Swatch and the Global Watch IndustryIn the 1980s, Swiss watch manufacturers began to realize that they had to change their business model to adapt to a new global market. They needed to change not only their vision of the market but also the infrastructure of watch production. To compete globally they needed to improve their technology, design products that appeal to new markets, and be able to compete with other companies on quality and cost. During this time, the merger of two companies helped create a new market for Swiss watches. Asuag and SSIH merge to create Société Micromecanique et Horlogere (SMH). They developed a line of watches called "Swatch" that was aimed at a younger target audience. Their new design, distribution and manufacturing strategies created a niche market that has become popular around the world. The Swatch Watch Company transformed itself from near bankruptcy in the early 1980s to a world leader in value in the late 1990s, again facing new sets of challenging issues that would affect their future in a rapidly changing global economy. These issues included: -Sales are stable between 18 and 20 million units per year. -Sales and profit margins below levels achieved in the early 1990s. -Increased competition in existing and new markets. Problem Analysis Although the Swatch Group was the world's leading watch manufacturer; they faced many problems. They needed to establish a strong presence in the US market as Timex, Casio, Seiko and Citizen made up over 50% share. Furthermore, the company became too diversified into producing fourteen (14) different brands, although... middle of paper... it was only when it responded to global threats that it became successful again and how it had to do it. they chose once again between short-term social obligations or long-term survival obligations. In the past, competitors did everything they could to gain market share and penetrate new markets and did not stop or change their expansion strategies out of displeasure for the Swiss. Competitors will continue to do everything they can to expand markets, defending existing ones and preventing the Swiss from attempting to enter existing or new markets. The competition will even try to compete with the Swiss for world leadership in the high-end price segments; and just as in the past, if the Swiss were not ready for such competition, they would lose that leadership without a fight. The loss of such leadership in this segment will once again spell the end of the Swiss watch industry.