Coma Le Dijo A La Hoya

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REV: FEBRUARY 10, 2012

ROHIT DESHPANDÉ KAROL MISZTAL DANIELA BEYERSDORFER

The Swatch Group
Most people of my age would probably never have bought an Omega. Their father would wear one, and their son would own one. We have therefore lost part of this generation, definitely. — Stephen Urquhart, President, Omega In 2006, when I told the press before the Olympic Games in Turinthat the objective of Omega is to overtake Rolex, its natural competitor, people were smiling and saying that Rolex is in a different league, up there. But this positioned Omega, inside and outside, totally. — Nick Hayek, CEO, Swatch Group On the afternoon of March 15, 2011, the only day closed for visitors during Baselworld, the major global watch and jewelry trade show held in Basel,Switzerland, Nick Hayek, the CEO of the leading Swiss watch manufacturer Swatch Group, completed a series of informal meetings with his watchmaking counterparts. After all that had been said behind the glamorously showcased watch collections, Hayek lit a cigar to reflect on the discussions’ impact on his watchmaking empire. The late Nicolas G. Hayek (hereafter Hayek Sr.), the charismatic founder of theSwatch Group (and Nick Hayek’s father) who passed away nine months ago, would have applauded the group’s exceptional 2010 results which encouraged the company to set a sales goal of 10 billion Swiss Francs (CHF) within the next four to five years (see Exhibit 1 for the group’s key financials).1 Given how well the Swatch Group had weathered the recent difficult years for the industry, Hayek was notsurprised by the 2010 numbers. He attributed this success partly to the group’s vast range of 19 watch brands serving all consumer segments, and to its solid Swiss industrial base which allowed the group to feed the latest technology into its timepieces. The company’s results had been largely driven by Omega, the group’s revived flagship brand that was confronting Rolex to become the world’s leadingluxury watch. Believing in the brand’s growth potential, Hayek worked closely with Stephen Urquhart, Omega’s president, to decide on key marketing issues that would set the way forward for surpassing Rolex (see Exhibit 2 for the two brands’ sales estimates). For example, they debated whether to prune Omega’s product families, either towards the brand’s upper or lower ends in order to make it morecoherent and minimize potential overlaps with other group’s brands, or whether to add more watch collections to attract new Omega customers, similarly to the successful 2009 relaunch of the Constellation family which drove Omega’s success in China, the group’s key geographical market. Hayek also reflected on Omega’s communication strategy wondering to what extent the brand’s message should focuson
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Professor Rohit Deshpandé, and Research Assistant Karol Misztal and Assistant Director Daniela Beyersdorfer of Harvard Business School Europe Research Center, prepared this case. The authors gratefully acknowledge the help of Michael Khayyat of Harvard College. HBS cases aredeveloped solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2012 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go towww.hbsp.harvard.edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.

Purchased by VEGA SOFT S.A DE C.V (ricardo.zarazua@vegasoft.com.mx) on April 12, 2012

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The Swatch Group

aspects like the successful Co-Axial technology or its celebrity sponsors such as George Clooney and...