GCOE Discussion Paper Series
Global COE Program

Human Behavior and Socioeconomic Dynamics
Discussion Paper No.193

The Comeback of the Swiss Watch Industry on the World Market:
A Business History of the Swatch Group (1983-2010)

Pierre-Yves DONZÉApril 2011

GCOE Secretariat
Graduate School of Economics

OSAKA UNIVERSITY

1-7 Machikaneyama, Toyonaka, Osaka, 560-0043, Japan

The Comeback of the Swiss Watch Industry on the World Market:
A Business History of the Swatch Group (1983-2010)*
Pierre-Yves DONZÉ†

Abstract
The objective of this paper is to contribute to a better understanding of the comeback of the
Swiss watch industry on the world market since the end of the 1980s. It focuses on the Swatch
Group (SG), currently the world’s biggest watch company.
In 1983, the merger of the largest watch group (SSIH) and of the trust controlling the
production of parts and movements of watches (ASUAG) into SG was the main measuretaken to overcome the Japanese competition. Managed since 1986 by Nicolas G. Hayek(1928-2010), SG experienced a high growth and recovered its competitiveness on the world
market, becoming a driving force for the entire Swiss watch industry. This success istraditionally explained by the firm itself and by scholars as the result of the launch of a new
product (Swatch, a cheap plastic quartz watch first marketed in 1983) and the persistence ofan old technical culture in Switzerland which enabled this rebirth.
This paper, based on SG annual reports, focuses on the strategy adopted by SG since 1983. It
shows that, rather than product innovation (Swatch), it was the rationalization andglobalization of the production system (concentration of strategic parts’ production in
Switzerland; transfer of production facilities in Asia), together with a new marketing strategy(brand segmentation, distribution and retailing facilities, communication, etc.) which were thetwo main sources of the comeback of the Swiss watch industry on the world market. While
Japanese still attach great attention to product innovation, SG largely established its
competitiveness on non-technological innovation.

JEL: M31; N80
Keywords: Watch Industry; Switzerland; Swatch Group; Luxury Goods; Marketing Strategy*

My thanks go to Nicolas Babey, Olivier Crevoisier, Nicolas Hanssens, Laurence Marti and Christelle Roks fortheir comments and constructive criticism. The author is however solely responsible for the views expressed here
and any possible mistakes.
†
Osaka University, Graduate School of Economics, Post-doctoral Research Fellow of the Japanese Society for
the Promotion of Science (JSPS), email: py.donze@gmail.com

1Introduction
This paper tackles the comeback of the Swiss watch industry on the world market after the
1975-1985 crisis. The analysis focuses on the Swatch Group (SG), the main Swiss watch
company since its foundation in 1983 and the current world leader in this branch, with theobjective of shedding light on the strategic choices made by the firm and theirimplementation.
The Swiss watch industry was considered as virtually dead at the beginning of the 1980s, nothaving been able to repel the worldwide expansion of its Japanese rival. Thanks to the mass
production of high-quality mechanical watches followed by quartz watches, the Japanesewatch industry undertook in the second half of the 1960s a growth strategy aimed at putting
an end to Swiss domination of the world market.1 The tremendous development of Japanesewatch companies in the 1970s, whose production value skyrocketed from USD 350 million in1970 to 2.0 billion in 1980, allowed the country to overtake Switzerland in 1981-1985.
During this five-year period, the average value of Japanese watch production amounted to
USD 1.96 billion, as compared with USD 1.69 billion for Swiss watch exports.2 Thesestatistics do not include the Swiss domestic market, but it is unlikely that it had a decisive
influence due to its very small size. Moreover, Japanese watch exports amounted to an
average of USD 1,741 million in 1981-1985, that is, a higher value than Switzerland, adifference which clearly reflects how Swiss watchmakers had become less competitive on theworld market.3
Japanese competition triggered a major crisis in Switzerland, characterized by a drop andstagnation in exports as well as a steep decline in employment (from 89,000 in 1970 to 33,000
in 1985).4 Yet at the end of the 1980s, both countries moved into entirely different phases,
marked by a huge growth of Swiss exports (USD 4.9 billion in 1990; 6.1 billion in 2000; 11.5
billion in 2009) on the one hand, and a stagnation then a drop in Japanese exports (USD 2.8
billion USD in 1990; 1.5 billion in 2000; 0.6 billion in 2009).
In Japan, since the 1990s, in the context of the decline of the watch industry, both the watch
companies and the scholars have given high priority to product innovation in order to get outof the crisis and to become competitive once again with the Swiss watch industry. Thisobsession with product innovation has led firms to launch many new products (solar watch
1995; spring drive watch 1999; radio-controlled watch 2005), but has had very little impact interms of growth.5 In the meanwhile, management scholars also continue to attach great
1

Donzé 2011a.
Statistique annuelle du commerce extérieur de la Suisse, Berne: Federal Customs Department, various years ;Kikai tokei nenpo, Tokyo : MITI, various years;
3
Nihon gaikoku boeki tokei, Tokyo: Ministry of Finance, various years.
4
Convention 2008, p. 13. For the crisis, see Donzé 2011b.
5
Donzé 2010.
22

importance to technological innovation, emphasizing product diversification or productmodularization as ways to recover competitiveness.6
While the Japanese have stuck to technological innovation, Swiss scholars have given moreweight to cultural issues and marketing strategy in explaining the shifts that have occurred inthis industry since the 1990s. Two main approaches can be distinguished. The first andpredominate one is an explanation based on the industrial district theory.7 The use of somekey elements of Marshall’s district (industrial atmosphere, inter-firm competition-cooperation
relations, etc.) made it possible to interpret the rebirth of the Swiss watch industry as resulting
from a technical culture situated in a specific territory, which enabled the repositioning of theindustry at the high end and the manufacture of quality products using traditional know-how.
However, this kind of approaches cause problem, because they propose a model which isbased on a disputable interpretation of industrial district and on an analysis which does notrely enough on documentary sources, on the one hand, and because they do not insert the
Swiss watch industry in a global context, on the other hand.
The second approach interprets the revival of the Swiss watch industry as the consequence ofa new marketing strategy aimed at a repositioning towards Japanese and Chinese competitors.
Glasmeier briefly showed that the readaptation of the Swiss production system to global
competition in the 1980s – what she called a “reorganization à la Japanese”8 – was the sourceof the restored competitiveness of Swiss watchmakers. As for the works of Crevoisier and his
team, they highlighted not only the transformation of the production system but also thedecisive importance of new marketing strategies.9 According to Jeannerat and Crevoisier, thebasis for the success of the Swiss watch industry is precisely a “non-technologicalinnovation.”10 However, work dealing with the regional economy generally focuses on the
period after 2000 and fails to situate this strategy as part of a historical process.
This contribution forms part of the second kind of approaches described above. It is aimed atfurthering understanding of the implementation of the new marketing strategy adopted by the
Swiss watch industry in the 1990s and, notably, at highlighting links with the production
system. The approach adopted here is that of business history, with a special focus on the
Swatch Group (SG). However, in view of this company’s unique position within the Swiss
watch industry, as the biggest firm (26.6% of all employment in this sector in Switzerland in
1990; 28.9% in 2000)11, on the one hand, and as a quasi-monopolistic producer and supplierof parts and movements for the entire industry, on the other hand, understanding its
development sheds light on the evolution of the industry as a whole.
6

Shintaku 1994, Hara 2003, Nakamoto 2003, Sakakibara and Matsumoto 2005, Kimura 2009.
Fragomichelakis 1994, Landes 2000, Pasquier 2008a, Pasquier 2008b.
8
Glasmeier 2000, p. 247.
9
Crevoisier 1993.
10
Jeannerat and Crevoisier 2011.
11
Own calculations on the basis of Convention 2008, p. 13, and SG annual reports.
73

1. The creation of SG and the “legend of the Swatch”
At the beginning of the 1980s, the main measure adopted to pull out of the recession was themerger of the two biggest Swiss watch groups, namely ASUAG and SSIH (1983). With grosssales amounting respectively to CHF 1.3 billion and CHF 815 million in 1979, they
outstripped other watchmakers, third place being commonly occupied by the Société desGarde-Temps SA and Rolex, whose gross sales at the time were evaluated at CHF 190
million.12 What is more, in 1979 ASUAG and SSIH employed about half of the workforce in
the Swiss watch industry.13 However, this clout must be seen in perspective, as it was
primarily due to the crisis which impacted other companies. In reality, ASUAG and SSIH
faced huge industrial and financial difficulties, and their survival owed much to the support ofthe major banks.
ASUAG had difficulties due to the fast-paced growth and diversification of previous decades.
Whereas this company had initially been founded in 1931 as a trust controlling the productionof movements and parts for nearly all the industry and benefited from the support of thefederal State, the liberalization of the 1960s called this traditional role into question.
Consequently, the firm attempted in 1971 to diversify into the production of complete watches
by setting up the group General Watch Co. (GWC), which included notably the companies
Longines and Rado. This strategy had a deep impact on the company’s finances andmanagement. Between 1970 and 1974, ASUAG assets shot up from CHF 54.5 million to CHF
234.1 million. Of course, gross sales were also growing steadily during this period, risingfrom CHF 760 million in 1970 to a peak of CHF 1.4 billion in 1974. However, ASUAG
depended increasingly on outside capital, which made it possible to found GWC. It amounted
to 28.3% of assets in 1974 as against 23.7% in 1970. As a result, when the Swiss watch
industry went into a tailspin, ASUAG’s gross sales plummeted to less than CHF 1.2 billion
per year in 1975-1978 and its dependency on bank capital deepened.14
SSIH was also hit by the crisis after 1974. This group of complete watch-makers, including
especially Omega and Tissot, diversified extensively in the 1960s and the early 1970s,
especially into cheap mechanical watches (Economic Swiss Time Co.), which were notcompetitive on the world market. Between 1974 and 1982, SSIH collapsed. The volume ofsales plummeted from 12.4 million to 1.9 million watches, while gross sales sank from CHF
733 million to CHF 537 million. As for employees, they numbered 7,300 in 1974 but only
3,400 in 1982.15 Banks kept the company going, granting credits and becoming involved inmanagement. A restructuring committee, led by the Union Bank of Switzerland (UBS), the12

