Business

Swiss Army knife adapts to remain a cutting-edge tool

The first factory that produced Swiss Army knives
Image caption The original cutlery factory, located at Ibach in Switzerland, was opened by Karl Elsener in 1884

Few products are as inexorably linked to their country of origin as the Swiss Army knife.

The multifunctional pocket knife from Switzerland has been recognised worldwide for almost 130 years after Karl Elsener, and his mother Victoria, began a cutlery company to handle an order for the Swiss army.

Mr Elsener worked on a revolutionary idea - a knife that offered as many practical functions as possible in a compact form.

In 1897 he patented the Swiss Officer's and Sport Knife - later marketed as the Swiss Army knife.

He also formed the company Victorinox, amalgamating his mother's name with inox - short for acier inoxydable, the French term for stainless steel.

The company has supplied the Swiss army for more than 125 years and also supplies knives to the German and 10 other armies.

Broader brand

Victorinox makes 35,000 knives each day and has also branched out into producing luggage and clothing.

"We started diversification in 1989 with timepieces, followed by travel gear and fashion, and today almost 50% of our total sales is with the new product categories," says Carl Elsener, the great-grandson of the man who formed the company.

"The core of our brand is the Swiss Army knife and we will do everything to keep that because everybody knows it," he says.

"But it is very important that the values of the Swiss Army knife can be transformed to other product categories," he asserts.

"These values are high quality, functionality, innovation and the iconic design."

He is aware that such an iconic product is readily copied and counterfeited.

"This is a challenge when you have a very popular brand," he says.

"It is a flattery, but it has a disadvantage. If the copies are not at the same quality, people may get disappointed. This is one of the reasons why we invest a lot into protecting our brand and patent value," he explains.

Counterfeits are not a big problem in China, says Mr Elsener, because the Chinese who can afford to buy Western products are really interested in strong brands, and in the original products.

Tough times

However, things have not always gone smoothly for the company.

"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%," Mr Elsener recalls.

In the wake of the aircraft ban on carrying Swiss Army knives and pocket tools, Victorinox leased workers to other companies, while continuing to pay their wages.

Image caption Modern versions of the Swiss Army knife feature USB drives, laser pointers and MP3 players

"We have never made a worker redundant for financial reasons," he notes.

"We have tried to adapt some of our products to the situation. We have now some products which offer USB memory sticks and we have come up with so-called flight versions. That means we have taken the blade out but we have left all the other features," he says.

Mr Elsener recognises that people today think the one thing they really need in their pocket is a smartphone. They no longer feel that they need a knife in their pocket.

"It depends what you are doing, but the Swiss Army knife is still very handy and very helpful."

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