Why does Swatch want to stop selling watch components?Why is

1. Why does Swatch want to stop selling watch components?
2. Why is the Swiss government reluctant to allow Swatch to stop supplying components to its competitors?
3. Based on the large share of the watch movements and components industry that Swatch controls, which competitive environment do you think it operates in: pure competition, monopolistic competition, oligopoly, or monopoly?

The Swatch Group SA is known for its beautifully elegant watches as well as its high-quality and precisely made internal movements and components. These internal parts have generated many sales for the company. For several years, Swatch has been appealing to the Swiss Competition Commission to change regulation under the Swiss Cartel Act. Swatch must provide supplies to its competitors in the watch industry. Swatch wants to stop supplying components to its rivals.

The company’s requests have been delayed or declined by the Swiss government because of the large market share that Swatch has in the industry. Swatch and its subsidiaries provide approximately 70 percent of the movements and 90 percent of components to other domestic and foreign brands. The Swiss government has agreed to minimal reductions in Swatch’s supplying of movements, cuts to the supply of components cannot be reduced.

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