatch’s international market strategy we noticed that it uses a multi-domestic approach, which is reached by offering products that are customizable and satisfying the different needs and conditions of customers. They extended their range of products and offer several brands to satisfy the different needs in all segments of the watch-industry. They realize that consumers in all various segments are searching for different benefits. Therefore, differentiated market mixes for each segment are used. Each segment has its own pricing, promotion and product strategy, but there is also a similarity between all Swatch brands: they offer high quality mass-production items which are customizable and have various designs.

●●●References●●●

Introduction:
www.swatch.com
http://www.swatchgroup.com/en/group_profile/history/yesterday
http://www.swatchgroup.com/en/group_profile/history/today

The company’s businesses: http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009
http://www.marketing-online.nl/nieuws/index2005-43.html http://www.tijd.be/nieuws/ondernemingen_consumptie/Horlogemaker_Swatch_klopt_verwachtingen.8294680-430.art
http://genevalunch.com/blog/2010/02/09/swatch-upbeat-for-2010-as-2009-losses-show-market-share-gained/
http://www.swatchgroup.com/en/brands_and_companies/electronic_systems

The performance of the company from 2005-2009:
http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009
http://www.tijd.be/nieuws/ondernemingen_consumptie/Horlogemaker_Swatch_klopt_verwachtingen.8294680-430.art

Segmentation, targeting and positioning:
www.swatch.com
www.swatchgroup.com

Market entry modes and Product strategies:
The Swatch Group Ltd – History of the Swatch Group
Book: Essentials of Global Marketing (Svend Hollensen)
Swatch and Global Brand Management – Temple University/Fox School of Business

Promotion and Pricing strategy:
www.swatch.com
Annual Report 2009 of Swatch Group: http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports
http://www.businessplans.org/Market.html

Corporate social responsibility:
www.swatchgroup.com






STEP 2: Academic Vocabulary
2.1 Read the introductory home page of www.academicvocabularyexercises.com
The AWL lists are very useful for students. Practicing the vocabulary provided by the web side has improved my confidence in writing, since I have a broader range of words to express myself.
2.2 Create a vocabulary profile
I really enjoyed using this tool as it is very interesting to see the outcome. Nevertheless, I found it hard to improve the assignment in such a way that there would be a reasonable difference between my first and my second draft. Again, I found it hard to improve the parts written by my fellow students, since I often felt that, in order to make the text sound more academic, I would have to change the sentence structure. This refers to part 1.3 of this examination, where I already explained my difficulties with changing paragraph structures. Nevertheless, I will use this tool more often in the future for editing texts written by myself.
2.3 Check new words in the JustTheWord Collocation Finder
Considering the fact that I often have problems with word combinations, this tool is very useful for me. While trying to improve the assignment in terms of vocabulary, I found it very handy to use the JustTheWord Collocation Finder in order to see how I can use certain words from the AWL lists in combination with other words.
2.4 Check contextual meanings with concordancers
To be honest, I found it really hard to understand how this tool works and I found it too time consuming. Therefore, I did not find it useful at all and I do not intend to use this tool again.
2.5 Make a gapfill exercise
Although I think that this tool is useful in order to learn about new vocabulary by trying to fill the gaps, I would only use it in situations where I have a lot of time. As mentioned before, I prefer to take care of vocabulary as well as structure matters during the writing process and not afterwards. But I assume that this tool is very supportive for persons who tend to write a text first without paying attention to appropriate vocabulary use and improve their text afterwards.
2.6 Read a research article
Globalization and the English Skills Gap
This article by Deepak Desai is about the impact that globalization has on the use of English worldwide. The author’s aim is to show how important it could be for one’s life and career to speak adequate English as well as how strong companies rely on it.
Globalization has a great impact on people’s jobs. Since companies are now looking for employees all over the world in order to fill a certain position, it does not matter where someone comes from. What matters are not only his/her skills needed for a certain task but also the potential employee’s level of English. The fact that companies increasingly operate worldwide makes it crucial to communicate between people from different countries in order to do business. English is the common language used. All over the world, people learn English as a second language from their early years on. Therefore, English is not only crucial to companies in order to make profitable business, but also to people and their careers.
Although there are several ways for people to acquire a certain level of English it is hard to learn the background of a language, meaning things beyond the vocabularies and grammar. Examples are sayings, indications, dialect or sarcasm. It is almost impossible for a non-native speaker to learn, interpret and use these in the right way. Therefore, the problem of communication is not easily solved by studying a language from the book. This does not only create a problem for private persons who try to communicate with others from a different country but also for people doing business.
A lot of people employed by an international operating company say that, although their English is on an acceptable level, they feel a need to improve their English since it is still not good enough. The author therefore states that companies should invest in the education of their employees. Such an investment could lead to an overall better performance and therefore turn out to be profitable for the firm. Technology provides new and cost efficient ways to learn English. Providing employees with access to an online English course, for example, could be a good investment for the future of companies.

