Lucerne University of Applied Sciences and Arts

Lucerne University of Applied Sciences and Arts

OCCUPY
YOUR
WRIST.
Lucerne University of Applied Sciences and Arts
Design Management International
Strategic Design Planning Project
October 2012
Tutor: Hans-Kaspar Hugentobler
Authors: Alice Dal Fuoco, Thomas Petrig
table of contents
3 who is swatch?
4 10 types of innovation analysis/current situation
7 value curve/current situation
8 ethnographic research/personas
10
ethnographic research/insights
11 need finding
12 value curve/future
13 value exchange
14 10 types of innovation analysis/future
15conclusion
17appendix
3
who is swatch?
Founded in 1983
Headquarter in Biel / Bienne
Famous for its plastic watches, Swatch found a niche market
mission
by offering high quality watches to a very low price. The in-
Swatch has taken advantage of the Group’s vast experi-
novative new approach at that times was the answer to the
ence, know-how and production capacities in microme-
aggressive competition from Japan, such as Seiko or Citizen.
chanics and microelectronics to develop its activities in the
Swatch is considered to have saved the swiss watch industry
telecommunications and internet sectors, where Swatch Ac-
from its collapse.
cess (wireless access control, internet access, e-commerce) is
but one example of the brand’s remarkable ability to trans-
Swatch has matured to a differentiated brand and has es-
form advanced technology into successful products.
tablished a dominant position in the global watch market.
The successful introduction of jewelry products by selected
vision
brands has established a basis for a growing presence in
We produce beauty, sensuality, emotionality in watches –
this sector. 2
and we also produce high-tech on your wrists. Both, emo-
enthusiastic
provocative
innovative
tionality or poetry and high-tech are part of what we feel
towards our customers. We love them genuinely. We want
them to be happy – we want YOU to be happy.1
* values of swatch
1 http://www.swatchgroup.com/en/group_profile/nicolas_g_hayek_message_from_the_founder
2 http://www.swatchgroup.com/en/group_profile/history/tomorrow
4
10 types of innovation/
current situation
Business Model
Enabling Process
How the enterprise makes money
Routine non-differentiating processes often outsourced to others
Swatch’s business model was unique and extremely innovative at
As Swatch are managing the entire value chain by themselves, they
the time they entered the market with their plastic watches. At a
also manage the non-differentiating processes internally.
time where watches were perceived as a luxury product, Swatch
were able to create an entirely new market segment for the watch
Core Process
industry by introducing their high quality at a low price watches.
Differentiating proprietary processes
But since then, they didn’t put much effort into innovating their
business model and as a result of that their main revenue stream is
Swatch’s core processes are the design, production and marketing
still the sales margin of product sales.
of high quality watches. Due to the implementation of the automatic ink jet production line and the decrease from 90 to 51 watch
Networking
components, Swatch are able to produce high quality watches at a
Enterprise’s structure and value chain
low price.
Swatch is not dependent on setting up a network because they
Product Performance
manage their entire value chain within the company. Occasional-
Basic Features and Functions
ly Swatch is partnering with famous artists or designers as Jeremy
Scott, Keith Haring or Stella McCartney, to launch special edition
Nicolas H. Hayek once said, “I understood that we are not selling
watches.
a consumer product, or even a branded product. We were selling
an emotional product.” A Swatch watch is more than just a high
business
model
network
finance
enabling
process
process
core
process
product
performance
product
system
offering
service
channel
brand
customer
experience
delivery
5
quality and affordable fashion accessory; it can be seen as an emo-
Brand
tional object. Swatch puts the most effort into the design of their
How value is communicated to customers
watches, which is reflected in their monthly changing and stunning products.
Swatch is steadily working on strengthening its brand through
their online shop, advertisement, event sponsorship, PR, social
Service
media and their Swatch stores. But more and more Swatch is fo-
Assistance provided to prospects and customers
cusing on their as event sponsor for events such as the freestyle.
ch, Art You, Biennale or the FIVB Swatch Beach Volleyball Tour.
