LONGINES

Casula Amarender Aditya 10BSPHH010198 Submitted to : Prof. Sriram Ranjan 6/2/2020

INDEX

1.Longines:Introduction 2.Longines:A History 2.1.Brand Evolution 2.2.The First World War:Creations 2.3.Principles of the manufacture in Les Longines:3 2.4.Longines and Formula 1 2.5.Towards Electronic High Precision 2.6.Towards the 21st Century 3.Milestone Products & major Changes 4. Promoter 4.1.The Swatch Group 4.1.1.The Swatch Group Yesterday 4.1.2.The Swatch Group Today 4.1.3.The Swatch Group Tomorrow 5.Brand Ambassadors 6.Market Analysis 6.1.Luxury Watch Industry:A Short Overview 7.Analysis of Luxury Watch Industry 7.1.Threat of New Entrants 7.2Bargaining Power of Buyers 7.3.Bargaining Power of Suppliers 7.4Threat of Substitute Products 7.5.Intensity of rivalry among Existing Competitors
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Pillars

8.Conclusion 8.1.Competitive Strategy in Luxury Watch making Industry 8.2.Differentiation 8.3.Product Campaign 8.4Celebrity 8.5.Overall Cost Leadership 9.Longines Campaigns

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Longines : Introduction Longines has been based at St Imier, Switzerland, since 1832. Its watchmaking expertise, built up over 175 years, reflects a strong devotion to tradition, elegance and the sporting world: it has generations of experience as the official timekeeper at world championships and as a partner of international sports federations. Longines is a member of The Swatch Group S.A., the worlds leading manufacturer of watches and associated products. With an excellent reputation for creating refined timepieces, the brand, whose emblem is the winged hourglass, is now established in more than 130 countries. In 1832, Auguste Agassiz entered the world of watchmaking by establishing a partnership with a watchmaking counter in Saint-Imier. Before long, he quickly took control of the enterprise and renamed it Agassiz & compagnie. At the time, the company assembled watches according to the tablissage method, with people working at home, and developed trade links that enabled the company to sell its timepieces around the world, particularly in North America. In the 1850s, Ernest Francillon, a nephew of Agassiz, took over the management of the reputed compa ny and looked for ways to improve the traditional manufacturing methods used in local watchmaking. His idea was to group the different operations involved in the finalisation of timepieces together in one factory, where he would use mechanical production methods to assemble and finish complete watches. To bring this project to fruition, he purchased two adjoining plots of land on the right bank of the river Suze in the Saint-Imier valley in 1866. This area of land was called Les Longines. To help him develop the machines he needed to perfect the watchmaking processes, Ernest Francillon employed a young relative, an engineer named Jacques David. In the 1870s, the industrial approach that Francillon had chosen proved highly successful and the factory continued to grow until the first third of the 20th century. By 1911, the Longines factory employed more than 1,100 people and its watches were being distributed around the world. The technical research carried out at Longines was recognized by many awards and distinctions. In fact, the brand with the winged hourglass was named Leading Prize Winner at several international exhibitions, right up until the Barcelona Exhibition of 1929, and won no fewer than 10 Grands Prix. The winged hourglass logo together with the Longines name form the oldest brand symbols still in use today and are registered with the World Intellectual Property Organisation. They have remained unchanged since 1867, when they were introduced as a sign of quality to combat the growing number of counterfeits trying to benefit from the excellent reputation of Longines products. Thanks to the expertise that Longines developed in- house, the company established a special relationship with the world of sport. It invented several devices for the precise timing of sporting events, such as the broken wire automatic timing system used at the Swiss Federal Gymnastics meeting in 1912, the Photogines, the first mechanism to link timing with a photo finish, in 1952, and the Contifort in 1960, which was the first system to combine timing with a moving image. These inventions enabled Longines to provide the timing for a large number of world-class
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events and secured its place in the annals of sport. Its supreme mastery of highly demanding technology encouraged the company to propose its timing systems to the world of Formula 1, and a prestigious partnership developed with the famous Italian car company, Ferrari. Building on this long association with sport, today the company is closely involved with equestrianism, gymnastics, short-track speed skating, archery, tennis and skiing. All of these sports demonstrate the brands core values of precision and elegance. Longines contributes its timing expertise in these disciplines at many top- level international events. It is the official timekeeper for major international equestrian competitions, as well as for the famous race at Royal Ascot in England. Longines also times the World Rhythmic Gymnastics Championships and the World Artistic Gymnastics Championships, two competitions that particularly express the brands unyielding passion for elegance. The company is also the official timekeeper for the French Tennis Championships at Roland Garros, one of the worlds four Grand Slam tournaments. Longines is also present on the White Circus, timing numerous Alpine ski events in various places including Levi (Finland), Aspen and Beaver Creek (USA), Val Gardena, Bormio, Cortina dAmpezzo, Tarvisio and Sestrire (Italy), Adelboden and Wengen (Switzerland), Maribor and Kranjska Gora (Slovenia), Garmisch Partenkirchen and Ofterschwang (Germany), Bansko (Bulgaria) and Kvitfjell (Norway), as well as the finals of the World Cup in Are (Sweden) and the World Championships in Val dIsre (France). To embody its values of tradition, elegance and performance, Longines has appointed several Ambassadors of Elegance. These are celebrities whose personalities correspond to the brands image, such as the famous tennis couple Andre Agassi and Stefanie Graf, the Indian actress Aishwarya Rai Bachchan, the Chinese star Aaron Kwok Fu Shing, the Russian actor Oleg Menshikov and the Lithuanian actress Ingeborga Dapkunaite. Other Longines Ambassadors of Elegance include the models Denise Keller and Chi Ling Lin, and the German actor Peter Lohmeyer. The watchmaking brand has also entrusted its reputation to sportsmen and -women who actively personify its most cherished values in competition. The Norwegian skier Aksel Lund Svindal, the Swiss riders Jane Richard and Markus Fuchs, the gymnast Shawn Johnso n, and the Chinese mens gymnastics team are all Longines Ambassadors of Elegance. Despite these strong links with sport, the company does not confine itself to timing competitive events. Since 1919, it has been the official supplier to the FAI, the World Air Sports Federation, and has provided the aeronautical world with the timing equipment required to verify several world records. Among them was the historic human and technical achievement of the American pilot, Charles Lindbergh, who, in 1927, made the first non-stop solo crossing of the North Atlantic in his vessel named Spirit of St Louis. Longines instruments have thus accompanied many explorers on journeys around the planet and have supported the pioneers of the sky.

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Today, Longines creates timepieces that are adapted to the constraints of modern times without sacrificing its core values. The watchmaking tradition of the winged-hourglass brand is exemplified by models in the Longines Master Collection, the Longines Evidenza, Longines Spirit, or the Heritage Collection (Flagship Heritage, Longines Clous de Paris, Conquest Heritage, or Les Elgantes de Longines). Its devotion to elegance is expressed in the Longines Dolce Vita, Longines BelleArti (contemporary elegance) or La Grande Classique de Longines (classic elegance) collections. Finally, all of its sporting experience is invested in performance, with models such as the HydroConquest, Conquest, GrandVitesse and Longines Admiral. The Longines Sport Legends (The Longines Weems Second-Setting Watch, the Lindbergh Hour Angle Watch, the Longines Legend Diver and the Longines Istituto Idrografico R. Marina Watch) all pay tribute to the famous instruments that have been invented by the brand with the winged hourglass. Longines is a member of the Swatch Group, the worlds leading producer of watches and associated products. Its signature is timeless elegance based on a rich aesthetic heritage that it keeps up-to-date with a skilful blend of refinement and classicism. Its current models are inspired by a history of daring technology and bold styling nurtured within the Manufacture, a huge laboratory that carefully protects the profile of Longines creations. Longines is a brand that has always had worldwide ambitions. Today, the company is present in more than 130 countries and has preserved its essential, long-standing values. Elegance is the fundamental principle that still drives every aspect of its activities around the world

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Longines :A History Brand evolution In 1832, Auguste Agassiz entered the world of watchmaking by establishing a partnership with a watchmaking comptoir (the Swiss name for a watch production workshop and dealership) in Saint-Imier. Shortly thereafter, he took control of the enterprise and renamed it Agassiz & compagnie. At the time, the company assembled watches according to the tablissage method, with people working at home, and developed trade links that enabled the company to sell its timepieces around the world, particularly in North America. In the 1850s, Ernest Francillon, a nephew of Agassiz, took over the management of the company on behalf of his uncle, who was obliged by ill health to delegate his responsibilities. Francillon continued the work of the company, concentrating his efforts on the production of standard watches and aiming to increase production of it. In 1862 Francillon gave his name to the company, although it remained under the auspices of his uncle, being now known as Ancienne Maison Auguste Agassiz, Ernest Francillon, successeur. Immediately, he looked for ways to improve the manufacturing methods currently in force in the watchmaking industry of the Jura region. Referred to as tablissage, this method of organising the labour necessary to produce watches is characterised by a very clear division of labour within a network of artisans, each specialising in highly segmented tasks and each working independently. At the head of this diffuse system of production were the watch manufacturers who like Francillon owned a watchmaking comptoir. The watch manufacturer distributed the work to be carried out among the independent artisans, co-ordinated production, and was responsible for the marketing of the finished watch. When he took over responsibility for the former Agassiz comptoir, Francillon was fully aware of the deficiencies inherent in the system, and looked for a solution to reduce the effect of these deficiencies on the watch production process. His conclusions led him to attempt to formulate a new method of production which would be for the assembly of the movement did not sufficiently improve the tablissage production process, and Francillon also explored the possibilities afforded by machine tools. Mechanisation of the production process was of fundamental importance for Swiss watchmaking in the second half of the 19th century, and Francillon was one of the pioneers in this field which was at that time unknown among regional watchmakers. He used machines for the production of certain components of the movement, but his main ambition was to acquire the capacity based on two principal axes: geographical concentration of labour (which at that time was spread over a wide area within the tablissage system), and the use of mechanical production methods which were being developed at that time. In 1866 he bought an old amalgam mill at a place called Les Longines on the banks of the river Suze in the Saint-Imier valley. Here he aimed to set up a watchmaking factory, bringing together under one roof some of the artisans who were affiliated with his comptoir.