Though I am interested in improving my own English skills, I am not interested in articles about the importance of English. I did not enjoy this exercise, since I did not see the importance of it for my own improvement.

Taking the steps of part 2 into consideration, I developed a third part of my marketing assignment.

Marketing report vocabulary revised (3rd draft)
●●●Introduction●●●

This report analyses the international marketing strategy of the Swiss watch manufacturer Swatch. We will provide the reader with a short overview of the firm’s activities, which will be followed by a description of the company’s performance in the last 5 years. After that, we will proceed with the analysis of Swatch’s international marketing strategy before the report will end with a short conclusion.

General introduction.
The Swatch group is a Swiss company which mainly manufactures watches and jewelry. However, the emphasis lies on the manufacturing of watches. The Swatch group was established in 1983 as a result of a merger between ASUAG and SSIH witch. These were two watch makers from Switzerland which were established in the beginning of the 1930s. Both companies incorporated several brands, but they were facing high competition from Japanese watch makers during the 1970s. In order to gain a strong market position the two companies merged and established the SMH (Swiss Corporation for Microelectronics and Watch making Industries Ltd.), which later on became known as the Swatch Group. It only took 5 years for the newly merged company to become the biggest watch manufacturer in the world, which it still is today. Swatch owns 19 different watch brands, which are sold in different segments of the market. The brands are:
Breguet, Blancpain, Glashütte-Original, Léon Hatot, Jaquet-Droz, Omega, Longines, Rado, Union Glashütte, Tissot, ck Calvin Klein, Certina, Mido, Hamilton, Balmain, Swatch, Flik Flak, Endura and Tourbillon.
At the moment, Swatch is focusing on Research and Development in order to attain the market position of its brands. Furthermore, the Swatch group is also active in the automobile sector, telecommunications and it provides sports timing measurement equipment (e.g. for the Olympic games.)

http://www.swatchgroup.com/en/group_profile/history/yesterday
http://www.swatchgroup.com/en/group_profile/history/today
March 15
●●●The company’s businesses●●●

This section of the report is aimed to provide an overview of the company’s activities.
Swatch mainly produces watches and all other activities Swatch engages in are related to the watch production in some way. The products which Swatch delivers (according to their annual report website 1, footnote) are watches in different market segments, jewelry, electronic systems and several parts of watches.

The watch production is the company’s core business. Swatch is the biggest watch manufacturer in the world and therefore a market leader. We estimate the market share of Swatch at around 20%. This, we derived from the fact that in 2005 the market share was at 18% and it is indicated by several sources (websites 2,3 and 4, footnote) that it increased in the year of 2009.

Since Swatch mainly focuses on the manufacturing of watches, its involvement in the jewelry market is relatively low. The jewelry is created to match with the watches, which aims to attract Swatch watch owners to purchase the complementing jewelry.

Seven companies of the Swatch group are engaging in the production of electronic systems. The 7 companies are: EM Microelectronic, Micro Crystal, Renata, Microcomponents, Oscilloquartz, Lasag and Swiss timing. These companies are located in different parts of the world and the operations are interrelated. The geographical disparity and the technical expertise of every single company create a cluster of collective knowledge. This network enables all of the companies to gain market share in both geographical and industrial terms.

In the market of producing, supplying and selling components of watches, Swatch is also a market leader, maintaining 156 production centers around the world. Its responsibility in this field covers the whole watch industry. Buying a watch from a brand that does not belong to Swatch, still leaves a major possibility that some parts of the watch are produced by Swatch.

Swatch serves the global market. It has subsidiaries all over the world and in the countries where this is not the case, there is still the possibility to buy a Swatch product via a local distributor. To give an indication, the following countries have Swatch subsidiaries, according to their annual report of 2009 (website 1, footnote)
Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxemburg, The Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, United Kingdom and Ireland
Americas: Brazil, Canada, Mexico, Panama, USA
Oceania: Australia
Asia: China, Hong Kong, India, Japan, Macao, Malaysia, Singapore,
South Korea, Taiwan, Thailand
Middle East: United Arab Emirates
Africa: South Africa

1) http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009
2) http://www.marketing-online.nl/nieuws/index2005-43.html
3) http://www.tijd.be/nieuws/ondernemingen_consumptie/Horlogemaker_Swatch_klopt_verwachtingen.8294680-430.art
4) http://genevalunch.com/blog/2010/02/09/swatch-upbeat-for-2010-as-2009-losses-show-market-share-gained/
5) http://www.swatchgroup.com/en/brands_and_companies/electronic_systems
march 15



●●●The performances of the company from 2005-2009 ●●●

Appendix 1 demonstrates that Swatch has experienced growth in the past 5 years. This is indicated by the gross sales, which increased by 20.55% from 4497 million CHF in 2005 to 5421 million in 2009. Furthermore, the fact that in 2009 the gross sales were 9.1% lower than in 2008 provides evidence that the financial crisis had an impact on sales. Otherwise, the gross sales would have had increased following the trend of the past years.
Until 2008 the company was constantly growing. Sales, as well as the net income and assets were increasing. This is illustrated in appendix 1. During the financial crisis every account except from equity dropped. Appendix 2 displays that sales decreased, as well as net income and that the net profits from 2008-2009 declined with 24.9%. This can also be derived from appendix 3, where you can see that both blue bars have shrunk. Something that is not included in appendix 1, 2 or 3, but that was mentioned in the annual report of Swatch, is, that the export had decreased by 22% in 2009 whereas the company was gaining market share. Appendix 3 shows signs of recovery in the cash flows from operating activities in comparison to 2008.

