Case Study Description of Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case)
When students have the English-language PDF of this Brief Case in a coursepack, they will also have the option to purchase an audio version.Flare Fragrances, a manufacturer of perfumes for women, faces a growth challenge in a difficult economic environment. CEO Joely Patterson outlines two growth opportunities for her marketing staff to evaluate. One involves launching a new scent -- and possibly separating it from the trusty "umbrella brand" that comprises Flare's other scents; the other involves deepening Flare's penetration into the drugstore channel. In Patterson's view, the firm can pursue the first opportunity, the second, or both -- but it must do something . In helping Patterson to assess the opportunities, the marketing team must consider a wide range of factors, including brand management, consumer demographics, and positioning and pricing issues. The case requires students to complete a quantitative assignment as part of case analysis.Key topics include product line management, product positioning, and new product launch.
Swot Analysis of "Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case)" written by John A. Quelch, Lisa D. Donovan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Flare's Patterson facing as an external strategic factors. Some of the topics covered in Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) case study are - Strategic Management Strategies, Growth strategy, Marketing, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) casestudy better are - – increasing commodity prices, talent flight as more people leaving formal jobs, wage bills are increasing, there is backlash against globalization, increasing household debt because of falling income levels, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
supply chains are disrupted by pandemic , increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Flare's Patterson, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Flare's Patterson 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 Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) can be done for the following purposes –
1. Strategic planning using facts provided in Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) case study
2. Improving business portfolio management of Flare's Patterson
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 Flare's Patterson
Strengths Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Flare's Patterson in Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Flare's Patterson 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.
Highly skilled collaborators
– Flare's Patterson has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Flare's Patterson digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Flare's Patterson 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.
Learning organization
- Flare's Patterson 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 Flare's Patterson is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Flare's Patterson is one of the leading recruiters in the industry. Managers in the Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Flare's Patterson is one of the most innovative firm in sector. Manager in Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Flare's Patterson has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) firm has clearly differentiated products in the market place. This has enabled Flare's Patterson to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Flare's Patterson to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Flare's Patterson in the sector have low bargaining power. Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Flare's Patterson to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Flare's Patterson is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Flare's Patterson 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.
Diverse revenue streams
– Flare's Patterson is present in almost all the verticals within the industry. This has provided firm in Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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.
Weaknesses Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) are -
Low market penetration in new markets
– Outside its home market of Flare's Patterson, firm in the HBR case study Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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 Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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 Flare's Patterson has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, John A. Quelch, Lisa D. Donovan suggests that, Flare's Patterson 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case), in the dynamic environment Flare's Patterson has struggled to respond to the nimble upstart competition. Flare's Patterson has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Flare's Patterson 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Flare's Patterson is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Flare's Patterson supply chain. Even after few cautionary changes mentioned in the HBR case study - Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Flare's Patterson vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case), is just above the industry average. Flare's Patterson 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.
Need for greater diversity
– Flare's Patterson 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.
Slow to strategic competitive environment developments
– As Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) HBR case study mentions - Flare's Patterson 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.
Skills based hiring
– The stress on hiring functional specialists at Flare's Patterson 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.
Opportunities Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) | 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 Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) are -
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 Flare's Patterson in the consumer business. Now Flare's Patterson can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Flare's Patterson 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 Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Flare's Patterson to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Flare's Patterson to increase its market reach. Flare's Patterson will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Flare's Patterson can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Flare's Patterson 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Flare's Patterson 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Flare's Patterson can use these opportunities to build new business models that can help the communities that Flare's Patterson operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Flare's Patterson 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.
Leveraging digital technologies
– Flare's Patterson 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Flare's Patterson can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Flare's Patterson can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Flare's Patterson has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Flare's Patterson is facing challenges because of the dominance of functional experts in the organization. Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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.
Threats Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case), Flare's Patterson 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 .
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. Flare's Patterson can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Flare's Patterson is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Flare's Patterson 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Flare's Patterson 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.
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. Flare's Patterson 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.
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. Flare's Patterson needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Environmental challenges
– Flare's Patterson 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. Flare's Patterson can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing wage structure of Flare's Patterson
– 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 Flare's Patterson.
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.
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 Flare's Patterson business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Flare's Patterson with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Flare's Patterson 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.
Weighted SWOT Analysis of Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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 Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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 Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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 Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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 Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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 Flare's Patterson needs to make to build a sustainable competitive advantage.