Swiss Clock

Switzerland is tiny yet they manage to make excessive money by exporting bullshit.

For example they make 2.5% of the world’s watches as measured by the number of units, yet this is 54% of the market for watches when measured be revenue. Annually they export $23b worth of watches, half the value of all Australia’s manufacturing exports. And these are just nice looking pieces of 19th century mechanical technology – they have the whole world fooled. They make massive margins on these dinosaur watches.

Another example is coffee. Switzerland imports raw coffee beans (2.6% of the world’s total), processes it, and then exports it as Nescafe coffee pods. By doing this Switzerland’s roasted coffee exports were valued at 49% more than the next largest exporter—Italy—even though the Swiss export 67% less volume.

Do you see the similarity in these two cases? These seemingly impossible scenarios are held up by a combination of quality, brand value, supply chain complexity, marketing, a little technology and a relentless drive to maintain and improve their market position. Oh, and they keep their manufacturing in Switzerland rather than outsourcing it to Asia. They can do this by making sure their margins are massive and by also investing in automated manufacturing technology.

We in Australia would see the Swiss watch and coffee pod industries as exports of manufactured goods and primary products respectively. The Swiss see these industries as complex and intricate machines that only they can build and manage.

It’s all a matter of perspective.

p.s. The team bus logos (painted on the side of the buses) for the Swiss and Australian soccer teams at the 2014 World Cup are respectively; “End Station: 13.07.2014 Maracana! Final Stop: 07-13-14 Maracana!” and “Socceroos: Hopping Our Way Into History“. Says it all really, doesn’t it?