Famed for precision timekeeping since the late 16th century, Switzerland’s watch industry nevertheless ran into crisis during the mid-1970s when Asian companies began to take over the market with quartz crystal technologies. Battling recession at the same time, Swatch (then known as SSIH) became insolvent, forcing its creditor banks to take control. Eventually, in the mid-1980s, CEO Nicolas Hayek took the company private and started a design revolution which was to save the business and put Switzerland back in the vanguard of watch manufacturing.
Design was instrumental in this reinvention. A combination of product aesthetics and reengineering (which reduced costs) gave Swatch the edge, leading it to become the largest watch company in the world, rescued from the jaws of collapse. Launched in 1983, the first Swatch wristwatch was a slim model using only 51 components (versus a typical 91 or more) and was marketed at an affordable price with contemporary design and styling. According to Swatch, the product has gone on to become the most successful wristwatch of all time.
Swatch’s gross sales reached approximately £3 billion in 2007, but Hayek also claims that the design strategies he developed for Swatch in the early 1980s led to the rebirth of the entire Swiss watch industry, regaining its leading position worldwide since 1984. Data bear this out, with Swiss watch exports growing from around £2 billion in 1986 to £7 billion in 2006, according to the Federation of the Swiss Watch Industry.