Having a look at the numbers given in the appendix, one could get a mislead impression about Swatch´s performance in 2009. Although it seems that Swatch performed poorly throughout the entire year, this is not the case as sales were already improving in the second half of 2009. Therefore, the drawbacks from the first half can be interpreted as a consequence of events in 2008.

Interpreting the data, we conclude that over the last 5 years Swatch has done a noticeable job. Although the impact of the financial crisis is visible, one can say that Swatch has succeeded in managing it with even experiencing growth.


●●●Segmentation, Targeting, Positioning ●●●

Segmentation is based on identifying the different consumer needs in a market. Since Swatch produces and sells watches and jewellery, we will focus on the needs in this market. There are several reasons to buy a watch; some of these are that it is a handy tool used to be aware of the time in regular daily life and in sports. Besides this, it can be used as jewellery and therefore provide you with a certain status.
The benefit of watches for manufacturers is that this product can be sold to all age groups. But these groups are looking for different benefits. Youngsters are in general looking for a trendy watch, which in most cases is used as jewellery, since they use their cell phones to check the time. This is in contrast to the elderly. This group is interested in the usefulness and quality of a watch.

In the 1980’s Swatch faced foreign competition and the company realised that, in order to maintain its successful status, it had to focus on a certain target market instead of trying to sell its products to the broad mass. Before making a final decision on which market to target, a company needs to engage in extensive research on possible markets. The research is supposed to collect information on issues like market size, demand, local taste and competition. Swatch discovered that its strengths are being innovative, artistic and being able to create new designs. But one of the most important abilities is Swatch’s ability to produce a low-cost watch while maintaining a high quality. Since most competitors were engaged in selling mass-produced watches with little room for innovation and a lack of knowledge for cost saving production, Swatch found a market niche it was able to serve.

Nowadays, Swatch is familiar with the fact that specialization in a chosen market is more profitable than trying to reach all customers in the market at once. Therefore, the choice of its target market was made very carefully. The main goal was to produce an artistic, low-cost and high-tech watch. This turned out to be a highly successful concept and Swatch became the world’s largest watch producer. Its leading position created the possibility for Swatch to extend its product range and follow a differentiated strategy.

Recently, Swatch has shifted its focus back to more market segments. The company achieved to become a very important player in all segments it operates in (prestige and luxury range – high range- middle range- basic range – private label segment). Swatch understands the different needs in each of these segments and therefore it offers various brands with different benefits in each market segment.

Today Swatch differentiates itself from its competitors by selling mass-production items which are customizable. Besides this, because of all the brands offered by Swatch, the products provide many different benefits for all kinds of customer. Therefore, Swatch is meeting a wide range of customers with different budgets and tastes.


●●●Market Entry Modes●●●

The worldwide known Swiss corporation Swatch has earned its reputation under the management of Nicolas G. Hayek, in the early ‘80s. Created by merging the two Swiss watch leader firms (SSIH and ASUAG), Swatch was SMH’s (Societe Suisse de Microelectronique et d'Horlogerie) most important brand name, an outcome of the Swiss watch industry crisis. The launching of the Swatch watch in 1983 only lead to many more brands under the same name, which have always been under continuous development and improvement processes. The Swatch group later began to take over smaller businesses that specialized in producing watches and under the highly innovative management of Mr. Hayek, the company was able to expand quickly and it achieved to build a strong position in the watch manufacturing industry.

Our research shows a general view of the company’s entry modes based on the firm’s historical information. By founding joint ventures with numerous less and more worldwide famous firms in time, the Swatch group entered new markets through intermediate modes, creating retail chains. Some of the most relevant joint ventures between the Swiss watch producer and other companies have been with:
• German Daimler AG in 1994. The aim was to create the “Smart Car”, project which never got finalized due to withdrawal.
• Guiness Tourneau watch retailer in 2006. The purpose of this venture was to launch watch stores in luxury outlet malls.
• Chinese Jing Jiang Group in 2007. The Swiss holds 90 percent of the venture, focusing on the development of one of China’s most important monuments, the Peace Hotel.
• Tiffany.Co in 2007. The agreement is to design and manufacture Tiffany brand watches. Specialists argue that Tiffany has lost money and properties in Swatch’s favor, therefore predicting a most likely unsuccessful venture.

Apart from these, Swatch has also ownership of the luxurious watch brands Breguet, Jaquet Droz, Omega and some of Calvin Klein.

