Ornatus-Mundi
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News: Swatch Group threatens to stop deliveries of parts to competitors...
in today's edition of the Swiss newspaper 'L'Agefi' Nicolas G. Hayek, President of Swatch Group, announces that he intends to stop shipments of parts to competitors.
"Yes, you understood correctly, Swatch Group intends to stop production for and deliveries to third parties" he said in the interview. Swatch Group will discuss this matter with the Swiss competition authority (Weko).
Hayek assumes the companies concerned will survive despite this: "All are claiming that they have capabilities to produce the needed parts themselves". But still, they are shopping with Swatch Group as if it was a supermarket.
It is therefore that his companies carry the burden of investing into production, whereas the competitors have free funds to spend on marketing. Hayek says that if he would have a choice he would continue, market situation permitting, to sell to trusted long term, reliable customers, albeit under different conditions.
I am eager to learn how this newest chapter in this book impacts on the Swiss watch industry.
Cheers,
Magnus
(translated from a report in the Neue Zuercher Zeitung, today's edition)
News: Swatch Group threatens to stop deliveries of parts to competitors...
in today's edition of the Swiss newspaper 'L'Agefi' Nicolas G. Hayek, President of Swatch Group, announces that he intends to stop shipments of parts to competitors. "Yes, you understood correctly, Swatch Group intends to stop production for and deliverie...
Oh boy...
early flexing of the muscles by the Swatch group... wondering what is the next chapter to this as well. Thanks for sharing.
my point
well, this is a statement with two ends, one ones view A arrogance as if swatch is stating they are only the ones out there. point B is , this is a way of filtering the market from TOO many assemblers out there who claim to be producers, on the other hand...
I seem to recall the last time
They tried this, which was also winter so as to have the most effect on Baselworld/SIHH, the Swiss anti-monopoly people smacked them down. From my perspective, though US anti-trust laws are I believe much stronger, that's the right response. Swatch's enor...
hmmm... so being a parts supplier
wasn't a lucrative biz for the Swatch group? either way it should result in upward pricing adjustment... Maybe the chinese part suppliers ll seize the opportunity to grab the mkt!? interesting, eD~
I suspect it will be good for the industry in the long run,
...albeit difficult at first. It's certainly true that there are way too many "assemblers" out there (nice one, Faisal) who have founded their own brands on the back of others' work - specifically, the collaborative efforts that, over many years, created ...
One the other hand...
if he is complaining that the assembleurs make the money and he (ebauche suppliers) not - isn't there something wrong with his economics? He could change that easily! Best, Magnus This message has been edited by Magnus Bosse on 2009-12-18 08:07:09
A guy as smart as Hayek...
...is not going to publicly outline the real reasons for his business decisions. Whatever he said, is what he wants us to think. His actual strategy is undoubtedly much more subtle. Cheers Tony P
Very interesting story, Thanks Magnus. I guess an industry shake-out is coming...
Very bold move of Mr. Hayek - pulling the plug when vast numbers of brands are already "addicted" on the ETA. Interesting to see who will fill the gaping void.
IANA antitrust atorney, but in the USA,
if I am a manufacturer who sells finished products and parts to independent third parties as well as internally and/or closely held affiliates, then I am required to price all such sales competitively. This does not mean I won't make a profit selling to a...
I think it is a problem not for complete movements
but Swatch still has an effective monopoly on hairsprings and some other components and that's where the anti-trust laws would get involved. A
I think its good for Swatch and the industry
uanti-trust aside, I can;t begrudge Swatch from doing this from a business pov. They are in a position to and if they do not and competitors catch up with them because of this, they will be guilty of not bringing to bear all the weapons in their arsenal. ...
It's his right; let's hope he uses it wisely.
The move will undoubtedly squeeze out many companies that shouldn't be in business anyway. Presumably it is also intended to drive competitors' costs up and give Swatch a competitive advantage. I'm not convinced that a higher pricing level will help the i...
Why shouldn't they be in business? The entire car industry...
is mainly doing assembly of parts manufactured by third parties. The average in-house production depth is only about 15%. All the rest, sometimes even the entire development of a car, is done by specialist subcontractors. Same in the airline industry, whe...
When the manufacture concept is brought to the most ridiculous (and dangerous) point!
Hi, If Nicolas Hayek was seen so far as the man who saved the industry, the application of this annoucement would possibly turn him into the man who killed the Swiss watch industry! It is a negation of the Swiss watchmaking history ,and possibly the end o...
An Economics Lesson
First a confession. I am an antitrust lawyer by trade. I am sorry to say that many of the comments in this thread enjoy no support in modern antitrust law. Antitrust laws are conceived to preserve competition not competitors. They are not meant to serve a...
Basic principle
Generally speaking there is broad agreement among the nations with developed competition law on core antitrust principles. Yes market defintion approaches show variation and certain notions of infringement show variation. But the key principle that before...
With respect to components
With SWATCH owning Nivarox, they have an effective monopoly on hairsprings, not something that can ba "spit out of a milling machine". I think that may be the one part of their business where their monopoly would hit legal issues. There are plenty of move...
Absolutely not true
I am sorry, but there really cannot be a "monopoly on the supply of hairsprings". Why? Because every single brand that has desired to make them......does. Without problem. Lange, Montblanc, Moser, Patek, UN all use hairsprings that do not come from Nivaro...
It matches very well the recent Intel/AMD case
(ok, discounting the entire "paying people to use only intel chips fiasco, but the "it doesn't take 100% of a market to use your weight to unfairly compete") In terms of production the vast majority of the watch industry uses Nivarox springs, perhaps not ...
Sorry guys but the analysis fails
Here is my bet. For less than the price of a house on Lac Leman, you too can go into the business of making spirals. End of story. More will be spent in legal fees defending a bs antitrust claim than the cost of a third party entering the business. This c...
Only comparing to the monopoly
I was only using the AMD/Intel case to show that one needn't have 100% of the market to have monopoly leverage
Huge difference
The barriers to entry into the chip business are humongous! It costs billions to build a fab facility and engineer leading edge chips. Entry into the market to make hairsprings costs essentially nothing--as I said, less than a house on Lac Leman. So you r...
Aha, you're in my world now...
and you're completely wrong, the barriers to chip manufacture are quite low, not perhaps "cheap" but not humongous by any stretch The barriers to fabrication are enormous, but needn't fab your own chips, there are companies like TSMC that are basically fa...
Perhaps a bit dated on the suppliers
But not a bad article on the topic www.marketwatch.com And itemizing some of the complexities that go into spiral manufacture A
Yup, just complete movements :-)
the reason I posted was that I have no idea where Seiko get their raw materials for hairsprings, but surely nivarox is just an alloy...and the tooling for the wire can't be that difficult (unless of course, these assemblers have no interest in R&D.......
This may also affect availability of spares for the vintage market ??????
A very interesting and lets be honest - a long overdue and long anticipated posting.My main concern is with regards of the availability of 'genuine' vintage brand spares.I have a vintage VC,Omega,AP and Cartier. I have always entrusted my watches to a ver...
it's already hard to get spare parts for many brands
and I doubt that this development will change it one way or the other. If your watch repairer looks hard enough, and offers enough (of your) cash, he can get what he needs for most vintage timepieces. He'll have to know lots of people, read the adverts ve...