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Simply bringing together the various specialists in certain operations to produce bauches, or movement blanks, which constitute the substructure of the movement. The possibility of machining these blanks is an essential strategic element of watch produc tion, on the one hand enabling a manufacturer to develop his own calibres, and on the other hand providing some relief from dependence on movement blank manufacturers, which supplied the entire watchmaking industry of the Jura region with these basic movement frameworks. To develop the machines necessary for production, Francillon sought the assistance of a young relative, an engineer named Jacques David, who together with an experienced watchmaker by the name of Edouard Chtelain undertook to modify the mechanical methods involved in the established production programme. In 1867, Francillon was able to present the first calibre entirely designed at Les Longines the 20A, a mechanical movement with pendant winding. This was first presented at the Universal Exhibition in Paris. At the same time, Francillon undertook steady development of calibres which he adapted to his ambitious new production set-up. This quest for the movement continued until the end of the 19th century and went on into the first third of the 20th century, in spite of the death of the founder of the Longines factory. In 1878, Longines produced a calibre fitted with a simple chronograph mechanism, the 20H. This movement was the first chronometric device manufactured by Longines. During the 20th century the brand was to invest massively in this field. The 1876 Universal Exhibition held in Philadelphia is generally regarded as being the starting point for the process of the industrialisation of the Swiss watchmaking industry, which was still based on a production system governed by the tablissage organisational method, in spite of some attempts to question this system (the most successful such attempt being that of Longines). By indirectly setting Swiss watch production against that of the American manufacturers, in particular at the Waltham and Elgin factories, the exhibition provided an opportunity for the delegate from the Socit Intercantonale des industries du Jura, Jacques David, to evaluate the emergence of the competition, which was as unexpected as it was serious. Returning from the United States armed with a report containing disturbing findings about how far Swiss watchmakers firmly rooted in a concept for the organisation of labour which had contributed much to regional development were falling behind, Jacques David, the engineer at the Longines factory, paved the way for a new production concept which would enable the Swiss watchmaking industry to affirm its expertise within the framework of a different production system, more suited to supporting its firm resolution to fight the threat of the transatlantic competition which was a cause for concern from many points of view. But while Swiss watchmakers were still putting up resistance to the introduction of machine tools, Longines (thanks to Francillons intuition and Davids efforts) played a pioneering role in the process of the mechanisation albeit partial of watch production. Indeed, the production route taken by Francillon was to receive confirmation in the form of distinctions and prizes awarded at universal exhibitions held internationally. In the last third of the 19th century, the production of the Longines factory was regularly honoured by various
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accolades testifying to the quality of a production concept which attempted to integrate, on different levels and according to different experimental approaches, the contributions that machine tools could make to watchmaking. In 1874, Francillon also took protective measures to guarantee the authenticity of his production, and to guard against the counterfeits that were attempting to take advantage of the Longines name. He published a notice stipulating that all watches and all movements produced in his factory from 1867 onwards were to bear the name of Longines or the winged hourglass which is the symbol of the brand. From that time onwards the Longines brand and the winged hourglass symbol became firmly established. In 1880 the brand name was filed with the Federal Office of Intellectual Property, while the symbol was registered in 1889. In 1893 worldwide protection was provided when the brand name and symbol were filed with the United International Bureaux for the Protection of Intellectual Property, the forerunner of WIPO. Longines is thus the oldest brand name to have been re gistered with WIPO and still in use unchanged today. The putting in place of a structure for producing watch movements and watches required major effort and constant modification. From its beginnings in 1867, this vast work in progress continued during the end of the 19th century and into the 20th. The organisation of the factory underwent major development; additional tasks (inherited from the division of labour which applied in the context of regional tablissage) were integrated and a process of specia lisation led to the emergence of new operations, indeed of new professions. The changes in the organisational structure to some extent reflected the development of the production method used at the Longines factory. At the same time, mechanical production processes were progressively introduced under the supervision of the engineer Jacques David. Encouraged by the findings brought back from Philadelphia by David, Francillon continued to try to improve production by implementing the benefits of the mechanical age. In parallel with these changes in working methods, quality and production control procedures were set up. Although the first watches produced at Les Longines are listed from 1867 onwards, it would take several years, during which the production structure was being put in place, before the documents containing this information the livres d'tablissage began to include headings indicating the existence of a procedure for verifying production quality. Once the movement was assembled and cased up, i.e. once the timepiece was finished, the watch was subjected to a final control carried out by experienced watchmakers. The regularity of the rate was checked, and if any irregularities in the functioning of the watch were detected the watch was sent back to the timing workshops or other workshops further upstream in the production process. These production controls were carried out in what was known as the lanterne department, because it housed the special glass- fronted cupboards in which repairers and timers hung watches being kept under observation. This was the last stage carried out within the factory before the watch was put on sale. Once the control procedure was completed, the watch and the movement inside it were placed on lists covering the entire production at the factory, the livres d'tablissage. Kept in the dispatch
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department, these huge ledgers listed all the movements and timepieces produced at Les Longines using an individual consecutive number engraved on each calibre. In 1867, when Francillon was taking his first steps towards a new production concept, he immediately put in place a system which would enable him to identify all the movements produced in his factory. He wanted to have total traceability of production. All this information is recorded in the livres d'tablissage, a series of documents which made it possible for quality control to be exercised on all items produced. At the beginning of the 20th century, Longines consolidated the links it had established (going back as far as the time of the Agassiz comptoir) with the American market, an essential outlet for the Swiss watchmaking industry, in spite of the emergence of serious local competition. The Saint-Imier brand became well established in the United States and North America, thanks to the links maintained with Mayor, based in New York, and then with his successor J. Eugne Robert. In 1890, Albert Wittnauer took over the running of the establishment and the Longines representation on the other side of the Atlantic. This New York branch enabled the manufacture in Saint-Imier to sell a major part of its rapidly growing production. At the factory in Les Longines, for a good deal of effort was undertaken to shift production to an industrial scale. While new various new technologies were adapted for use in movement production, the brand also developed different types of movements for its timepieces. Influenced by a clear trend towards miniaturisation of the movement, Longines was now marketing its first wristwatches, although the pocket watch still took the lions share of its production. In 1900, the achievements of the winged hourglass brand were appropriately rewarded with the Grand Prix awarded at the Universal Exhibition in Paris. On the cusp of the 20th century, this recognitio n, taken in conjunction with the prizes won on similar occasions, reflected the progress made by the Longines factory since 1867 in putting in place a different system of production that was subject to systematic quality control. During the first decade of the 20th century, the development of the movement the heart of the watch and the centre of activities at the factory at Saint-Imier underwent a process of reorientation. Spurred by the creative impetus of Alfred Pfister, who joined the company in 1896, a range of calibres was developed. While the Longines movements of the first third of the 19th century were characterised by their robustness, the design perfected by Pfister and his staff was to place a new value on aesthetics. This range of calibres was produced in sizes from 8 to 24 lines; it was also executed in a slimmed-down version. The emergence of a construction model for the movement produced according to different approaches betokened a new way of thinking about watch manufacturing, aimed at the rationalisation of production. The calibres produced in Les Longines were mainly used in pocket watches, but the wristwatch which used movements similar to those used in pocket watches were gradually gaining ground. Over the first ten years of the century, Longines employed a significant number of workers although the numbers were very much dependent on economic circumstances. While the
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workforce at the Longines factory numbered about 900 in 1907, this figure rose to over 1000 in 1911 and almost 1200 by 1912. In a village of scarcely more than 8000 souls, the place occupied by the company, in spite of the presence of numerous other watch manufacturers, appeared predominant to say the least. Every day a long procession of workers would march up along the banks of the river Suze in the direction of the village; this procession of workers illustrated the close connections that existed between the Longines factory and the village of Saint-Imier, whose development owes much to the watchmaking industry. The First World War: Creations From an industrial point of view, the first decade of the 20th century represented a period of extension, increased production and the development of new movement models. This period was brought to an end by the First World War and its consequences. In the context of strong demand for timepieces, with wristwatches gaining in importance, the technical department headed by Alfred Pfister was studying the construction of shaped movements, specially designed for timepieces to be worn on the wrist. These calibres, which were developed during the war, represented the first example of movements specifically created by Longines for wristwatches. The oval and rectangular shapes of these calibres, and consequently the shapes of the timepieces themselves, were a response to the aesthetic trends of the period. But the beginning of the first global conflict interrupted the period of growth and consolidation which had begun for the factory at the end of the 19th century. The general mobilisation decreed in Switzerland emptied the workshops of their men, forcing horological matters to come to a standstill. The managers at Longines were obliged to suspend shipments and to impose shorttime working. However, in order to counteract the economic consequences of the war, a process of diversification of production was initiated. Adapting the production equipment available, Longines manufactured prismatic compasses to send to England and sighting compasses for the United States. However, the necessity for this tentative diversification proved short-lived. In spite of the obstacles to trade, global demand for timepieces rapidly recovered strength in the majority of the world markets. While the spectre of unemployment (the managers great fear at the start of the conflict) vanished during the latter years of the war, it was the shortage of labour, particularly the workers that had been called up to serve in the armed forces, that represented the most damaging deficiency as far as the activities of the company were concerned. Once the war was over, the technical office resumed the development of calibres, which had been put on hold during the last two years of the conflict. Even though a series of shaped movements intended for wristwatches had been developed in 1916, the innovation relating to the heart of the watch the centre of the companys industrial activities experienced a period of stagnation which contrasts with the uninterrupted development of movements from 1867 onwards. In spite of the emergence of the wristwatch, supported as much by the needs of the military as by the directions in which female fashions were moving, the construction of the Longines calibre seemed temporarily to have reached a technological plateau. It was 1920 before
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the factory launched a movement with a power reserve of 8 days, which was used in a series of special pieces that included small clocks, office clocks, travel clocks, and clocks used in cars and planes. From an economic standpoint, the beginning of the 1920s was marked by a pronounced slowdown which plunged the watchmaking industry, albeit accustomed to putting up with the hazards inherent in business affairs, into an intense crisis. In spite of the commercial lethargy prevailing at the beginning of the 1920s, the factory relaunched the process of movement development which had been interrupted by the war. For example, a special calibre with an alarm device was designed during this economically difficult period. In parallel, the company took part in competitions organised by observatories charged with verifying the operation of timepieces and certifying their accuracy. Longines obtained excellent results from the Washington observatory, where its on-board chronometers were often awarded first prize. In the context of the competition among watchmakers in matters of precision and reliability, the recognition provided by good results in observatory competitions was equivalent to a guarantee of production quality. Although Longines took part in the Geneva observatory competition in 1922, the winged hourglass was not to be seen in Neuchtel for several years, but was frequently present at Teddington in England. The factorys products appeared regularly in the upper echelons of observatory classifications. However, the need for precision timepieces went beyond the ultimately commercially-based competition among manufacturers in the observatory competitions. The chronometer a time measurement instrument the accuracy of which is certified by an observatory constitutes an essential item of equipment in many fields. In 1923, for example, when French scientist Jean Lecarme led a scientific expedition on Mont Blanc, he took with him ten Longines chronometers. The 1920s witnessed numerous attempts to master air travel, a field which requires time measurement instruments of extremely high precision. Thanks to its chronometers, Longines, the official supplier to the International Aeronautical Federation (IAF) since 1919, was right up there with the pioneers of the sky in their expeditions. In 1925, for example, the winged-hourglass brand accompanied Locatellis flight in the North Polar region; in 1926, the Saint-Imier company was there when Mittelholzer flew from Switzerland to Iran. But it was above all the human and technical achievement of Charles Lindbergh in 1927 which had a real impact in terms of brand awareness. Flying the "Spirit of St. Louis", Lindbergh succeeded in making the first non-stop crossing of the North Atlantic, from New York to Paris. His feat, officially ratified by the IAF, was timed using Longines measurement equipment. Subsequently, equipment provided by the winged-hourglass brand was to assist numerous pilots in their explorations of the skies. The Saint-Imier brand also accompanied the Antarctic expedition led by Admiral Byrd, but it was above all in the field of aviation that Longines was to provide chronometers. Between 1926 and 1939, the company was associated with a long list of prestigious flights. Longines also provided the equipment for the "Graf Zeppelin" airship captained by Hans von Schiller during his world tour. In 1938, Howard Hughes beat the speed record for a flight around the world,
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circling the globe in less than four days equipped with chronometers and chronographs supplied by Longines. In 1931, however, Longines involvement in the conquest of the skies took on a whole new dimension when, based on a design executed by Charles Lindbergh on the basis of his experience as a pilot, the company developed and produced an Hour Angle watch. This device, which was to be of crucial importance for pilots at that time, showed Greenwich time and the corresponding hour angle. The repercussions of the spectacular collapse in share prices at the New York Stock Exchange on October 24th 1929 sounded the death knell of the boom years and dragged the United States down into an unprecedented crisis affecting all Western economies to varying degrees. At the Longines factory, however, the situation seems to have been perceived as less worrying than at the time of the 1921 crisis, and the managers considered themselves better equipped to face a recession. Nevertheless the crisis spread, seriously affecting the Swiss watchmaking industry, which in addition was having to cope with new competition from American watches which were protected by the prohibitive customs tariffs voted by Congress. Furthermore, the practice of chablonnage, i.e. the exporting of movement blanks and assorted parts, increased and aggravated the threat hovering over the Swiss watchmaking industry as a whole. Indeed the impact was sorely felt at Longines: for the first time ever, the company recorded a serious annual deficit, working hours were shortened, the payment of dividends was deferred, workshops outside the factory were closed and observatory competitions were postponed. The impact of the recession in the 1930s also led to a reorganisation of the production process, a severe cutback in the number of calibres in production and the design of new movements including a small baguette calibre. At the instigation of Alfred Pfister, Longines adapted its production methods and sought to reduce the cost price of its movements. The crisis gave rise to a remodelling of the structure of the factory. In 1936 the situation improved again for watchmaking in conjunction with the re-opening of the American market, where Longines from then onwards had a reorganised branch operating under the name of the Longines-Wittnauer Watch Co, which once again set about the task of filling up the factorys order books. After six difficult years marked by the worldwide economic slump, Longines came to the end of the financial year 1936 with a modest profit. The period of recovery that took place in the second half of the 1930s was stopped in its tracks by the start of the Second World War. The general mobilisation of the Swiss army deprived the workshops at Les Longines of the necessary workforce to maintain the productivity levels that had been attained by the end of the decade. In addition, as the war extended its grip, commercial difficulties emerged, although the watchmaking industry found ways of selling its products, for by contrast with the impact that the First World War had had on the course of business, the demand for timepieces continued unabated during the years of the conflict, particularly as far as chronographs were concerned. The aeroplane now took the place of the boat for the transport of watches produced in Les Longines. But in spite of this change, there were often severe obstacles in the way of traffic and finished timepieces were sometimes only delivered with difficulty.
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It was during this period that the New York branch of the business showed its potential as far as the Saint-Imier company was concerned. With the closure of many European outlets, the Longines-Wittnauer company absorbed the majority of the watches produced on the banks of the Suze, even though the factory was working to its maximum capacity during this period. Indeed, in spite of the war, the financial position of the factory was very much better than it had been at any time since 1936. While chronograph movements were the object of numerous developments in the 1930s and 1940s the need for such instruments was great, especially during the war Longines was also researching the design of other technical devices. Outside the field of sports timekeeping, where the company was beginning to study and create various systems, Longines was adding to the range of instruments which it could provide to aviators. In particular, the company designed an on-board chronometer which became known as the siderograph, which gives the sidereal time at Greenwich expressed in degrees, minutes and fractions of arc minutes; this was used to speed up calculations of position by directly showing the hour angle of the vernal point in relation to Greenwich. Although a difficult time from a commercial point of view, because of the many obstacles and communication problems, as far as the economic situation was concerned the Second World War was quite a favourable period for the watchmaking industry. On the technical level, the period of the conflict proved to be a period rich in developments at Longines. Many calibres were also designed between 1939 and 1945 (although the creative pace proved to be slower than at the start of the decade), while simultaneously the brand developed new processes in the field of sports timing. But one important innovation was created in the workshops at the Saint-Imier factory towards the end of the war: the technical department researched the development of a calibre with automatic winding, a type which was beginning to find favour with the international clientele. Under the leadership of Alfred Pfister, the technical department made huge efforts in terms of research and development, on the one hand in order to design an self-winding movement starting with a special movement blank and on the other hand in order to create the tools necessary for its production. The development of a prototype, using a new winding technology never yest adapted to large-scale production, represented a considerable challenge requiring the participation of all the departments of the factory. In 1945, Longines introduced its first self- winding movement created in its own workshops : Calibre 22A. This circular movement measuring 21.5 mm in diameter was built simultaneously with subsidiary seconds or centre seconds, and was protected by numerous patents. In 1944, another development project was started in the field of chronographs. The technical department wanted to develop a calibre for a wrist chronograph that would be lighter than the models in production at that time. Following a lengthy phase of research and modification, in 1947 Longines brought out a mechanical manual winding movement fitted with a chronograph device, Calibre 30CH the last wrist chronograph movement to be developed by the Saint-Imier factory.

