The Quartz Crisis (Japanese Dictionary)
In the mid-twentieth century, Swiss companies ruled the international watch market. Their mechanical timepieces, famous for reliability, used a complex system of springs and gears to keep time. Swiss dominance, however, was challenged by a new technology that used an electronic device called an “oscillator,” which was regulated by a quartz crystal, to measure time. This led to battery-powered watches that were cheaper and more precise. Despite quartz technology having been developed with the help of Swiss inventors, Swiss watchmakers looked down on the lower technical skill involved in producing quartz watches. By the 1970s, however, inexpensive quartz timepieces manufactured in both Japan and the United States had flooded the market. Swiss companies were slow to respond, even when it became clear quartz would dominate the global market, and Swiss watch exports fell sharply. Worldfamous brands were put out of business, and by the end of the 1970s, the industry’s work force had shrunk considerably.
Unlike Japanese and American manufacturers, Swiss watch companies were small to medium-sized businesses and could not compete in terms of both large-scale production and mass marketing. Furthermore, the Swiss were incredibly hesitant to embrace technological innovation. It was not, however, simply a matter of losing to quartz technology: in the 1970s, Japanese watchmakers began manufacturing inexpensive mechanical watches similar to those made by the Swiss. They were able to maintain a high standard of quality by decreasing and continuously refining the range of models. This proved incredibly profitable, allowing them to overtake the Swiss in this market too. Swiss watchmakers faced further trouble when the US dollar lost roughly 60 percent of its value against the Swiss franc, causing a sharp rise in the prices of Swiss imports to the United States.
The 1980s, however, brought two developments that saved the Swiss watch industry. Manufacturers focused on the uniqueness and history of Swiss watches by increasing prices and promoting the art of watchmaking, transforming their products into high-end status symbols. Although successful, this strategy required the manufacturers to reinvest large percentages of their profits back into marketing. At the lower end of the market, restructuring and the adoption of efficient production methods led to the creation of the Swatch in 1983 an inexpensive quartz watch that became an instant hit, selling millions and becoming a fashionable brand in its own right. Although only a fraction of today’s watches are Swiss made, the revival of the Swiss watch industry lies not in the volume of sales but in the re-establishment of the desirability of the Swiss brand.