JETRO 1982.
JETRO 1982.
14
ASUAG annual reports, 1970-1979.
15
Fallet 2003, p. 185.
13

4

Swiss Bank Corporation (SBC) and Credit Suisse (CS), was set up in 1980. The following
year, a former director of UBS, Peter Gross, was appointed President of the Board of
Directors. Between 1981 and 1983, banks injected more than CHF 900 million into these two
watch groups and tried to withdraw as soon as they could.16

1.1 The creation of SG and corporate governance in 1983-1986
To pull off this reorganization, banks turned to the consultant Nicolas G. Hayek. Born at
Beirut in 1928 and trained at the University of Lyon (France), Hayek had founded in 1963 a
consulting firm in Zurich, Hayek Engineering, working for several European industrial
companies.17 In the reports he wrote for banks in 1982, he proposed as the main measuremerging ASUAG and SSIH into a single holding company, the Société suisse demicroélectronique et d’horlogerie SA (SMH). This was done in 1983, giving birth to theworld largest watch group, which changed its name to Swatch Group in 1998 (hereafter SG).
The years 1983-1986 were a transition period when the merger was implemented. The whole
structure of SG was indeed very unwieldy, as ASUAG and SSIH were both organized asholding companies possessing several groups of enterprises – sometimes with their own
subsidiaries. In 1983, the various companies were grouped together into three sub-holdings,
depending on their type of activity (complete watches; movements and parts; other), andinitially characterized by rationalization. This policy was directed by a four-member
Executive Management Board.18 Chaired by Pierre Arnold, CEO of the Migros chain store
and a member of several Boards of Directors (CFF, Swissair), it also included three division
managers from both merged companies (Ernest Thomke for watch production, Andor Helti
for high-tech and Carl M. Meyer for finances). This board worked under the supervision of
Nicolas G. Hayek, who was engaged until 1986 as a special adviser to the Board of Directors,
and went on to become the real seat of power within SG.
As for the Board of Directors, it was still dominated by bankers, who wanted to monitor the
success of the transition. In 1985, there were four bank directors among the eight members,
and the presidency was occupied by François Milliet, an administrator of several companies
including UBS. Arnold, SG’s CEO, was also a member of the Board, as well as two
watchmakers, Norbert Schenkel, president of Roventa-Henex SA and obviously a former
shareholder of ASUAG, and Paul Lüthi, president of Rado. This Board did not get involved in
the operational management of the company.
In 1985, together with a group of Swiss German investors (Pool Hayek), Nicolas G. Hayek

16

Pasquier, « Swatch Group », in DHS.
Fallet, « Nicolas Hayek », in DHS, Hayek 2006, Wegelin 2010.
18
Journal de Genève, 16 June 1984.
17

5

acquired the majority of SG’s capital. He then entered the Board of Directors and becamepresident in 1986, in the stead of Milliet. The two watchmakers also left the board shortly
thereafter, in 1986 for Schenkel and in 1989 for Lüthi. As for the bankers, they stayed on the
Board but welcomed new members from the Pool Hayek.
In the short term, the main result of rationalization was to enable the company to become
profitable once again. After a loss in 1983, SG was back in the black the following year. Of
course, the profit margin, which amounted at less than 5% of gross sales until 1987, was weak
and gross sales grew slowly in the 1980s. By the way, it was only in 1989 that SG reached the
CHF 2 billion mark in gross sales, that is, the peak reached by ASUAG-SSIH in 1974.19 The
second part of the 1980s thus appears as a turning-point when SG recovered its
competitiveness on world markets. Usually, key importance is attached to the Swatch in thisprocess, but this common view must be discussed.

Fig. 1: Gross sales for SG, as millions of CHF, and net profit as a %, 1983-2010

100.0
%
80.0

7000
6000

Millions CHF

5000

60.0

4000
40.0
3000
20.0

2000

0.0

1000

-20.0
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

0

Gross sales

Net profit

Source: SG annual reports
Note: net profit is the profit after depreciations, reserves and taxes.

1.2 The relative importance of the Swatch
The Swiss collective memory, the story told by SG and academic works usually portray the19

Annual reports of ASUAG and SSIH.

6

crucial role of a product innovation in explaining the success of SG and the comeback of the
Swiss watch industry on the world market: the Swatch.20 Developed as a fashion product, thisplastic-made quartz watch manufactured in Switzerland was launched in 1983 andexperienced growing popularity in the world since the end of the 1980s. Its successsupposedly enabled SG to invest in taking over and restructuring other brands and thereby
relaunching the entire industry. According to the “legend of the Swatch”, Hayek’s launchingof a cheap quartz watch, a product which traditional watchmakers did not trust because of
their conservative mindsets, supposedly made it possible to rescue the Swiss watch industry
and make it able to compete with Japan once again.
Due to the lack of data about the various SG brands and products, it is not possible to assess
precisely the real impact of the Swatch on the firm’s management or to determine which
products were responsible for its restored competitiveness. However, the Swiss foreign trade
statistics and the annual reports of the Federation of the Swiss Watch Industry give somevaluable clues. 21 They indeed mention the value and volume of exports of “non-metal
watches”. Even if these watches are not only Swatches, this brand obviously represents a very
important place within this category, with the value of its export posting high growth after thelaunch of the Swatch (1983), rising from CHF 13.4 million in 1980 to CHF 225.9 million in1985 and a high of CHF 798.7 million in 1993, before falling sharply until 2000 thenstagnating at an average of CHF 297.6 million CHF in 2000-2009, that is, the same level as
the second half of the 1980s.
These numbers do not fully reflect Swatch’s gross sales. On the one hand, they also include
products from other brands, even if their share is obviously very low due to the general trend
towards metal products within the Swiss watch industry. On the other hand, not all Swatches
are contained in these numbers: Swatches sold on Swiss market and metallic Swatches (forexample the Irony line) are excluded. Yet, as this is the only accessible data, it is interesting tocompare the value of these exports to SG’s gross sales. This type of watches accounted for
only a minority share of SG’s gross sales. In the years 1985-1990, it only came to an averageof 16.0%. During the peak years 1990-1995, the value of exports of non-metal watches was ashigh as 22.8% of SG’s gross sales, but since 1999, this share has been less than 10%. Thismeans that some 75-80% of SG’s gross sales came from other businesses in the 1980s-1990s,
and some 90% in the 2000s. Even if it undoubtedly represents a major profit source, that is, a
key supply of money for restructuring, the Swatch did not play the overwhelming role that is
usually thought. In fact, SG’s regained competitiveness is based on two other major elements:
the rationalization of production systems and a new marketing strategy.

20
21

Carrera 1991 and Landes 1990.
Statistique annuelle du commerce extérieur de la Suisse, Berne: Federal Customs Department, various years.

72. Rationalization and globalization of production systems (1985-1998)
The years 1985-1998 were characterized by far-reaching streamlining of the means of
production. The ASUAG-SSIH merger indeed led to a weakly integrated conglomerate ofwatch companies, and the reorganization of the production of watches, movements and parts
was a major issue during the first few years. This policy rested upon two key points:
centralization of movement and parts production in Switzerland; and globalization of
production systems.

2.1 Centralization of movement and parts production in Switzerland
One of the first measures adopted was the centralization of movement and parts production
within the company Eta SA, which belonged to ASUAG until 1983. This was not a newpolicy but rather a continuation of the strategy of merging Eta’s subsidiaries which Thomke
pursued after he was appointed to head up the firm (1978).22 The objective was the same: theconcentration of production aimed at rationalizing (reduction of number of models,interchangeability of parts) and automating production. However, contrary to what happened
until the beginning of the 1980s, this policy was applied to all the group’s companies. It led toa deep upheaval within the biggest watch companies, which had to stop producing their own
movements and concentrate on marketing. The rationalization brought functional dissociation
at the group level, with some enterprises tasked with producing movements and others
responsible for selling watches. This change particularly affected the most prestigious
companies of the group: Omega, Longines and Rado stopped producing their own movements
in 1984-1987.
The development of production systems also took the form of the acquisition of firms,
essentially subcontractors for which SG was already a customer. Apart from assembly plants
opened in Asia and in America (see below), the takeover of two Swiss companies, namely thewatchcase maker Georges Ruedin SA (1989) and the crown-maker Meco SA (1990), must be
underlined. Abroad, SG acquired two parts makers in France, Régis Mainier SA (1987) andMarc Vuilleumier (1990), as well as the company Frésard Composants SA (1991). In
Germany, SG bought up a movement and parts maker, Pforzheimer Uhrenwerke PORTA
GmbH (1990). Buying up production companies in Europe dovetailed with a verticalization
strategy aimed at strengthening the control of parts supply.

2.2 Globalization of production systems
The international division of production was the second thrust of the rationalization strategy
22Vogt, « Eta », DHS.