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Generally, the newfound peace seemed to benefit the Swiss watchmaking industry and to contribute to its development. However, the influx of orders in the period following the war should not obscure the position achieved by the industry in Switzerland during the conflict, while foreign competition was suffering under a variety of constraints. In the face of the expansion of the worldwide demand for watches, production equipment was deployed and factories were enlarged. At Les Longines, new buildings were constructed throughout this period as part of a huge transformation programme. In addition to innovation in watchmaking technology, the winged- hourglass company continued to pursue the paths it had been successfully following for several years beforehand. In the field of precision, Longines participated in the chronometry competition set up by the Neuchtel Observatory to evaluate wristwatches, and obtained exce llent results. Abandoned during the war (by Longines in particular), these chronometry tests setting one watchmaking brand against another took on a new importance in the context of the competition between the various companies. But although the chronometry competitions were a suitable means of testifying to production quality, the necessity of having a precise instrument for measuring time remained a fundamental need in many areas. From the 1950s onwards, sports chronometry, a field in which Longines had s ignificant expertise even at that time, constituted an important part of the activities of the winged- hourglass brand. Thanks to chronometry instruments developed by the Saint-Imier company from 1878 onwards, Longines had participated in numerous sports events of international importance. Productivity at the Longines factory, achieved during the first half of the 20th century at the cost of rationalisation and modification of the production method, was largely maintained at the same level in the years between 1950 and 1970. Through its chronometers, Longines participated in the travels undertaken by pioneers searching the world for as yet unexplored territory. The French polar expeditions led by the scientist and ethnologist Paul- Emile Victor between 1947 and 1976 were among these attempts at the exploration of the planet, carried out even in sometimes hostile regions. The large amounts of sophisticated equipment that these expeditions required included Longines chronometers. For a long voyage into an inhosp itable environment, a reliable chronometer is a vital piece of equipment, principally for determining position. Subjected to huge variations in temperature, the equipment produced by Longines supported geologists, physicists, geophysicists, glaciologists, geodesists and other engineers of the French expedition in their polar journeys. Apart from the characteristics of the movement itself, i.e. the construction and totality of the technical parameters contributing to a precise rate, the watertightness of the timepiece was an essential prerequisite for any expedition in difficult conditions: a watertight case protects the movement and promotes a regular rate. While Longines was participating in the discovery of the poles, or in other expeditions such as the British topographical campaign in Georgia in 1955-1956, the winged-hourglass company also found itself plunged to the depths of the ocean bed. Through its chronometry equipment,
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Longines was associated with the marine explorations carried out by Professor Auguste Piccard. A Swiss physicist, Piccard had devoted the first half of his career to conquering the stratosphere in a pressurised airship of his own design, with which he attained a height of 15,781 metres in 1931. After the Second World War, he resumed the position of Professor of Physics which he had held before the conflict at the University of Brussels, where he led work on the development of an engine for exploring the ocean depths. He designed his first bathyscaphe (derived from the Greek bathus (deep) and skaph (boat)). At the beginning of the 1950s, Piccard directed the construction of a new submersible, financed by Italy and Switzerland, which he christened Trieste in honour of the Italian city where the project was based. The first tests were carried out during the summer of 1953 along the Italian coast, with the assistance of the Italian Navy. In the cabin of the Trieste, high-precision Longines counters formed part of the equipment with which the scientist and his son Jacques Piccard launched themselves to a test depth of more than 1000 metres. On September 30th 1953, the "Trieste" attained a depth of 3,050 metres off the island of Ponza. This was to be the professors last dive, after which he handed over the control of his bathyscaph to his son. In addition to its mechanical instruments, Longines was also studying new technologies for the measurement of time. Thus the company developed a high-precision quartz clock which enabled it to obtain an unprecedented result at the Neuchtel Observatory in 1954. The performance of this device, designed in- house at the Saint-Imier factory, superseded the accuracy records previously established by time- measurement instruments at astronomical and chronometric observatories. After 24 hours in operation, the Longines quartz clock showed an error of zero (0 thousandths of a second). It was the chronometry department which, under the supervision of the engineers from the winged-hourglass company, had perfected the mechanical and electronic parts of the device. This quartz clock was then coupled to a Paillard-Bolex H16 camera. This technical association enabled Longines to design a sports timing device using a principle already evaluated with the previously developed Chronocamra, i.e. the visualisation of time on the finishing line. In this device, known as the Chronocingines, the time indicated to one hundredth of a second by the quartz clock was projected via a set of lenses on to each frame of a film (up to 100 frames per second), thanks to a synchronous motor which causes a counter movement to turn. During the 1950s, the development of sports timekeeping devices continued at Longines. Although it was just one of a series of systems designed by the Saint-Imier company, the Chronocingines signalled the emergence of a new technology, the technology of electronics and quartz, within the field of time-measurement techniques. In 1952, Longines brought out its first self-winding calibre designed in house, the 19A. The factory was acquiring knowledge relating to automatic winding technology. In 1956, this experience was mobilised for the design of a small oval self-winding movement which was intended for ladies watches, the 14.17. Dependent upon the decisive progress made with regard to lubrication, this calibre was fitted with a balance and spring assembly oscillating at a frequency of 19,800 vibrations per hour; it constituted the only self- winding movement for
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ladies watches developed by Longines. The increase in the frequency of oscillation of its regulating organ marked a basic trend in the development of the mechanical movement, particularly in the context of the emergence of technological competition based on electronics and quartz. This progression, rendered possible by the independent development of the components, also had an impact on chronometry. In 1959, Longines developed a calibre specifically designed for observatory competitions. Designated by reference number 360, this movement, rectangular in shape with rounded corners, was produced in a very small series. It was exclusively allocated to the precision competitions in which the major watchmaking companies so eagerly participated. The construction characteristics of the 360 reflected its function: although its total surface area was very close to the limits specified by the observatories, the large size of this calibre permitted the use of a large barrel mainspring and promoted good management of the distribution of energy. In addition, the dimensions of the 360 made it possible to use a large balance and spring assembly oscillating at a frequency of 36,000 vibrations per hour, enabling a very precise rate. The 360 calibre set new records for precision in the wrist chronometer category at the Neuchtel Observatory. In 1957, Longines presented a timepiece which was named the "Flagship". Fitted with a 30L calibre built by the technicians of the manufacture in 1955, this watch set the seal on the adoption of a new concept for marketing watches. Although the technical characteristics remained an essential parameter of production, the fact of giving a timepiece a name opened up a strategic field which had until then been little exploited. Longines used the production of this watch as a centre around which it planned all of its publicity in the context of a world wide advertising campaign. At the end of the 1950s, Longines devoted significant resources to perfecting its mechanical movements. Calibres which were specially designed for wristwatches seemed at that time to have strong potential for advancement. Increasing the frequency of oscillation of the regulating organ formed at that time a technical trajectory which was systematically pursued. However, by contrast with earlier practices, the design of calibres was undertaken simultaneously with the creation of watch models. At the Basel Fair in 1959, Longines presented a timepiece which it christened "Jamboree"; it was fitted with a calibre available in several variants also designed in 1959, the 280. In the same year, the Saint-Imier brand also brought out a new 11 - line selfwinding calibre, the 290, which made the production of an automatic Conquest range possible. Following the example of contemporary movements, the 290 and its derivatives had a regulating organ oscillating at 19,800 vibrations per hour. In 1960, Longines developed the 340 calibre and its variants (341, 342, 343, 345) with which the Flagship timepieces are fitted. This 12- line selfwinding movement is also fitted with a balance-balance spring unit which vibrates at a frequency of 19,800 vibrations per hour. Within the factory, working methodology was being rationalised according to the principles of the scientific organisation of work. In the area of research and development, the second half of the 20th century saw the establishment of new rationales in the process of technical creation. At
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the Longines factory, engineering science was increasingly replacing the watchmakers technical expertise which had reigned supreme up to that time. The company called upon specialised skills to deepen its knowledge in certain fields which were being explored at that time, such as electronics and chemistry. Thus new technologies for the measurement of time, specifically electronics and quartz, were juxtaposed with traditional watchmaking techniques. This technical dichotomy of activity necessitated recourse to new expertise from outside the watchmaking industry. In 1954, the chronometry department, in collaboration with the engineers from the factorys technical department, had developed a portable quartz clock which was connected to a camera. This device, known as the Chronocingines, was frequently used by Longines in spite of the subsequent development of other systems for measuring intervals of time. For example, the Chronocingines was used for measuring the time for the world land speed record set in 1964 by Donald Campbell from the UK. In the Bluebird, a racing car weighing four tonnes and measuring over 9 metres, Campbell attained a speed of 648.728 km/hour on the bottom of Lake Eyre, a dried up lake in Australia. Thanks to an engine capable of 4100 horse power, the British driver did indeed break the world land speed record. To time the course of Campbells Bluebird, Longines used four Chronocingines devices. Thanks to the cameras, which were filming at a hundred frames per second, the system used made it possible to determine the exact position of the car at any given hundredth of a second. Longines also measured the time for the speed record on water as set by Campbell at the end of 1964. In Australia, the UK pilot attained a speed of 445 km/hour. Hot on the heels of the first portable quartz clock designed in Saint-Imier, major research into electronics and quartz technologies was undertaken and showed the first signs of success towards the mid 1960s. Having succeeded in miniaturising the technical principles of the clock controlling the Chronocingines devices, Longines developed a quartz electronic movement, Calibre 800, which was used for on-board chronometers. Equipped with an electromagnetic motor and a mercury battery, this time- measurement device paved the way for a degree of precision entirely different from that provided by mechanical devices. This chronometer superseded the records obtained by mechanical devices in the observatories. In addition to such technical aspects, Longines was pursuing its efforts in the area of watch design. Alongside the standard collections, the brand was creating prestige ranges displaying a certain aesthetic boldness. During this period, stylistic innovation beca me established as a new production dimension. Strengthened by its status as a manufacture (a watch industry French term referring to companies capable of making their own calibres), Longines continued to develop watch movements, following the broad outlines of the advances made since the 1950s. However, in 1967, Longines developed a 11 -line self- winding calibre which took the development ideas which had been pursued over the previous twenty years to their technical conclusion. The 430
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movement, of which several variations were produced, had a regulating organ vibrating at a frequency of 36,000 vibrations per hour, resulting in a very precise rate. While the frequency of oscillation of the balance and spring assembly increased from the 1950s onwards, it was generally limited to 19,800 or in some cases 21,600 vibrations per hour. At this level, Calibre 430 had the same characteristics as the movements designed specially by the company for the precision competitions at the observatories. Unlike these calibres, however, the 430 and its variants were developed for use in wristwatches that were generally available on the market. One special collection was in addition designed simultaneously with the development of this calibre; it was named "Ultra-Chron" in reference to the technical performance of the 430. This movement stemmed from a desire to create a mechanical countermeasure to the gradual (though at that time clearly perceptible) emergence of competition using electronic and quartz technologies. Although quartz was gaining ground, the creation of the 430 movement did not constitute the last stand of the mechanical calibre, the centre of Longines industrial activity since the company was founded in 1867, but rather the conclusion of a technical trajectory that had been pursued for a good quarter century. Longines also continued to develop mechanical calibres up until the 1980s. At the end of the 60s, therefore, traditional watchmaking was the subject of intense and costly research. In addition, mechanical chronometers were also modified in accordance with the advances made in certain fields, such as 1966 Calibre 262, which provided sports counters with a sliding hand so that the time could be measured to 1/10 of a second. At the end of the 1960s, the sustainability of the directions in which Longines was moving was also demonstrated by the companys activities in sports timing. The winged- hourglass brand continued to provide timekeeping equipment for various sports competitions all over the world, including the Tour de France, a cycling competition for which Longines has provided chronometers on 33 occasions. At the beginning of 1969, no official mention was made of the potential production of wristwatches fitted with a quartz electronic movement. However, a secret project had been initiated within the walls of the manufacture. Known as the "projet sablier" or hourglass project, its aim was to develop and produce a quartz Longines watch before 1970. Nonetheless, Longines was associated, together with other watchmaking companies and other firms, with the work carried out by the Centre Electronique Horloger (CEH), which was studying the design of a calibre using the piezoelectric properties of quartz. This joint research led to the development of the famous Bta 21, but on the basis of its potential as a movement manufacturer, Longines had been conducting an independent study in parallel, more focused on the reasonably large-scale production of an electronic movement for wristwatches. After eighteen months of research, the physicists, watchmaking engineers, electronics technicians and mechanical experts of the Saint-Imier factory had succeeded in realising the costly hourglass project, a challenge to which few watchmaking companies at the time were able to rise.

