gfm Insights - “Lex On”: Modernization or dilution of Swissness?

The case surrounding On and the so-called “Lex On” is more than just an industry controversy. It reveals a fundamental strategic question that is relevant far beyond Switzerland: What does origin actually still mean in a globalized value chain?

The initial situation is well known. A globally successful Swiss brand is allowed to use the Swiss cross even though its products are manufactured abroad. Some speak of an overdue adjustment to the reality of global value creation. Others speak of a dangerous dilution of one of the world's strongest labels of origin.

Logic of value creation

The pro position argues that the logic of value creation has fundamentally changed. Today, value is created less at the point of production and more where products are developed, designed and branded. This is often precisely where the Swiss contribution lies: in engineering, design, innovation and brand management. A strictly production-based definition of Swiss made therefore falls short. It would disadvantage precisely those companies that scale globally and at the same time anchor their strategic core competencies in Switzerland. From this perspective, Lex On is not a special case, but a necessary step towards updating an outdated understanding of origin.

Labels of origin are not business categories

The contra position argues that origin labels are not economic categories, but signals of trust. And it is precisely these signals that only work if they are clear, consistent and intuitively understandable. So far, Swiss made has been exactly that: a strong, easily decodable promise, closely linked to production in Switzerland. If this logic is weakened, there is room for interpretation. And room for interpretation is the enemy of any strong brand. The danger lies not in the individual case, but in the signal effect. If Swissness becomes arbitrary, it loses its differentiating power.

An additional dimension is the question of protectionism or legitimate protection. Some of the criticism is perfectly understandable, as it is about protecting a collective brand value that has been built up over decades. At the same time, different business models clash. Companies with production in Switzerland bear structurally higher costs than those with global production. If both are allowed to use the same signals of origin, this creates a field of tension. In this area of tension, the boundaries between legitimate brand management, the call for a level playing field and a certain, often implicit protectionism become blurred. The decisive factor is therefore not whether protectionism plays a role, but how much of it makes sense. Too little leads to a dilution of the brand, too much slows down innovation and international competitiveness.

Swissness is not an individual asset

What we are really seeing here is a governance problem. Swissness is not an individual asset, but a collective good, built up over decades by a wide variety of industries. This creates a classic area of tension between individual optimization and collective value preservation. This is precisely where clear guidelines are needed that are neither too rigid nor too arbitrary.

In the end, it comes down to a simple but important question: how far can Swissness be stretched before it loses its economic value? After all, the value of a label of origin does not come from its use, but from the trust it inspires. And trust is based on clarity.

By Prof. Dr. Marcus Schögel, President of gfm - the Swiss Marketing Association and Institute of Marketing at the University of St. Gallen