In order to deepen the relationship with their customers, Swatch
But also Swatch’s daily presence on social media platforms such as
is providing an exclusive membership service known as the Swatch
facebook, twitter and instagram contributes to the Swatch brand.
Club. The Swatch Club is meant to be a community of Swatch aficionados, who after buying the yearly Swatch Club’s watch, have
Customer Experience
exclusive access to limited edition watches. This concept worked
All aspects of customer interactions with a company its brand
somehow quite well during the 1990s but since then Swatch never made any attempt to improve or redesign their Swatch Club
Due to their various brand strengthening activities and their main
concept.
operating channels, Swatch is able to deliver customer experience
Besides the Swatch Club, Swatch is also providing the typical prod-
through social media, the swatch store, competitions, the swatch
uct services such as 24 months warranty and other services at their
club and events.
own Swatch stores.
Channel
Conduits through which offerings reach customers
Swatch is operating through four main channels such the Swatch
Stores, Retailers such as Manor, Online Shop and the Swatch Club.
business
model
network
finance
enabling
process
process
core
process
product
performance
product
system
offering
service
channel
brand
customer
experience
delivery
6
Neglected Niche
Bridge The Extremes With Hybrid Solutions
The 10 types of innovations framework revealed that according to
Niche innovation strategy are based on core process, product perfor-
Monitor Group’s Thinking Differently Innovation Types, Swatch is
mance, brand and customer experience. As a result of that, Swatch
following the Neglected Niche innovation strategy. In 1983, Swatch
was able to differentiate themselves from luxury brands such as
created a totally new market by selling mass-produceable and high
IWC, Tag Heuer, Rolex etc., by turning the watch into an affordable
quality watches at a low price. This niche market, also referred to
and fashionable product.
as low budget watch market, has evolved into the biggest market
of the watch industry. The main building blocks of the Neglected
business
model
network
finance
enabling
process
process
core
process
product
performance
product
system
offering
service
channel
brand
customer
experience
delivery
7
value curve/
current situation
quality
design / aesthetics
price
Swatch is able to keep a relativley high quality and at
the same time keeping the price low, due to standardized manufacturing processes.
technology
Since its introduction in 1983 Swatch has not invested
in major technological innovations. Swatch differentiated by increasing it’s presence on art, sports and fashion
individuality
events and workign with renowned designers who designed limited editions.
This enabled Swatch to clearly differentiate its position
fashionable
to all the other large watch brands in the low-budget
segment.
low
high
8
ethnographic research/
personas
meet zoé!
Zoé is 40, and works as a business analyst at Swiss. If
friends of Zoé had to describe her with one adjective,
they might say, over-punctual. She’s the swiss-ness in
person, and maybe because of that she’s a Swatch aficionado. Zoé still remembers the time when the Swatch
hype started to take over the world in the 90s. All her
In order to gather essential
information from current
Swatch wearer, two completely
different customers have been
interviewed. The aim of these
interviews was to uncover if
there are any unmet needs or
discomforts people experiencing with Swatch, whereby the
product focus was only set on
the watches.
friends were members in the Swatch Club, and started collecting the limited editions like others collecting
postage stamps. But she never joined the Swatch Club,
she preferred being a simple Swatch customer who occasionally buys a new watch to match it with new outfits.
She values the ever-changing designs so she always can
select a new watch – it’s cheap and she can always buy a
new one if she feels like it.
Usually, she decides to buy a new watch when her current one starts to wear out, as the Swatch watch is not
build for eternity. Wearing a watch on her wrist is for her
The characteristic information
about the interviewees was
taken also directly from the
interview and translated into a
persona.
like brushing her teeth, you just do it and it therefore is
one of the first things she does in the morning. She buys
her watches in the Swatch store at the airport, because
she travels quite a lot, or now and then does some Sunday-Shopping at the airport.
Image Source: flickr.com, J Trav Persona Set
9
ethnographic research/
personas
meet steven!
Steven is 23, and studies business informatics in the first
semester. Besides his studies he works as an IT Application supporter at Crédit Suisse. If friends of Steven had
to describe him with one adjective, they might say chic.
