It proved difficult for both, however, to implement a common industrial policy for the subsidiaries concerned. Foreign competition, in particular the Japanese watch industry, with its mass production of cheap new electronic products and new technology, was rapidly establishing a strong foothold in the market. At this point, Nicolas G. Hayek, at the time Chief Executive Officer of Hayek Engineering, received an assignment to develop a strategy for the future of both companies.
In , the soon to be renowned Hayek Study recommended a number of measures designed to enable the survival and ultimate recovery of the companies. The subsequent implementation of the measures recommended by the Hayek Study, together with the take-over of the majority of shares by the Hayek Pool and the nomination of Nicolas G.
Hayek as CEO, successfully created new opportunities and established a new culture. Within five years, the SMH Group was to become the most valuable watchmaker in the world. The Swatch Group Ltd.
The Group is active in the manufacture of finished watches, jewelry, and watch movements and components. It produces nearly all of the components necessary to manufacture the watches sold under its 18 watch brands and the multi-brand Tourbillon and Hour Passion retail labels, as well as the entire Swiss watchmaking industry.
In addition, it operates its own worldwide network of distribution organizations. The Swatch Group is also a key player in the electronic systems sector. Less than 40 years ago, the Swiss watchmaking industry was battling a serious crisis.
The first Swatch watches were released in The years since then have seen the recovery of the Swiss watchmaking industry as a whole, and the establishment of The Swatch Group as a strong, diversified industrial holding.
This solid foundation has allowed the Group to broaden its reach and extend its range of brands. However, its history began in at ETA , where they were already working on the development of a low-cost quartz watch.
The Swatch resulted from the collaboration between Nicolas Hayek and Ernst Thomke and quickly developed into a bestseller: In the sales target was set at 2.
The cheap quartz watch that once brought the watch industry to its knees was now their salvation. Swatch relied on fully automated production and reduced the number of components from 91 to only 51 components, which greatly increased the profit margin.
Following the success of the Swatch , the company turned its attention to the other brands, which had previously undergone logistical reforms, but still maintained their old brand images. In , Hayek restructured the board of directors and brought the brand managers of all the larger brands on board. The objective was to find the appropriate segment for each brand, so that they would no longer compete with each other and instead increase the image of the Swatch Group.
The path to luxury In , the Swatch Group acquired Blancpain , one of the oldest watch brands in the world, thus adding a prestigious and traditional company to the group.
However, Blancpain remained in the manufacture of mechanical watches, despite the trend to quartz watches. It was decided that Omega should move into the luxury market to compete directly with Rolex. This was done by drawing on resources from Rado, which had come to embody a futuristic spirit and had made a name for itself, most notably in China.
Soon Omega would assume Rado's position in the Chinese market, while Rado and Longines would be repositioned as entry-level brands offering affordable luxury. All four offered excellent craftsmanship and a history rich in tradition, but had not yet found their own niche in the watch market. Using the marketing know-how of the Swatch Group , the companies became internationally renowned. This went hand in hand with the centralization of movement production within the Group during the s.
The Swatch Group also made its mark in the distribution of luxury watches. The group quickly began to set up boutiques for its major luxury brands. In , an agreement was signed with Tourneau to establish multi-brand boutiques called Tourbillon in exclusive locations and luxury department stores, where Swatch Group watches would be distributed. Hayek remained an important voice in the Swatch Group and brought his family into the company. In , Nicolas G. His grandson, Mark A.
When Nicolas G. Hayek passed away unexpectedly in , his daughter, Nayla Hayek , took over as President of the Executive Board. The Swatch Group has continued to grow ever since. Blancpain, which ended with record sales, is expected to continue to grow, particularly thanks to the Fifty Fathoms model. Omega, which celebrated the 50th anniversary of the moon landing , also successfully launched selected exclusive models.
Regarding technical innovations, the group introduced the Nivachron balance spring in This means that every Swatch Group watch is now antimagnetic as a result of using either a silicon or the Nivachron balance spring.
This will allow the Swatch Group to continue to stand out from their competition. As the pandemic causes events to be cancelled worldwide, the watch industry is also struggling with the consequences.
For example, in addition to the largest jewellery and watch fair Baselworld , the Swatch Group cancelled its "Time To Move" event scheduled for March , however, this will not completely stop the Swatch Group from introducing new watches online. Given the current situation, however, it remains to be seen when the Swatch Group will present the new models from their luxury brands like Omega or Breguet. Which brands belong to the Swatch Group?
Related Posts. Watch parts in focus: Watch movement It has a number of flattering names: the heart, core, and masterpiece. How a movement works Why are jewels being … Watch parts in focus: Watch movement continue reading. After nearly 40 years of virtually steady growth the drop in exports of watches and movements during World War II had been more than offset by the production of munitions for the belligerents , the Swiss watch industry entered a recessionary phase in Swiss foreign trade statistics clearly reflect this phenomenon see Figure 2.
The volume of exports soared from As for the number of people employed, it nosedived from almost 90, in to fewer than 47, in With gross sales amounting respectively to CHF1. The rationalization of means of production within the Swiss watch industry, which was pursued in the years —, was clearly a new phenomenon in this industrial branch, given the scope of the restructuring.
This new marketing strategy was implemented in two stages. First, during the years —, the emphasis was placed on restructuring distribution systems, a move which was part of the overall policy to streamline the Group. Second, in the mids, the Swatch Group adopted a policy of brand repositioning.
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