Competitive Environment One main competitor was Timex They designed a simple low cost cheap watch that was made up of new alloy bearings. By having this new material it made automated production easier. The Timex watches were priced at a low rate and were marketed to be disposable. The were priced to low and they were made so that they couldn’t be opened they made for not aftermarket repair or sales of parts. At the end of the 50’s one out of three watches bought in the US were a Timex. In 1970 with the introduction of the quartz technology changed the market place once again.
The quartz watches had some advantages over the Swiss, they were based on electronics, it made it easier to add the date or the day to the watch. It also became significantly cheaper to manufacture, because the cost of the chips were being driven down by chip manufactures. Out of this wave and leading the way were manufacturers like Hattori-Seiko and Citizen. The two companies made huge investments in fully automated facilities around the world.
They were soon joined by Casio, which was specializing in a low cost multifunctional, plastic watch that was incorporating features such as timers and calculators. By 1979 Hattori-Seiko had become the world’s largest watch company in terms of revenues; they were producing 22 million watches annually. By the end of 1986 Citizen had become the overall global leader in both movement and finished watch production volumes. With the rise in quartz technology hastened the decline of the Swiss watch industry. The Japanese watch makes saturated the global market with the quartz watch at rock bottom prices.
The Essay on Price Ceilings & Floors
Price ceilings are usually government policies and limits that intend to save consumers from being charged too high a price. This generally means to limit and control how high a price for a product can go. If price ceilings are not present, the suppliers will set prices extremely high for necessities which then become too expensive to be affordable. Suppliers know that no matter what, the items ...
In the early 1980’s the Swiss market place in the watches below $100. their market share was 0%. Watches between $100 and $350 they had a market share of about 3%. But in the market place of $350 and above they carried a share of 97% of the market. Some of the strengths were that they were making watches that were at a low cost high volume. The factories were placed all over the world and were able to ship to all the different market places with great eases.
Also by using the quartz technology they were again able to cut cost to offer a cheaper watch to the consumer. The customers like the fact that they could buy a cheap great looking watch that would take a licking and keep on ticking. The life styles of the consumers buying the watches were of a younger generation. They felt that they were getting their moneys worth out of the watches that they were buying. The weakness that were coming out by this fact, were that the companies were not gaining any of the higher market share. The watches were not some thing that the consumer was wanting to pass on in the family “Here son I want you to have this $10 Timex that I bought a few years ago.” They couldn’t be repaired so a lot of the higher in shops didn’t want to carry the watches in their shops, so they had to go to other sources..