8

adopted by SG in the years 1985-1998. In reality, it was not a new strategy in the Swiss watch
industry. The liberalization of the industry in the 1960s made outward direct investment
possible, and in the 1970s the main watch companies opened some production plants abroad,mainly in South-East Asia.23 Thus, in 1979, ASUAG had a stake in Beta SA, in Brazil, acompany involved in the assembly of watch movements.24 As for SSIH, in 1981 it owned thecompany Economic Swiss Time, Hong Kong.25 Accordingly, SG’s strategy of globalizationof production dated far back, but it was rationalized and extended to a larger scale.
The opening of a production center in Asia was a priority of the management since thebeginnings of rationalization. As a result, Eta SA opened a plant in China in 1985, which wastransferred to Thailand the following year due to administrative problems with the Chinese
bureaucracy. 26 The Bangkok-based company Eta (Thailand) Co. Ltd specialized in the
production of watch components – primarily destined for supplying Swiss plants – and theassembly of electronic modules for the Asian market. 27 It experienced high growth,characterized by the opening of a subsidiary in Malaysia, Micromechanics Sdn Bhd (1991). In
1998, Thai exports of watch movements and movement parts amounted to 137.4 million USD,
of which 45.8 million USD to Switzerland and 72.2 million USD to Hong Kong.28 The
expansion in Asia was pursued with the opening of a plant in China, Zhuhai SMH
Watchmaking Ltd., in the Special Economic Zone of Shenzhen (1996). The objective of thiscompany was the production of watch components as well as the production of quartz
watches for the Chinese market.29 However, this second objective, essentially based on the
launch of the brand Lanco, turned out to be a failure and the Shenzhen plant produced mainly
quartz movements at the beginning of the 2000s.30
As for America, the second base for the assembly of movements within the SG outside
Switzerland, it included two subsidiaries. The first was an assembly plant opened in 1961 by
American investors in the Virgin Islands, Unitime Co. Ltd.31 This company belonged to theAmerican watch distributor Harris, which was taken over in 1973 by Mido, G. Schaeren &Cie SA, a member of the holding General Watch Co. controlled by ASUAG, with theobjective of extending its activities on the US market.32 The second was also an assemblyplant set up before the 1983 merger, the company SMH do Amazonas, in Brazil. Even if it
was only mentioned since 1990 as an operational company in the SG’s annual report, it was
23

Blanc 1988.
Annual report, 1979, p. 30.
25
Annual report, 1980-1981, p. 39. This company was sold to Nimex AG in 1982.
26
Journal de Genève, 13 September 1994.
27
Journal de Genève, 13 September 1994.
28
World Trade Atlas, foreign trade statistics for Thailand, numbers 9108 + 9110.
29
Journal de Genève, 14 December 1994.
30
Le Temps, 7 May 2004.
31
JETRO, 1966, p. 17. On watchmaking in the Virgin Islands, see Oxtoby 1970.
32
Journal de Genève, 30 January 1973.
24

9

obviously the continuation of Beta SA in which ASUAG had a minority stake.33
The evolution of the structure of SG’s employment illustrates perfectly this globalization of
production systems. The share of employees in Switzerland, which was 80% in 1983-1985,
dropped to 71% in 1990 and to 54% in 1998, a proportion which has remained stable until
now. This internationalization primarily relies on the development of the Asian plants. The
share of employees in Asia, not mentioned in the 1980s, indeed amounted to 21% in 1992 andto 33% in 1998.

2.3 Consequence: better productivity
The rationalization policy had two major results. Firstly, it boosted production growth. The
volume of watches and movements produced by SG shot up from 44.3 million units in 1985
to 86.9 million in 1992 and to 118.8 million in 1998. Levels of growth are characterized by
two periods, with high growth in 1985-1992 (annual growth of 8.3%), followed by weaker
growth (5.3%), a difference related to productivity trends.
Secondly, it let SG regain its competitiveness on the world market thanks to better control
over production costs. The company’s productivity trends between 1984 and 2004 clearlyhighlight the key issue of this period. Even if this index is approximate, as it does notdistinguish between blue-collar and white-collar workers, or between complete watches andmovements, it sheds some light on the issue of rationalization of production. The averageamount of units produced per employee indeed grew steadily until 1992, rising from 3,329 in1984 to 6,075 in 1992. Since 1992, productivity has remained relatively stable, with anaverage of 6,034 units in 1992-2004.34

2.4 A movement producer
What watch types were made within this rationalized and globalized production system? SG’s
annual reports contained very few detailed data on products. However, some production
statistics published in 1986-1987 make it possible to grasp this question.
Data published in the 1986 and 1987 annual reports show that SG produced essentially
movements (see table 1): their volume amounted to more than 30 million per year, as against
15 million for complete watches. Moreover, they were mostly quartz movements (98.4% ofvolume and 95.3% of value). The high proportion of movements can be explained by the factthat one of the two enterprises merged into SG in 1983, ASUAG, was actually a trust that had
33

This company is not mentioned in the annual reports until 1989, probably due to the fact it was a minority
stake. In 1990, SG possessed 70% of shares, which explains why it entered the list of companies belonging toSG.
34
The volume of production is unknown since 2004.

10

controlled parts and movement-blanks production for the entire Swiss watch industry sincethe 1930s. Accordingly, SG has perpetuated its historical role of movement supplier for
virtually all Swiss watch enterprises. Thus, the proportion of movements sold in Switzerlandamounted to 36.9% and 32.8% of the total, for volumes in excess of 10 million pieces.
Obviously, movements represented a substantially lower average value (CHF 10.6 CHF in1986) than watches (CHF 83.1 in 1986). Yet their sale was important for SG. In 1986, even if
it amounted to a mere CHF 326 million, that is 17.9% of gross sales, it was a sum similar tothe one for exports of non-metallic watches (Swatch) that year. The new growth experienced
by the Swiss watch industry since 1985, with a volume of completed watches rising from lessthan 20 million pieces by year in 1982-1984 to 21.1 million in 1985 and 34.9 million on
average in the 1990s, undeniably benefited the main producer of movements. Yet, since 1988,
SG’s annual reports no longer provide any data related to movement volume and shares. The
firm’s communication strategy has emphasized the worldwide success of the Swatch as the
key profit source, and began to hide the fact that it was first and foremost a movement
producer. Nevertheless, since 1997, the value of the division “movements and components”
has represented sales of CHF 1.2 billion, that is, 32.2% of gross sales. Within ten years, thisdivision apparently grew steadily. Finally, the point should be made that SG did not only sell
watch movements to Swiss companies. Its main customers for this product in 1986 and 1987
were actually foreign companies, mostly Asian and American. It is not possible to know thenature of these movements, but these were apparently products made in SG’s plants abroad.

Tab. 1: SG sales as products, 1,000 pieces, 1986-1987
1986

1987

Movements

WatchesMovements

Watches

N

%

N

%

N

%

N

%

Switzerland

11349

36.9

1400

9.4

10040

32.8

1420

8.6

Europe

1494

4.9

6034

40.3

846

2.8

6762

40.7

Far East

10153

33.0

463

3.1

12510

40.9

762

4.6

America

7484

24.3

6169

41.2

7192

23.5

6700

40.4

Other

308

1.0

893

6.0

3

0.0

957

5.8

Total

30788

100

14959

100

30591

100

16601

100

Source: SG annual report, 1987, p. 10.

Regarding complete watches, the only data published are those concerning the years 1986 and1987. Two comments are in order. Firstly, the domestic market appears as more important
11

than is usually considered, as it amounted to some 10% of the volume. Secondly, thisunderscores SG’s extreme dependency on big traditional outlets: Europe and the USA. SG,
which exported 90% of its finished watches there, was more dependent on them than the
Swiss watch industry as a whole (83.4% of exports).35 While Europe was still a competitivemarket for the Swiss watch industry, due to good control of the distribution network and acompetitive advantage of Swiss brands over American and Asian ones, the US posed a
problem for SG. The strong dependency on this market, which absorbed more than 40% ofsales volume in 1986 and 1987, reveals above all the absence of other fast-growing markets,
especially in Asia. The share of the Far East came to a paltry 3.1% of sales volume in 1986
and 4.6% in 1987. For the entire Swiss watch industry, only the three biggest Asian outlets –Hong Kong, Japan, Singapore – reached 5.7% of exports of complete watches in 1986.

2.5 Financial impact of restructuring
The main financial consequence of the restructuring of the means of production and of the
distribution system was the progressive autonomization of the company as well as the end ofreliance on bank capital. SG became a very lucrative company, ploughing back a large shareof its profits into developing the firm. Net profit after depreciation, reserve and taxes posted
continuous growth, rising from 3.3% of gross sales in 1985 to 10.7% in 1995. This excellent
financial situation made it possible to distribute ever-larger dividends (5% in 1986; 12% in
1990; 18% in 1992).
Yet the relentless growth of profits should not obscure a key element of the firm’s
management: its self-financing policy. The modernization of the means of production and thegrowth of the company went together with ever-diminishing dependency on the banks. A hugeamount of profits were ploughed back into reserves. Apart from paid-up capital, SG’s
accumulated equity capital came to CHF 2.0 billion in 1995, as compared with a scant CHF
190 million in 1985 and 750 million in 1990. Measured as a percentage of the balance sheet,shareholders’ equity posted a rising trend until 1997. Whereas it was only 32.1% in 1985, it
passed the 50% mark in 1989 and reached 70.1% in 1995. This financial empowerment
enabled SG to develop without relying on bank loans. For Nicolas Hayek, who was only aminority shareholder in 1985, this strategy was the way to become independent in the medium
term. As for banks, their disinvestment from ASUAG and SSIH was an objective which went
back to the 1970s. The evolution of SG’s governance clearly reflects this process ofemancipation, with the successive departure of most of the bankers from the Board of
Directors: Rolf Beeler (BPS) and Paul Risch (BCB) in 1993, followed by Walter G. Frehner(SBS) in 1997. Since 1998, there has only been one banker on the Board, Peter Gross (UBS).
35

Data communicated by the Federation of the Swiss Watch Industry.

12

3. A new marketing strategy
The second main thrust of the strategy which made it possible for SG to establish itself as theworld’s leading watch group was the adoption of a new marketing strategy. This occurred in
two phases. Firstly, during the years 1985-1995, the focus was primarily on the restructuringof the distribution system, a move which dovetailed with the group’s overall rationalization
policy. Secondly, since the mid-1990s, SG adopted a brand repositioning strategy.

4.1 Rationalization of the distribution system (1985-1995)
Since the middle of the 1980s, the restructuring of the means of production went together witha profound rationalization of the distribution system, characterized by the creation of
distribution companies responsible for all of the group’s brands on the main markets. When
SG was founded in 1983, each watch company had its own distribution network, as a result of
which SG possessed several distribution and sale companies in some countries. For example,
in 1985, it had eight subsidiaries in the USA, five in Germany and two in Hong Kong.
The principle of rationalization adopted in the second part of the 1980s was premised on asingle distribution company in one market. As a result, SG closed several of them down. In
1991, it had only one such network in the USA and one in Germany. What is more, SG
liquidated SA Longines pour la Suisse (1993), Omega Electronics Ltd in UK (1994) and SMH
Trading Far East in Hong Kong (1994), as well as SMH Venezuela (1994). At the same time,
however, it opened many other distribution companies in other countries: Brazil (1986),
Ireland (1986), Netherlands (1986), Singapore (1986), Malaysia (1988), Austria (1993),
British Virgin Islands (1993), Canada (1993), Portugal (1993) and South Korea (1994).
The control of distribution system appears as a key element in the construction of a global
network to enhance all group brands worldwide. This geographical extension policy was
subsequently pursued in the 1990s and the 2000s.