The expansion of the company took place under the hierarchical entry mode, by means of setting up subsidiaries under which several different watch manufacturers (GWC General Watch Co.Ltd.) are linked.

However, the forces behind this global expansion, which led Swatch to being the largest watch manufacturer in the world, have also been strongly related with internal and external factors. For instance, the increasing size of the Swatch group has played a major role in its international development. It led to success in overcoming the sociocultural distances between Swatch’s home country and its host countries. This aspect remains highly questionable though, due to the fact that Swatch engaged in minor adaption towards the new markets it had entered. The company kept producing the same type of luxury watches, which were sold at exclusive stores. However, it remained in its high market position due to the affordability, quality and reputation.


●●●Product Strategies●●●

In this section, we aim to identify Swatch’s product strategies. During its activities in the past, Swatch has been constantly focusing on creating new designs and improving its watches. This process was initiated by the development of the original plastic watches and resulted in the creation of a broad range of watches varying in shape, color, design and material.

The Swatch product line contains five “families”:
• Swatch Originals – Plastic cased watches
• Swatch Irony – Metal cased watches
• Swatch Skin – The Original Skin and The Skin Chronograph watches
• Swatch Beat – Digital watches integrating “Internet Time”
• Swatch Bijoux

Product positioning is an important factor influencing a company’s competitiveness. This aspect is highly important in order to be successful as it influences the perception that customers get from a product. If a firm has a good reputation among customers these believe that that product offered by this firm is different or more special than others. Swatch differentiates itself from competitors by selling mass-production items which are customizable.

Another crucial aspect of the reputation of Swatch is the country-of-origin effect the firm benefits from. Switzerland has been baring its status of being the world’s greatest watchmaker since the 16th century. With Switzerland being the country of origin of Swatch, the company benefits from the positive image that people have from watches manufactured in Switzerland. In addition to that, since Swatch has achieved in becoming the most famous producer, the product will have an even greater influence on the buyer’s perception.


●●●Promotion and Pricing strategy ●●●

Concerning the promotion strategy, Swatch engages in a multi-domestic approach, which can be taken from the Annual Report 2009. There, a detailed description about the activities of each brand of the Swatch Group can be reviewed in categorization of countries. One example is that in Greece the Swatch-MTV playground event took place in 2009, which draws the attention of young people to the brand. It already shows the most important segment of the promotion strategy, the age. Most of the watches and jewelry designed by Swatch are colorful, modern and sporty. This lets us conclude, that the target group consists of young people and people who feel young. That is also reflected by the website, which is characterized by sophisticated technology, various colors, and snowboarders taken as advertising mediums. Even the chairman is displayed with a pose that makes him look like a person who stayed young. Furthermore, Swatch has a unique promotion activity with the introduction of its Snowpass watch, with which the access to skiing slopes is eased.
As indicated before, one of the promotion strategies is sponsorship. The joint event with MTV is only one of various events that Swatch organizes or sponsors in order to reach young people. There is the opportunity to join the Swatch club online of which members get informed about events taking place. Another example would be the partnership of Swatch with several snow- and bike parks where the firm offers to shoot videos from the stunts made by visitors and post them online. Visitors who want to review their performances can do so on the Swatch website. Swatch benefits from the positive association people make with the brand when they visit the events. Furthermore, a lot of the activities offered by Swatch do not only include the taking place of a single event but require to staying in touch with the company, as the videos reviewable online , for instance, do.
Another important factor of promotion for Swatch is its country of origin. Being a watch manufacturer from Switzerland, the company benefits from the good reputation the country has worldwide in manufacturing watches. Swatch is known to be one of the best quality serving watch manufacturers in the world.
The intense investment in advertisement made by Swatch suggests that it focuses on the pull strategy. This means, that the firm tries to reach its customers directly through strong advertisement by means of which demand is created.

The pricing strategy of Swatch is to offer goods at affordable price levels. It is stated in the Annual Report of 2009 that Switch aims to be accessible to customers. The prices given for watches on the official homepage reach from about 40 Euros up to about 200 Euros. The jewelry line falls into the same range of prices. Given the price range and the fact that Swatch is a high quality brand, one can say that its pricing strategy is set on a medium level. Regarding the fact that Swatch addresses young people with its promotion strategy, the price level appears to be accurate. A brand targeting young people would not be successful if the prices of its goods were not affordable for those.
Keeping the young target group in mind, one could consider the upper section of the price range to be set high. Swatch can therefore also be seen as a prestige brand. However, since the prices are relatively low in comparison to the prices of other high quality brands, we decided to stick to determining the prices as medium. Furthermore, it can be argued that Swatch follows a cost-leadership strategy. This means that the firm manages to produce its goods at a lower price than its competitors, while maintaining a high quality of the product. Swatch has established a routine in manufacturing watches, while investing intensively in R&D and the training of employees. This creates a good basis for a cost leadership position. Furthermore, the reputation and promotion strategy of the brand help to maintain such a position. All factors together compose a competitive advantage.


