Do you wear a watch? I think the answer for most of us is “yes” (we forget the children who no longer wear watches because they have their cell phones for everything!) Well, what kind of watch do you wear? She? Is that a Patek Philippe? I do not believe that. However, there is a market for very expensive Swiss watches. This market is currently in trouble, and it is not the fault of the heads of Swiss watch products.
What happened to the Swiss watch market?
As product managers, we are prepared for the development of our markets. Yes, there will always be new competitors, new functions that only customers need, etc.However, Swiss watch product managers have had events in their market over which they have had no influence. They actually couldn’t predict what would happen and are now in a unique and unenviable position.
The event that turned the Swiss watch market on its head happened when the Swiss government decided to change the applicable exchange rate restrictions. Without making you financially complicated, the Swiss government has no longer ensured that the exchange rate was CHF 1.20 to one euro. This means that the exchange rate can now move up and down freely. The bottom line is that Swiss watches have become much more expensive at night.
As if that wasn’t bad enough, it turns out that the recent political unrest in Hong Kong has not helped Swiss product managers either. For three months, protesters closed off parts of central Hong Kong. Unfortunately, this is an important way for Swiss watchmakers to purchase their watches for wealthy Chinese visitors. It was clear that no watches were being sold while the protesters were camping in front of the stores.
How Swiss Watch product managers can survive
Take a look at the definition of your product development, and I suspect you will find that it does not mention how to deal with these changing market conditions. It can be too easy to sit back and say, “I can’t help it” – a kind of “act of God” attitude. However, we always have to think about our product manager’s resume, and that means we have to be ready to take action when the unexpected happens.
The change in the exchange rate of the Swiss franc will have a direct impact on the results of Swiss watchmakers. A first thought might be to move all or part of your watch production to a country where labor costs are lower than in Switzerland. However, it turns out that any watch manufacturer wishing to affix the coveted “Swiss Made” label to their watch must have made at least 60% of the watch in Switzerland.
Instead, Swiss watch product managers may have to raise prices—the more desirable the watch, the more practical this strategy. However, for some small brands or brands that have lost popularity among customers, they need to look for other options. These options may consider merging with another watchmaker to create a stronger brand that can better protect your market.
What all this means for you
Although I’ve heard that Switzerland is a very nice place to live, I’m not sure I want to become a product manager there now. The Swiss government’s decision to “float” its currencies against other currencies has created major unrest in the expensive world of Swiss watches.
Swiss product managers were affected by two major changes in their markets: operating profit was negatively impacted by the new floating Swiss franc, and demonstrators in Hong Kong closed an important three-month sales channel. To meet these challenges, Swiss watch product managers must try to increase the price of their product. If they can’t, they may need to look for other companies to merge with.
As product managers, we like to think that we can control both our product and our market. However, this is not always the case, as the product managers of Swiss watches prove. We have to adapt quickly to changes in our markets. The ability to do this must be part of every job description for a product manager. Swiss watch managers now have the opportunity. Let’s take a look (so to speak) and see how everything works!