4.1.1 SG’s brand strategy
In an initial phase, the centralization policy had little impact on the marketing strategies ofdifferent brands. It focused essentially on logistics. In the second half of the 1980s, there was
not really any brand strategy at the group level, even though top management decided toabandon some low-end brands which were not booming, such as Record Watch and Baume.
Also, the only two brands launched during this period, the children’s watches Flik Flak (1987)
and the fashion watches Pierre Balmain (1987), did not come from any marketing department
but rather from the group’s movement maker, the company Eta SA, which had found an
13

opportunity to diversify its outlets and extend its activities. For other brands, the image
differentiation between brands was not very pronounced. Omega and Longines remained thehistorical rivals they had been since the end of the 19th century, with various lines of products
embodying very similar values (precision, sports, fashion, elegance). There was also
ambivalence in the middle range (Certina, Mido, Tissot), where differentiation was alsodifficult, even if Tissot was chosen for launching new products, such as watches with a stonecase, the Rock Watch (1985), a wooden case, the Wood Watch (1988) or with a dual analog
and digital display, the Two Timer (1986). The two other brands to distinguish themselves
were Rado, which featured a modern design, and Hamilton, which cultivated its American
origins (so-called American Tradition line).
Clearly, the general lack of differentiation can be explained by the need to begin by reforming
the in-house marketing strategy of each brand. The objective was rationalization, through adrastic reduction of the number of models. For example, at Omega, the number of different
models, which amounted to some 1,600 at the beginning of the 1980s, was slashed to 850 in1985 and to 284 in 1986. In October 1987, management announced a further reduction toabout 100 different models. This reorganization of supply put Omega back in the black in1986 for the first time in many years.36
In 1990, however, Hayek restructured SG’s Management Board to implement brandmanagement on a group scale, characterized by brand differentiation and market segmentation,that is, a strategy requiring stronger coordination between the various brand managers. Thus,
the Management Board, which had been in charge of overseeing the ASUAG-SSIH merger
and the streamlining of the company in the 1980s, was reorganized. Apart from Anton Bally,head of production and Eta’s new director, the eight persons appointed at the Extended GroupManagement Board in 1990 were the brand directors for most of them: Walter von Kaenel(Longines), Hans Kurth (Omega), Peter Petersen (Swatch) and Roland Streule (Rado). There
were also some representatives of high-tech companies (Willi Salathé) and of outside parts
makers (Paul Wyser). Finally, two managers from marketing and distribution were appointed.
The first was Raymond Zeitoun, president of the distribution company SMH France. The
second was a manager who came from marketing and communications, Franco Bosisio,
former brand manager at Procter & Gamble and marketing director at Cartier Italy, before
joining SG (1986). This centralization of power in marketing enabled the adoption of a global
strategy and the control of its implementation on the various markets.37
In the following years, appointments to the Management Board and at the Extended
Management Board confirmed their role as a marketing platform. SG brands must notcompete with each other, but rather target different groups. As far as the implementation of36
37

Le Journal de Genève, 24 October 1987.
Zou and Cavusgil 2002

14

this new strategy was concerned, the takeover of Blancpain proved pivotal.

4.1.2 A decisive step: the takeover of Blancpain (1992)
History and tradition entered SG through Blancpain. This brand, which belonged to SSIH, hadbeen acquired in 1983 for the modest sum of CHF 18,000 by Jean-Claude Biver, former
manager at Audemars-Piguet, and Jacques Piguet, CEO of Frédéric Piguet SA, one of the veryrare independent luxury watch movement makers.38 The strategy adopted by Biver went
against the entire industry: refusing to use quartz movements, he built the image of a brandbased on tradition and technical excellence, the foundations of the brand’s repositioning as a
top-end watchmaker. Quoting the year 1735 as the origin of the enterprise (Blancpain was thename of a family which has apparently been involved in watchmaking since this date), thiscompany declared itself the “world’s oldest watch brand”39 and encountered a quick andgrowing success, selling its watches, often equipped with complications (moon-phase,tourbillion, erotic figures, etc.) as craft products, that is, luxury goods. The firm’s gross sales
were booming, soaring from CHF 8.9 million in 1985 to CHF 56 million in 1991. 40
Nevertheless, they were small in relation to SG’s gross sales (CHF 2.0 billion in 1991). Yet
when Hayek bought Blancpain in 1992, he was interesting in doing more than merely
enlarging market share – he was looking for a new kind of know-how, in marketing. Indeed,
the takeover provided an opportunity to internalize the marketing skills of Biver – appointed
to the Extended Management Board in 1992 and to the Management Board in 1993 – and his
team, then to apply them to the group as a whole. Incidentally, Biver was entrusted with therebranding of Omega, of which he has been Marketing and Communications Manager since1992.414.1.3 The choice of Omega
In the mid-1990s, SG engaged in a policy of differentiation and repositioning of its mainbrands in the luxury segment, in order to boost their complementarity and help the company
compete in various segments. This was particularly the case in the so-called accessible luxury
segment, between the main historical brands of the group, Omega, Longines and Rado. The
objective was to strengthen their own image and to depict them as different andcomplementary products, destined for different customers. Omega was selected as a luxury
consumer good with the aim of competing with Rolex on the world market. It soon became
38

It supplied notably renowned Swiss watch companies, such as Audemars Piguet or Vacheron Constantin. Le
Nouveau Quotidien, 9 July 1992.
39
Annual reports of the SG 1992, p. 13.
40
Journal de Genève, 12 June 1987 and Le Nouveau Quotidien, 9 July 1992.
41
Information kindly communicated by Jean-Claude Biver.

15

the group’s main brand. In this perspective, Longines and Rado had to be repositioned to nolonger compete with Omega.
Longines was repositioned in a less expensive segment and rebranded as a product of
elegance and classicism, which did not clash with other brands in the same price range, Rado(high-tech and modern design) and Union Glashütte (technical tradition and classicism). For
example, in the 1990s Longines refocused on sponsoring activities suited to an image ofclassical elegance (horse riding, gymnastics, ski, tennis, classical music), relinquishing former
fields such as Formula One racing (1992). Moreover, it reinforced its image of a historicalpioneer in watchmaking with the publication in 1992 of two books, one recounting thecorporate history and the other being the editing of a famous report on American watch
companies written in 1876 by Jacques David, technical director of Longines at that time.42
Unlike Blancpain, which emphasized the traditional know-how of the watchmaker’s craft,Longines meshes with the tradition of the manufacture that has played a pioneering role inmodernizing and industrializing watch production, an image better suited to its accessible
luxury position.
As for Rado, it underwent a development very similar to Longines, characterized by thedisinvestment of the brand in favor of Omega. Founded as a watch movement making
company in 1917, this firm launched completed watches with the brand Rado in 1954.43 It
quickly established itself as one of the main Swiss watch brands in the Far East. In 1982, it
posted gross sales of some CHF 200 million for an annual production of about 1 million
watches, 96% of which were sold in the Far East.44 At the time, one of Rado’s features was
the use of high-tech materials (hard metal, ceramic, lanthanum) for some of its models, since
1962 (DiaStar watch). Thus, when SG was created, Rado occupied a strong position amongwatch makers. Its CEO, Paul Lüthi, was even the only brand representative on the Board of
Directors (1984-1989). Despite its restructuring in 1987, with the personal involvement ofThomke, Rado was clearly still one of the group’s main brands. However, SG’s newmarketing strategy made it a global brand specialized in futurist designs. This differentiation
aimed especially at giving Omega a free hand in the top range, especially in Asia. Thus, in
2010, new generations of urbanized Chinese were more familiar with the brand Omega thanwith Rado, unlike their elders.45

4.2 Towards luxury (1995-2010)
The marketing strategy adopted in the early 1990s was pursued and developed in the
42

Henry Bédat 1992 and David 1992.
Pasquier, « Rado », DHS
44
Journal de Genève, 23 March 1982
45
Hanssens 2008, p. 36.
43

16

following years. The main thrusts of this policy were the repositioning towards luxury; thestrengthening of differentiation between the brands; and huge investments in distribution
systems. Thus, while the company’s growth relied on rationalization in the 1980s, it
subsequently came to depends more and more on marketing. The production system was evenreorganized from this perspective – with a shift from movement producer to complete watch
seller.

4.2.1 First line: the repositioning towards luxury
SG’s repositioning strategy dovetailed with the general context of the sea change in the luxury
industry that took place in the 1980s.46 Whereas this sector had previously been characterized
by elitism, discretion and handiwork, it experienced in the 1980s a trend towards
democratization based on brand globalization and the enlargement of customers, accompanied
by a concentration of luxury enterprises within very profitable industrial groups. However,this democratization of luxury led to the stronger distinction between exclusive luxury andaccessible luxury. 47 Exclusive luxury describes high-quality and excessively expensive
products, designed for a small social elite – that is, the traditional acceptation of luxury. As foraccessible luxury, it designates brand products sold like luxury goods but financiallyaccessible to a large clientele.48 This product differentiation aims at different targets andmakes it possible to pursue simultaneously strategies based on exclusivism anddemocratization of luxury.
The watch industry is perfectly suited to this context, with, for example, the entry ofRichemont (1988) and LVMH (1999) into the watch business. SG adopted a repositioning
strategy based on both the firm’s acquisition and rebranding of products. The first objective
was to enlarge its portfolio of exclusive luxury brands, as it only owned Blancpain in thissegment, by purchasing four brands: Léon Hatot (1999), Breguet (1999), Glashütter
Uhrentriebe (2000) and Jaquet-Droz (2000).
The strategy was the same in all four cases. SG snapped up prestigious brands whose main
weaknesses were rooted in their marketing strategies: narrow distribution systems, and a lackof a distinctive design. Accordingly, SG defined specific designs for each brand (jewel-watchof Art Deco inspiration for Léon Hatot; hands and dials reminiscent of some key works of
Abraham-Louis Breguet; modern design inspired by Pierre Jaquet-Droz’s classic models;classicism and grandes complications for Glashütter Original), integrated them into its
46

On the luxury goods industry in general, see Silverstein and Fiske 2004; Nueno and Quelch 1998.
In reference to Allères 1991. She distinguishes three categories of luxury (inaccessible, intermediate,
accessible), followed by common consumer goods. However, in the particular case of the watch industry and ofSG, the category “intermediate luxury” is hard to consider as a specific one, which is why it was not used in thispaper.
48
Truong, McColl and Kitchen 2009.
47

17

worldwide distribution system and turned them into global brands. Moreover, the takeover ofthese four companies led to streamlined production of luxury watches, as the manufacture ofhigh-quality movements was reorganized and centralized within SG in the 2000s.
Finally, the skills acquired in designing and marketing exclusive luxury watches led SG tosign an agreement with Tiffany & Co. in 2007. Since then, it has also produced watches forthe prestigious American jeweler.

