Swiss Army: Diversifying into the Fragrance Business SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Swiss Army: Diversifying into the Fragrance Business
In 2005, Victorinox, the original producer of the Swiss Army Knife, acquired Wenger, including the fragrance label "Swiss Army Fragrance." The acquisition of Wenger allowed Victorinox to become the only producer of the famous Swiss Army Knife as well as the key player in Swiss Army watches. Victorinox's head of marketing was asked to design a business strategy that would successfully allow the company to enter the fragrance industry. How should Victorinox diversify into the fragrance business? Should it aim to transfer its existing brand attributes to fragrance products? Or should it adopt a strategy that would include the use of another brand to market the perfumes? The head of marketing had to present a plan to the CEO of Victorinox on how best to brand and position the product, and how to compete in the fragrance industry. Authors are affiliated with Rollins College.
Authors :: Ilan Alon, Marc Fetscherin, Claudia Carvajal
Swot Analysis of "Swiss Army: Diversifying into the Fragrance Business" written by Ilan Alon, Marc Fetscherin, Claudia Carvajal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fragrance Victorinox facing as an external strategic factors. Some of the topics covered in Swiss Army: Diversifying into the Fragrance Business case study are - Strategic Management Strategies, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Swiss Army: Diversifying into the Fragrance Business casestudy better are - – wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, technology disruption, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic ,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
Introduction to SWOT Analysis of Swiss Army: Diversifying into the Fragrance Business
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Swiss Army: Diversifying into the Fragrance Business case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fragrance Victorinox, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fragrance Victorinox 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 Swiss Army: Diversifying into the Fragrance Business can be done for the following purposes –
1. Strategic planning using facts provided in Swiss Army: Diversifying into the Fragrance Business case study
2. Improving business portfolio management of Fragrance Victorinox
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 Fragrance Victorinox
Strengths Swiss Army: Diversifying into the Fragrance Business | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fragrance Victorinox in Swiss Army: Diversifying into the Fragrance Business Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Fragrance Victorinox in the sector have low bargaining power. Swiss Army: Diversifying into the Fragrance Business has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fragrance Victorinox to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Fragrance Victorinox is one of the most innovative firm in sector. Manager in Swiss Army: Diversifying into the Fragrance Business 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
– Fragrance Victorinox is present in almost all the verticals within the industry. This has provided firm in Swiss Army: Diversifying into the Fragrance Business 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Swiss Army: Diversifying into the Fragrance Business firm has clearly differentiated products in the market place. This has enabled Fragrance Victorinox to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Fragrance Victorinox to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Fragrance Victorinox 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 Swiss Army: Diversifying into the Fragrance Business HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Fragrance Victorinox 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.
Superior customer experience
– The customer experience strategy of Fragrance Victorinox in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Swiss Army: Diversifying into the Fragrance Business 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
- Fragrance Victorinox 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 Fragrance Victorinox is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Swiss Army: Diversifying into the Fragrance Business Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Fragrance Victorinox 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 Swiss Army: Diversifying into the Fragrance Business - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Fragrance Victorinox digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fragrance Victorinox 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.
Ability to lead change in Sales & Marketing field
– Fragrance Victorinox 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 Fragrance Victorinox in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Swiss Army: Diversifying into the Fragrance Business | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Swiss Army: Diversifying into the Fragrance Business are -
High bargaining power of channel partners
– Because of the regulatory requirements, Ilan Alon, Marc Fetscherin, Claudia Carvajal suggests that, Fragrance Victorinox 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.
Slow to strategic competitive environment developments
– As Swiss Army: Diversifying into the Fragrance Business HBR case study mentions - Fragrance Victorinox 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Fragrance Victorinox needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Aligning sales with marketing
– It come across in the case study Swiss Army: Diversifying into the Fragrance Business 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 Swiss Army: Diversifying into the Fragrance Business can leverage the sales team experience to cultivate customer relationships as Fragrance Victorinox is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Fragrance Victorinox 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. Fragrance Victorinox 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Swiss Army: Diversifying into the Fragrance Business, is just above the industry average. Fragrance Victorinox 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 operating costs
– Compare to the competitors, firm in the HBR case study Swiss Army: Diversifying into the Fragrance Business 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 Fragrance Victorinox 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Swiss Army: Diversifying into the Fragrance Business, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Swiss Army: Diversifying into the Fragrance Business, it seems that the employees of Fragrance Victorinox 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.
Need for greater diversity
– Fragrance Victorinox 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.
Lack of clear differentiation of Fragrance Victorinox products
– To increase the profitability and margins on the products, Fragrance Victorinox needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Swiss Army: Diversifying into the Fragrance Business | 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 Swiss Army: Diversifying into the Fragrance Business are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fragrance Victorinox can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Fragrance Victorinox to increase its market reach. Fragrance Victorinox 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fragrance Victorinox 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 Fragrance Victorinox to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fragrance Victorinox is facing challenges because of the dominance of functional experts in the organization. Swiss Army: Diversifying into the Fragrance Business 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fragrance Victorinox 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.
Building a culture of innovation
– managers at Fragrance Victorinox 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fragrance Victorinox can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Fragrance Victorinox can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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. Fragrance Victorinox can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Fragrance Victorinox 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.
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. Fragrance Victorinox can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Fragrance Victorinox has opened avenues for new revenue streams for the organization in the industry. This can help Fragrance Victorinox to build a more holistic ecosystem as suggested in the Swiss Army: Diversifying into the Fragrance Business case study. Fragrance Victorinox can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fragrance Victorinox 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, Swiss Army: Diversifying into the Fragrance Business, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Fragrance Victorinox 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 Swiss Army: Diversifying into the Fragrance Business - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fragrance Victorinox to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Swiss Army: Diversifying into the Fragrance Business External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Swiss Army: Diversifying into the Fragrance Business are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fragrance Victorinox 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
– Fragrance Victorinox 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.
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. Fragrance Victorinox can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Regulatory challenges
– Fragrance Victorinox 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.
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. Fragrance Victorinox 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.
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 Fragrance Victorinox business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Fragrance Victorinox 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.
Shortening product life cycle
– it is one of the major threat that Fragrance Victorinox is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fragrance Victorinox 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 Swiss Army: Diversifying into the Fragrance Business .
Environmental challenges
– Fragrance Victorinox 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. Fragrance Victorinox can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Stagnating economy with rate increase
– Fragrance Victorinox can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Swiss Army: Diversifying into the Fragrance Business 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 Swiss Army: Diversifying into the Fragrance Business 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 Swiss Army: Diversifying into the Fragrance Business 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 Swiss Army: Diversifying into the Fragrance Business 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 Swiss Army: Diversifying into the Fragrance Business 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 Fragrance Victorinox needs to make to build a sustainable competitive advantage.