Companies obtain competitive" advantage by offering superior value to the customer through (!) lower prices than competitors for equivalent benefits and/or (2) unique benefits that more than offset a higher price.4 Several important considerations enter into achieving customer satisfaction and gaining competitive advantage.

1. The process should be customer-focused.

2. Analysis of needs/wants (requirements) should look at groups of buyers with similar preferences.

3. Opportunities for advantage occur when gaps exist between what customers want and competitors' efforts to satisfy them.

4. Opportunities are created by finding buyers' requirements which are not being satisfied.

5. Customer satisfaction analysis should look for the best opportunities for the organization to create superior value. • '

SMH achieves its competitive advantage in the watch market using both value and cost strategies. Its expensive brands offer unique value derived from high quality and prestigious image. Meanwhile, management has lowered the costs of all brands by using automated production processes.6 For example, the Swatch watch Sells today at a price very similar to its price over a decade ago.

. Although several factors contribute to the effectiveness of an organization, competi­tive advantage is a core requirement. "Chief executives must take the lead in moving their institutions toward strategic management by designing organizations and developing management systems that look forward and look out"7 Several elements are influencing change in organization structure. The relationships among business functions such as manufacturing, marketing, research and development, finance, and human resources are becoming more integrated in many companies. Teams of people from different functions are working together to design new products and improve customer service. Causes of these changes include (I) a turbulent business environment that is global in scope and (2) the availability of an impressive array of information technology that can be used to improve the effectiveness of workers.

Organizational change occurred in a wide range of companies during the last decade. Many companies reduced the size of professional staff and the number of management levels. "Holding up the latest ideal in organizational design, the flat organization, many companies have already cut the layers of management between the chief executive and front-line supervisors from a dozen to six or fewer."* Such changes drastically alter the span of control of managers and require new management and control systems. For example, information technology performs many of the functions traditionally handled by middle-level managers. The increased scope of management also requires executives to have a better understanding of work functions than in the past.

SMH's chief executive, Nicolas G. Hayek, implemented several actions to turn around the poor performance of Switzerland's two largest watchmakers (which were combined in 1983 to create SMH).9 He streamlined operations, replaced weak managers, strengthened marketing capabilities, and gained direct control of distribution. When the banks financing SMH wanted out of the watch business, insiders took over the company with support from investors. The inexpensive Swatch line was introduced and production costs reduced to facilitate a tow-price strategy. Efforts continue toward producing quality at the lower cost.