Marketing case study: the Swiss Army knife

There’s so much business studies wrapped up in the neat Swiss Army knife package. I was thinking if the multifunctional device could be a metaphor for effective student answers (break a complex issue down into parts, approach evaluation questions from different angles) but never got that far.

The article I was reading a few days ago covered several interesting points:

The company has endlessly experimented with new product development, retiring models in the decline phase of the product life cycle. The company maintains a broad product portfolio (see below). I chose the picture to illustrate this blog quite deliberately!

Victorinox (the company who owns the brand and patents for the Swiss Army knife) makes 35,000 knives each day and has also branched out into producing luggage and clothing – a good example of diversification. Now almost 50% of total sales are from newer product categories. The CEO is quoted as saying, “it is very important that the values of the Swiss Army knife can be transformed to other product categories”.

Then I got thinking about the importance of undertaking value analysis before embarking on production. Here’s the CEO again: “These values (of the Victorinox brand) are high quality, functionality, innovation and the iconic design”. The company has to fight hard to defend its patents from counterfeiters.

How about the impact of the external environment to finish with? The period after the 9/11 attacks in the US was the toughest time for Victorinox because sales of the Swiss Army knife dropped by almost 30% in the wake of the aircraft ban on carrying knives and pocket tools. Victorinox responded to the problem of over capacity by leasing workers to other companies, while continuing to pay their wages. They’ve even produced Swiss Army knives without knife blades in order to create an adapted ‘flight’ version!