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Swatch Group And Francogeddon Case Solution

Solution Id Length Case Author Case Publisher
2253 772 Words (7 Pages) Kieran J. Walsh Darden School of Business : UV7626
This solution includes: A Word File A Word File and An Excel File An Excel File

The analysis shows that the company is facing several challenges including competition from lower price similar brands of different countries, declining demands of particular watch, and the currency rate issues. Exhibit 6 of the case shows that sales have been declining in Switzerland but are growing in other regions although the exchange rate appreciation would have a negative impact on the overall revenue growth. Despite declining demand and increasing competition the company has been able to encash brand name and has generated steady revenues with moderate growth (Exhibit 7).

Following questions are answered in this case study solution

  1. Analysis

  2. Strategy

  3. Exhibit A

  4. Exhibit B 


Case Analysis for Swatch Group And Francogeddon Case Solution

The income statement and balance sheet analysis reveals that the company has reported a decrease in profits despite high revenue which is complemented by high growth in PPE in the years 2013 and 2014 which represents a strategy of growth supported by the positive outlook of the industry. Swiss brands have witnessed high growth in the industry mainly because of the strong brand image of Swiss companies (Deloitte, 2021). Swatch group can take advantage of its brand positioning and can increase its market share and consumer base significantly in the upcoming years with the right strategy. Another issue is the relationship of the stock price of Swatch with an appreciation of currency which is inverse. The company’s sales growth become slow with lesser revenuers in case of appreciation as it relies more on exports (Exhibit 02). Although the macro-economic indicators are more in favor of the company (Exhibit 1) with positive real GDP growth and optimum levels of inflation and unemployment.

2. Strategy

In line with the given scenario, the most optimum level of growth can be achieved by increasing market share in foreign markets with a focus on high-growth markets such as China. Exhibit A represents the sales growth projections with a steady growth rate of 4% for all markets which can result in significant growth of sales and revenues. With the same level of growth rate, it is obvious that China has the most potential among foreign countries and markets. If a different rate of growth is applied to China for example a more positive 5% then overall revenue growth can be more visible and significant.

In addition to that, the company needs to opt for the strategy of diversification to get the most of its strong brand name.

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