●●●Corporate Social Responsibility●●●

The Swatch Group also pays attention to the field of Corporate Social Responsibility (CSR). The company engages in ecological practices and aims to protect the environment. Therefore, it tries to limit the use of raw materials and energy sources. Furthermore, it introduced waste management in order to reduce unnecessary litter. Besides the CSR, Swatch is trying to reduce costs based on the best and most sustainable ways to protect the environment. An example of this is the recycling of batteries.

●●●Conclusion●●●

Swatch has been very successful with its international marketing strategy. Its products are sold all over the world and Swatch achieved to become the world’s largest watch manufacturer. Its strategy includes the acquisitions of joint ventures and the setting up of several subsidiaries to create a network of watch manufacturers. By analyzing Swatch’s international market strategy we noticed that the company uses a multi-domestic approach, which is achieved by offering customizable products and continuing innovation in order to satisfying the different needs and conditions of customers. In order to serve different segments of the watch industry Swatch extended its product range and operates by means of several brands. The company takes into account that customers in various segments are searching for different benefits. Therefore, it uses differentiated market mixes for each segment. This shows in the variation of pricing, promotion and the product strategy. There is also a similarity between all Swatch brands: they offer high quality mass-production items which are customizable and have various designs.

PART B
Step 1
1.1 Peer-edit your partner’s writing
I peer-edited the text of Merlijn Komdeur and I have to say that I really liked it, as it was easy to read, though it was academic. Especially I found impressive that it was not noticeable which part was written by Merlijn and which part was written by his partner Bas Stellink. However, there is still room for improvement concerning the vocabulary.
1.2 Meet your sub-group and exchange information

Globalization and the English Skills Gab
We found this article interesting although it was clear to us that globalization creates a necessity to speak English. Nevertheless, the facts included in this article were very interesting. It made us realize how English can influence one’s whole career. Therefore, we also talked about how following a study program in English could influence our own lives. Especially the fact that it actually does not matter where you come from when it comes to finding a job in an international environment made it even more clear to us what learning English could mean for us.


English is India’s passport to economic success
We all agreed that this article is a very interesting one since the problem was new to us. A lot of people have been writing about India as a booming economy and it is widely known that British call centers have been outsourced to India because of the English speaking workforce. However, in order to become a significant player in the world order of business the general level of English (as a second language in India) needs some serious improvement. Once again, this article shows what an impact globalization has on the world.


Writing in Academic Style
Personally, I did not find this article interesting. That is because I do not feel that I learned from this article. Of course it would be better for someone’s career in an international environment to be able to write with academic style. I agree that a certain level of style influences the impression that other people have of you but I also think that the style should not be taken more into account than the context of what is being said.


1.3 Exchange ideas on web tools and writing processes
All three of us agreed on that the most useful tools in this research were JustTheWord Collocation Finder and the Lextutor Vocabulary Profile. Furthermore, nobody seemed to find the lextutor concordancers very useful for the reason that it is too time consuming and complex.

meeting minutes research articles

Globalization and the English Skills Gab
We found this article interesting although it was clear to us that globalization creates a necessity to speak English. Nevertheless, the facts included in this article were very interesting. It made us realize how English can influence one’s whole career. Therefore, we also talked about how following a study program in English could influence our own lives. Especially the fact that it actually does not matter where you come from when it comes to finding a job in an international environment made it even more clear to us what learning English could mean for us.


English is India’s passport to economic success
We all agreed that this article is a very interesting one since the problem was new to us. A lot of people have been writing about India as a booming economy and it is widely known that British call centers have been outsourced to India because of the English speaking workforce. However, in order to become a significant player in the world order of business the general level of English (as a second language in India) needs some serious improvement. Once again, this article shows what an impact globalization has on the world.


Writing in Academic Style
Personally, I did not find this article interesting. That is because I do not feel that I learned from this article. Of course it would be better for someone’s career in an international environment to be able to write with academic style. I agree that a certain level of style influences the impression that other people have of you but I also think that the style should not be taken more into account than the context of what is being said.

Marketing report vocabulary revised (3rd draft)

●●●Introduction●●●

This report analyses the international marketing strategy of the Swiss watch manufacturer Swatch. We will provide the reader with a short overview of the firm’s activities, which will be followed by a description of the company’s performance in the last 5 years. After that, we will proceed with the analysis of Swatch’s international marketing strategy before the report will end with a short conclusion.

