Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand
"Parfums Cacharel, a division of L'OrA?al, used to have a dominating position on the European market with both the number one and number two best-selling fragrances: AnaA?s AnaA?s and Loulou. At the time of the case however, sales were declining at a rate of 15 % per year and Cacharel was a fragance brand in need of a major revitalization. The task assigned to Dimitri Katsachnias, the new general manager of Cacharel, is to turn around the business. But before doing that, he needs to understand the brand. 1. Brand identity decoding a?? What is Cacharel's brand identity? What are its conceptual and tangible components? Can it be summarized in less than five words? a?? Does the Cacharel umbrella brand itself have an identity beyond that of its sub-brands? Which sub-brands are mostly responsible for creating Cacharel's identity? 2. Brand revitalization a?? What is the root source of Cacharel's maturity crisis and how can understanding the brand's identity help? a?? Should Kataschnias bring the Cacharel brand closer to where the market is now? Should he focus on meeting the desires of today's consumers or in remaining faithful to the brand's original identity Students can watch the television commercials mentioned in the case on the dedicated case website: http://cases.insead.edu/cacharel/home. On this website, instructors can also access video interviews with the managers mentioned in the case, more recent television commercials, and PowerPoint presentations to be used in the classroom or as handouts using the login and password mentioned in the teaching note."
Authors :: Pierre Chandon, Rowell Nicholas, Klaus Wertenbroch
Swot Analysis of "Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand" written by Pierre Chandon, Rowell Nicholas, Klaus Wertenbroch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cacharel Identity facing as an external strategic factors. Some of the topics covered in Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand case study are - Strategic Management Strategies, Professional transitions and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels,
talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cacharel Identity, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cacharel Identity operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand can be done for the following purposes –
1. Strategic planning using facts provided in Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand case study
2. Improving business portfolio management of Cacharel Identity
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cacharel Identity
Strengths Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cacharel Identity in Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Cacharel Identity in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Sales & Marketing field
– Cacharel Identity is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cacharel Identity in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Cacharel Identity has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Cacharel Identity has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Cacharel Identity is one of the most innovative firm in sector. Manager in Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Cacharel Identity are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Cacharel Identity
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cacharel Identity does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Cacharel Identity digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cacharel Identity has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Sales & Marketing industry
– Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand firm has clearly differentiated products in the market place. This has enabled Cacharel Identity to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Cacharel Identity to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Cacharel Identity is present in almost all the verticals within the industry. This has provided firm in Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Cacharel Identity has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cacharel Identity to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Cacharel Identity is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Cacharel Identity is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand are -
Increasing silos among functional specialists
– The organizational structure of Cacharel Identity is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Cacharel Identity needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cacharel Identity to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand, is just above the industry average. Cacharel Identity needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Lack of clear differentiation of Cacharel Identity products
– To increase the profitability and margins on the products, Cacharel Identity needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Cacharel Identity has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand, it seems that the employees of Cacharel Identity don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand, in the dynamic environment Cacharel Identity has struggled to respond to the nimble upstart competition. Cacharel Identity has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Cacharel Identity has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Cacharel Identity has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Aligning sales with marketing
– It come across in the case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand can leverage the sales team experience to cultivate customer relationships as Cacharel Identity is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cacharel Identity supply chain. Even after few cautionary changes mentioned in the HBR case study - Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cacharel Identity vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Pierre Chandon, Rowell Nicholas, Klaus Wertenbroch suggests that, Cacharel Identity is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand are -
Using analytics as competitive advantage
– Cacharel Identity has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cacharel Identity to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Cacharel Identity to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cacharel Identity can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Cacharel Identity can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Leveraging digital technologies
– Cacharel Identity can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cacharel Identity can use these opportunities to build new business models that can help the communities that Cacharel Identity operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cacharel Identity to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Cacharel Identity to hire the very best people irrespective of their geographical location.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cacharel Identity to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cacharel Identity in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cacharel Identity is facing challenges because of the dominance of functional experts in the organization. Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cacharel Identity in the consumer business. Now Cacharel Identity can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Cacharel Identity has opened avenues for new revenue streams for the organization in the industry. This can help Cacharel Identity to build a more holistic ecosystem as suggested in the Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand case study. Cacharel Identity can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Cacharel Identity can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cacharel Identity in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Shortening product life cycle
– it is one of the major threat that Cacharel Identity is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cacharel Identity.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Cacharel Identity demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Cacharel Identity has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Cacharel Identity needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing wage structure of Cacharel Identity
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Cacharel Identity.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cacharel Identity can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cacharel Identity with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cacharel Identity can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Cacharel Identity high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Regulatory challenges
– Cacharel Identity needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Weighted SWOT Analysis of Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Cacharel Identity needs to make to build a sustainable competitive advantage.