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The creation of a quartz electronic calibre was well off the beaten track of the technologies developed for many years by Longines and indeed by the Swiss watchmaking industry in spite of the incorporation of electronics into the field of sports timing from the 1950s onwards, and the production of electronic on-board chronometers in the mid 60s. A different mode of operation, dissimilar development strategies, production equipment which was different from traditional structures and an entirely different manufacturing method: it is possible to view the irruption of electronics on to the scene as a clear break in the dynamic of the technical progress of the watchmaking industry. However, in the face of foreign competition, the adoption of quartz seemed to be regarded by watchmakers as an onerous necessity, complementary to the traditional mechanical approach. In spite of the significant financing required, the manufacture approach which had inspired the creation of movements in Les Longines since the foundation of the factory had pushed the managers towards initiating the independent research project which was completed in 1969 when the company presented the 6512 calibre. Known as the Ultra-Quartz, this electronic movement for wristwatches was fitted with a quartz barrel and oscillated at a frequency of 9350 cycles per second. Powered by a 1.35V mercury battery, the Ultra-Quartz movement had a vibrating motor linked to the gears by means of a worm screw. It was referred to as a cybernetic movement in that it was made up of two mutually stabilising oscillating circuits. The design strategy behind the Ultra-Quartz revealed the technological choices implemented with the aim of simplifying the production of the movement, especially by avoiding having to integrate the circuit by the use of 14 transistors, 19 resistors and 7 capacitors. Finally, priority had to be given to its production. However, the rapid progress made in terms of the miniaturisation of electronic components and integrated circuits discredited the technical options selected by Longines for its Ultra-Quartz calibre, the first ever electronic movement for wristwatches to be marketed by a watch company. Meanwhile, Longines was trying other means of breaking into the market, with products that went beyond traditional watchmaking. In 1972, Longines brought out an avant- garde style wristwatch produced jointly by the company at Saint-Imier, Ebauches SA and Texas Instrument Incorporated. Unlike other products of the winged- hourglass brand, this timepiece, which became known as the Longines LCD (liquid crystal display) had a digital display using a screen with liquid crystals. With precision guaranteed to about one minute per year, this watch gained the high distinction conferred by the IR100 (Annual Industrial Research Conference and Awards). This was the first time a Swiss company had received an award for the best products of scientific and industrial research. Principles of the manufacture in Les Longines: 3 pillars In terms of watchmaking creations, the start of the 70s revealed the existence of several distinct development trends at Les Longines. First of all, the classic mechanical wristwatch was to the object of further development, while attention continued to be devoted to the mechanical movement, in spite of the competition represented by new technical solutions for the measurement of time. Secondly, electronics and quartz technologies were gradually becoming
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integrated into production. Thirdly and finally, the role of design was becoming increasingly dominant in the creation of watch collections: in 1972 Longines entrusted the conception of a new collection to the designer Serge Manzon, who expressed a fresh artistic vision through creating solid silver timepieces. While electronics and quartz were generally perceived as a regrettable necessity for the survival of the Swiss watch and clockmaking industry, Longines nevertheless did not abandon its traditional watchmaking activities, particularly those affecting the creation and construction of mechanical movements. During the 1970s, the factory at Saint-Imier studied new technical approaches to improving the functioning principles of the self- winding mechanical movement. In 1975 the manufacture developed a self-winding calibre which was fitted with two series-coupled coaxial barrels, Calibre 890. This innovative solution made for greater constancy in the transmission of energy and therefore affected the rate of the movement and its precision. The idea of fitting a calibre with two linked barrels had an effect on the thickness of the movement, a problem which was resolved in 1977 with the design of Calibre 990, which arranged the two barrels on the same level. The industrial strategy adopted at that time by Longines consisted of three pillars, comprising traditional watchmaking activities, sports timing and industrial electronics. Its status as an authentic manufacture endowed the Saint-Imier company with important research and development potential, which was mobilised both for the realisation of innovative mechanical movements and for the creation of quartz calibres. Thus, alongside the mechanical watchmaking which the company had been continuously practising and improving upon since its foundation, Longines was also seeking to create its own quartz electronic calibres to use in its timepieces. In 1978, the brand brought out timepieces fitted with the 950 calibre, a quartz electronic movement powered by a silver oxide battery and fitted with a bipolar stepping motor. This movement, which went beyond the boundaries of traditional watchmaking technology, was entirely developed within the manufacture in Les Longines. Whereas in the early 1980s the technical aspect still occupied a position of fundamental importance for the watchmaking industry (from a commercial standpoint) the aesthetic dimension was definitively making its emergence felt. In particular, the distinctions awarded for the aesthetics and refinement of the timepieces bore witness to a more general acknowledgement of the importance of this parameter. For long periods of time, the technical characteristics of the watch were perceived as more important than any artistic considerations, although aesthetics remained a determining criterion in certain quarters. In 1978, for example, a watch from the Volubilis collection was awarded the Baden-Baden Golden Rose, a distinction awarded to Longines four times. In 1975, the Saint-Imier brand had received an award for its Cloptra timepiece, inspired by oriental lines interpreted on a bangle bracelet. Longines and Formula 1:

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Through its sports timing devices, Longines was actively involved in the early days of motor sports. The manufacturer in Saint-Imier had been adapting equipment to the requirements of racing circuits from the 1920s onwards, and provided the timekeeping equipment for the Brazil Grand Prix in 1933. By handling the timing for the first of the Grand Prix events in the history of Formula 1, in the mid 20th century, Longines witnessed and contributed to the emergence of this discipline. The brand also provided timekeeping services for other competitions in the field of motor sports. For example, during the 1970s Longines provided the equipment for qualifying rallies for the World Championship (Corsica, England, Germany, Sweden, Mille Lacs, Ivory Coast, Portugal, Bulgaria, Czechoslovakia, Cyprus, San Remo, Tulip, Alps, Acropolos, Zakopane Poland), as well as continuing to provide timekeeping equipment for the legendary Le Mans 24 Hours endurance race, a task which it carried out from 1960 to 1991. At the end of the 1970s, Longines, with the assistance of Olivetti, developed an innovative timing process which was tested for the first time at the United States Formula 1 Grand Prix at Long Beach, in 1980. By dint of intensive study of the field of automated timekeeping, Longines created a system which operated by radio waves. By equipping each vehicle in a race with a small transmitter fixed to the front of the vehicle, the timekeeper was able thanks to the finishing line being covered with a metallic paper strip acting as a receiving antenna to determine the time clocked by each car. When a vehicle crossed the finishing line, the clock emitted a signal which was identified by a decoder and then directed to a computer and the corresponding timing equipment. The computer, which was supplied by Olivetti, was then able to retrieve the name, nationality and model of car, the net time for each car (lap by lap), the ranking, the average speed, the number of laps and even the fastest lap completed. This information could also be circulated via a closed circuit television network available to manufacturers and racing teams. This timekeeping process required no human intervention and consequently was not open to dispute. The information provided was also made available to the press and the television channels, and constituted an indispensable working tool for commentators and analysts. Alongside its involvement with chronometry for automobile and mechanical sports, a field whose emergence had been supported by the Saint-Imier company with its chronometry systems, in 1980 Longines signed a partnership agreement with Ferrari , thus becoming the official timekeeper for the Italian Formula 1 racing team. The nature of the Longines-Ferrari collaboration primarily comprised the development and supply of control and timekeeping equipment for the Italian team. It was on account of the technical expertise of the Saint-Imier company that the collaboration was set up, but Longines was also to provide the staff for all the races in which Ferrari was participating. In addition, Longines was given the task of fully equipping the teams private circuit at Fiorano, and in return the brand was permitted to use the trackside billboards for advertising. Secondly, a commercial collaboration was set up on the basis of the companys underlying technical know how. Ferrari granted Longines rights to the use of the image and the brand for advertising purposes. Alongside the technical partnership set
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up with Ferrari in 1980, Longines became official timekeeper for all the Formula 1 Grand Prix races between 1982 and 1992, while at the same time continuing its cooperation with the Italian team. In 1981, Longines also set up a partnership with the Renault stable, which also required specialised technical assistance in the field of timekeeping. Towards electronic high precision: In 1984, Longines added another model to the Conquest range, a timepiece made of two-tone PVD-coated steel, and fitted with a quartz electronic calibre developed in the workshops of the manufacture in Saint-Imier using a technology which had been developed in Les Longines. Once the issue of the thickness of the quartz movement had been resolved, towards the end of the 70s, the R&D department turned its attention to another field, that of high precision. At the beginning of the 1980s, the focus of research for the engineers at the factory in Les Longines, as far as the design of the electronic movement was concerned, was on evaluating new perspectives, in particular finding solutions to the way variations in temperature affected the properties of quartz. The work resulted in the construction of the 276 VHP (very high precision) calibre, a thin quartz movement fitted with an oscillator thermo-compensated by a tuning fork type quartz oscillating at 262144 Hz. This additional device, i.e. a thermometer quartz, provided better functioning than other quartz electronic calibres. In addition, this high-precision movement benefited from development work carried out at the start of the decade to improve batteries by the use of lithium. Towards the 21st century: Now part of the Swatch Group, the largest watchmaking group in the world, Longines entered the 21st century in fine form. Although during the 1980s the continued existence of the Swiss watchmaking industry seemed to be painfully in doubt, the series of restructurings of production means (undertaken at the instigation of the SMH Group), the adoption of a strict and streamlined positioning on the market, and possibly also the fact of watches losing their status as functional objects, are doubtless sufficient to explain the globally positive development enjoyed by Longines up to the end of the 20th century. With the rationalisation of the production facilities carried out within the context of the Swatch Group, Longines saw a significant growth in its production capacity. The beginning of the 21st century heralded a new economic trend for the watchmaking industry. The watch, having lost its status as a functional item and an essential piece of equipment in the modern world, is becoming an emotional object. At the same time, the mechanical movement is being re-evaluated and perceived in a different light. While the communication and marketing campaigns carried out by the Swiss watchmaking industry played an important role in this change of status electronics and quartz having threatened its very existence it is also important to note that mechanical watches are associated with values vastly different to those of quartz and of functional timepieces. Mechanical watches embody a set of significant values
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which include aspects of tradition, historical expertise and even a way of life. In the years since 2000, mechanical watches have experienced a success which is in marked contrast to the forecasts that managers of watchmaking companies might have issued in the 1980s. At the beginning of the 21st century, the proportion of mechanical watches sold by Longines is clearly increasing. Within the context of the mechanical watchs steady return to favour among customers, the Saint-Imier company has introduced a collection which is dedicated to its watchmaking tradition. This is known as The Longines MasterCollection, and is entirely made up of mechanical watches (with manual or automatic winding). In 2007 the brand also presented an entirely new timepiece to complete the range dedicated to celebrating the companys watchmaking tradition, The Longines MasterCollection Retrograde. Conscious of the profound changes affecting the market for timepieces, such as the revival of the mechanical watch, Longines commissioned ETA, the company responsible for the construction and production of the calibre within the Swatch Group, with the development of a mechanical movement. At the instigation of the winged-hourglass brand, ETA accordingly developed two versions of a completely new self- winding movement fitted with retrograde functions, and used exclusively by Longines. Also in 2007, Longines reaffirmed its links with the world of sport, investing in sporting disciplines that match the companys values. In parallel, the brand launched a wide range of sporty watches, The Longines Sport Collection, representing a continuation at product level of Longines enduring commitment to sports timing.

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Milestone products and major changes 1832 - 1850

Auguste Agassiz joins a watchmaking comptoir in Saint-Imier that manufactures and markets pocket watches with a crown-wheel escapement that is typical of the systems produced by the Swiss watchmaking industry in general.

1850 to 1860

The watchmaking company uses movements with cylinder escapements in its pocket watches rewound with a key, similar to those developed by the Swiss production system for timepieces.

1860

Ernest Francillon takes over the management of the company and adopts a new technical solution for controlling the oscillations of the regulating organ within watch movements: the anchor escapement. This type of escapement differs from the systems used locally but becomes the standard type of escapement in the Saint-Imier watchmaking company.

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1867

The Longines factory is founded and produces its first movement, the 20A. This 20 line calibre has an anchor escapement as well as a pendant winding and time-setting mechanism. The movement receives an award at the Universal Exhibition in Paris that year.

1867-1875

The Longines company acquires and develops the technical skills necessary for manufacturing its own movements and creates a rational production system. The watch calibres designed at the factory during this period mark the beginning a line that will continue until the end of the 19th century.

1877

The Manufacture creates a movement that incorporates recent improvements in mechanics. The 18- line Lpine calibre (18L) introduces mechanical engineering techniques to the production process and the company now has the strategic capacity to develop its own calibres.

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1878

Using mechanical procedures perfected within the Manufacture, Longines produces a movement equipped with simple chronograph functions. The calibre 20H is Longiness first device in the fields of chronometry and the measurement of elapsed time. The brand will invest heavily in these areas during the 20th century.

1880

The Manufacture introduces a range of calibres that are constructed using mechanical production techniques developed in the factory. This family of movements includes large counter plate and a straight- line anchor escapement

1888 . Having created the basis of a watchmaking production system using machine tools, Longines now invests part of its resources in the area of high precision and creates its first certified chronometer, the calibre 21.59 This chronometer movement is based on a calibre developed inhouse in 1878, adapted to improve its accuracy.

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1889

Longines creates a second movement that enables high-precision regulation. The 21- line calibre 21.60 springs from the technical roots developed by the Manufacture in the 1870s.

1893

The Saint-Imier company develops a calibre measuring 11- lines (26 mm). Its small size meets the growing taste for jewellery watches and for pieces of jewellery that incorporate a watch.

1895

A new line of calibres is launched (including movements 18.68 and 18.69). It continues to be produced, with variations, for several years.

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1897

Alfred Pfister, a young technician who joined the company in 1896, develops the 9.77 movement. This 9-line calibre (21.30 mm) is the smallest movement produced by Longines in the 19th century. It is inspired by some of the companys larger models.

1900

Longines wins the Grand Prix at the Universal Exhibition in Paris with a pocket watch named La Renomme. It is fitted with the chronometer calibre 21.59.

1908

The Saint-Imier Manufacture designs a 24-line calibre for on-board chronometers. Longines continues to penetrate the domains of precision timing and develops high-quality instruments.

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1909

The development of small calibres based on original technology created in the early 1900s enables Longines to undertake the large-scale marketing of wrist watches and jewellery watches.

1910

Longines develops a 21-line chronometer movement, the calibre 21.29. This high-precision movement, with several modifications, is used throughout the first half of the 20th century. It also provides a technical basis for the siderometer created by the company in 1939.

