Macroenvironment Challenges Of Swatch Group Essay Example

Macroenvironment Challenges Of Swatch Group Paper Contemporary organizations face changes everyday, including structural change and management change (Bestial Jargon 2014). Gerber (2013) discussed that change in the workplace is unavoidable and it should be embraced by the managers to ensure the transition process is smooth. The change is sometimes attributed to the general environment which defined as a relatively distant environment and it consists of elements such as technological and demographic that influent an organization indirectly (Laureate Florin, 2012). Since the environmental forces impact the organization significantly, the structural and technical change cannot be obtained with closed system (Danish, Minor, Karakas, Jabber Unwary, 2014). Along With the changes of general environment, managers roles have been changed. According to Integer (1 975), managers roles can be distinguished into ten basic roles which mainly classified under interpersonal, informational and decision roles (SICKLINESS, 2007). Since there will be constant changes in the general environment, the managers should be able to perform more roles and being more flexible (Pence, 2001 cited in ICELINKS, 2007). Swatch Group Ltd is a worldwide organization active in watching industry. It consists of 18 well-known watch brands such as Omega and Swatch and nearly all the watch components required by the brands supplied by the Group (Lorena, 2014). Besides, most of the third- party watchmakers of the world demand for its watch movements and components. Its headquartered located in Bill, Switzerland and 33590 employees work for it as of December 31, 2013. We will write a custom essay sample on Macroenvironment Challenges Of Swatch Group specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Macroenvironment Challenges Of Swatch Group specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Macroenvironment Challenges Of Swatch Group specifically for you FOR ONLY $16.38 $13.9/page Hire Writer The purpose of writing this essay is to analyses the two general environment factors that influent the operation of Swatch Group and to discuss to which extent the work of managers would be impacted. Economic condition and technological notation are the two factors that will be discussed and the theories that will be applied are Henry Payolas Management Functions which consists of planning, organizing, controlling and leading, Roberto L. Stats Management Skills which are conceptual skills, human skills and technical skills, Payolas General Administrative Theory which consists of 14 points, as well as Henry Integers Management Roles . As Swatch Group is globalizes, it has to work with the complex and dynamic global business environment, in other terms, open system under systems approach (Anthrax Inkers, 2013). Economic condition is one of the general environments that affects the operation of the Group, for example, fluctuation of currency exchange. Since it operates its business over the globe, revenues repatriated from overseas have to convert to Swiss Franc currency. Therefore, the groups profit could be negatively affected by fluctuations of currencies against Swiss Franc like the US Dollar and the China Rene Min Bi (The Swatch Group Ltd SOOT Analysis, 2014). Throughout the first half year of 2014, 188 million Francs are shaved from the Groups gross sales because of the extremely adverse exchange rate situation (Lorena, 2014). By comparing the annual financial report of 2007 to 2014 of the Group, the gross sales increase consistently but the currency exchange rate of Swiss Francs display a very unstable rate, especially in 2011 that has an -10. 8% exchange rate. Furthermore, the group also concerns about economic recession. When there is economic recession, peoples confidence level will be lower since they have less purchasing power (Abraham, Greenness Mould, 1998). According to The Conference Board (2014) and Housing Industry Association Ltd (2014), most of the countries has achieved a peak consumer confidence level (ICP) in the year 2007 but has clines significantly since that. When people purchase less, apparently the revenue that Swatch Group can generate is lesser. Moreover, metals and plastics, as the main raw materials of a watch, are having a extremely high market prices in recent years and which ultimately leading to a high production cost and low margin of profit for Swatch Group especially Swatch since it uses plastic as the straps of watches (Essays, 2013). Conversely, when the economy is good, peoples spending on luxury range of watches will increase. For example, the gross sales of the Group have a dramatic increase n 2012 and 2013 since the ICP has recovered (Cowcatchers. Com, 2014). To raise awareness of the fluctuation of currency, top line managers of the Group performed resource locator roles by approving a significant decision which required the production line to create a plastic watch featuring with sass bank note to all the pressure groups, mainly the stakeholders (Revile, 2014). Meanwhile, the Chief Executive Officer (CEO), Nick Hayes showed his figurehead and spokesperson roles by suggesting that Swiss National Banks governing bank should carry out some actions to strengthen their currency Revile, 2014). During economic recession, top line managers of Swatch Group have engaged in planning by setting the strategy of concentrating on lower-end. Since the consumers will more tempted to buy products that are relatively low in price, the decision of differentiating and dividing products with a pricing strategy is made. For example, basic range like Swatch and luxury range like Omega. Different brands target on different classes by ingratiating