General introduction.
The Swatch group is a Swiss company which mainly manufactures watches and jewelry. However, the emphasis lies on the manufacturing of watches. The Swatch group was established in 1983 as a result of a merger between ASUAG and SSIH witch. These were two watch makers from Switzerland which were established in the beginning of the 1930s. Both companies incorporated several brands, but they were facing high competition from Japanese watch makers during the 1970s. In order to gain a strong market position the two companies merged and established the SMH (Swiss Corporation for Microelectronics and Watch making Industries Ltd.), which later on became known as the Swatch Group. It only took 5 years for the newly merged company to become the biggest watch manufacturer in the world, which it still is today. Swatch owns 19 different watch brands, which are sold in different segments of the market. The brands are:
Breguet, Blancpain, Glashütte-Original, Léon Hatot, Jaquet-Droz, Omega, Longines, Rado, Union Glashütte, Tissot, ck Calvin Klein, Certina, Mido, Hamilton, Balmain, Swatch, Flik Flak, Endura and Tourbillon.
At the moment, Swatch is focusing on Research and Development in order to attain the market position of its brands. Furthermore, the Swatch group is also active in the automobile sector, telecommunications and it provides sports timing measurement equipment (e.g. for the Olympic games.)

http://www.swatchgroup.com/en/group_profile/history/yesterday
http://www.swatchgroup.com/en/group_profile/history/today
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●●●The company’s businesses●●●

This section of the report is aimed to provide an overview of the company’s activities.
Swatch mainly produces watches and all other activities Swatch engages in are related to the watch production in some way. The products which Swatch delivers (according to their annual report website 1, footnote) are watches in different market segments, jewelry, electronic systems and several parts of watches.

The watch production is the company’s core business. Swatch is the biggest watch manufacturer in the world and therefore a market leader. We estimate the market share of Swatch at around 20%. This, we derived from the fact that in 2005 the market share was at 18% and it is indicated by several sources (websites 2,3 and 4, footnote) that it increased in the year of 2009.

Since Swatch mainly focuses on the manufacturing of watches, its involvement in the jewelry market is relatively low. The jewelry is created to match with the watches, which aims to attract Swatch watch owners to purchase the complementing jewelry.

Seven companies of the Swatch group are engaging in the production of electronic systems. The 7 companies are: EM Microelectronic, Micro Crystal, Renata, Microcomponents, Oscilloquartz, Lasag and Swiss timing. These companies are located in different parts of the world and the operations are interrelated. The geographical disparity and the technical expertise of every single company create a cluster of collective knowledge. This network enables all of the companies to gain market share in both geographical and industrial terms.

In the market of producing, supplying and selling components of watches, Swatch is also a market leader, maintaining 156 production centers around the world. Its responsibility in this field covers the whole watch industry. Buying a watch from a brand that does not belong to Swatch, still leaves a major possibility that some parts of the watch are produced by Swatch.

Swatch serves the global market. It has subsidiaries all over the world and in the countries where this is not the case, there is still the possibility to buy a Swatch product via a local distributor. To give an indication, the following countries have Swatch subsidiaries, according to their annual report of 2009 (website 1, footnote)
Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxemburg, The Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, United Kingdom and Ireland
Americas: Brazil, Canada, Mexico, Panama, USA
Oceania: Australia
Asia: China, Hong Kong, India, Japan, Macao, Malaysia, Singapore,
South Korea, Taiwan, Thailand
Middle East: United Arab Emirates
Africa: South Africa

1) http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_reports/annual_report_2009
2) http://www.marketing-online.nl/nieuws/index2005-43.html
3) http://www.tijd.be/nieuws/ondernemingen_consumptie/Horlogemaker_Swatch_klopt_verwachtingen.8294680-430.art
4) http://genevalunch.com/blog/2010/02/09/swatch-upbeat-for-2010-as-2009-losses-show-market-share-gained/
5) http://www.swatchgroup.com/en/brands_and_companies/electronic_systems
march 15

































●●●The performances of the company from 2005-2009 ●●●

Appendix 1 demonstrates that Swatch has experienced growth in the past 5 years. This is indicated by the gross sales, which increased by 20.55% from 4497 million CHF in 2005 to 5421 million in 2009. Furthermore, the fact that in 2009 the gross sales were 9.1% lower than in 2008 provides evidence that the financial crisis had an impact on sales. Otherwise, the gross sales would have had increased following the trend of the past years.
Until 2008 the company was constantly growing. Sales, as well as the net income and assets were increasing. This is illustrated in appendix 1. During the financial crisis every account except from equity dropped. Appendix 2 displays that sales decreased, as well as net income and that the net profits from 2008-2009 declined with 24.9%. This can also be derived from appendix 3, where you can see that both blue bars have shrunk. Something that is not included in appendix 1, 2 or 3, but that was mentioned in the annual report of Swatch, is, that the export had decreased by 22% in 2009 whereas the company was gaining market share. Appendix 3 shows signs of recovery in the cash flows from operating activities in comparison to 2008.

Having a look at the numbers given in the appendix, one could get a mislead impression about Swatch´s performance in 2009. Although it seems that Swatch performed poorly throughout the entire year, this is not the case as sales were already improving in the second half of 2009. Therefore, the drawbacks from the first half can be interpreted as a consequence of events in 2008.

Interpreting the data, we conclude that over the last 5 years Swatch has done a noticeable job. Although the impact of the financial crisis is visible, one can say that Swatch has succeeded in managing it with even experiencing growth.