4.2.2 Second line: better brand positioning
The involvement in exclusive luxury aimed essentially at promoting accessible luxury brands,
particularly Omega. Of course, some exclusive luxury brands boast ample profit margins,
estimated at 23% for Breguet and at 20% for Blancpain in 2006. However, they amount toonly a small share of gross sales. According to the consulting firm Helvea SA, they accounted
for a mere 12.6% of SG’s watch sales in 2006 (see table 2). Yet they offer strong growthpotential, due to their recent integration into a globally organized group.
The main benefit of these brands is rather indirect: they enhance the image of other SG brands
and facilitate their repositioning. The brands that generate the largest profits are indeed
accessible luxury brands, mainly Omega, which accounted for one-third of watch sales in2006 (33.9%), but also Longines (9.7%) and Rado (9.3%). The weight of these brands
highlights the issue of the democratization of luxury in the watch industry.
As for the mid-range, apart from Tissot, the group’s third brand in terms of sales in 2006, it
represents only a fraction of gross sales: taken together, Balmain, Certina, Hamilton and Midoaccounted for only 3.5%. Nevertheless, SG has not given up on this segment. As there is stilla global market for such products, it pursues its involvement, for example by launching cheap
watches for the American fashion company Calvin Klein in 1997. The same year, it tried once
again to market the Lanco brand on the Chinese market. Even if the Lanco venture ended in
failure, the attempt underscores SG’s interest in the mid-range.

Tab. 2: SG watch brands, 2010
Name

Year ofacquisition

Sales in 2006
(million CHF)

As a % of total
watch sales

Selling priceranges (CHF)

Breguet

1999

305

7.8

>10'000

Blancpain

1992

115

2.9

>10'000

Glashütte Original

2000

60

1.5

>10'000

Jaquet Droz

2000

9

0.2

>10'000

Léon Hatot

1999

5

0.1

>10'000

18

Omega

1983

1’325

33.9

>1'800

Tiffany & Co

2007

-

-

-

Longines

1983

380

9.7

900-3'000

Rado

1983

365

9.3

750-4'000

Union Glashütte

2000

-

-

-

Tissot

1983

395

10.1

300-900

CK Watch

1997

150

3.8

150-1'500

Balmain

1987

Certina

1983

Mido

1983

138

3.5

350-2'000

Hamilton

1983

Swatch

1983

640

16.4

<70

Flik Flak

1987

-

-

-

Endura

1983

-

-

-

Source: estimates of Helvea SA (The Swatch Group, Geneva: Helvea, 2007).
Note: these estimates obviously largely overevaluated Swatch’s sales, in comparison with the data of Swiss
foreign trade statistics (exports of non-metallic watches)

4.2.3 Third line: strengthening of the sale network
The vertical integration of distribution has been a key issue in the luxury watch industry since
the end of the 1990s. The objective was not only to better control distribution and sales of
products, but also to internalize profits from this activity. Thus, in order to strengthen the
exclusive image of luxury goods, distribution became a major issue. As a result, theverticalization of distribution affected first and foremost the group’s luxury brands, throughthe creation of flagship boutiques.
The priority given to the distribution and sale of complete watches resulted in the creation oftens of new subsidiaries, whose number rose from 23 in 1998 to 65 in 2009. Two comments
are in order as far as their functional breakdown is concerned. Firstly, so-called emerging
markets were given special attention. Whereas SG focused on traditional outlets until the endof the 1990s, especially Western Europe, it shifted to new markets after 2000, with thecreation of distribution companies in India (2001), Mexico (2001), Russia (2002), Thailand(2002), Poland (2004), Taiwan (2004), United Arab Emirates (2006) and South Africa (2009).
SG also took stakes in retail companies, especially in Thailand (2002) and in the United ArabEmirates (2008). In this context, China occupies a special position, as it included ten
distribution and sale companies in 2009 as against only two in 1998.
19

Secondly, the creation of retail companies must be underlined, as it became a key thrust of
marketing strategy. This was especially the case for luxury brands, with Les Boutiques
companies opened in many countries (Germany, China, France, UK, Italy, Switzerland, USA).
Since 2000, SG’s main brands have their own flagship boutiques, which are designed to serve
not only as sales outlets but also as showcases and venues for events graced by global stars
and ambassadors. Finally, the strengthening of links with local companies which control wide
retail networks can also be observed, sometimes leading to the creation of joint ventures(China, United Arab Emirates, Thailand). In the United States, SG took over the chain store
Borsack (1999) and signed an agreement with Tourneau to open watch stores in luxury malls(2006).

4.2.4 Fourth line: a production system devoted to marketing
The production system took on the group’s new strategy and reflects an evolution dictated by
the repositioning towards luxury. Its main features are the vertical integration of producers of
external parts (habillage); the end of the supply of movement-blanks and parts to Swiss watch
makers outside SG; and the reorganization of production of quartz movements abroad.
On the whole, the production system reached equilibrium at the end of the 1990s. After 1998,
the proportion of employees abroad was stable (54% in 1998; 51% in 2005; 54% in 2009) andproductivity stagnated at an average of 5,903 pieces by employee in 1999-2004. 49 The
large-scale reorganization of the production system in the 1980s and 1990s was over.
However, despite this apparent stability of the production system, its structure shows rather an
important change, with the vertical integration of watch external parts producers (cases, dials,
hands, straps). This strategy is consistent with the issue of brand repositioning towards luxury.
The internalization of competences and know-how in the field of design became a major
challenge and can be seen in other watch groups.50 Until then, SG relied primarily on
independent suppliers. One after the other, it took over producers of cases Favre & Perret SA(1999), of hands Universo SA (2000), of dials Rubattel & Weyermann SA (2002) and MOM
Le Prélet SA (2006), of indexes for dials Indexor SA (2007), and of oils Moebius & Fils
(2008), all in Switzerland. Abroad, SG acquired the German dial maker Deutsche Zifferblatt
Manufaktur GmbH à Pforzheim (2006). The internal reorganization of the production ofhigh-quality movements and parts must also be underlined here. The movement makerFrederic Piguet SA, bought up in 1992, was merged by its main customer, Blancpain SA,
while Valdar SA was merged by François Golay SA (2010). This dual restructuring made it
possible to strengthen the production capacity of Blancpain with the verticalization of the
manufacture, on the one hand, and to rationalize the production of high-quality parts, on the49
50

As the volume of production is unknown since 2005, it was not possible to measure productivity after 2004.
Donzé 2008, pp. 173-174.

20

other hand. What is more, it reinforced the image of the traditional manufacture producing
in-house all the parts it needs, used to maximum benefit in advertising.
The second feature of the production system since the end of the 1990s has been the decision
to stop supplying movement-blanks and parts to customers outside the group. This change
dovetails with the overall repositioning of the Swiss watch industry towards luxury, which
was accompanied by a steady decline in the volume of watch exports, while their value kept
rising. The number of watches exported averaged 34.9 million items in the 1990s, thendropped in 1998-2000 before stabilizing at a new average of 25.5 million items in 2001-2007.
For SG, this marked a fundamental change: as the main supplier of movements to the wholeindustry, it implied a shrinking of the market. Movement-blanks and parts sold outside thegroup represented 17.1% of gross sales in 2000, 11.9% in 2005 and only 7.6% in 2010.
The repositioning towards luxury made it possible for SG to throw off the yoke of trade inwatch movements, when management decided to stop supplying competitors. The
announcement made in 2002 that SG would no longer sell parts and movement-blanks outside
the group after 2006 led to fierce reactions: it was indeed estimated that at the time, SG
produced 80% of movement-blanks and more than half all the movements produced in
Switzerland. 51 In 2002, the Federal Commission of Concurrence (Comco) opened aninvestigation into the company Eta SA for abuse of a dominant position, forcing it to continue
its deliveries. In December 2002, Eta replied and announced a sharp price rise, especially forhigh-quality movements.52 Finally, an agreement was signed in November 2006 by Comcoand SG, whereby the latter agree to keep selling movement-blanks until 2010.53 Subseqently,
in 2010, SG’s management reaffirmed its desire to pursue its strategy and put an end to suchtrade. SG’s main competitors were no longer Japanese watch makers, but precisely other
Swiss watch companies, whose growth SG clearly has no reason to support. Calibers supplied
to competitors were sold worldwide as luxury products.
Finally, the third feature of the production system after 1995 was the pursuit of the productionof movements in Asia, at least until 2005-2006. Even if data are very fragmented and virtuallynonexistent since 2004, several clues militate in favour of such a hypothesis. Firstly, theproduction volume of watches and movements went from 103.5 million units in 1999 to 127.1
million in 2004, that is, a growth of 22.8% in five years. During this same period, however,the volume of Swiss exports fell steadily from 36.7 million units in 1999 to 30.7 million in
2004. Accordingly, even if we consider all these exports as SG’s products, this still leaves abalance of some 100 million units produced outside Switzerland in 2004. The company
Zhuhai SMH Watchmaking Ltd. alone would have produced around 80-90 million units that51

Le Temps, 16 September 2002.
Le Temp, 20 December 2002.
53
Le Temps, 20 November 2004.
52

21

year. 54 According to Chinese foreign trade statistics, exports of watch movements to
Switzerland amounted to an average of USD 37.9 million in 2000-2004, making Switzerland
the second-largest outlet (28.7%) of the Chinese watch industry for movements, after Hong
Kong (58.8%) but before Japan (7.5%).55 This trade decreased strongly in 2005 (USD 11.3
million) and after (less than USD 2 million per year in 2006-2009), precisely when SG
announced its decision to cut back production in China.
Secondly, SG closed down assembly plants outside Asia. According to the annual reports,
production was stopped in the Virgin Islands (2003) and in Brazil (2005), at a time when
production in Thailand and in China was growing fast. Yet this reflected not a simple transfer
of production to Asia, but rather a real globalization of production systems. America’s
increasingly important role as an outlet for SG in the early 2000s – 7% of volume in 1999;
18% in 2004 – was clearly due to the delivery of quartz movements made in China or in
Thailand.
Thirdly, and lastly, Asia took on growing importance in SG’s gross sales, rising from 28% in1999 to 35% in 2004 and 44% in 2009. Yet this steady increase was undoubtedly not limited
to the trade of luxury watches in China, a phenomenon which was not all that significant in
the first half of the 2000s.
However, SG announced in 2005 the closure of “production facilities”56 in Asia, without
giving any details. Was it Chinese plants of the group, which would explain the sudden dropin Chinese exports of movements to Switzerland since 2005? Owing to SG’s lack ofcommunication concerning its production centers outside Europe, this question cannot beanswered.57 In any case, even if the repositioning towards luxury of the Swiss watch industry
would have led to a drop of parts sourced from Asia, SG’s production centers situated in
China, Thailand and Malaysia are still integrated within the group’s organizational structureand still producing.

