Swatch was born in the 1980s as a radical innovation in the watch industry by focusing on self-expression rather than technical precision. Their vision was to make watches that added beauty, sensuality, and emotion while being affordable and fun. Swatch achieved this through an innovative organizational structure, marketing strategies, and constant new product development. They manage innovation through cultivating structural, human, and relational capital like their watchmaking schools, social media efforts, and sponsorship activities. Going forward, Swatch continues innovating new products while repositioning their brand and exploring sustainability initiatives to inspire consumers.

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?