Steven is an extremely fashion-conscious man, who loves
shopping and therefore perfectly matches his accessories
to the outfit. One of Steven’s favorite and most valuable
accessories is his IWC PORTUGIES watch.
Steven has always been fascinated by mechanical watches and especially by the skillset needed to construct such
a high-end watch. Steven only wears his IWC watch
when he’s in the mood to wear it and when it fits to
his outfit. But when he goes swimming or partying with
his friends he doesn’t like to wear it. Steven considers
buying one of the color watches of Swatch, because he
likes the variety of colors and the value for money for
such a watch. Steven perceives Swatch as an extremely
sympathetic brand, but to him their brand and product
language is sometimes too childish.
Image Source: flickr.com, J Trav Persona Set
10
ethnographic research/
insights
“A Swatch watch isn’t a
“Swatch stands for
Switzerland.”
product I would buy with
the intention to keep it
for the next 10 years.”
“One of the first actions
in the morning is to put
on my watch.”
“I don’t recall a specific
“The reason why I am
“I throw them away
watch of Swatch, it’s
wearing a watch has a
when they’re broken. I
always those I like at the
lot to do with it being a
only keep those given as
moment.”
styling accessory.”
a present to me.”
Quotes of interviewees are one
of the most powerful tools to
display key insights gathered
from an interview. The quotes
on the left hand side are based
on statements the interviewees
made during the conversation.
11
ethnographic research/
analysis
The interviews have brought up the topic of national
identity and Swatchs strong relationship to Switzerland,
which lead to the insight that as a Swiss a Swatch establishes a patriotic bond; a sense of identity.
Furthermore, Swatch is not considered as an object with
outstanding product quality, it is generally not perceived
as a product with much longevity.
Due to its low price, a Swatch is easily thrown away or
replaced, unless it was a gift and is considered too personal to be thrown away.
The insights gained from the ethnographic research lead
to the following set of new criteria for the value curve:
*identity
*longevitiy
*personal
12
value curve/
future
quality
design / aesthetics
With the three new criteria in place, the following new
price
value curved was defined. Swatch should keep its current values in place, namely manufacturing aesthetically design watches, at a low budget price, as this is key
technology
in differentiating swatch from its competitors.
Nonetheless Swatch should not take its strong bond to
national for granted, but further embrace its national
identity values.
Longevity is another issue, where the desire or satisfaction with the watch should not exceed the actual
individuality
fashionable
identity
product life cycle.
longevity
The last critera focuses on investing in making Swatch
highly personal and making this value a key component
of Swatch.
personal
low
existing value curve
future value curve
high
*identity
*longevitiy
*personal
value exchange
w a tc h es, je w elry ie
b
sa
t
ou
spo
-c
d e v en ts, a r
t, s p
i dence, individu
a
onf
ort
lit y
s,
fa
goods, services, revenue
This currency describes the exchange of goods, services
or knowledge products that generate revenue.
knowledge
This describes the exchange knowlwedge that supports
the core product and service value chain.
intangible Benefits
This describes the type of exchange of value that go
beyond the actual product or service and cannot be accounted for traditional financial measures.
sh
n
lf
se
nsore
io
describes the exchange of the three currencies of value:
or
The value exchange between Swatch and the customer
st
13
loy
on
alty
, recommendati
feedback
pa
ym
ce
ent
pri
, sale
nit
s margin from u
14
10 types of innovation/
future
Business Model
become more emotionally attached to the products. People would
How the enterprise makes money
then be able to upload their designs and let them get rated by the
Since 1983 Swatch’s business model hasn’t changed, and therefore
Swatch Community. Swatch should also consider bringing more
they should consider in finding new revenue streams. By following
longevity into their product lifecycle, by making the watches more
a strategy of providing a platform engaging users to take part in
modular. Instead of forcing people to dispose the watches when
the design process, they could add extra fees on the watches like
some components become fragile, they should provide solutions
on the limited editions. This would have affect on Swatch’s current
for an easier replacement.
production lifecycle, instead of producing the watches in masses
they could save resources and inventory costs by introducing just
Brand
in time production.
