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By Pierre-Yves Donzé (auth.)

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Additional info for A Business History of the Swatch Group: The Rebirth of Swiss Watchmaking and the Globalization of the Luxury Industry

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16 Thus, on account of the lack of detailed data in the Swatch Group’s annual reports on the activities of the various subsidiaries, it is not possible to identify the supply channels for parts or the structure of its outsourcing network. However, Swiss foreign trade statistics are a valuable tool for shedding light on some key elements of the global value chain in the watch industry. Rationalization of the Production System 47 The global value chain in the watch industry in 1995 In 1995, the main producers of movements in Switzerland were the Swatch Group (more than 100 million movements, quartz and mechanical), ISA Swiss SA (some 45 million movements, quartz), and Ronda SA (some 10 million movements, quartz).

16 Even if this extreme case may not be representative of the industry as a whole, it underscores the impact of the absence of marketing rationalization on production. On the other hand, a mass production system was being introduced for the manufacture of cheap and simple watches (pin-lever watches, also called roskopf watches). Made in Switzerland from the end of the 19th century onwards,17 they recorded high growth worldwide after World War II thanks to the introduction of mass production methods.

In the 1990s, the main reason why American, European, and Japanese industrial companies opened production units in China was to take advantage of low-cost local labour for products intended for world markets, not to penetrate the domestic Rationalization of the Production System 43 Chinese market. Watchmaking was no exception, and China also became the world’s watch factory. The other event which no doubt helped convince the Swatch Group to open a subsidiary in China was the arrival of Citizen Watch Co.

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