4.4 The case of Omega
Omega undoubtedly best embodies the changes experienced by SG since the mid-1990s. The
success of this brand, which accounted for about one-third of all group watch sales in 2006, isindeed emblematic of SG’s new marketing strategy.
In the mid-1990s, SG decided to make Omega, one the oldest and most prestigious Swiss
54

Le Temps, 7 May 2004.
World Trade Atlas, (accessed in February 2011). According to Swiss foreign trade statistics, imports ofmovements from China are virtually nonexistent, amounting to a paltry USD 100,000 per year in 2000-2004.
56
SG annual report, 2005, p. 144.
57
For example, the website of the movement and part maker Eta SA does not mention the existence of
production centers in Asia and only proposes to online customers Swiss Made movements. www.eta.ch (siteaccessed 21 February 2010).
55

22

watch companies,58 its flagship brand and to reposition it in the accessible luxury segmentwith a view to competing with Rolex, the world’s best known watch brand.59 This strategy
was worked out by a new management team led by Blancpain’s director, Jean-Claude Biver,
who became Marketing and Product Director of Omega in 1994. He brought with him several
new managers with whom he implemented a rebranding policy, especially Michele Sofisti and
Aldo Magata.60 Former marketing director of Ferrari, Sofisti entered Omega in 1995 and waspromoted to CEO two years later, before directing the brand Swatch (2000).61 As for Magada,
he entered Omega as Vice-President of the Marketing Division in 1993, after a career in thepharmaceutical and electronics industry and four years as Product Manager at Piaget. He left
Omega in 1997 to pursue a career in various watch companies (Ebel, Gucci, Reuge).62 The
marketing strategy implemented by this team was characterized by the rebranding and therestructuring of the distribution system.

4.4.1 Rebranding strategy
Firstly, the rebranding strategy was founded on the strengthening of Omega’s threefold
legitimacy – technique, history and glamour – on which the new brand image has been based
since then. To start with, Omega reinforced its image of technical excellence. The
chronometry certificates, which attest to watches’ technical quality, show a trend since 1960
that highlights the strategic changes adopted by Omega in this respect during half a century.
Relations with Rolex, which remained attached to a management model founded on the mass
production of high-quality watches, also shed light on the challenge of Omega’s
repositioning.63 Until 1974, Omega was, together with Rolex, the main manufacturer ofchronometers: between 1961 and 1974, their shares amounted to 48.9% for Omega and 38.2%
for Rolex. After 1974, Omega entered a period of crisis, which apparently spared Rolex. The
number of certificates issued nosedived from 190,396 in 1974 to less than 30,000 per year in
1980-1983. After SG was established, the restructuring of the group, and of Omega inparticular, led to a dramatic drop in the registration of chronometers, which averaged a scant
5,657 in 1985-1989. With only 5.7% of all the certificates, Omega relinquished this segment
to its rival Rolex, which enjoyed a virtual monopoly (89.2%). Omega then adopted a new
strategy in the early 1990s aimed at recovering its place in chronometry. Since 1994, Omega
has evinced an upwards trend (108,516 certificates in 1994; 146,144 in 2000; 377,514 in2008), enabling it to regain market share (12.7% in 1994; 14.2% in 2000; 23.6% in 2008).
Omega’s repositioning as the main chronometer maker in Switzerland alongside Rolex was
58

Richon 1998 and Donzé 2008, pp. 49-50 and 136-138.
Interbrand, The Leading Luxury Brands 2008, www.interbrand.com (site accessed 21 February 2011).
60
Information kindly communicated by Jean-Claude Biver.
61
Le Temps, 15 October 2005.
62
Information kindly communicated by Aldo Magada.
63
Pasquier, « Rolex », DHS.
59

23

designed to restore the brand’s technical legitimacy.
This strategy was reinforced by the relaunching of a tourbillion model (1994) and above allby the use of a new kind of escapement, called “coaxial” (1997), followed by the launching ofa new movement equipped with this escapement (2007). This purely marketing event marks anoteworthy break, insofar as the rationalization adopted in the 1980s aimed precisely atabandoning the in-house development of movements by each brand and at adopting
standardization. However, the repositioning of some brands towards accessible luxury madethis change a necessity. Even if the consumer has trouble understanding the working andusefulness of such an innovation, it enables Omega to affirm its own technical excellence.
Secondly, Omega reinforced its historical legitimacy, its communication strategy aimed atemphasizing the long tradition of its innovative nature and technical excellence. The 1998
commemoration of the 150th jubilee of Omega’s founding provided an opportunity tocelebrate the firm’s historical roots, with for example the publication of a nearly 500-page
corporate history – Omega Saga – underlining notably the development of sports timing, theprizes won in chronometry competitions and the involvement in the journey to the Moon, as
many events combining tradition and excellence.64 However, the event which constitutes areal break in the historical discourse of the company was undoubtedly the organization of theauction Omegamania by Antiquorum in Geneva in 2007.65 In 1989, this auction company
specialized in horology started organizing thematic auctions related to prestigious brands andwatchmakers (Patek Philippe, 1989 and 1999; Breguet, 1991; Rolex, 1992; Vacheron
Constantin, 1994 and 2005; Cartier, 1996; etc.), 66 which significantly boosted brandrecognition. 67 The thematic auction devoted to Omega therefore helped to strengthen
recognition of its historical value and technical excellence. Omega’s historical legitimacy was
also backed by the establishment of special sale outlets, for example the Omega Vintage
boutique, opened at Burlington Arcade, London, a store which sold only old models (2008).
Finally, Omega’s repositioning was based on glamour legitimacy. Whereas efforts to advertiseand communicate this brand relied primarily on objects, that is, watches themselves, until the
1990s, emphasizing their technical and esthetical qualities, show business stars made anoteworthy arrival when American supermodel Cindy Crawford was engaged as anambassador (1995). This change was not peculiar to Omega but could be seen throughout theluxury goods industry, where the status of Hollywood stars shifted from customer to emblemof the brands. Since then, Omega has hired various sport, fashion and movie stars asambassadors, the best symbol of the globalization of luxury being obviously James Bond,64

Richon 1998.
Omegamania 2007.
66
http://beta.antiquorum.com/home/ (site accessed 28 July 2010).
67
Watch Around, No. 4 (Spring 2008), p. 32.
65

24

who also became an ambassador in 1995.68

4.4.2 Reform of the distribution system
The second thrust of Omega’s new marketing strategy was the reform of the distribution
system, with a view to improving the visibility of the brand rather than the density of the sales
network. The rise towards luxury and the transformation of a non-specialized brand into anaccessible luxury good must go together with a distribution system that is consistent with thisnew image. Thus, as Helvea noted in a report on SG in 2006, Omega had a huge sales
network in the early 2000s, but it was radically restructured in the middle of the decade: thenumber of sale outlets was slashed from 4,800 to 3,000, with Germany, UK and Japan
experiencing a reduction of 20-30% of the number of outlets.69 The sites that were dropped
were usually retailers who did not offer the Omega brand sufficient visibility. Together withthis reduction, the opening of Omega flagship boutiques was in full sway. Omega was indeed
one of the main SG brands to benefit from the system of flagship boutiques. The first was
opened at Zurich in 2000, in collaboration with an independent retailer with whom a joint
venture was created. In 2010, there were 178 Omega boutiques in the world, of which 71 incontinental China, 10 in Hong Kong and 3 in Macao.70 They play a key role in the marketingof Omega’s products.

4.5 A new Eldorado: China
As the example of Omega shows, China has been the driving force of SG’s growth since themid-2000s. Even though SG provides limited data on sales by region, Asia’s share of grosssales has jumped from an average of 28.3% in 1995-2000 to 37% in 2005 and 44% in 2009.
Of course, these data include other sectors than only complete watches – notably the sale ofmovements and electronic parts made in Asia. However, the growing dependence on Asia
occurred parallel to the repositioning strategy towards luxury and the production of complete
watches. Moreover, China’s position has become stronger and stronger in terms of SG’s grosssales. Since 2008, SG has published sales statistics for the so-called “Greater China” market,
including continental China, Hong Kong and Taiwan. Business in this area amounted to 23%
of SG’s gross sales in 2008 and to 28% in 2009.

68

On ambassadors, see McCracken 1989
The Swatch Group, Geneva: Helvea, 2007, pp. 15-16.
70
www.omegawatches.com (site accessed 7 July 2010).
69

25

Fig. 2: Swiss watch exports to China, 2001-2010
8.0

1,200.0
Million CHF%

7.0

1,000.0

6.0
800.0

5.0
4.0

600.0

3.0

400.0

2.0
200.0

1.0
0.0

0.0
2001

2002

2003

2004

2005

2006

Value, million CHF

2007

2008

2009

2010

Chinese market (%)

Source: FHS
Note: these data do not include Hong Kong, where a large share of watch imports are re-exported to unknown
destinations. Hong Kong accounts for an average of 15.2% of the value of Swiss watch exports between 2001
and 2010, and has experienced very high growth since 2009 (19.7% in 2010).