How value is communicated to customers
Swatch should maintain its strong and innovative brand strategy,
Product System
but they should consider in engaging more with the customers by
Structured offering with an array of tailorable, integrated
showing what’s happening behind the scenes. By offering cus-
components
tomers the possibility of co-creation as mentioned in the product
As a mass producer of watches, Swatch should try to make the
system, Swatch should also think about inviting the top co-design-
watches more personal again. People only keep objects when they
ers to their design office. By having so-called “A Day @Swatch”
perceive it as personal, such as presents from their family or close
events they could engage more with their customers and share the
friends. By providing a platform encouraging people to contrib-
experiences in their social media community.
ute in the meta-design as co-designer, they could make people
Customized Comfort
Make everyone feel special
business
model
network
finance
enabling
process
process
core
process
product
performance
product
system
offering
service
channel
brand
customer
experience
delivery
The future value curve for
Swatch lead to the conclusion
that according to the Monitor
Group’s Thinking Differently
Innovation Types, they should
consider to follow the Customized Comfort innovation strategy. This innovation strategy
connects comfort, customization
and special, which perfectly
matches the criteria (identity,
longevity, personal) gathered
from the ethnographic research.
15
conclusion
The goal of the Strategic Design Planning project was to apply the
these criteria into a new value curve about a possible future state,
key principles of human-centered innovation planning in the con-
taking identity into consideration but increase the personal value
text of an organization.
of Swatch.
The project helped us to apply the different tools and methods of
With the new criteria and the new value curve, we were able to
human centered innovation planning, such as the 10 types of inno-
translate them into a strategy by means of a new positioning in-
vation, the value curve or the value exchange to decipher Swatch
side the 10 types of innovation model. We there focused on Swatch
current way of approaching innovation.
finding new revenue streams in changing their business model, establish a product system to increase the personal relationship to its
With desk research we were able to determine Swatchs current in-
customer and maintain its current branding strategy.
novation model, which is finding a niche in the market that is being
underserved.
To conclude, the whole process was very complex to follow and
Furthermore we developed a clear understanding what values
required a high-level and abstract thinking. At times it was hard to
Swatch currently embraces and at what extent, such as its focus on
connect the different steps to make an overall cohesive analysis and
low technology, price but high value in design/aesthetics.
recommendation.
Ethnographic research lead us to insights from potential customers
But in the end, WE MADE IT.
what Swatch is for them and what they associate with or miss about
Swatch and its products.
Taking these insights we were able to break them down into three
essential criteria:
Identity, Longevity and Personal. We infused
17
appendix/
interview zoé*
Wieso hast du dich für eine Swatch entschieden?
Wenn du an Uhr denkst, denkst du an Swatch?
Weil ich die Uhren schön finde und weil sie nicht ein Vermögen
Nein wenn ich Swatch höre, denke ich an eine Uhr. Also Schmuck
kosten und weil ich nicht immer die gleiche Uhr haben möchte -
würde ich wohl nie bei Swatch kaufen.
es kostet nicht viel und dann kann ich mir auch wieder eine neue
kaufen. (...) und sie halten meistens sowieso nicht so lange. Sie sind
Wo bist du Swatch schon überall begegnet?
sehr schnell zerkratzt und vorallem bei den Plastikuhren, kaufe ich
Im Flughafen, Bahnhofstrasse ... im Ausland – sehr viele Swatch
ziemlich schnell wieder eine.
Läden. Im Flugzeug. Als ich noch jung war, hat man noch Swatches
gesammelt. Dort hat man sie zwar gekauft, aber nie getragt. Nein,
Ist dies deine erste Swatch?
alle Kollegen haben viel Geld ausgegeben um eine solche zu haben,
Nein
alle Chronos und Scubas. Ein Kolleg von mir ist oft geschäftlich geflogen und musste für alle Swatch-Uhren kaufen.
Wenn nicht, was hat dich dazu bewogen noch eine weitere zu kaufen bzw. würdest du dir noch eine weitere von Swatch kaufen?
Welche Produkte kennst du von Swatch?
