Ratios Generic strategy The corporate startegy

Return on Equity = Net profit after taxes/ Stockholders equity Return on Equity = 16.82% (2011)
Measures the rate of return on the book value of total stockholders equity.

Fixed Asset Turnover = Sales/Fixed assets Fixed Asset Turnover = 4.14 (2010) & 3.52 (2009).
Measures how efficiently fixed assets ( plant, equipment, building, etc.) produce sales.

Quick ratio or acid test ratio =(currents assetsinventory)/current liabilities

=(7096 -3671)/1151 = 2,98

Asset turnover = sales / total assets

= 7143 / 9805 = 0,73

Return on sales = net operating profit before taxes / net sales = 1611/ 6764 = 0,24

Activity ratios

Net sales 6764 Inventory 3671 1,84

Indcates how many times average inventory of finished goods is sold per year

Cash Days of cash Net sales for year/365

1616 6764,00 0,24

Measers the number of days of cash on hand within the context of recent revenue levels

Long term debt

Long-term debt-toequity ratio

91 0,33

stockholder's equity

274

Indicates the percentage of funds provided by longterm creditors as compared with owners,

Profitability ratios

Net income before taxes Total assets

1276 9805

0,13

Measures rate of return on total assets employed

Indicates how much of the current liabilities the current assets can cover, ordinarily, a ratio of 2 to 1 or better is desirable.

Indicates to what extent net working capital may be threatened by inventory buildup.

Indicates the number of times accounts payable is turned over in a year.

Indicates the percentage that borrowed funds are utilized to finance the assets of the firm.

Indicates the ratio of funds provided by creditors as compared with owners.

Commercial prof itability.

Net result

9805 6764

turnover

1,449586

Apparent productivity = added value / workforce = 3432 / 1818 = 1,89

Production/ Person = Production / workforce = 2015 / 1818 = 1,11

Mechanization intensity = operating assets / workforce = 1665 / 1818 = 0,92 Obsolescence of fixed assets = depreciation / fixed assets = 229/ 1696 = 0,135

Positioned as a high fashion accessory, the management of swatch decided to enlarge the market focussing on the low price segment. This strategy permit to swatch to recover the segments that it had ceded to the competitors from JAPAN and Hong-Kong.

Swatch Group has adopted the strategy of differentiation, for all segments, except that the type of differentiation changes from one segment to another, for some segments it adopted a differentiation up (and increase the price and quality) namely luxury brands (Breguet Blancpain Jacquet Droz Tiffany & Co) brands of high quality (RadoLongines), by cons for brands to medium range Swatch group has adopted the strategy of differentiation down, with good quality and prices down to less, (Balmain Tissot, Hamilton, Swatch, Flik Flak ..

Due of the choice of strategy differenciation of Swatch group.

When Swatch emerged in 1983, it was a prime time to enter the watch industry. Existing rivalry and the threat of new entrants were medium, allowing Swatch to thrive.

Not one of the many competitors held more than 15% of the total global market, thereby creating medium concentration. In addition, cost conditions, excess capacity and exit barriers, and product differentiation were also medium. Although there was high diversity among competitors, Swatchs strategy of differentiation, complemented with the other industry factors, allowed them to enter the industry and profit.

Although there were barriers to entry and a high threat of substitute products, Swatch was able to forgo the barriers and create a niche to avoid threats. While low concentration and extreme price sensitivities of shop buyers created high buying power; the power of suppliers was extremely low, enabling efficiencies.

Swatch pursues the focused strategy integrated cost leadership and differentiated strategy. It is obvious that Swatch has the characteristic of niche idea according to the plastic material that can be considered as differentiation.

Moreover, Swatch tries to be low cost manufacturer by constructing low cost structure that can be achieved through globally locating the production facilities. Applying all the strategies simultaneously is risky in confusing customers.

The mission statement is to offer low cost, high quality and accurate watch with synthetic material. The low cost component is able to achieve when compared to the other Swiss companies.

Although it is difficult to compete with the Asian region where the labour cost is much lower, Swatch is able to gain the advantage from being the first brand that comes along with the colourful plastic material. Moreover, Swatch tries to position itself as the fashionable timekeeping that owns different personalities and targets to niche markets where most of the companies might overlook these profitable markets.

