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 household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, central banks are concerned over increasing inflation,
there is backlash against globalization, increasing energy prices, 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 -
Operational resilience
– The operational resilience strategy in the Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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.
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.
Effective Research and Development (R&D)
– Flare's Patterson 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 Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Analytics focus
– Flare's Patterson 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 John A. Quelch, Lisa D. Donovan 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.
Organizational Resilience of Flare's Patterson
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Flare's Patterson does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Flare's Patterson 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.
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.
High cash cycle compare to competitors
Flare's Patterson 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.
Products dominated business model
– Even though Flare's Patterson has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) should strive to include more intangible value offerings along with its core products and services.
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 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.
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 -
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.
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.
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.
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.
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.
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.
Developing new processes and practices
– Flare's Patterson can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
Building a culture of innovation
– managers at Flare's Patterson 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.
Creating value in data economy
– The success of analytics program of Flare's Patterson has opened avenues for new revenue streams for the organization in the industry. This can help Flare's Patterson to build a more holistic ecosystem as suggested in the Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) case study. Flare's Patterson can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Flare's Patterson 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.
Buying journey improvements
– Flare's Patterson can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) 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.
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.
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 -
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.
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.
Technology acceleration in Forth Industrial Revolution
– Flare's Patterson has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Flare's Patterson 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.
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 Flare's Patterson in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Flare's Patterson 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 Flare Fragrances Company, Inc: Analyzing Growth Opportunities (Brief Case) .
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 Flare's Patterson.
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.
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.
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.
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.
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.
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.
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.