Ach keine Ahnung, ich hatte schon relativ viele. Es waren bestimmt
So kitschigen Modeschmuck machen sie noch und Uhren. Machen
mehr als einfach nur 3-4.
sie sonst noch was?
Was hat dich immer wieder dazu bewogen neue zu kaufen?
Welche sind dir besonders aufgefallen?
Die alte war nicht mehr schön und ich will dafür kein Vermögen
Mir kommen keine bestimmten Modelle in den Sinn. Es sind voral-
zahlen, und 10’000 – 20’000 CHF ausgeben.
lem die, welche mir im Moment gefallen. Ich habe die Scubas und
Chronos nicht so cool gefunden. Ich bin jemand, für mich ist eine
Welche Eigenschaften schreibst du Swatch zu?
Uhr nicht extrem wichtig. Ich muss eine haben, weil ich nicht jedes-
Immer wieder etwas Neues – vom Design. Von der Qualität her,
mal mein Handy hervorzücken um nach der Zeit zu schauen. Ich
ist das Uhrwerk wahrscheinlich schon gut, aber von der Qualität
brauche eine Uhre am Handgelenk, aber es muss nicht eine 20’000
her ist es nichts hochwertiges. Eben ich denke auch nicht dass sie
CHF sein, aber sie darf schon schön sein.
dafür gemacht sind, dass diese ewig halten. Sie haben ja auch kein
kratzfestes Glas.
* Name changed
18
appendix/
interview zoé*
Wieso hast du dich für eine Swatch entschieden?
en, und 10’000 – 20’000 CHF ausgeben.
Weil ich die Uhren schön finde und weil sie nicht ein Vermögen kosten
und weil ich nicht immer die gleiche Uhr haben möchte - es kostet
Welche Eigenschaften schreibst du Swatch zu?
nicht viel und dann kann ich mir auch wieder eine neue kaufen. (...)
Immer wieder etwas Neues – vom Design. Von der Qualität her, ist das
und sie halten meistens sowieso nicht so lange. Sie sind sehr schnell
Uhrwerk wahrscheinlich schon gut, aber von der Qualität her ist es
zerkratzt und vorallem bei den Plastikuhren, kaufe ich ziemlich sch-
nichts hochwertiges. Eben ich denke auch nicht dass sie dafür gemacht
nell wieder eine.
sind, dass diese ewig halten. Sie haben ja auch kein kratzfestes Glas.
Ist dies deine erste Swatch?
Wenn du an Uhr denkst, denkst du an Swatch?
Nein
Nein wenn ich Swatch höre, denke ich an eine Uhr. Also Schmuck
würde ich wohl nie bei Swatch kaufen.
Wenn nicht, was hat dich dazu bewogen noch eine weitere zu kaufen
bzw. würdest du dir noch eine weitere von Swatch kaufen?
Wo bist du Swatch schon überall begegnet?
Ach keine Ahnung, ich hatte schon relativ viele. Es waren bestimmt
Im Flughafen, Bahnhofstrasse ... im Ausland – sehr viele Swatch Läden.
mehr als einfach nur 3-4.
Im Flugzeug. Als ich noch jung war, hat man noch Swatches gesammelt. Dort hat man sie zwar gekauft, aber nie getragt. Nein, alle
Was hat dich immer wieder dazu bewogen neue zu kaufen?
Kollegen haben viel Geld ausgegeben um eine solche zu haben, alle
Die alte war nicht mehr schön und ich will dafür kein Vermögen zahl-
Chronos und Scubas. Ein Kolleg von mir ist oft geschäftlich geflogen
19
appendix/
interview steven*
Warum hast du dich dafür entschieden eine IWC Uhr zu kaufen?
Sommer wenn es warm ist, ist es besser weil diese ein Metallarm-
…Weil es ein Schweizer Qualitätsprodukt ist und weil sie mir vom
band hat und nicht wie die IWC ein Lederarmband. Oder falls ich
Design her gefallen hat – es ist die einzige gewesen die bei mir
schwimmen gehe, ziehe ich auch die Tissot an. Ich muss auch nicht
in Frage kam bei den mechanischen Uhren. Mechanische Uhren
immer eine Uhr tragen.
faszinieren mich. Die Market hat mich auch angesprochen.