At present, dependency on China is a general tendency for the Swiss watch industry as awhole. After China joined the World Trade Organization in 2001, Swiss exports to the country
boomed, rising from CHF 36 million in 2001 to a peak of 826 million in 2008, then fallingslightly due to the world financial crisis (CHF 700 million in 2009) before increasing again to
set a new record in 2010 (CHF 1,099 million). In terms of market share, business with China
has also recorded steady growth, increasing from less than 1% of Swiss watch exports in 2001
and 2002 to 6.8% in 2010. If we add Hong Kong and Taiwan, Chinese outlets accounted for
22.4% in 2008 and 28.4% in 2010, that is, similar shares to SG.
Yet SG managed to strengthen its position in China during the world crisis: indeed, its sales inGreater China rose from CHF 1.3 billion in 2008 to 1.4 billion in 2009. If this sum includes
only watches exported from Switzerland, this would mean that SH controlled 34% of Swiss
watch exports to this region in 2008 and 46% in 2009. These proportions are obviously
exaggerated due to the fact that SG sales in Greater China probably include products other26

than watches (electronic parts) and some watch movements and parts produced out of
Switzerland. However, it is not exaggerated to talk of SG’s growing domination of the watch
business in China.
Above all, the key thrust of the marketing strategy was collaboration with one of the biggest
Chinese watch distributors, Xinyu Hengdeli Holdings Ltd., in which SG took a strategic stakeof 6% of the capital in 2005, raised to 8% in 2007 and 9% in 2009.71 In addition, since 2006,
one of the eight members of the Board of Directors, Shi Zhongyang, has been a legal counsel
for SG, whose employ he entered in 2000. 72 This enables SG to access some internal
information and to actively participate in the management of the firm, which is not the casewith the rival luxury group LVMH, which also holds an interest in Hengdeli (7% in 2009). At
its origin, Beijing Hengdeli Timepieces Shop was a State-owned enterprise founded in 1957
and active in the distribution and the sale of watches and clocks in China. Privatized in thelate 1990s, it was acquired in 1997 by the Zhang family, who had been involved in the watch
business in continental China and in Hong Kong since the early 1980s.73
The distribution network of this former State-owned enterprise, combined with the marketingknow-how of the Zhang family, made Hengdeli Group, listed on the Hong Kong Stock
Exchange, the leading watch distributor in China. It sells not only SG and LVMH products,
but also a wide range of Swiss and other brands. It also holds several Swiss brands (Nivada,
Olma and Numa Jeannin). It has become a force to be reckoned with when it comes toorganizing the expansion of sales on the Chinese market.

Tab. 3: Hendgeli Group, 2004-2009
2004

2005

2006

2007

2008

2009

Gross sales, total

1518

1396

2405

4578

5516

5899

Retail business

530

637

1363

3048

3742

4435

Wholesale business

974

745

1025

1439

1631

1329

Other

14

15

17

90

143

135

Retail as a %

34.9

45.6

56.7

66.6

67.8

75.2

Wholesale as a %

64.2

53.4

42.6

31.4

29.6

22.5

Other as a %

0.9

1.1

0.7

2.0

2.6

2.3

Source: Annual reports

In the second half of the 2000s, the Hengdeli Group grew at a fast clip, thanks to its
71

According to the SG annual report.
www.hengdeliholdings.com, site accessed 16 June 2010.
73
Report of Guoco Capital Ltd., www.guococapital.com (site accessed 20 January 2011).
72

27

involvement in retailing and the geographical extension of its sales network. The fact that its
gross sales shot up from 1.5 billion RMB in 2004 to 5.9 billion in 2009 was indeed due to thestrengthening of retailing activities, which accounted for 34.9% of gross sales in 2004 and75.2% in 2009. In particular, it has the biggest luxury watch chain store in China, and has
extended its network by acquiring other companies. Consequently, the number of its own
stores soared from 65 in 2005 to 270 in 2010. It also works with more than 300 wholesalersthroughout China,74 and in 2005 entered into a strategic alliance with three companies withpowerful distribution networks (Shanghai San Lian Group Ltd; Shanghai Oriental
Commercial Building Ltd; Shenzhen Hengjili World Branch Watches Center Tdd.). Together,
they reportedly control some 48% of the Chinese market.75 Moreover, Hengdeli extended its
geographical network. In 2005, nearly half of retail sales were limited to Beijing (18.5%),
Zhejiang (18.3%) and Shanghai (10.3%). 76 The following year, the company began
expanding outside continental China, with for example the acquisition of Elegant
International Holdings Ltd., which had four boutiques in Hong Kong. By 2009, continental
China amounted to only 61.6% of gross sales.
Accordingly, the cooperation with Hengdeli appears to have been one of the pillars of SG’s
expansion strategy in China since 2005. Hengdeli’s involvement in retailing led notably to thecreation of flagship boutiques for various Swiss brands, including those held by SG. In
particular, it cofounded two major joint ventures, one for the exclusive distribution of Omega
and Rado watches (2003) and the other for the management of flagship boutiques – especially
Omega and Swatch stores (2007).
The establishment and large-scale development of flagship boutiques is another characteristicof the expansion on the Chinese market (see table 4). The fact that China was a virgin market
obviously explains the weight of this strategy, as there was no need to negotiate with former
distributors and independent retailers, on the one hand, and because nobody controlled thewatch business at the national scale yet, on the other hand. Moreover, the Chinese customer
had to be “educated” in terms of luxury and watch culture, and flagship boutiques played avery important role in this respect. In 2010, there were a great many flagship boutiques in
China, especially for Omega, which had 84 of its 178 boutiques in China (47.2%) and Swatch,which had 66 (more than 10%). The Longines and Blancpain boutiques are also strongly
represented on this market. This marked presence in China peaked in May 2010, with the
opening of Swatch Art Peace Hotel, in Shanghai.

74

Hengdeli Holdings, Annual Report, 2009, p. 3 (www.hengdeliholdings.com, site accessed 16 June 2010).
Hengdeli Holdings, Annual Report, 2005, p. 12.
76
Hengdeli Holdings, Annual Report, 2005, p. 12.
75

28

Tab. 4: SG’s flagship boutiques, July 2010
Brand

Total

China

As a %(Hong Kong included)
Breguet

19

1

5.3

Blancpain

21

5

23.8

Glashütte Original (Watch Atelier)

5

3

60.0

Swatch> 600

66

10-11%

Omega

178

84

47.2

Longines

20

11

55.0

Jaquet-Droz

6

2

33.3

Tissot

79

n.c.

?

Boutiques Tourbillon

17

2

11.8

Source: Internet website of each brand (sites accessed 7 July 2010).
Note: n.c. = not communicated

4.6 Financial impact of the new marketing strategy
Whereas the restructuring of 1985-1995 not only made the company more profitable but
weaned it off outside capital, which were the consequences of the new marketing strategy interms of finance and governance?
The tremendous growth in gross sales, which skyrocketed from CHF 2.6 billion in 1995 to 4.5
billion in 2005 and to 6.5 billion in 2010, was accompanied by fast-growing profits. Indeed,net profit after taxes and depreciation came to CHF 273 million in 1995 and to 763 million in
2009, after having peaked at 1 billion in 2007. Measured as a relative number, profits
averaged 11.2% of gross sales in 1995-1999, 13.3% in 2000-2004 and 16.4% in 2005-2009.
Thus, SG’s repositioning into luxury had a direct positive effect on gross sales growth andprofit margins. Profits were generously distributed: the dividend rate shot up from 17% in
1995 to 55% in 2000 and 178% in 2008. Yet reserves also grew steadily, reaching CHF 2.0
billion in 1995 and 5.9 billion in 2009. Shareholders’ equity remained stable, at an average of
72.0% in 1995-2009, that is, the level reached in 1995.
The company’s development and growing profitability also had an essential impact on
governance, whose main feature was the affirmation of Hayek family. When the bankers
resigned from the Board of Directors, most of them were not remplaced by new appointees,
and the number of Board members fell from 9 persons in 1990 to 6 in 1998. Three newmembers, all appointed in 1995, were Nayla Hayek, daughter of the president, Professor
Klaus Schwab, director of the World Economic Forum, and Ernst Tanner, president of the29chocolate company Lindt & Sprüngli SA and a member of the Board of Directors of theCredit Suisse Group. The next appointees (Johan-Niklaus Schneider-Ammann in 1999;
Claude Nicollier in 2005; Jean-Pierre Roth in 2010) also had only very limited influence on
corporate management. The appointment of Nicollier, who is not a shareholder, could even beinterpreted as a marketing ploy: posing with his astronaut suit in annual reports and on thecompany’s website, he recalls Omega’s involvement in the Apollo space program and the trip
to the Moon, thereby helping to strengthen the brand’s technical and historical legitimacy.
By allowing him to move away from bankers, the financial empowerment strategy enabled
Nicolas Hayek and his family members to reinforce their grip, thanks to the constantenlargement of their shares. Indeed, the percentage of voting rights he personally controlledwith his shares rose from 28.5% in 1998 to 36.4% in 2005 and to 40.2% in 2009. Moreover,he actively prepared the arrival of the second generation in the business. Thus, his daughter
Nayla was appointed to the Board of Directors in 1995, whereas his son Georges Nicolas,
known as Nick, employed in the marketing department of Swatch SA, an SG company incharge of marketing Swatch watches, became a member of the enlarged direction (1994) andthen of the direction (1995) of the group, and was appointed CEO of Swatch SA shortly
thereafter (1998). In 2003, Nicolas G. Hayek retired from his position of CEO of SG, which
he passed on to his son Nick, but remained active as President of the Board of Directors. In
addition, his grandson Mark A. Hayek was appointed Marketing Manager (2001), then CEO
of Blancpain SA (2002), a dazzling promotion which is obviously not unrelated to Biver’s
departure from SG (2003). Mark A. Hayek was also appointed to the enlarged direction(2002), then to the direction (2005) of the group. As a result, when Nicolas G. Hayek passed
away suddenly in 2010, there was no break in corporate governance and management: Nayla
became President of the Board of Directors and Nick remained CEO, while Mark has tended
to strengthen his involvement in exclusive luxury brands.