Swatch applies the vertical growth strategies through both backward integration and forward integration:
the backward integration is implemented through the acquiring the watch manufacturing companies (ETA, Meco Suisse). The forward integration consist to allow the individual investors and distributors to open Swatch stores to sell anything that carries Swatch brand Name.

Manufacturing strategies of lean production, inventory reduction, and just-in-time were copied from the successful Japanese manufacturers (Seiko), who established themselves as world-class, low-cost (cheaper) producers. To test the new market of the United State, a joint venture had been established with a Texan businessman.

Swatch responds the customers demand through the wholesaler organization that is the division within the Swatch group subsidiaries around the world. Swatch is operating under the pattern of product-country matrix where the local division managers have to report to the country managers, who are directly responsible for total profits and losses as well as the brand headquarter in Switzerland.

Swatch's strategy is based on an innovative generalized process . More than purely technological, innovation focuses on the work oriented toward the development of branding and marketing approach.

The Swatch is on any wrist. To stay, the group adopt a strategy which aims to increase openings Swatch Stores worldwide (Europe, North and South America, Far and Middle East and Africa). the group adopted a strategy of separate distribution for each of its products luxury watches, basic watches, and jewelry

A Swatch is always a round shape; it is the only thing that has not changed since 1983. Everything else is left to the imagination of the Swatch Design Lab in Milan. Nearly 2500 references were launched with the idea of always providing a Swatch for everyone, at every moment of his life. It is possible to distinguish several ranges of swatch, each one with its own characteristics and with many varieties of colors.
There has Swatch encrusted with diamonds, other made of plaid or platinum ... specific collections and jewelry.

"Swatch demonstrates that it is possible to produce a top quality product, at very low prices, in a place as expensive as Europe." The Swatch Group, set a price that provides the high margins needed for massive advertising, and to fund its marketing investments and expand its territory, as the acquisition of number of brands such as Breguet and Jaquet Droz

The Swiss retaliated with a quartz movement so thin that its first trade name shall be Delirium tremens but with true innovation: the elements of the electronic motion are assembled directly on the bottom of the box, which reduces both the thickness of the case, the number of parts required and the manufacturing time. A consultant appointed Nicolas G. Hayek will transform this failure into a stroke of genius. With this technology, it has a young crowd of colored plastic, declinable in all styles, with quartz accuracy, an unbeatable price (40 francs Swiss). The first collection was launched in March 1983.

Swatch prefers to communicate by the event rather than the product, including prices, colors and patterns are already in itself a communication.

Swatch attends international artists. Vocation confirmed by fashion shows, humanitarian operations (UNICEF, fight against AIDS, environmental protection at the UN) give a true soul. The Olympic Games reinforce competence watch, and more promotions.

The Swatch Group actively promotes the further education of its executives and professionals. Therefore, the Group offers every year a wide range of seminars in the domains of leadership skills, social competencies, professional competencies, methodological competencies and self-competencies.

These seminars are oriented towards actual practical demands and issues and their content is efficiently and rapidly applicable. Thus, the Swatch Group contributes to the increase in the employees satisfaction and promotes a high degree of independence, personal responsibility and change ability within the Group.

The Nicolas G. Hayek Watchmaking Schools are proactively addressing the need to educate a new generation of skilled watchmakers. Founded by Nicolas G. Hayek, Swatch Groups former Chairman, there are now five schools located in Shanghai (China), Kuala Lumpur (Malaysia), Glashtte and Pforzheim (Germany), and in Miami (United States). There is also a partnership arrangement with the British School of Watchmaking in Manchester.

The companies based in Switzerland offer around 300 apprenticeships in some 30 different professions. The broad spectrum includes commercial, technical, artistic and industrial positions. This means that places in highprofile production companies and at the Swatch Groups renowned brands are open to you. The Swatch Group offers his employees optimal working conditions and also pay particular attention to their professional basic education. This ensures the acquisition and nurturing of know-how in the long term. Each year approximately 75 young professionals complete their apprenticeships with the Swatch Group. At the end of their training period they are, in most cases, hired by the companies which trained them.