Warum trägst du überhaupt eine Uhr? Was bewegt dich dazu
Warum hat dich die Marke IWC angesprochen?
morgens eine Uhr anzuziehen?
Weil die Uhr sehr klassisch aussieht, sie ist nicht zu extravagant
Ich glaube es hat mit dem Stylefaktor zu tun. Ich sehe die Uhr als
und auch nicht zu speziell. Sie ist schlicht, und das hat mich ang-
ein Accessoires. Es ist halt auch praktisch, denn ich muss dann nicht
esprochen.
immer aufs Handy schauen wenn ich wissen muss wie spät es ist.
War es für dich auch eine Art Investition, dass du diese Uhr geka-
Hast du dich jemals beobachtet wenn du deine Uhr trägst, ob du
uft hast?
dann wirklich auf die Uhr schaust um die Zeit zu lesen oder doch
Also es war mir schon klar als ich sie mir gekauft habe, dass das
dein Handy nach vorne zückst?
Geld nicht einfach weg ist sondern, dass diese Uhr auch einen
Diese gibt es und mir fällt das auch auf und dann frage ich mich
gewissen Wert hat und diesen sicherlich auch nicht verlieren wird
warum habe ich jetzt das Handy nach vorne genommen obwohl
so wie andere Uhren. Vorallem wusste ich, dass ich diese sicherlich
ich eine Uhr trage. Eigentlich schaue ich aber schon auf meine Uhr
irgendwann zu einem angemessenen Preis verkaufen könnte.
wenn ich sie trage.
Könntest du dir es vorstellen jemals diese Uhr zu verkaufen?
Momentan nicht, vielleicht wenn ich mal in Geldnot sein werde
Würdest du sagen, dass du eine emotionale Bindung zu deiner
lach….
Uhr hast?
Ja ich denke schon, ich würde sie nicht hergeben oder jeman-
Du trägst deine Uhr heute nicht, passiert das noch oft oder war-
dem ausleihen. Auch wenn sie mir jemand klaut und ich das Geld
um hast du sie heute nicht an?
von der Versicherung erhalten würde, wäre es einfach nicht das
Ich hatte heute einfach keine Lust eine Uhr anzuziehen. Ich habe
gleiche. Denn dann ist es nicht dieselbe IWC die ich hatte.
ja noch eine Tissot, welche ich ab und zu anziehe, vorallem im
* Name changed
20
appendix/
interview steven*
Findest du, dass IWC und Tissot eher für die Schweiz stehen als
ich es die nächsten 10 Jahre habe. Für mich ist es eher so es wäre
Swatch?
noch cool so eine farbige Uhr zu haben udn vielleicht auch wenns
Nein, ich finde Swatch steht auch für die Schweiz, vorallem die die
mal passt, dass ich diese anziehe oder auch zum schwimmen weil sie
sich auskennen wissen was Swatch für die Schweizer Uhrenindustrie
ja aus Plastik ist. Doch für mich ist es keine Uhr die man als Investi-
getan hat. Für mich ist Swatch eine sehr schweizerische Marke und
tion kauft oder länger besitzt, oder etwas, dass man seinen Kindern
vorallem auch eine sympathische Marke.
vererbt oder gar sammelt.
Hattest du selber jemals eine Swatch Uhr?
Ehm nein….doch aber als Kind eine Flik Flak aber ich habe in letzter
ZEit schon ein paar mal eine dieser farbigen Swatch Uhren anprobiert, weil mich das Design anspricht und sie auch schlicht ist und man
kann sie als accessoire einsetzen. Das wäre durchaus eine Uhr die ich
mir kaufen würde.
Was hat dich bis jetzt daran gehindert eine zu kaufen?
Für mich mussten Uhren immer eine gewisse Qualität haben, also
ich wollte einfach lieber ein bisschen mehr Geld ausgeben für etwas,
dass dann aber lange halt. Swatch ist für mich eher im unteren Preissegment und es ist nicht ein Produkt, dass ich kaufen würde damit