●●●Segmentation, Targeting, Positioning ●●●

Segmentation is based on identifying the different consumer needs in a market. Since Swatch produces and sells watches and jewellery, we will focus on the needs in this market. There are several reasons to buy a watch; some of these are that it is a handy tool used to be aware of the time in regular daily life and in sports. Besides this, it can be used as jewellery and therefore provide you with a certain status.
The benefit of watches for manufacturers is that this product can be sold to all age groups. But these groups are looking for different benefits. Youngsters are in general looking for a trendy watch, which in most cases is used as jewellery, since they use their cell phones to check the time. This is in contrast to the elderly. This group is interested in the usefulness and quality of a watch.

In the 1980’s Swatch faced foreign competition and the company realised that, in order to maintain its successful status, it had to focus on a certain target market instead of trying to sell its products to the broad mass. Before making a final decision on which market to target, a company needs to engage in extensive research on possible markets. The research is supposed to collect information on issues like market size, demand, local taste and competition. Swatch discovered that its strengths are being innovative, artistic and being able to create new designs. But one of the most important abilities is Swatch’s ability to produce a low-cost watch while maintaining a high quality. Since most competitors were engaged in selling mass-produced watches with little room for innovation and a lack of knowledge for cost saving production, Swatch found a market niche it was able to serve.

Nowadays, Swatch is familiar with the fact that specialization in a chosen market is more profitable than trying to reach all customers in the market at once. Therefore, the choice of its target market was made very carefully. The main goal was to produce an artistic, low-cost and high-tech watch. This turned out to be a highly successful concept and Swatch became the world’s largest watch producer. Its leading position created the possibility for Swatch to extend its product range and follow a differentiated strategy.

Recently, Swatch has shifted its focus back to more market segments. The company achieved to become a very important player in all segments it operates in (prestige and luxury range – high range- middle range- basic range – private label segment). Swatch understands the different needs in each of these segments and therefore it offers various brands with different benefits in each market segment.

Today Swatch differentiates itself from its competitors by selling mass-production items which are customizable. Besides this, because of all the brands offered by Swatch, the products provide many different benefits for all kinds of customer. Therefore, Swatch is meeting a wide range of customers with different budgets and tastes.



●●●Market Entry Modes●●●

The worldwide known Swiss corporation Swatch has earned its reputation under the management of Nicolas G. Hayek, in the early ‘80s. Created by merging the two Swiss watch leader firms (SSIH and ASUAG), Swatch was SMH’s (Societe Suisse de Microelectronique et d'Horlogerie) most important brand name, an outcome of the Swiss watch industry crisis. The launching of the Swatch watch in 1983 only lead to many more brands under the same name, which have always been under continuous development and improvement processes. The Swatch group later began to take over smaller businesses that specialized in producing watches and under the highly innovative management of Mr. Hayek, the company was able to expand quickly and it achieved to build a strong position in the watch manufacturing industry.

Our research shows a general view of the company’s entry modes based on the firm’s historical information. By founding joint ventures with numerous less and more worldwide famous firms in time, the Swatch group entered new markets through intermediate modes, creating retail chains. Some of the most relevant joint ventures between the Swiss watch producer and other companies have been with:
• German Daimler AG in 1994. The aim was to create the “Smart Car”, project which never got finalized due to withdrawal.
• Guiness Tourneau watch retailer in 2006. The purpose of this venture was to launch watch stores in luxury outlet malls.
• Chinese Jing Jiang Group in 2007. The Swiss holds 90 percent of the venture, focusing on the development of one of China’s most important monuments, the Peace Hotel.
• Tiffany.Co in 2007. The agreement is to design and manufacture Tiffany brand watches. Specialists argue that Tiffany has lost money and properties in Swatch’s favor, therefore predicting a most likely unsuccessful venture.

Apart from these, Swatch has also ownership of the luxurious watch brands Breguet, Jaquet Droz, Omega and some of Calvin Klein.

The expansion of the company took place under the hierarchical entry mode, by means of setting up subsidiaries under which several different watch manufacturers (GWC General Watch Co.Ltd.) are linked.

However, the forces behind this global expansion, which led Swatch to being the largest watch manufacturer in the world, have also been strongly related with internal and external factors. For instance, the increasing size of the Swatch group has played a major role in its international development. It led to success in overcoming the sociocultural distances between Swatch’s home country and its host countries. This aspect remains highly questionable though, due to the fact that Swatch engaged in minor adaption towards the new markets it had entered. The company kept producing the same type of luxury watches, which were sold at exclusive stores. However, it remained in its high market position due to the affordability, quality and reputation.





























●●●Product Strategies●●●

In this section, we aim to identify Swatch’s product strategies. During its activities in the past, Swatch has been constantly focusing on creating new designs and improving its watches. This process was initiated by the development of the original plastic watches and resulted in the creation of a broad range of watches varying in shape, color, design and material.

