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Companies must adapt to markets that are rapidly changing under the effects of globalization. In the late twentieth century, firms fully embraced the value of innovations as a source of competitive advantage. However, a path toward a successful product launch is unique for each company and its desired markets. ETA’s Swatch is a European watch brand that, under a new managing director’s leadership, reimagined the approach to accessible and appealing products at that time. This paper will review ETA’s business-level strategy and how the actions of Ernst Thomke turned this company into a globally renowned watchmaker.
Gaining a competitive advantage is a challenging task for companies that cannot predict market fluctuations and their customers’ preferences. The article depicts Thomke as a forward-looking managing director who pushed the company toward innovations that won the company a spot in the global market for watches. He began ETA’s transformation by setting goals yet to be attained by any other company in the world and then pushed the border of possibilities further. Anticipating other firms’ actions allows one to avoid staying behind an industry’s leaders (Stein & Stein, 2018). Thomke understood the steps that his firm needed to take to create a profitable product. He directed ETA’s engineers toward that vision through smart goal-setting that promoted innovation and creativity (Thomson & Baden-Fuller, 2010). As Thomke pursued a massive reduction of manufacturing costs, the first part of ETA’s strategy was focused on low-cost mass production.
Understanding the genuine value that a product holds for its customers is the core of a firm’s proper competitive placement. Thomke realized that people wear their watches for reasons similar to fashion trends: to stand out and to show others their unique style (Thomson & Baden-Fuller, 2010). Product line extensions became one of the primary ways to enter a new market. Swatch utilized this strategy as a means to engage customers from the United States, Asia, and Europe in its seasonal design swap that followed the path of the latest fashion trends (Thomson & Baden-Fuller, 2010). Starting in the U.S., Swatch has launched its marketing campaigns and gradually expanded them to other markets. The initial product tests are paramount, as they help companies outline the initial market risk and adapt their manufacturing lines to fit into the expected sales count (Stein & Stein, 2018). The second part of ETA’s strategy in revolutionizing its Swatch brand was to differentiate products to fit into a new trend for highly customized looks.
In conclusion, ETA was able to create a sustainable path for economic growth through Swatch products that captivated the attention of millions of people across the globe. Thomke’s decisions show a genuine understanding of the core concepts on which a firm’s competitive advantage is built. ETA’s business-level strategy focused on low-cost products that were able to remain in style for generations through continuously updated designs. The success of this firm lies in Thomke’s future-oriented view on wristwatches that are both stylish and affordable.
References
Stein, A. D., & Stein, L. (2018). The value frontier: An introduction to competitive business strategies. Kendall Hunt Publishing Company. Thomson, N., & Baden-Fuller, C. (2010). Basic strategy in context: European text and cases. John Wiley & Sons.
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