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centralized                             decentralized

                                                 SMH
                                                       KP              KA              VP              CR              CS
                                                                         production &
                                                                        quality control
                                                                             r&d
                                                                        hr, fi nance, etc.  b blancpain, lancpain,           high end
                                                                                                                            h
                                                                                                                            high end igh end
                                                                                                                           and luxury
                                                                                        omega, longines,
                     B<7 Xb eTacXRP[[h X]cTVaPcTS P]S                                   omega, longines,                   a and luxury nd luxury
                                                                                                                            se se se se
                                                                                                                            segmentgmentgmentgmentgment
                                                                                             rado                           segment
                                                                                             rado
                     centralized with respect to production,                             tissot, certina,                     mid
                                                                                         tissot, certina,
                                                                                                                              mid
                                                                                                                              mid
                                                                                         hamilton, mido
                     R&D, sourcing and HR.                             KR                hamilton, mido  CH CH              se se
                                                                                                                            segment
                                                                                                                            segmentgmentgment
                                                                                        swatch, fl  ik fl  ak
                       4PRW B<7 QaP]S T]Y^hb Pdc^]^\h                                   swatch, fl  ik fl  ak               mass market
                                                                                                                          mass market
                                                                                                                          mass market
                                                                                                                          mass market
                                                                         manufacturing
                     regarding product, design, and marketing               plant
                                                                            plants
                                                                            plantss
                     communication decisions.                           brand portfolio
                                                                        brand portfolio
               Swatch
               KPKP            KAKA            VP VP   C$      CRCR            CS CS           R$ R$
                                                                                                              watch sales
                                                                                                              watch sales                 235
                                product design
                                product design
                                                                   lifestyle
                                                                   lifestyle
                                 marketing &
                                 marketing &                      movement
                                                                  movement
                                communication
                                communication
                   S
                   SMH as MH as                trendy low-cost
                                               trendy low-cost
                 production
                 production                        lifestyle                     mass-market
                                                   lifestyle
                                                                                 mass-market
                   partner     KR KR            (second) watch  CH CH
                   partner
                                                (second) watch
                                                                 swatch shops
                                                                 swatch shops
                                                                    retail
                                swatch design
                                swatch design                       retail
                                                                lifestyle events
                                swatch brand                    lifestyle events
                                swatch brand
                                                                  guerrilla
                                                                  guerrilla
                                                                  marketing
                                                                  marketing
               C$ C$  manufacturing payments to SMH    R$ R$
                    manufacturing payments to SMH
                                                                     watch sales
                                                                     watch sales
                              marketing
                              marketing
          !"#$%&'(%)*+(%,,---.52                                                                                                      /012013---2482-67
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