Estimating Competitors' Future Strategies

Competitors' future strategic s may continue the directions that they have established in the past, particularly if no major external influences require changing their strategies. Nevertheless, assuming is. existing strategy will continue is not wise. Competitors' current actions may signal probable future actions. Recall our discussion of SMH's Swatch line of watches in Chapter I. Swatch's strong market position was threatened by new competitors. By 1995 it was clear that Timex would continue its aggressive new product and promotion strategy aimed at expanding its market position at the expense of Swatch.'5 Timex launched an array of new brands, including licensing the Nautical, Joe Boxer, and Timberland braid names, and offered the new $40 Expedition line. Failure to anticipate Timex's capons to .Swatch's market success created serious problems for Swatch in the U.S. market.

By the early 1990s the number of retailers carrying Swatch had declined while consumer tastes shifted from plastic to metal watches. Swatch's market sensing was faulty. To counter competition Swatch's 1995 advertising budget was over 12 times larger than previous years, and new watch designs were introduced.