Differentiation through Innovation: A Timeless Case Study of Swatch

1. DIFFERENTIATION THROUGH
INNOVATION:
A TIMELESS CASE STUDY OF SWATCH
Lyla Lin
ylin013@e.ntu.edu.sg

2. Outline
• Overview of company
• Vision, mission & culture of Swatch
• Drivers of innovation at Swatch
• Innovation management at Swatch
• Structural capital
• Human capital
• Relational capital
• Recap & Road ahead

3. Swatch vs. The Swatch Group
• Swatch
• The Swatch Group - the world's largest watchmaker

4. Overview of Swatch
• Born in the early 80’s and proved to be a radical innovation
of meaning that created market success – due to the
realization that people cared more about self-expression
than technical precision (Seiko and Casio)
• Reputed for diversified offerings
• 5 families under the brand
Originals Irony Skin Beat Bijoux

5. Vision, mission and culture of Swatch
• To become the creative & innovative
Mission leading brand in global market and
establish strong brand image in the
mind of consumers
• To add beauty, Vision
sensuality, emotionality
to high-tech watches
and to make YOU happy
with them Culture
• Emotionalism & realism
• Humanism & combativity
in the face of formidable
competitors

6. Drivers of innovation at Swatch
• Drivers from inside
• Self positioning
• Brand
• Product
• Vision, mission and culture
• Drivers from outside
• Nature of fashion industry
• Short lifecycles
• High volatility
• Attention to details
• Competition
• Customers

7. Innovation management at Swatch
Structural
capital
Innovation
management
Relational Human
capital capital

8. Innovation in structural capital management
Organizational capital
- Brand image: stylish, trendy, joyful, cool, fun, provocative
- Team based, non-bureaucratic hierarchy
Process capital
- Fundamental change to watch design
- Marketing strategies (product + price + place + promotion)
Innovation capital
- Patents of watches, watch cases, support for holding
watches, display stands, sales counters, etc.
Swatch production:
http://www.youtube.com/watch?
v=ij0N1E_5dwk

9. Innovation in human capital management
• Highly integrated with business strategy
• Training and development
• Watchmaking schools

10. Innovation in relational capital management
• No/ little market research for new product launch
• Social media efforts
• Different targets with different collections
• Sponsorship for sportspeople and sports events
• Swatches smelling of mint, strawberry and banana, etc.
• Swatch club – build and strength the relationships

11. Recap
• Permanent innovation: new products
• Other innovations:
• Culture
• Org structure
• Marketing
• Communication

12. Road ahead
• Brand repositioning + campaigns
• To attract a larger variety of consumers
• Recycling initiatives like UNIQLO’s
• To benefit the business in terms of revenue (cost down + profit up),
reputation, and culture
• Last but not least, inspire and WOW consumers

13. References
• http://en.wikipedia.org/wiki/Swatch
• http://www.venturenavigator.co.uk/content/104
• http://www.swatch.com/zz_en/home.html
• http://www.scribd.com/doc/80909723/Case-Study-Swatch
• http://www.venturenavigator.co.uk/content/104
• http://timkastelle.org/blog/2011/12/avoid-fatal-business-
models/
• http://www.management-issues.com/2010/1/18/opinion/
management-lessons-from--swatch.asp

14. • Any questions?