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 - – geopolitical disruptions, there is backlash against globalization, increasing commodity prices, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, technology disruption, increasing energy prices,
talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
Operational resilience
– The operational resilience strategy in the Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Cacharel Identity has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cacharel Identity has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
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.
Analytics focus
– Cacharel Identity is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Pierre Chandon, Rowell Nicholas, Klaus Wertenbroch can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High switching costs
– The high switching costs that Cacharel Identity has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Low bargaining power of suppliers
– Suppliers of Cacharel Identity in the sector have low bargaining power. Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cacharel Identity to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
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 -
Slow decision making process
– As mentioned earlier in the report, Cacharel Identity has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Cacharel Identity even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Low market penetration in new markets
– Outside its home market of Cacharel Identity, firm in the HBR case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cacharel Identity has relatively successful track record of launching new products.
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.
Interest costs
– Compare to the competition, Cacharel Identity has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Cacharel Identity has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Slow to strategic competitive environment developments
– As Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand HBR case study mentions - Cacharel Identity takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
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.
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.
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 -
Low interest rates
– Even though inflation is raising its head in most developed economies, Cacharel Identity can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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.
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.
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.
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.
Buying journey improvements
– Cacharel Identity can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at Cacharel Identity can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cacharel Identity can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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 -
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.
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.
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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Cacharel Identity business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Cacharel Identity needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Cacharel Identity in the Sales & Marketing sector and impact the bottomline of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Cacharel Identity will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Parfums Cacharel de L'OrA?al 1997-2007: Decoding and Revitalizing a Classic Brand, Cacharel Identity may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Environmental challenges
– Cacharel Identity needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Cacharel Identity can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
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.
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.