1911 A watch in the shape of a barrel marks Longiness entry into the elegant world of the wristwatch. This timepiece is also the ancestor of the Longines evidenza collection.

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1912

The brand with the winged- hourglass symbol builds an 8-line calibre for small wristwatches: the 8.37 movement.

1913

Longines introduces its first calibre for a single push-piece wrist chronograph, the 13.33Z. This movement, which measures 29 mm in diameter, is equipped with a 30minute instantaneous counter and is accurate to 1/5th second.

1914 Development and launch of a movement with a power reserve of 8 days, the calibre 19.41.

1916

During the war, the Saint-Imier company starts developing shaped movements and markets a range of oval and rectangular calibres for wristwatches.

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1920

evelopment of the 24.41 movement, a 24- line calibre with an 8-day power reserve and indicator. It is fitted in a series of pecial models including miniature clocks, desk clocks, travel clocks and clocks for cars or aircraft.

1921

Introduction of a movement fitted with a wake- up mechanism, the calibre 19.65.

1922

More timing devices are developed, including a new version of the 19.73N chronograph movement with flyback mechanism.

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1925

Longines creates an oval-shaped calibre to satisfy the trend for this form on the American market, the 7.48 movement. It is notably used to equip oval and barrel-shaped wristwatches.

1928

The company begins to renovate the calibres currently in production and develops a product technical base with updated tooling. Examples of this generation of calibres include the 18.68Z and 18.69Z.

1929

Longines continues to develop timing devices and designs several chronographs equipped with variations of the calibre 18.72.

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1930

The calibre 4.21 is designed to meet the tastes and requirements of the American market. It is a small movement in the form of a baguette measuring 9.15 mm by 21.00 mm.

1931

After flying non-stop across the Atlantic from New York to Paris, the pilot Charles A. Lindbergh asks Longines to produce an idea that he has developed for a navigation instrument. The Hour Angle watch based on his concept is both a timekeeper and a calculating instrument. It becomes the companion for an entire generation of pilots as they progressively conquer the sky.

1932

Responding to the fashion for shaped movements, Longines produces the small baguette calibre 6.22 and the rectangular calibre 9.32 with a seconds dial that is separate from the main dial.

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1936

Introduction of the wrist chronograph calibre 13ZN. Several versions are released: with 1 or 2 push-pieces, a 30- minute semi- instantaneous counter, or a 60-minute continuous-action counter. Longines registers a patent for this calibre to protect the principle of the flyback.

1938

Longines markets a wrist chronograph based on a robust movement developed in- house with an added stop seconds mechanism: the calibre 12.68Z stop.

1939

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1943

During the war, the Manufacture creates a mechanical movement with a hand calendar fitted onto a calibre that is already in production. The new movement is named 12.68ZQ.

1945

The company launches its first automatic movement, the calibre 22A, which was developed in the Manufacture during the war. This round movement, measuring 21.5 mm in diameter, is produced both with a small-seconds counter and centre seconds, and is protected by several patents. Building the prototype, which incorporates new winding technology that has not yet been adapted to large-scale manufacturing, is a major challenge that involves all production departments.

1947

The technical office decides to develop a wrist chronograph calibre that is lighter than the models currently in production. After a long phase of analysis and adaptation, Longines produces a hand-wound movement fitted with a chronograph mechanism, the 30CH. It is the last chronograph developed by the Manufacture at St-Imier.

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1950

Longines takes a decisive step in its commitment to high precision by starting the production of movements designed specifically for timing operations. The company builds 300 pieces of the 30Z, a 30mm calibre intended uniquely for observatory competitions.

1952

A second self- winding movement, the 19A, is developed in several versions with centre seconds or a calendar.

1954

Launch of the Conquest, a line of watches that will continue into the 21st century. The Conquest models introduce a new approach to manufacturing that is gradually integrated into watch production.

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1956

A small self-winding movement is developed for womens watches, the calibre 14.17. Measuring 17 mm x 14.20 mm, it has a tandem sprung balance that oscillates at a frequency of 19,800 vibrations per hour.

1957

Longines introduces the Flagship, a wristwatch fitted with the calibre 30L built by the Manufactures technicians in 1955. This watch represents a different approach to marketing and confirms the new trends in manufacturing that were introduced in 1954 with the Conquest collection. Production of Flagship watches continues into the 21st century.

1958

The manufacturing system that Longines adopted several years ago results in the development of the self-winding calibre 290 with a tandem sprung balance oscillating at a frequency of 19,800 vibrations per hour. It is produced in several versions. Increasing the frequency of the regulating organ becomes a direction that is routinely followed to improve mechanical movements.

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1959

Development of a calibre specifically intended for observatory competitions, the 360, which is produced in a very small series. It has a rectangular shape with rounded corners and its construction features reflect its function: while its total surface area is close to the limits set by the observatories, the calibres generous size accommodates a large barrel spring and improves the management of energy transmission. It also enables the use of a large tandem sprung balance oscillating at a frequency of 36,000 vibrations per hour, which allows for very precise operation. The calibre 360 sets precision records in the wrist chronometer category at the Neuchtel Observatory.

1960

Longines introduces the movement 261, with a diameter of 50 mm, for the pocket watch category of observatory competitions. Its tandem sprung balance oscillates at a frequency of 36,000 vibrations per hour. This movement is based on a 24- line calibre developed specifically for sports timing in 1939.

1963

To evaluate the various options offered by the new technology flooding into the watchmaking industry, Longines designs the 400 movement, an electro- mechanical calibre powered by a 1.35V mercury battery.

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1965

Extensive research into electronic and quartz technologies leads to the internal development of a quartz electronic movement, the calibre 800, used to equip on-board chronometers. With an electromagnetic motor driven by a mercury battery, it opens the way towards a level of precision that is superior to mechanical calibres. This chronometer rewrites the records set by mechanical movements in observatories. 1967

Introduction of a new 11- line self- winding calibre that takes the technical developments of the last 20 years to new heights. The 430 movement, produced in several versions, is equipped with a regulating organ with a frequency of 36,000 vibrations per hour, which enables it to operate with great precision. The calibre 430 has the same characteristics as the movements that were specifically developed by the company for observatory precision competitions. At the same time, a special collection is designed around this calibre; it is called the Ultra-Chron in reference to its exceptional technical performance. This mechanical movement is born from a desire to counteract the growing competition from electronic and quartz technology. 1969

A confidential project is launched within the company to respond to new watchmaking technology. The objective of Projet Sablier (Hourglass Project) is to develop a Longines quartz watch before 1970. This goal is achieved when the company presents the calibre 6512, the Ultra-Quartz. The quartz bar in this electronic wristwatch movement resonates at a frequency of 9,350 cycles per second. Powered by a 1.35V mercury battery, the Ultra-Quartz movement has a vibrating motor linked to an endless screw. It is a cybernetic movement in the sense that it is made up of two oscillating circuits that stabilise each
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other. The Ultra-Quartz is designed to use technology that simplifies the manufacture of the movement. In particular, the need for an integrated circuit is avoided by using 14 transistors, 19 resistances and 7 capacitors, which benefits the companys own production.

1972 Longines introduces a wristwatch developed in conjunction with Ebauches SA and Texas Instruments Inc. Unlike other models produced by the brand, the Longines LCD timepiece presents a digital display on a screen of liquid crystals. With an accuracy of approximately one minute per year, the watch receives the highest award from the IR100 (Annual Industrial Research Conference and Awards).

1973

The role of design becomes more important in the development of wristwatches and Longines invites Serge Manzon to collaborate on its new collection. He creates watches with a bold new look in solid silver.

1975

The Saint-Imier factory examines new technological approaches for improving the operating principles of mechanical self- winding movements. In 1975, the Manufacture develops the self- winding calibre 890 equipped with two coaxial barrels in series. This

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innovative solution improves the consistency of energy transmission and thus the movements operation and accuracy.

1976 Launch of the brands first electronic chronograph, the Montreal, named after the city that hosted the 1976 Olympic Games. Its electronic tuning- fork movement is fitted with a chronograph mechanism and a 30minute counter.

1977

The company produces the mechanical self- winding calibre 990 with two barrels mounted in the same plane. This flat movement, measuring 2.95 mm in height, reinforces the Longines range of mechanical movements at a time when many watchmakers are turning to quartz.

1978 Longines introduces watches fitted with the calibre 950, an electronic quartz movement powered by a silver oxide battery driving a bipolar stepper motor. This movement, which is a major advance over traditional watchmaking technology, is completely developed within the Longines factory.

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1979

The company announces an outstanding technical achievement with an extremely slim quartz watch that measures just 1,98 mm. The Feuille dOr (Golden Leaf) is based on specific technology developed jointly by Longines and Ebauches SA/ETA.

1980

The development of electronic quartz calibres continues with the introduction of the 960 in several variations. The movement is powered by a silver oxide battery.

1981

The Saint-Imier factory announces another electronic quartz movement developed entirely in- house, the 970. This calibre has a thickness of 1.95 mm, and is driven by a Lavet-type motor powered by 1.55V silver oxide batteries. The movement is available in several versions, each one stamped with the companys famous seal: the winged hourglass.

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1982

A classical, elegant collection, the Agassiz, is introduced to commemorate the 150th anniversary of the Comptoir Agassiz, the original ancestor of the Longines company.

1984

The Conquest range is extended with a self- winding model, the Las Vegas, in two-tone steel. It maintains the family characteristics of strength, performance and refinement. Another model is added to the Conquest range: a steel watch with a twotone PVD finish, fitted with an electronic quartz calibre developed inhouse. The design of the 276 VHP (Very High Precision) movement nullifies the effect of temperature variations on a quartz crystal. The oscillator is thermo-compensated by a quartz-type tuning fork 262144 H, which ensures extremely precise operation. 1986

Longines launches the Charleston collection. While its inspiration comes from the 1920s, it is manufactured with the most advanced watchmaking technology.

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1987

To commemorate the 60th anniversary of Charles Lindberghs his toric flight across the Atlantic, the company updates the Hour Angle watch that he invented. The new versions of this famous watch are equipped with mechanical movements.

1989

This year marks the 100th anniversary of the registration of the companys trademark, the winged hourglass. To celebrate, the company produces a self- winding wristwatch called the Ephmride. This model has a patented external turning bezel that indicates the months and the Equation of Time curve. Apertures display sunrise and sunset times, as well as the solar declination.

1993

Introduction of the Grand Classique de Longines collection, a range of elegant, refined watches that draw their inspiration from the classical style that characterises traditional watchmaking.

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1997

The Longines DolceVita collection is launched, a line of watches with a contemporary design. Its modern interpretation of watchmaking elegance makes it a great success. To celebrate the 130th anniversary of the founding of the company, Longines produces a set of three mechanical timepieces including a chronograph counter, a chronometer and a watch that indicates 24 time zones.