The Swatch product line contains five “families”:
• Swatch Originals – Plastic cased watches
• Swatch Irony – Metal cased watches
• Swatch Skin – The Original Skin and The Skin Chronograph watches
• Swatch Beat – Digital watches integrating “Internet Time”
• Swatch Bijoux

Product positioning is an important factor influencing a company’s competitiveness. This aspect is highly important in order to be successful as it influences the perception that customers get from a product. If a firm has a good reputation among customers these believe that that product offered by this firm is different or more special than others. Swatch differentiates itself from competitors by selling mass-production items which are customizable.

Another crucial aspect of the reputation of Swatch is the country-of-origin effect the firm benefits from. Switzerland has been baring its status of being the world’s greatest watchmaker since the 16th century. With Switzerland being the country of origin of Swatch, the company benefits from the positive image that people have from watches manufactured in Switzerland. In addition to that, since Swatch has achieved in becoming the most famous producer, the product will have an even greater influence on the buyer’s perception.








●●●Promotion and Pricing strategy ●●●

Concerning the promotion strategy, Swatch engages in a multi-domestic approach, which can be taken from the Annual Report 2009. There, a detailed description about the activities of each brand of the Swatch Group can be reviewed in categorization of countries. One example is that in Greece the Swatch-MTV playground event took place in 2009, which draws the attention of young people to the brand. It already shows the most important segment of the promotion strategy, the age. Most of the watches and jewelry designed by Swatch are colorful, modern and sporty. This lets us conclude, that the target group consists of young people and people who feel young. That is also reflected by the website, which is characterized by sophisticated technology, various colors, and snowboarders taken as advertising mediums. Even the chairman is displayed with a pose that makes him look like a person who stayed young. Furthermore, Swatch has a unique promotion activity with the introduction of its Snowpass watch, with which the access to skiing slopes is eased.
As indicated before, one of the promotion strategies is sponsorship. The joint event with MTV is only one of various events that Swatch organizes or sponsors in order to reach young people. There is the opportunity to join the Swatch club online of which members get informed about events taking place. Another example would be the partnership of Swatch with several snow- and bike parks where the firm offers to shoot videos from the stunts made by visitors and post them online. Visitors who want to review their performances can do so on the Swatch website. Swatch benefits from the positive association people make with the brand when they visit the events. Furthermore, a lot of the activities offered by Swatch do not only include the taking place of a single event but require to staying in touch with the company, as the videos reviewable online , for instance, do.
Another important factor of promotion for Swatch is its country of origin. Being a watch manufacturer from Switzerland, the company benefits from the good reputation the country has worldwide in manufacturing watches. Swatch is known to be one of the best quality serving watch manufacturers in the world.
The intense investment in advertisement made by Swatch suggests that it focuses on the pull strategy. This means, that the firm tries to reach its customers directly through strong advertisement by means of which demand is created.

The pricing strategy of Swatch is to offer goods at affordable price levels. It is stated in the Annual Report of 2009 that Switch aims to be accessible to customers. The prices given for watches on the official homepage reach from about 40 Euros up to about 200 Euros. The jewelry line falls into the same range of prices. Given the price range and the fact that Swatch is a high quality brand, one can say that its pricing strategy is set on a medium level. Regarding the fact that Swatch addresses young people with its promotion strategy, the price level appears to be accurate. A brand targeting young people would not be successful if the prices of its goods were not affordable for those.
Keeping the young target group in mind, one could consider the upper section of the price range to be set high. Swatch can therefore also be seen as a prestige brand. However, since the prices are relatively low in comparison to the prices of other high quality brands, we decided to stick to determining the prices as medium. Furthermore, it can be argued that Swatch follows a cost-leadership strategy. This means that the firm manages to produce its goods at a lower price than its competitors, while maintaining a high quality of the product. Swatch has established a routine in manufacturing watches, while investing intensively in R&D and the training of employees. This creates a good basis for a cost leadership position. Furthermore, the reputation and promotion strategy of the brand help to maintain such a position. All factors together compose a competitive advantage.


























●●●Corporate Social Responsibility●●●

The Swatch Group also pays attention to the field of Corporate Social Responsibility (CSR). The company engages in ecological practices and aims to protect the environment. Therefore, it tries to limit the use of raw materials and energy sources. Furthermore, it introduced waste management in order to reduce unnecessary litter. Besides the CSR, Swatch is trying to reduce costs based on the best and most sustainable ways to protect the environment. An example of this is the recycling of batteries.




























●●●Conclusion●●●

Swatch has been very successful with its international marketing strategy. Its products are sold all over the world and Swatch achieved to become the world’s largest watch manufacturer. Its strategy includes the acquisitions of joint ventures and the setting up of several subsidiaries to create a network of watch manufacturers. By analyzing Swatch’s international market strategy we noticed that the company uses a multi-domestic approach, which is achieved by offering customizable products and continuing innovation in order to satisfying the different needs and conditions of customers. In order to serve different segments of the watch industry Swatch extended its product range and operates by means of several brands. The company takes into account that customers in various segments are searching for different benefits. Therefore, it uses differentiated market mixes for each segment. This shows in the variation of pricing, promotion and the product strategy. There is also a similarity between all Swatch brands: they offer high quality mass-production items which are customizable and have various designs.