their favor and setting an affordable price. They also engage in organizing which including market surveys that need to be constructed in order to analyses which age group they should target on and what is their common preferences. Middle line managers on the other hand should convey the accurate message of the board to the first-line managers so that they can manage the manufacturing process and the retail sales. The sales during the economic downturn period can also be stimulated by further increasing the visibility of the brands. One of the actions that the Group has taken is that they have sponsored plenty of sporting events. For instance, top line managers of the headquarters played the role of spokesperson and figurehead by signing agreement with International Olympic Committee to become Olympic Partners sponsor and official timekeeper of the game (Themselves, 2002). On the other hand, the marketing managers, as the middle line managers control and manage the details of the events. Human skills are very important for them as the corporation with other departments and the Committee are unavoidable. They should able to communicate, lead and inspire enthusiasm. Meanwhile, to ensure that the timers are functioned properly, technical skills are inevitable and the first-line mangers have to respond to any situation changes, which comply with situational approach (Magmata Susquehanna, 2009). Secondly, technological condition also influent the Groups operation. Swatch Group is challenged by schismatic, which is highly focused when Pebble launched its kick-starter campaign in 2012 (Destroyers, 2013). Although the weaknesses of smart watch like highly dependent on smartened have not been overcame, Samsung Galaxy Gear watch has dominated 78 percent of 96 million revenue gained in schismatic market of US (Roar, 2014). This promising sales figures may be a threat for Swatch Group in a long run, especially when the schismatic passes the chasm of technology by having a better functionality. Based on a market research that took a sample size of 2577 adults in US, 63% of echo boomers, who are those who aged between 18 to 35 years old has slightly interested in owning a schismatic (Shannon- Missal, 2013). Besides, since the counterfeit watches are much cheaper and kick alike as the original watch, they occupy a huge market share. What make the situation worse is the people who wants to buy original but unintentionally buy a counterfeit watch. In a long run, peoples loyalty towards the branded products will loss and brands reputations will be damaged. In response to the new era, top line managers of the Group perform their inception skills as they made a decision to corporate with Microsoft in laughing a schismatic called Paparazzi ten years ago. Although the schismatic did not bring the expected succeed, both Research and Development departments showed their proficiency in technical skills. Moreover, the PR and marketing managers are the bridge to connect both organizations and hence human skills which used to build cooperative effort become extremely important. Meanwhile, Hayes does not agree with the says that schismatic is a threat to them, instead, he is very confident that it is a hence for them to convince people who willing to wear a schismatic try on their products (Kilowatt Potter, 2014). He did played his job well in the aspect of representing the Groups information and thought to the media, whether in another term, spokesperson. Moreover, as a leader, he has motivated and gave a clear direction to the employees during the time when the employees are worried about the future of the company due to the presence of schismatic. Although the technology advance has brought many challenges to Swatch Group, it can also treated as an opportunity. Since there are people who enjoy online-shopping nowadays, a new platform, e-commerce have been introduced to reduce the chance loss. The main jobs of e-commerce developers are to ensure that the e-business of the group are operated smoothly, the users and technical documents are established, which perfectly interpret the responsibilities of first-line manager, thus the proficiency in relative technical skills is strongly required (Swatch Group, 2014). The corporation of many departments including marketing department and IT department are required since the head of the departments, also known as middle line managers have to manage what products can be sold via the web hill the first-line manager, mainly the technicians and the salesperson have to ensure the website is updated, operated normally and the proper manner used when communicate with consumers. The top line managers like the CEO have to keep track on the online sales. Furthermore, to ensure that the employees are aware of the worlds change, the Group gives training on technical-know-how, interpersonal skills and acquisition of competencies to their employees (Cowcatchers. Com, 2014). The team leader, no matter which line of managers should show their leader role by understanding what the employees request for and are they being motivated enough. This in turn aids in promoting the esprit De corps principle that builds harmony and a united front within the organization, according to Payolas 1 4 principles (Wren Bedside, 2009). In conclusion, economic and technological are two of the general environments that affect the Groups operation in positive and negative ways. The changes are unavoidable but the ways that the managers embrace and adapt to it determine the smoothness of its operation. Therefore, managers, which are human capital of Swatch Group is one of its key success factors as they dedicates great effort to the Group according to the positions they hold ND the responsibilities they carry.