SMH Brand Reformation and Strategy

Reorganization of SMH Group

  • The SMH group has undergone significant changes in its manufacturing and brand positioning.
  • Goals of the reorganization include improving efficiency and enhancing the overall structure of the organization.

Consolidation of Manufacturing Functions

  • Independent manufacturing and assembly functions of brands like Omega and Longines have been centralized into ETA (formerly Ebauches).
    • ETA's Role:
    • Supplies movements to all SMH brands.
    • Condensed movement types into common parts for efficiency.
    • Expanded sales to external watchmakers and reduced costs through improved manufacturing.

Brand Positioning and Strategy

  • SMH has clarified brand positioning by:
    • Reducing the number of product models offered.
    • Repositioning brands to complement one another.
  • Case Study - Omega:
    • Adopted global marketing strategies for Swatch.
    • Focused on highlighting brand individuality and value.
    • Created a universal promotion model for uniform branding.

Resource Allocation

  • Omega, as a core group brand, received prioritized resources.
    • Focused on mechanical movements with high value and appealing designs.
    • Promoted brand history and heritage while using well-known ambassadors for marketing.

Impact of Reorganization

  • The efficient "selection and concentration" strategy in production and marketing increased trust from partner banks, resulting in significant financial influxes.

Global Production System

  • Acquisition of parts subcontractors led to improved international production processes.
  • Adoption of an international division of labor with production in countries like China and Thailand.

Channel Consolidation

  • Global distribution channels were streamlined:
    • Consolidation into single agents or local subsidiaries in each country.
    • Subsidiaries manage all functions of marketing, advertising, IT, finance, logistics, and after-sales service for multiple brands.

Competitive Landscape Post-Plaza Accord 1985

  • Following the Plaza Accord, Japanese manufacturers lost their competitive edge due to currency fluctuations.
    • The weakening of the yen and strengthening of the dollar adversely affected competitiveness.
    • The Swiss franc's shift led to favorable exchange rates for Swiss manufacturers, bolstering reconstruction efforts.