See Exhibit #1 in the case Swatchs Groups Income Statement. See subtitle b Omegas Net Sales are made up of

Watches and Jewelry

Electronic Systems (Nivarox& ETA )

1.Discuss how Sales Revenue is generated from each Watches/Jewelry & Electronic Systems.

2.Take another look at Exhibit #1. Specifically, look at OmegasExpenses

Material Purchases

Is this cost fixed or variable? ________

PersonnelExpense

Is this cost fixed or variable? ________

3.Is Advertising (not shown in Ex #1) fixed cost or a variable cost?________

4.Use Slides 6 and 7 and PM% to note which of the years (2008, 2009, or 2010) Swatch has highest PM%.

I.Use Costs from Exhibit #1 to guess why this year has highest PM%

SMH 1993 Unit Sales by Price Segment Exhibit 3 Units (millions Low-Priced Watches 34.9 Mid-Priced Watches 6.4 High-Priced Watches 4.2 Cheap Movements 35.5 Mechanical Movements 6.0 Total Units Sold 87.0 Swatch Unit Sales Over Time (in millions) Exhibit 1 Units Units/Year Growth Rate Cumulative 3.0 3 1983 33% 33% 7 1984 4.0 8.0 100% 1985 15 1986 12.0 27 50% 4% 1987 12.5 40 0% 0% 12% 1988 12.5 53 1989 12.5 65 14.0 1990 79 25% 1991 17.5 97 1992 26.0 49% 123 21% 154 1993 31.5 N SMH 1993 Unit Sales by Region Exhibit 4 Units (millions) Europe 37.4 42.6 Asia America 6.1 Other 0.9 Total Units 87.0 Sales by Product Type (as a % of gross sales) Low-Priced Watches 14% 13% 15% 19% 26% 28% Mid-Priced Watches 14% 13% 13% 12% 11% 10% High-Priced Watches Movements & Components 33% 36% 35% 34% 33% 31% 24% 23% 31% 31% 31% 28% Other 8% 7% 7% 7% 7% 9% SMH 1993 Unit Sales by Price Segment Exhibit 3 Units (millions Low-Priced Watches 34.9 Mid-Priced Watches 6.4 High-Priced Watches 4.2 Cheap Movements 35.5 Mechanical Movements 6.0 Total Units Sold 87.0 Swatch Unit Sales Over Time (in millions) Exhibit 1 Units Units/Year Growth Rate Cumulative 3.0 3 1983 33% 33% 7 1984 4.0 8.0 100% 1985 15 1986 12.0 27 50% 4% 1987 12.5 40 0% 0% 12% 1988 12.5 53 1989 12.5 65 14.0 1990 79 25% 1991 17.5 97 1992 26.0 49% 123 21% 154 1993 31.5 N SMH 1993 Unit Sales by Region Exhibit 4 Units (millions) Europe 37.4 42.6 Asia America 6.1 Other 0.9 Total Units 87.0 Sales by Product Type (as a % of gross sales) Low-Priced Watches 14% 13% 15% 19% 26% 28% Mid-Priced Watches 14% 13% 13% 12% 11% 10% High-Priced Watches Movements & Components 33% 36% 35% 34% 33% 31% 24% 23% 31% 31% 31% 28% Other 8% 7% 7% 7% 7% 9%