2001

To celebrate its production of 30 million watches, the company develops a wristwatch with a double-barrel movement, the calibre 990.

2003

Development of the Longines evidenza collection, a line of watches with a barrel-shaped case. Itconfirms the elegance of a style that is rooted in tradition.

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2005

As tastes around the world return to a preference for mechanical watches, Longines introduces a collection devoted to the companys long watchmaking history. The Longines Master Collection is entirely composed of mechanical watches, both hand-wound and self-winding.

2007

Longines reaffirms its links with the world of sport and launches a large range of sports watches at Baselworld. The company has long been recognised for its commitment to timing sports events, and its expertise is now translated by the wristwatches in the Longines Sport Collection. Launch of the Longines Master Collection Retrograde. This watch completes the range that celebrates the companys watchmaking history and contains a highly unusual mechanical calibre. In 2004, Longines ordered a mechanical movement to be developed by ETA, the co mpany responsible for the design and manufacture of calibres in the Swatch Group. Exclusively for Longines, ETA produced two versions of a self-winding movement fitted with retrograde functions, and these calibres drive the retrograde models in the Longines Master Collection Retrograde.

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Promoter The swatch group The Swatch Group formed from two financially troubled predecessor companies: SSIH originated in 1930 with the merger of the Omega and Tissot companies. Swiss watch quality was high, but new technology such as the HamiltonElectric watch introduced in 1957 and the Bulova Accutron tuning fork watch introduced in 1961 presaged increasing high technology competition. In the late 1970s SSIH became insolvent due in part to a recession and in part to heavy competition from inexpensive Asian made quartz crystal watches. These difficulties occurred even though it had become Switzerland's largest and the world's third largest producer of watches. Its creditor banks assumed control in 1981. ASUAG, formed in 1931, was the world's largest producer of watch movements and the parts thereof (Balance wheels, Balance Springs (Spiral), Assortments, Watch Stones ("rubis"). ASUAG had also integrated an array of Watch brand in 1972 into a sub holding company, General Watch Co. ASUAG failed similarly in 1982. Both groups were reorganized and merged into SSIH/ASUAG Holding Company in 1983. Taken private, in 1985, by then CEO Nicolas Hayek, with the understanding of the Swiss Banks and the financial assistance of a group of Swiss private investors, it was renamed SMH in 1986, and ultimately Swatch Group Ltd in 1998. The launch of the new Swatch brand "Swatch" watch in 1983, by the then ETA SA CEO Ernst Thomke and his young team of engineers, was marked by bold new styling and design. The quartz watch was redesigned for manufacturing efficiency and fewer parts. This combination of marketing and manufacturing expertise restored Switzerland as a major player in the world wristwatch market. The Swatch Group yesterday Under the leadership of Nicolas G. Hayek, the Swatch Group achieved worldwide renown as the crown jewel of the watchmaking industry. In the early 1980s, Mr. Hayek led the firms recovery from a severe crisis. His decisive leadership was critical to the launch of the Swatch watch in 1983 and subsequently drove the continuous development and improvement of all Swatch Group brands. His innovative strategies also served as important models for the Swiss watchmaking industry as a whole and played a key role in the revival of the industry. The achievements of N.G. Hayek have been widely recognized in Switzerland and beyond, resulting in a number of notable awards, including that of Doctor honoris causa, awarded by the Universities of Neuchtel
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and Bologna in 1998. In 2003, he was named Officier de la Lgion dHonneur de France. Nicolas G. Hayek was Chairman and Delegate of the Board of Directors of The Swatch Group Ltd from 1986 to 2010. In 1998, SMH (Swiss Corporation for Microelectronics and Watchmaking Industries Ltd.), founded by Nicolas G. Hayek in 1983 through the merger Swiss watchmakers ASUAG and SSIH, was renamed The Swatch Group. At the time, both SSIH and ASUAG held a number of well-established Swiss watch brands. ASUAG had been founded in 1931, SSIH a year earlier through the amalgamation of Omega and Tissot. SSIHs principal objective was to market quality Swiss watches. By taking over companies that produced high-quality movements and a number of lower-end watch brands, SSIH gradually managed to establish a strong position as a Swiss watch manufacturer. ASUAGs mandate was to maintain, improve and develop the Swiss watch industry. ASUAG also expanded gradually through the purchase of co mpanies that made movement-blanks and a number of finished watch manufacturers that were subsequently brought together under the subsidiary GWC General Watch Co. Ltd. In the 1930s, both ASUAG and SSIH sought to combat the severe economic crisis and ensuing unemployment by means of complementary research and development programs in their respective companies. It proved difficult for both, however, to implement a common industrial policy for the subsidiaries concerned. Following repeated crises in the Swiss watch industry, by the 1970s both ASUAG and SSIH were once again in trouble. Foreign competition, in particular the Japanese watch industry, with its mass production of cheap new electronic products and new technology, was rapidly establishing a strong foothold in the market. Eventually, both ASUAG and SSIH faced liquidation, and foreign competitors were offering to buy prestigious brands such as Omega, Longines, Tissot, and others. At this point, Nicolas G. Hayek, at the time Chief Executive Officer of Hayek Engineering, received an assignment to develop a strategy for the future of both companies. In 1983, the soon to be renowned Hayek Study recommended a number of measures designed to enable the survival and ultimate recovery of the companies. Critical steps included the merger of ASUAG and SSIH into SMH and the launching of a low-cost, high-tech, artistic and emotional second watch the Swatch. The subsequent implementation of the measures recommended by the Hayek Study, together with the take-over of the majority of shares by the Hayek Pool and the nomination of Nicolas G. Hayek as CEO, successfully created new opportunities and established a new culture. Within five years, the SMH Group was to become the most valuable watchmaker in the world.

The Swatch Group today The Swatch Group Ltd. is the number one manufacturer of finished watches in the world. The Group is active in the manufacture of finished watches, jewelry, and watch movements and
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components. It produces nearly all of the components necessary to manufacture the watches sold under its 19 watch brands and the multi-brand Tourbillon retail label, as well as the entire Swiss watchmaking industry. In addition, it operates its own worldwide network of distribution organizations. The Swatch Group is also a key player in the electronic systems sector. The Swatch Group takes its name from the extraordinarily successful story of Swatch, one of the worlds most widely recognized consumer brand names. Less than 30 years ago, the Swiss watchmaking industry was battling a serious crisis. The first Swatch watches were released in 1983. The years since then have seen the recovery of the Swiss watchmaking industry as a whole, and the establishment of The Swatch Group as a strong, diversified industrial holding. This solid foundation has allowed the Group to broaden its reach and extend its range of brands. Today, the Swatch Group offers watches in all price categories, and Swatch Group monobrands and the multibrand Tourbillon retail mark hold leadership positions in all market segments: Breguet, Blancpain, Glashtte-Original, Lon Hatot, Jaquet-Droz, Omega and Tiffany & Co. in the Prestige and Luxury range; Longines, Rado and Union Glashtte in the high range; Tissot, ck Calvin Klein, Certina, Mido, Hamilton and Balmain in the middle range; Swatch and Flik Flak in the basic range segment; Endura in the private-label segment; Tourbillon, the retail mark under which all selected Swatch Group watch and jewelry brands of the Prestige and Luxury range, as well as Swatch products are offered in a unique and exclusive multi-brand environment. Today, the Swatch Group continues to invest heavily in research and development, driving the steady expansion of its leading position in materials and process tec hnologies and in product design and manufacturing. In particular, the Swatch Group engages in significant development activities in microelectronics and micromechanics. The Group is also active in the field of telecommunications and in the automobile and service sectors. Sports timing and measurement technologies, although not a core business, play a key role in terms of brand and Group visibility. A strong number of Swatch Group companies serve as official timekeepers at a variety of international sports events, including the Olympic Games. The Swatch Group tomorrow In the years ahead, the core business of the worlds largest manufacturer of finished watches will clearly remain in the watch industry. Swatch Group companies are constantly adding innovative new watches to the brand product lines, inspired by the grand traditions of Swiss quality and craftsmanship and made possible by the enormous resources the Group brings to bear through its technology research and development teams. The successful introduction of jewelry products by selected brands has established a basis for a growing presence in this sector. A range of Group companies supply movements and
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components not only to Swatch Group brands, but to the entire Swiss watch industry and to selected watchmakers outside Switzerland. The Swatch Group also continues to develop high-tech components for the computer, telecommunications, medical applications, automotive and electronics industries. Swatch has taken advantage of the Group's vast experience, know-how and production capacities in micromechanics and microelectronics to develop its activities in the telecommunications and internet sectors, where Swatch Access (wireless access control, internet access, e-commerce) is but one example of the brands remarkable ability to transform advanced technology into successful products. At the top end of the market, The Swatch Group will further reinforce its presence in the Prestige and Luxury segment with a growing number of mono-brand outlets for Breguet, Blancpain, Glashtte Original, Jaquet Droz, Lon Hatot, Omega, Longines, Rado et Swatch. The new multibrand boutiques under the high-end Tourbillon label are proving increasingly successful. The Tourbillon brand boutiques offer all Swatch Group luxury brands products watches and jewelry collections highlighting each brands appeal in specially designed environments.

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Brand ambassadors

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The brand ambassadors are chosen keeping in mind the sporty and luxurious positioning of the product

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Market analysis Luxury Watch Industry: A Short Overview In the 1970s, after around 1000 companies and 55000 place of work disappeared, many analysts left the Swiss watch making industry for dead as it missed out the electrical revolution and was facing tough competition from cheaper Japanese watches. Today, the watch industry is Switzerlands third largest exporter after the machine and the chemical industry. Switzerlands production of finished watches amounts to around 26 million units for a value of 10 CHF billions. The average export price for Swiss watches is 378 CHF versus 7 CHF for Hong Kong and 61 CHF for French watches. Where does this huge price difference come from? Switzerland possesses close to 100% of the luxury market value (which represents 48% of the watch market value). Export of watches including precious metal represents only 5% in units, but 46% in value.

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Positioning of the Brand: Longines

The above figure shows a chart displaying the most important brands in the watch industry. They are grouped into five different profiles resulting from their consumer image. The categories are the following: Connoisseurs/specialists Sport Fashion Lifestyle Jewellery What is more, the chart is divided into four regions using three criteria: the price (low price accessible luxury exclusive luxury), the type of movement (mechanical and complication versus quartz) and the technology grade (technical content versus design content).

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Analysis of the luxury watch industry Analyze each of the five forces in the luxury watch making industry.

