Business Case Studies & Business Publications

Swatch Group and Francogeddon

Walsh, Kieran J.

Case

Swatch Group and Francogeddon

Walsh, Kieran J.

GEM-0167 | Published October 29, 2018 | 13 pages Case

Collection: Darden School of Business

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This case illustrates how exchange rate shocks affect international businesses. The focus is on one recent stark example: the effect on Swatch Group of the Swiss National Bank's January 2015 decision to end its policy of putting a ceiling on the euro/Swiss franc exchange rate. It is useful for an introductory class that defines different exchange rate concepts, illustrates why managers should care about exchange rates, and motivates/previews the study of the macroeconomics of exchange rates, capital flows, and monetary policy. This case is appropriate for use in a first-year MBA course that deals with international economics or finance, though it is written to be standalone and thus could also be employed in an advanced undergraduate or master's level course on international macroeconomics or finance.