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When the study was analyzed, the company was ahead and made profits from improved sales. The problem that the company faced was the loss of market share to Quartz watches from Japan. This paper will assess the possible alternatives to develop a strategy to strengthen the brand. First, people were interested in the brand because it combined innovation, technology, and pricing. The growth that was experienced between 1990 and 1993 as a result of entering a new market. There were only low-quality watches. The action that the company undertook was to come up with products that were trendy and innovative, which brought people satisfaction. This paper will look at the alternatives that could have been taken by the company to counter the problem.
One alternative that the company could opt for was to look for new markets for the products. From the case, it is clear the company did not venture into other regions like Africa, Asia, Australia, and some parts of the US. An advantage of this is that there would have been an increase in sales of the watches and new clients attracted. Another benefit is that there would have been little or no change in prices. The next benefit is that there would have been little/no increase in the cost of production due to no changes in quality. However, during the first months, a disadvantage would be a need to open offices in the new regions which would result in additional overhead costs in production (Shenkar, & Lou, 2004). Another disadvantage would be a need to learn about the new markets.
An alternative would be to look for partnerships with the new companies in the market. One way would be to seek for partnership with Quartz so that it could share the technology used. Although this would be a difficult task to undertake, one approach to overcome would be to venture in to Japan and learn the techniques used. If this plan succeeded, the organization would manage to retain its clients (Dicken, 2003). A benefit from that would be that the organization would be able to produce the same product without changing the cost of production. The company would still have good profits with the same quality of production though no innovation would be a disadvantage there.
Another alternative would be to reduce the cost of production. This way the group would expand the profit margin and earn more. The company should have reduced the workforce to low the cost of salaries and wages. Another way of doing that would be to automate some processes. Thus Swatch would just pay for the technology once instead of paying for wages and salaries monthly. An advantage would be a reduced cost of production and widened profit margin (Dicken, 2003).
To counter this competition, Swatch should have come up with an innovative move in price, advertising, and marketing. Another approach to be taken would be to diversify into production. This would mean that Swatch watches would appeal to the potential clients due to new features integrated. Added to the innovative marketing and advertising, Swatch would gain profits. If Swatch delved into telecommunications or the automotive industry, it would be a good move, as the Swatch concept would enlarge. Thus if Swatchmobile appeared, the company would thrive. An advantage of this move would be new clients attracted to the company. Moreover, the loyalty of the already existing customers would be won and assured. This is because the company would have innovations in its products. Another advantage is that there would be new products to offer. The loyal customers would increase their spending resulting in increased cash flow from the new products offered. However, a disadvantage of this move is that new products would mean additional expenses and increased cost of production. New offices and additional human resource would be added as well. Another disadvantage would include that there would be new industries, competitors and expanded portfolio to manage (Bouquet, & Morrison, 1999). The third disadvantage would be that the division of watchmaking would not get the required attention as it would be divided between the three divisions.
References
Bouquet, C., & Morrison, A. (1999). Swatch and the Global Watch Industry (Case Study 9A99M023). Ontario, Canada: The University of Western Ontario.
Dicken, P. (2003). Global Shift: Reshaping the Global Economic Map in the 21st Century (4th ed.). New York: The Guilford Press.
Shenkar, O., & Lou, Y. (2004). International Business. Hoboken, NJ: John Wiley & Sons, Inc.
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