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Harvard Business School Professor Michael Porter developed a model for industry analysis, known as the five forces model that pictures an industry being influenced by five forces. The following five dimensions are interacting and shaping the competition in an industry: The threat of new entrants: How easy is it for them to enter the market? This threat depends mainly on the presence of barriers to entry and the likelihood and capabilities of actual players to retaliate. The nature of the barriers to entry can be technological (the know-how is difficult to master, the actual players benefit of a patent), financial (economies of scale and/or of scope that a new entrant cannot achieve), strategic (the cost of building a brand) and linked to the actual legislation (protectionism, etc). The bargaining power of buyers: How strong is their position? Their bargaining power might enable them to ask for price reduction and or service enhancement. Their power might be especially high if they work together in order to buy in bulk, there is a lot of substitute products (or sellers), the product is standardized, they threaten to integrate backward, they are well informed and knowledgeable and/or the industry is not very important for them. The bargaining power of suppliers: How strong is their position? The reasoning is very symmetric to the one concerning the buyers. They may be able to increase the selling price. Their power is greater when there are a lot of buyers but few suppliers, the product is differentiated, they threaten to integrate forward, and/or the industry is not very important for them. The threat of substitute products: How easy can the product be substituted? This depends mainly on the willingness of customer to substitute and the relative price and quality of the substitutes. In the presence of high switching costs, customers are not likely to substitute. The rivalry among existing firms: How strong is the competition between the existing players? As the rivalry increases in an industry, its attractiveness and profits decreases. The competition on a market tends to be more intensive if the barriers to exit the industry are high, the growth of the market important, the players have the same size and are numerous. This model permits to understand the dynamics of the competition structure as well as the profitability of the studied industry. Threat of new entrants The first force that is examined is the threat of new entrants. In fact, not only incumbent competitors represent a thread but potential new entrants are also a threat for actual players on a market. The presence of profits in an industry will attract new firms willing to take advantage of these profits. Over time, too many new entrants will drive down these profits, decreasing at the same time the attractiveness of the industry. The presence of various barriers to entry can minimize this threat. The world of luxury watch making possesses numerous barriers that cannot be overcome very easily. The main barriers have been identified as the need of important financial capabilities, the difficulty to build a brand capital and finally the complicatedness to be distributed in top retail stores.

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Bargaining power of buyers In the Swiss luxury watch industry, even though companies tend to open more and more their own point of sales, the jewellers are still the main buyers. Luxury watch brands try to be presented in top jewellers stores in the best locations all over the world. But on the other hand, top jewellers also need to present top brands in their stores. Therefore, their bargaining power can be separated into two very distinct cases: the watch brand is an established player in the industry or the watch brand is a new entrant, still unknown by the final customer. Bargaining power of suppliers The third force examined is the bargaining power of suppliers. A watch usually includes, as main components, a movement, hands, a case, a dial, a crystal glass and a bracelet. The Swatch Group12 is an important movement supplier thanks to its company ETA and many other small ateliers supply the brands with some of the other components. Their power can vary depending on the company they are supplying. Actually, there is hardly any company that is fully autonomous. The only ones we could name are Rolex and the Swatch Group taken as a whole. They are highly vertically integrated and masters the entire value chain, in other words they are able to manufacture every single piece of a watch. Most of the other players (Richemont, Bulgari, LVMH, Movado) are directly or indirectly dependent on the Swatch Group, usually for the most important part of the watch: its movement. As it has already been mentioned, the luxury watch industry is dominated by mechanical technology; as a result, the procurement of mechanical movements is the high end brands main concern. Qualified manpower can also be an issue that should not be neglected; the number of watchmakers able to produce some of the most intricate complications is very small Threat of substitute products The fourth force presented is the threat of substitute product. It is difficult to talk, in a narrow and legal sense of close substitutes like it is meant when butter and margarine are compared. Nevertheless, counterfeit is a phenomenon that needs to be me ntioned because it represents a non negligible threat for the luxury watch industry. Secondly, in a larger sense, other luxury products can also be considered as a substitute.

Intensity of rivalry among existing competitors Last but not least, the fifth force discussed here is the one presented in the centre of Michael Porters model: the intensity of rivalry among existing competitors. Concerning the large trends, the past years, big groups were fighting over brands: each group wanted to increase its b rand portfolio by taking over independent brands. Richemont entered the luxury watch industry in 1999 with the take over of TAG Heuer for over 1 billion CHF. Then, in order to strengthen its watchmaking business unit, LVMH acquired Ebel (has integrated Movado Group in 1994), Chaumet and Zenith. This frenetic buying quickly expanded to other brands. Thus, Swatch Group adds Breguet, Glashtte Original and Jaquet Droz to its impressive brand portfolio. Gucci Group acquired Boucheron and Bdat and Co. The highest and also culminate
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point of this battle was reached when Richemont bought LMH16 for 3.08 CHF billion or about 60 times the estimated net profit and seven times the annual turnover. In the meantime the object of the battle has changed and now consists mainly in a run to components and spare parts. Conclusion The Swiss luxury watchmaking industry is a very profitable market but its nature and numerous barriers make it difficult for new entrants to successfully enter the market. Selling is for the actual players agreeable because they usually entertain good relationship with their distributors and if they have a strong brand it is easy for them to be distributed anywhere they want. On the other hand, the future of movements supply is still uncertain and it represents a serious issue for most companies. Therefore, the big groups try to integrate backward. The problem is that they are all trying to integrate backward and therefore, as demand for the same good increase, its price might also increase. Regarding substitutes products, no serious or close substitute threatens the industry even though counterfeits are, like for the entire luxury industry, a problem. Finally, the Swiss luxury watchmaking industry has been passably shaken the last years with first the arrival of LVMH as a major player and the gradual end of bauches delivery by ETA. This is adding a lot of competition and rivalry on a market that was usually very stable. Competitive strategy in the luxury watch making industry Michael Porter uses the criteria of strategic advantage and strategic target to define three fundamental competitive strategies for outperforming competitors in a long term perspective. In order to implement these strategies correctly, companies need to develop different skills, gather particular resources and have an adequate organization of the company. Each of these strategy provide defense against the five forces described in the Analysis of the luxury watch industry.

Differentiation The idea is to offer a product that is perceived as unique by the customer. The uniqueness can rely in the design -TechnoMarine, the brand who dares to mix plastic and diamond-, the brand image -Rolex and achievement, Cartier and art-, the technology used -Omega and the co-axial movement-, after-sales and customer services, etc. Of course, the company can not totally ignore the costs if it chooses a ifferentiation strategy but it is not the primary target. A differentiation
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strategy is not an easy task: it relies heavily on intangible values and therefore it is slow to create the brand image and slow to penetrate new markets. Besides, the brands have a very sensitive relationship with the market: customers are usually knowledgeable about the brand and ident ify themselves with it, therefore, companies have to be careful to nurture coherently the image of the brand and not disappoint them with mixed messages. In fact this is clearly showing a lack of innovation in marketing campaigns. No brand really dares to make something really different, imaginative or original and, therefore, strategies on the market are already much consolidated and look very alike. The implementation of the strategy is complex and difficult; the brand has not only to define intangible values but also to explain them and prove that they are different and apart from their competitors. But once the customer knows and understands the spirit of the product, the company can expect high margins on its product, a high degree of loyalty and lower sensitivity to price. Uniqueness can also protect from substitute because the more the product seems unique, the more it seems difficult to find close substitute. Moreover, as it has already being mentioned, the companies are protected from newcomers and benefit from high margin, thanks to this entry barrier. A differentiation strategy requires from the company strong marketing abilities to develop the uniqueness factor and qualified manpower that will be able to deal with intangible values. The latter usually relies on tradition, prestige, credibility, reputation, etc. What is more, managing creative people can be difficult sometimes as Gucci has experience with the depart of Tom Ford and Cartier with a high turnover of top management. The risk of having the managers of these luxury products falling with their product is also current. In this case, management then loses a critical view over the strategy and the product and might overdoing it. This can result in overpricing, over complacency or simply in a lack of innovation. Another important disadvantage of this strategy is that it is often subject to fraud and imitation. Luxury watchmaking brands rely on differentiation strategy which enables them to charge for important premium. Most of the brands are century old and therefore emphasis their long tradition in the industry, their reputation for quality tied with the Swiss made label, prestige and know-how. Taking a look at the communication strategies in the luxury watchmaking industry, the word differentiation sounds a little bit like an antilogy. In fact, the overall images of most of the brands rely on the values that have just been enumerated (tradition, prestige, etc). Concentrating only on the paper advertisement campaign, it is possible to identify five main approaches which are: product, sponsorship, technology, family and humor. Of course, most of the brands do not use a pure approach but can mix some of the elements. Nevertheless, the following categories are done mainly on the main message Product Campaign This strategy is the most used one. The product is the star and nothing else is shown on the advertisement beside the product. The background is usually very simple but it can also be a lot more sophisticated. The watch is sometimes shown far or close-up and sometimes it is. just a part of the watch like the bezel that is represented. Brands using this kind of strategy include Bdat & Co, Boucheron, Bulgari, Cartier, Chanel, Chopard, Dior, Dunhill, Gucci, Harry Winston, Montblanc, Raymond Weil, Rolex (some of its advertisement), Tyffany, and Van Cleef & Arpels Celebrity

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In this kind of communication strategy, the brand can sponsor a person, an event or a team. Usually, brands use celebrities, dead or alive. This type of advertisement usually shows a picture of the ambassador as well as the watch and the logo of the brand. It is sometimes accompanied by a slogan or a story. TAG Heuer and Omega use superstars like respectively golfer Tiger Woods and top model Cindy Crawford while Rolex use selective celebrities, that is celebrities who are famous but on their domain only. Some other brands use pseudo celebrities like Carl F. Bucherer. Breguet uses famous people who wore the watch (ranging from Napoleon Bonaparte to Queen Victoria) as well as famous citation written by writer of the literature of the 19th century mainly (Alexandre Dumas, Victor Hugo, Honor de Blazac). Longines uses past icons of elegance Humphrey Bogart and Audrey Hepburn as well as some other actual ambassadors Overall cost leadership On the contrary, a cost leadership strategy is a lot easier to explain because the benefits are obvious; the main benefice for the customer is that the product is cheaper. It also allows the company to standardized the product and protects it from the bargaining power of the buyers. In fact, buyers can not try to get lower prices the price because they do not have an opportunity to be supplied at cheaper prices on the market. Usually, in this kind of scheme, a customer is loyal to the price and will jump from one brand to the other whenever it is cheaper. Some of the disadvantages of this strategy are that a company can loose its advantage very quickly if a new entrants or a new technology enters the market and it was not prepared. What is more, cost leadership usually return small margins but require big investment because the company has to attain a critic size and achieve economies through economies of scale and of scope. As a consequence, in order to decrease price, companies following this strategy often decide to move their production where manpower is cheaper (India, China). What is more, the company has to control costs very carefully and try to achieve cost reduction through building of cost efficient-scale facilities and permanent cost minimization of any possible field (service, advertising, research and development, sales force, etc). But a company that has an overall cost leadership as its primary target can not totally neglect the differentiation part. In fact, the product should be perceived as comparable to the other products on the market. If this is not the case, the company will have to reduce its price furthermore. In the watchmaking industry, price is also an element of the strategy to differentiate the brands that have a identical positioning but this is never the focus. Brands rely on intensive management of their image.

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Longines campaigns

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Examples of Competitors Campaigns

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