Conclusion
In the space of some fifteen years, between 1985 and 2000, SG experienced a sea change
which made it shift from a very disparate conglomerate of weakly integrated Swiss watch
companies to a centralized, rationalized and globalized company. Whereas its Japanese rival –Seiko, Citizen, Casio – rushed headlong in the 1990s and 2000s into technological innovation
as a possible driving force to enter a new growth phase, SG managed to establish itself as theworld’s leading watch company without showing technological innovation. This
“non-technological innovation”, as Jeannerat and Crevoisier called it, is basically rooted in
two complementary policies: the rationalization of production system, and the implementationof a new marketing strategy.
30

The first phase of the rationalization of production systems lasted from SG’s foundation in1983 until the end of the 1990s. Its main features were the centralization of movement andparts production within the company Eta SA, the vertical integration of parts producers and,above all, the globalization of production system with the opening of subsidiaries in Asia
(Thailand, Malaysia, China). The rationalization boosted productivity and strengthened ETA’s
historical function of a producer and distributor of movements for the entire Swiss watch
industry.
Together with the finalization of this production rationalization process, a new marketingstrategy was adopted during the first half of the 1990s, following the takeover of Blancpain(1992). Characterized by a deep repositioning of brands, this strategy aimed at making SG a
producer, and above all a trader, of complete watches. Its major features were the acquisitionof several exclusive luxury brands in 1999-2000 (Breguet, Glashütter Original, Hatot, JaquetDroz) and the choice of Omega as the main brand to conquer the global market of accessible
luxury, traditionally a very profitable segment, and to compete with Rolex. This newmarketing strategy had a key influence on SG’s entire organizational structure. Corporate
governance tended towards strong concentration and centralization of power. Since 1990, theExtended Management Board has functioned as a marketing platform for coordinating thegroup’s global strategy between brands. Incidentally, it is interesting to underline here thestrengthening of the firm’s family nature, with the growing involvement of the Hayek familyon the operational side of business since 2000. In becoming a global leader, SG became afamily firm.

References
1. Published sources
ASUAG, Annual reports, 1970-1979.
Convention patronale, Recensement 2007, La Chaux-de-Fonds : CP, 2008.
Hayek Nicolas G., Au-delà de la saga Swatch : entretiens d’un authentique entrepreneur avec
Friedemann Bartu, Paris : Albin Michel, 2006.
Hengdeli Holdings, Annual reports, 2005-2009.
Gazette de Lausanne, various issues.
Interbrand, The Leading Luxury Brands 2008, www.interbrand.com (site accessed 21
February 2011).
JETRO, Beikoku no tokei shijo chosa, Tokyo: JETRO, 1966.
31

JETRO, Suisu no kinzokusei tokei bando shijo chosa, Osaka : JETRO, 1982.
Journal de Genève, various issues.
Kikai tokei nenpo, Tokyo : MITI, various years.
Nihon gaikoku boeki tokei, Tokyo : Ministry of Finance, various years.
Le Nouveau Quotidien, various issues.
Ordonnance réglant l’utilisation du nom « Suisse » pour les montres, 23 décembre 1971.
SG, Annual reports, 1983-2010.
SSIH, Annual reports, 1970-1979.
Statistique annuelle du commerce extérieur de la Suisse, Berne : Direction générale desdouanes, various years.
Le Temps, various issues.
World Trade Atlas, www.gtis.com

2. Articles and books
Allères Danielle, « Spécificités et stratégies marketing des différents univers du luxe », Revuefrançaise du marketing, no. 132-133, 1991, pp. 70-95.
Blanc Jean-François, Suisse-Hong Kong : le défi horloger : innovation technologique etdivision internationale du travail, Lausanne : Ed. d'en bas, 1988.
Carrera Roland, Swatchissimo, 1981-1991 : l’extraordinaire aventure Swatch, Genève :Antiquorum, 1991.
Crevoisier Olivier, Industrie et région : les milieux innovateurs de l’Arc jurassien, Neuchâtel :EDES, 1993.
David Jacques, Rapport à la Société intercantonale des industries du Jura sur la fabrication
de l'horlogerie aux Etats-Unis, Saint-Imier : Compagnie des montres Longines Francillon,
1992 (réédition).
Donzé Pierre-Yves, Histoire de l’industrie horlogère suisse de Jacques David à Nicolas
Hayek (1850–2000), Neuchâtel : Alphil, 2008.
Donzé Pierre-Yves, « Le Japon, un concurrent dépassé ? Evolution récente de l’industriehorlogère nippone (1990-2010) », in Bulletin de la Société suisse de chronométrie, vol. 65,
décembre 2010, pp. 49-54.
Donzé Pierre-Yves, “The hybrid production system and the birth of the Japanese specialized32

industry: Watch production at Hattori & Co. (1900-1960)”, in Enterprise & Society, vol. 12
no.2, 2011a (forthcoming).
Donzé Pierre-Yves, “Global competition and technological innovation: A new interpretationof the watch crisis, 1970s–1980s”, Thomas David, Jon Mathieu, Janick Marina
Schaufelbuehl and Tobias Straumann (eds.), Crises – Causes, interprétations etconsequences, Zurich: Chronos, forthcoming in 2011b.
Fallet Estelle, Tissot, 150 ans d’histoire, Le Locle : Tissot SA, 2003.
Fallet Estelle, « Nicolas Hayek », Dictionnaire historique de la Suisse (DHS), www.dhs.ch.
Fragomichelakis Michel, Culture technique et développement régional : les savoir-faire dansl'Arc jurassien, Neuchâtel : EDES, 1994.
Glasmeier Ami K., Manufacturing Time: Global Competition in the Watch Industry,
1795-2000, New York: Guilford, 2000.
Hanssens Nicolas, Which international marketing for luxury goods? The case of the Swiss
watch industry in China, University of Neuchâtel: MA thesis, 2008.
Hara Yoichiro, “Kokusai kyoso to kodoka no inobeshon: waga kuni seizogyo no kyoso kiban”,
Nagaoka daigaku kiyo, no. 2, 2003, pp. 1-20.
Henry Bédat Jacqueline, Une région, une passion: l'horlogerie : une entreprise: Longines,
Saint-Imier : Compagnie des Montres Longines SA, 1992.
Jeanneret Hugues and Crevoisier Olivier, “Non-technological innovation and multi-local
territorial knowledge dynamics in the Swiss watch industry”, Int. J. Innovation andRegional Development, Vol. 3, No. 1, 2011, pp. 26-44.
Kimura Toshio, Seiko Epuson jigyo takakuka no kigen, Hosei University, Research Institutefor Innovation Management, Working paper series, no. 68, 2009.
Landes David S., « Swatch! Ou l’horlogerie suisse dans le contexte mondial », in Paul
Bairoch and Martin Körner (eds), La Suisse dans l’économie mondiale, Genève : Droz,
1990, pp. 227-236.
Landes David S., Revolution in Time: Clocks and the Making of the Modern World,
Cambridge: Harvard University Press, 2000 (1st ed. 1983).
McCracken Grant, “Who Is the Celebrity Endorser? Cultural Foundations of the Endorsement
Process”, Journal of Consumer Research, vol. 16 no. 3, 1989, pp. 310-321.
Nakamoto Daisuke, “Seihin no mojuruka no shinten to gohatsu kigyo no keiei senryaku: seikogurupu wo jirei toshite”, Yokohama kokusai shakai kagaku kenkyu, vol. 8, no. 4, 2003, pp.
147-164.
33

Nueno Jose Luis and Quelch John A., “The Mass Marketing of Luxury”, Business Horizons,November- December 1998, pp. 61-68.
Omegamania : propriétés de divers amateurs qui seront vendues aux enchères au Mandarin
Oriental Hotel du Rhône, samedi 14 et dimanche 15 avril 2007, Genève : Antiquorum,
2007.
Oxtoby F.-E., “The Role of Political Factors in the Virgin Islands Watch Industry”, in The
Geographical Review, Vol. 60 (4), 1970, pp. 463-474.
Pasquier Hélène, La « recherche et développement » en horlogerie : acteurs, stratégies etchoix technologiques dans l’arc jurassien suisse (1900-1970), Neuchâtel : Alphil, 2008a.
Pasquier Hélène, « Une industrie remodelée (1975-2000) », in Laurent Tissot et Jacques
Bujard (ed.), Le pays de Neuchâtel et son patrimoine horloger, Neuchâtel : Edition de laChatière, 2008b, pp. 307-315.
Pasquier Hélène, « Rado », DHS.
Pasquier Hélène, « Rolex », DHS.
Pasquier Hélène, « Swatch Group », in DHS.
Richon Marco, Omega Saga, Bienne : Omega, 1998.
Sakakibara Kyonori and Matsumoto Yoichi, togogata kigyo no jirenma: Nihon tokei sangyo
no seiko to satetsu, New Energy and Industrial Technology Development Organization(NEDO), Discussion Paper Series 05-14, 2005.
Shintaku Junjiro, Nihon kigyo no kyoso senryaku: seijuku sangyo no gijutsu tenkan to kigyo
kodo, Tokyo: Yuhikaku, 1994.
Silverstein Michael and Fiske Neil, Trading Up: Why Consumers Want New Luxury Goods
and How Companies create them, New York: Portfolio, 2004.
The Swatch Group, Geneva: Helvea, 2007.
Truong Yann, McColl Rod and Kitchen Philip J., “New luxury brand positioning and theemergence of Masstige brands”, Brand Management, vol. 16 no. 5-6, 2009, pp. 375-382.
Vogt German, « Eta », DHS.
Wegelin Jürg, Mister Swatch: Nicolas Hayek and the secret of his success, London: Free
Association Books, 2010.
Zou, S. and Cavusgil, S.T. (2002), “The GMS: a broad conceptualization of global marketingstrategy and its effect on firm performance”, Journal of Marketing, Vol.66, No4, pp.40-56.

34